Maple v. Rainbow's End Recovery Center, LLC, 4:17-cv-00335

Background

Plaintiffs Crystal Maple and Derek Stephens (spouses) worked at Rainbow’s End Recovery Center (RERC); Maple alleges sexual battery by co-owner/manager Aly Bruner and that Executive Director Nancy Del Colletti failed to intervene.
Plaintiffs allege constructive discharge and asserted federal and state claims, many implicating Title VII.
Defendants moved to dismiss all federal claims before answering, arguing RERC never employed 15+ employees and thus is not a Title VII "employer."
Defendants attached extrinsic documents (quarterly tax records) to the motion, prompting potential conversion of the 12(b)(6) motion to a Rule 56 summary-judgment motion.
Plaintiffs moved under Rule 56(d) for discovery limited to whether RERC employed 15 or more employees; they submitted a declaration describing the needed payroll and ownership information.
Court granted Plaintiffs’ Rule 56(d) motion, limited discovery to the employee-count issue (30-day response periods), withheld ruling on the Motion to Dismiss, and allowed Defendants to renew or withdraw their motion after production.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether RERC is a Title VII "employer" (15+ employees)	Alleged in complaint that RERC employs 15+; need discovery to prove employee count	RERC submitted quarterly tax records showing it never had 15+ employees and moved to dismiss	Court withheld ruling; converted to summary-judgment context and ordered limited discovery on employee count
Whether court may consider documents outside the complaint on 12(b)(6) motion	Plaintiffs argued considering extrinsic documents requires converting to Rule 56 and giving Plaintiffs discovery	Defendants relied on attached records and urged dismissal now	Court held conversion necessary and that Plaintiffs must be given reasonable opportunity for discovery under Rule 12(d)/56(d)
Adequacy of Defendants’ quarterly tax records to determine Title VII threshold	Plaintiffs said quarterly reports inadequately show weeks employed; payroll and other records needed	Defendants argued quarterly reports are accurate and plaintiffs implicitly challenge their truthfulness	Court found quarterly reports insufficient under the statutory weekly/payroll test and ordered production of payroll and related records
Applicability of Rule 56(d) to delay decision	Plaintiffs provided a declaration identifying facts to be discovered and their relevance	Defendants argued plaintiffs did not meet Rule 56(d) affidavit/detail requirements	Court found plaintiffs satisfied Rule 56(d) requirements and granted limited discovery on the dispositive issue

Key Cases Cited

Conservation Force v. Salazar, 646 F.3d 1240 (9th Cir. 2011) (Rule 12(b)(6) notice-pleading standard guidance)
Porter v. Jones, 319 F.3d 483 (9th Cir. 2003) (pleading standards)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)
Conley v. Gibson, 355 U.S. 41 (1957) (notice pleading pre-Twombly framework)
Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must contain plausible factual allegations)
Moss v. U.S. Secret Serv., 572 F.3d 962 (9th Cir. 2009) (summary of Twombly/Iqbal standard)
Sprewell v. Golden State Warriors, 266 F.3d 979 (9th Cir. 2001) (courts need not accept conclusory allegations)
United States v. Ritchie, 342 F.3d 903 (9th Cir. 2003) (when extrinsic materials convert a 12(b)(6) to Rule 56)
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986) (summary-judgment standards and inferences)
Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (summary judgment as a tool to dispose of insufficient claims)
Steckl v. Motorola, Inc., 703 F.2d 392 (9th Cir. 1983) (initial burden on moving party for summary judgment)
Arbaugh v. Y & H Corp., 546 U.S. 500 (2006) (15-employee threshold is an element, not jurisdictional)
Walters v. Metro. Educ. Enters., Inc., 519 U.S. 202 (1997) (payroll method for counting employees under Title VII)
Family Home & Fin. Ctr., Inc. v. Fed. Home Loan Mortg. Corp., 525 F.3d 822 (9th Cir. 2008) (requirements for Rule 56(d) relief)
Blough v. Holland Realty, Inc., 574 F.3d 1084 (9th Cir. 2009) (discussing Rule 56(d) and discovery burdens)