CAPITAL ONE BANK v. DENBOER

MANSFIELD, J.

A credit card issuer challenges the dismissal of two separate small claims actions for failure to comply with Iowa Code section 537.5114 (2007). The lower courts ruled that section 537.5114 requires the creditor to provide the credit card user's entire transaction history dating back to when the account last had a zero balance. We disagree. We hold the creditor may comply with section 537.5114 in either of two ways. First, it may establish the prima facie elements of an account stated cause of action. This approach does not require proof of individual transactions. Alternatively, the creditor may provide an account history, such as electronic or hard copies of past monthly account statements. In doing so, the creditor would not be completely barred from recovery if it cannot go back to a zero balance, but would be limited to recovering any increase in debt for which itemization has been provided. Because the lower courts applied an erroneous interpretation of section 537.5114, we reverse and remand for further proceedings.

I. Background Facts and Proceedings.

This appeal involves two unrelated small claims actions brought by Capital One Bank (USA), N.A. (Capital One) against credit card account holders Carolyn Kelley and Aric Denboer. On October 22, 2008, Capital One filed an original notice in Iowa County asserting Kelley had defaulted on a credit card agreement and sought damages in the amount of $4036.42. On October 27, 2008, Capital One filed an original notice in Sioux County asserting Denboer had defaulted on a credit card agreement and sought damages in the amount of $974.96. Each original petition was accompanied by (1) a notice to cure default sent to the defendant; (2) a document titled "Verification of Account[,] Identification of Judgment Debtor, and Certificate re Military Service"; (3) a document titled "Capital One Credit Card Terms and Conditions" that had a copyright of 2002; and (4) some monthly billing statements. However, there was no information as to when each defendant had opened his/her credit card account and the billing statements did not begin with an account balance of zero.

In Kelley's case, Capital One submitted 148 pages of billing statements with closing dates from December 16, 2001 to October 16, 2006. In Denboer's case, Capital One filed only two billing statements with closing dates of September 15, 2007 and October 15, 2007, respectively.

Kelley and Denboer were personally served with notice, but failed to appear. In each case, the small claims court declined to enter the requested default judgment. Instead, orders were entered stating Capital One had failed to comply with the requirements of Iowa Code section 537.5114 and granting Capital One thirty days to correct the defects. In each case, the order was based on a form, which stated in part:

This file comes on for entry of a default judgment. After reviewing the file, the Court determines that the Plaintiff's action is based on a consumer credit transaction as defined by Iowa Code 537.1301(11). The Plaintiff has failed to comply with the requirements of the ICCC as contained in Iowa Code Chapter 537 and/or Iowa Rule of Civil Procedure 1.961 in the particulars stated below.

. . . .

_____ The Plaintiff has failed to comply with the requirements of Iowa Code 537.5114(1). The Plaintiff's petition fails to allege the facts of the consumer's default, the amount to which the creditor is entitled, and an indication of how that amount was determined.

_____ The Plaintiff has failed to comply with the requirements of Iowa Code 537.5114(2). "[I]n cases governed by the ICCC, `no default judgment shall be entered in an action in favor of the creditor' unless a court is provided with information sufficient to compute the amount to which the creditor claims to be entitled. The information must be included in a verified complaint or in sworn testimony." ITT Fin. Servs. v. Zimmerman, 464 N.W.2d 486, 489 (Iowa Ct.App. 1990).

In the Kelley case, both boxes were checked, indicating a failure to comply with subsections 1 and 2 of section 537.5114; in Denboer, only the second box, for subsection 2, was checked.

Capital One responded to each notice with a letter stating it did not believe it was required to produce an entire account history. In the Kelley action, Capital One said it had already filed all the billing statements it had; in Denboer, it included additional billing statements with the letter. However, in neither case did Capital One introduce a billing statement that began with an account balance of zero. On December 23, 2008, and January 13, 2009, the magistrates dismissed the cases against Kelley and Denboer respectively for failure to comply with the courts' prior orders.

In Denboer's case, Capital One filed billing statements from May 9, 2007 (with a beginning balance of $591.90) to October 15, 2007 (with an ending balance of $864.16).

Capital One appealed the dismissals to the district courts. Although it argued at considerable length that it was not required to provide an accounting from a zero balance, Capital One requested in the concluding paragraph of each brief that the district court affirm the small claims court so it could appeal to the supreme court. Capital One explained:

Unfortunately, a reversal by the district court will not set precedent at the county or state level. The small claims court will be required to follow the decision in this case only, but may rule without regard to this decision in future cases. Currently, there are six other counties in Iowa which adhere to the same standard of requiring an accounting from a zero balance. In addition, there are eleven other counties which require far in excess of the last statement to obtain a default. In short, the standard for entering a default in small claims court is in a state of chaos. Cap One hopes that by bringing this issue to the state's highest court, uniformity and clarity can be returned to the small claims system.

On February 5, 2009, the Sioux County District Court affirmed the dismissal of the Denboer case stating, "Pursuant to Appellant's prayer, the Judgment of the Magistrate is hereby affirmed." Two weeks later, on February 19, 2009, the Iowa County District Court issued a detailed opinion generally upholding the dismissal of the Kelley case. That court found that under Iowa Code section 537.5114, the court must "verify the amount of the debt at issue" in order to enter a default judgment and Capital One had not "met the particular requirements of Iowa Code section 537.5114 in regard to the starting balance." In short, the district court confirmed that Capital One needed to provide an accounting from a zero balance.

The district court reversed the dismissal only to the extent that it had been with prejudice, instead of without prejudice.

Capital One applied for discretionary review of both cases, which our supreme court granted. The appeals were consolidated and transferred to this court. See Iowa Code § 631.16; Iowa R.App. P. 6.106.

Although Capital One arguably consented to an adverse judgment from each district court, we do not find it has waived its right to appeal. See Hense v. G.D. Searle Co., 452 N.W.2d 440, 444-45 (Iowa 1990) (discussing the principle that consent to an adverse judgment generally precludes a litigant from complaining of errors in interlocutory rulings). In Hense, the court announced it would not follow a "strict appellate waiver rule," and added, "Unique procedural rules and considerations of judicial economy sometimes justify the allowance of such appeals." Id. at 444. This case presents a special situation where Capital One aggressively litigated each case at the small claims level, then renewed its arguments in the district court while requesting the district court to affirm the small claims court so it could appeal to a higher level and obtain statewide clarification on an important legal issue. In any event, the Iowa County District Court ignored Capital One's invitation and instead wrote a detailed opinion affirming the small claims court on the merits.

Capital One's applications for discretionary review indicate the requirements for collection of credit card debt vary considerably from county to county. Some jurisdictions appear to insist on full transaction histories, as did the lower courts here. Others apparently require only a "breakdown of principal and interest," documentation of "last charge or payment made," or something else. As one magistrate stated in an order that is part of our appellate record:

This Court is well aware that there are many views among Iowa Magistrates concerning what must be shown to obtain a default judgment in certain debt collection cases.

. . . .

This may be a dream but hopefully in the future there will be a `bright line' established that will yield universal criteria.

II. Standard of Review.

In a discretionary review of a small claims decision, the nature of the case determines the standard of review. Small claims actions that are tried at law are reviewed for correction of errors at law. A review of statutory construction is at law. We are bound, however, by a court's finding of fact if supported by substantial evidence.

GE Money Bank v. Morales, 773 N.W.2d 533, 536 (Iowa 2009) (internal citations omitted).

III. Analysis.

A. Section 537.5114 and the ITT Financial Services Case.

Capital One's actions against Kelley and Denboer were brought by a creditor against a consumer arising from a consumer credit transaction. Thus, they are subject to the provisions of the Iowa Consumer Credit Code (ICCC). See Midwest Check Cashing, Inc. v. Richey, 728 N.W.2d 396, 399 (Iowa 2007) (discussing that the ICCC applies to all consumer credit transactions in Iowa that are not specifically excluded under the statute). Section 537.5114 of the ICCC provides:

1. In an action brought by a creditor against a consumer arising from a consumer credit transaction, the complaint shall allege the facts of the consumer's default, the amount to which the creditor is entitled, and an indication of how that amount was determined.

2. No default judgment shall be entered in the action in favor of the creditor unless the complaint is verified by the creditor, or unless sworn testimony, by affidavit or otherwise, is adduced showing that the creditor is entitled to the relief demanded.

As noted, the small claims courts dismissed Capital One's cases against Kelley and Denboer for noncompliance with this section.

In interpreting statutes, we give words their ordinary meaning within the context of the provision at issue and interpret that provision consistent with the entire statute of which it is a part. Nash Finch Co. v. City Council, 672 N.W.2d 822, 826 (Iowa 2003). In this case, we are guided in part by a navigation device — our court's prior decision in ITT Financial Services v. Zimmerman, 464 N.W.2d 486 (Iowa Ct.App. 1990).

ITT Financial Services, like the present case, involved a review of a default judgment. 464 N.W.2d at 488. There ITT sought to collect $1180 allegedly owed by the Zimmermans under a promissory note. Id. at 487. ITT filed both the note itself and a "verification of account, identification of judgment debtor, and certificate re military service." Id. However, ITT provided no explanation as to how it computed the $1180 balance due. Id. The small claims court nonetheless entered the requested default judgment. Id. When the Zimmermans later appeared, both the small claims court and the district court refused to set aside the default judgment. Id.

On appeal, we reversed. We initially noted that ITT's complaint was "wholly devoid of the facts of the Zimmermans' default and of any indication of how the amount, $1,180, was determined." Id. at 489. However, we pointed out that by failing to appear, the Zimmermans had technically waived their objections to the petition itself under section 537.5114(1). Id. Regardless, that still left the question whether the default judgment complied with section 537.5114(2). On this point, we concluded that subsection (2) had to be read in tandem with subsection (1). As we explained:

The language of subsection 2, in conjunction with subsection 1, leads us to believe a court must be able to compute the amount the creditor claims it is owed. The ability to compute the amount of the debt assures the court the creditor is not taking unfair advantage of a consumer who fails to appear and defend for whatever reason, and furthers a stated purpose of the ICCC. The information included on a verified complaint, if it includes the information required by subsection 1, would allow a court to make this computation. Therefore, we believe "complaint" as used in subsection 2 must be read as a complaint meeting the requirements of subsection 1 of section 537.5114. Sworn testimony adduced at trial showing that a creditor is entitled to the relief demanded would also allow this computation. We hold, in cases governed by the ICCC, "no default judgment shall be entered in an action in favor of the creditor" unless a court is provided with information sufficient to compute the amount to which the creditor claims to be entitled. The information must be included in a verified complaint or in sworn testimony.

Id.

Thus, ITT Financial Services makes clear that in an ICCC case, the creditor must provide "information sufficient to compute the amount to which the creditor claims to be entitled," either in a verified filing with the court or in sworn testimony. Id.

As we have noted, both district courts here decided this meant the credit card company had to provide a full account history, starting with a zero balance. Capital One argues otherwise. It asserts: (1) the requirement that the court be able to compute the amount owed does not apply to efforts to collect credit card debt, as opposed to closed-end credit; (2) any such requirement is preempted by federal law; (3) section 537.5114 does not supersede the traditional account stated cause of action; and (4) in any event, section 537.5114 does not require it to produce a full account history beginning with a zero balance. Capital One argues that a verified "charge-off statement" together with a copy of the customer's account agreement should be a sufficient basis for obtaining a default judgment. As discussed below, we disagree with Capital One's first two arguments, but we agree in part with its third and fourth points.

B. Does ITT Financial Services Apply to Open-End Credit?

We first address Capital One's contention that ITT Financial Services does not apply to all consumer credit transactions. Capital One points out that ITT Financial Services involved a promissory note, not a revolving credit account. With a single promissory note, according to Capital One, it is relatively easy to produce the entire account history. Not so with a credit card, where there are new extensions of credit and fluctuating fees and charges.

These observations may be true, but we are not persuaded they matter. Nothing in section 537.5114 or ITT Financial Services suggests there should be two sets of rules, one for open-end credit and another for closed-end credit. Rather, there is one rule: Information sufficient to compute the amount claimed must be provided. ITT Fin. Servs., 464 N.W.2d at 489. Also, we are not convinced (at least on the record before us) that credit card companies or their assignees cannot usually provide account histories. Since the ICCC was adopted in 1974, and ITT Financial Services was decided in 1990, tremendous increases in computerization of data have occurred. Information that used to be retrievable (if at all) only by assembling numerous hardcopy statements is now stored electronically. See, e.g., Citibank v. Kovach, 157 Ohio Misc.2d 24, 930 N.E.2d 394, 400 (Ohio Com.Pl.2010) (upholding judgment for Citibank after Citibank provided eight years worth of monthly credit card statements from its electronic database and noting, "Citibank accounts are maintained in an electronic database; therefore there are no `original documents' constituting the account"); see also Newgard ex rel. Newgard v. Bank of Am., 303 Wis.2d 466, 735 N.W.2d 578, 582 (Wis.Ct. App. 2007) ("We see nothing absurd about requiring the Banks to retain the records of charges for which they wish to collect payment.").

C. Does Federal Preemption Apply?

Capital One next advances a series of arguments based on federal preemption. Initially, as a national banking association, it asserts state laws infringing on its lending power are preempted by federal law. See 12 C.F.R. § 7.4008. According to Capital One, the interpretation of Iowa Code section 537.5114 by the lower courts in this case represents an improper intrusion on its lending powers. We do not agree. Among other things, the relevant regulation specifically exempts state debt collection laws to the extent they only incidentally affect the exercise of national banks' non-real estate lending powers.

This section states, in part:

(d) Except where made applicable by Federal law, state laws that obstruct, impair, or condition a national bank's ability to fully exercise its Federally authorized non-real estate lending powers are not applicable to national banks.

(e) State laws that are not preempted. State laws on the following subjects are not inconsistent with the non-real estate lending powers of national banks and apply to national banks to the extent that they only incidentally affect the exercise of national banks' non-real estate lending powers:

(1) Contracts;

(2) Torts;

(3) Criminal law;

(4) Rights to collect debts;

(5) Acquisition and transfer of property;

(6) Taxation;

(7) Zoning; and

(8) Any other law the effect of which the OCC determines to be incidental to the non-real estate lending operations of national banks or otherwise consistent with the powers set out in paragraph (a) of this section.

Relatedly, Capital One argues that under Regulations of the Truth in Lending Act, it is only required to maintain credit card statements for two years. 12 C.F.R. § 226.25. However, there is no suggestion this law preempts more stringent record retention requirements that may arise in other contexts. See In re Shank, 315 B.R. 799, 810 (Bankr.N.D.Ga. 2004) (rejecting the argument that the normal proof of claim requirements should be loosened because Regulation Z does not require the relevant records to be retained).

In yet another attempt to play federal law as a trump card, Capital One argues that Regulation Z gives a consumer only sixty days to dispute a credit card statement. See 15 U.S.C. § 1666; 12 C.F.R. § 226.13(b). Thus, the argument goes, there is no reason to require Capital One to produce old account statements. However, Capital One's argument is somewhat oversimplified. Federal law establishes a deadline for a cardholder to notify the credit card company of a billing error, and thereby obligate the company to investigate and resolve the matteef450 U.S. 248, 252-53 (1981)).

In support of its motion for summary judgment, AK Steel initially argues that Nguyen has failed to establish a prima facie case of discrimination based on national origin under the McDonnell-Douglas burden-shifting test. Moreover, even if Nguyen is able to establish a prima facie case of discrimination, AK Steel submits that it has articulated legitimate nondiscriminatory reasons for terminating Nguyen, and that Nguyen has failed to demonstrate its reasons are pretextual. The Court will address each of these arguments seriatim. A. Plaintiff's Prima Facie Case

1. Disparate Treatment

It is undisputed that Nguyen has satisfied three of four elements of a prima facie case of national origin discrimination. First, Nguyen was born in Vietnam, and thus, is a member of a protected class. Second, Nguyen was qualified for the position he previously held at the AK Steel facility in Butler, Pennsylvania, at the time of his discharge. Third, Nguyen was suspended on February 24, 2007, and discharged effective March 1, 2007, and thus, suffered an adverse employment action. However, the parties dispute whether Nguyen has satisfied the fourth element.

In order to satisfy the fourth element of his prima facie case of national origin discrimination, Nguyen must show that similarly situated native-born American employees were treated more favorably than he. Sarullo, 352 F.3d at 798 (citing Pivirotto v. Innovative Sys., Inc., 191 F.3d 344, 352 (3d Cir. 1999); Int'l Bhd. of Teamsters v. United States, 431 U.S. 324, 335 n. 15 (1977)). The native-born American employees will be deemed similarly situated if Nguyen demonstrates that their "acts were of `comparable seriousness' to his own infraction." See Crumpton v. Potter, 305 F.Supp.2d 465, 472 (E.D.Pa. 2004) (citing Anderson v. Haverford College, 868 F.Supp. 741, 745 (E.D.Pa. 1994) (quoting Lanear v. Safeway Grocery, 843 F.2d 298, 301 (8^th Cir. 1988)). In the context of a discriminatory discipline claim, the district courts in this circuit have expounded on this test:

"In order for employees to be deemed similarly situated, it has been determined that the individuals with whom the plaintiff seeks to compare [his] treatment must have dealt with the same supervisor, have been subject to the same standards and have engaged in the same conduct without such differentiating or mitigating circumstances that would distinguish their conduct or the employer's treatment of them for it."

Ogden v. Keystone Residence, 226 F.Supp. 2d 588, 603 (M.D.Pa. 2002) (quoting Morris v. G.E. Fin. Assurance Holdings, No. 00-3849, 2001 WL 1558039, at *6 (E.D.Pa. Dec. 3, 2001)); Tyler v. SEPTA, No. Civ. A. 99-4825, 2002 WL 31965896, at * 3 (E.D.Pa. Nov. 8, 2002), aff'd without op. 85 F. App'x 875 (3d Cir. 2003) (to show that a particular employee is similarly situated, the employee's acts must be of comparable seriousness to plaintiff's own infraction, and engaged in the same conduct without such differentiating or mitigating circumstances); Anderson, 868 F.Supp. at 745 (quoting Mitchell v. Toledo Hosp., 964 F.2d 577, 583 (6^th Cir. 1992)) (same); see also Bullock v. Children's Hosp. of Philadelphia, 71 F.Supp. 2d 482, 489 (E.D. Pa. 1999). A plaintiff's burden at the prima facie stage of the analysis is not onerous, but is based upon a few generalized factors. Simpson v. Kay Jewelers, 142 F.3d 639, 646 (3d Cir. 1998) (citing Burdine, 450 U.S. at 253; St. Mary's Honor Ctr. v. Hicks, 509 U.S. 502, 516 (1993); see also Healy v. New York Life Ins. Co., 860 F.2d 1209, 1214 n. 1 (3d. Cir. 1988) (stating that the prima facie case is rarely the focus of the ultimate disagreement because it is easily made out).

Nguyen submits that he has met the fourth element of his prima facie case by presenting evidence that similarly situated employees, who were also accused of theft (albeit theft of time and fraudulently obtaining insurance benefits to which they were not entitled) and were not members of the protected class, were offered mitigated discipline, and therefore, were treated more favorably than he. In support, Nguyen relies on the decision of the United States Court of Appeals for the Seventh Circuit in Peirick v. Indiana University-Perdue University Indianapolis Athletics Department, which provided the following test for determining whether comparators are similarly situated:

To assess whether two employees are similarly situated, "a court must look at all relevant factors, the number of which depends on the context of the case." Radue v. Kimberly-Clark Corp., 219 F.3d 612, 617 (7th Cir. 2000). "[I]n disciplinary cases-in which a plaintiff claims that he was disciplined by his employer more harshly than a similarly situated employee based on some prohibited reason-a plaintiff must show that he is similarly situated with respect to performance, qualifications, and conduct." Id. (internal citations omitted). Typically this involves showing that the employees shared the same supervisor, performance standards, and "engaged in similar conduct without such differentiating or mitigating circumstances as would distinguish their conduct or the employer's treatment of them." Id. at 617-18. That said, "[o]ur similarly situated requirement `should not be applied mechanically or inflexibly.'" Boumehdi v. Plastag Holdings, LLC, 489 F.3d 781, 791 (7th Cir. 2007) (quoting Hull v. Stoughton Trailers, LLC, 445 F.3d 949, 952 (7th Cir. 2006)).

510 F.3d 681, 688 (7^th Cir. 2007).

Based on this test, Nguyen identifies eighteen other employees who were accused of theft but, unlike him, were not discharged. Fourteen of these employees were accused of fraudulently obtaining insurance benefits and the other four were accused of theft of time. Nguyen submits that in all nineteen cases, the misconducts with which they were charged constituted "stealing" as defined by the Company in its Handbook. Nguyen further submits that the same labor relations personnel/managers reviewed all 19 cases, and Rick Winter, the Human Resources Manager at Butler Works, was involved in the determination of disciplinary action taken in all 19 cases; in four of these cases, the employees had the same direct supervisor (Schmidt) as Nguyen. Nguyen also submits that Seyler, one of the labor relations representatives who reviewed the cases, viewed the misconduct in those cases to be the same, based on his statement, "theft is theft, stealing is stealing, and a falsehood is a falsehood." In the other 18 cases, all of the employees are native-born Americans. Nguyen contends these facts are sufficient to establish the fourth prong of his prima facie case, based on Third Circuit precedent such as Pivirotto, 191 F.3d at 352-54 (proof needed to establish the fourth prong varies depending on the circumstances, and the facts are not to be examined in a rigid or mechanistic fashion).

Nguyen further argues that to the extent AK Steel contends substantial differences exist between him and the other 18 employees whose discharges were approved by Seyler and Winter, those alleged differences require an assessment of the credibility of the asserted distinctions, which is not appropriate at the summary judgment stage, citing in support Marino v. Industrial Crating Co., 358 F.3d 241, 247 (3d Cir. 2004) ("In considering a motion for summary judgment, a district court may not make credibility determinations or engage in any weighing of the evidence; instead, the non-moving party's evidence `is to be believed and all justifiable inferences are to be drawn in his favor.'") (quoting Anderson, 477 U.S. at 255).

In response, the Company disputes that the alleged comparators are similarly situated to Nguyen. AK Steel submits that Nguyen's list of putative comparators is over-inclusive to the extent it includes employees who were implicated in misconduct that is not identical to Nguyen's misconduct. According to AK Steel, Nguyen is in a class of one insofar as he is the only employee who stole and resold Company property, lied about the incident, and then made a full confession leaving no question as to his culpability. In contrast, the putative comparators, whose misconduct consisted of either theft of time or fraudulently obtaining insurance benefits, plausibly denied that they knowingly obtained pay or benefits to which they were not entitled, and therefore, according to AK Steel, the incidents involved different misconduct and dramatically less proof of culpability. AK Steel further argues that Nguyen's list of putative comparators is under-inclusive to the extent that it ignores the fact that the Company discharged four other employees for theft, which evidence eviscerates Nguyen's disparate treatment claim.

In support of its argument, AK Steel initially submits that Nguyen cannot satisfy the exacting requirements for proving that he is similarly situated to any of his putative comparators. According to AK Steel, these requirements include showing that his comparators are similar "in all relevant respects[,]" Holifield v. Reno, 115 F.3d 1555, 1564 (11^th Cir. 1997), and that the "quantity and quality of the comparator's misconduct [is] nearly identical to prevent courts from second-guessing employers' reasonable decisions and confusing apples with oranges[,]" Maniccia v. Brown, 171 F.3d 1364, 1368 (11^th Cir. 1999). Indeed, AK Steel contends that an employer may treat employees differently who do not engage in the exact same act, even if they

The Eleventh Circuit's "nearly identical" misconduct requirement was called into question by a subsequent panel decision in Alexander v. Fulton County, Georgia, which held that the law requires only "similar" misconduct from the similarly situated comparators. 207 F.3d 1303, 1334 (11^th Cir. 2000). However, in Bush-Fowler v. Orange County, Florida, the court of appeals noted the disagreement between the panel decisions and held it was bound to follow the "nearly identical" standard enunciated in Maniccia because when a later panel decision contradicts an earlier one, the earlier panel decision governs. 447 F.3d 1319, 1323 n. 2 (11^th Cir. 2006) (citation omitted). Thus, there appears to be some disagreement as to whether the "nearly identical" standard should be the proper benchmark in the Eleventh Circuit.

violate the same general policies. Thus, AK Steel maintains that because none of the other alleged comparators whose discipline was mitigated engaged in the exact same conduct as Nguyen, they are not valid comparators. The Court does not agree with such a rigid interpretation of the standard.

In support of this proposition, AK Steel cites non-precedential opinions from the courts of appeals for the Third and Sixth Circuits, as well as a non-binding decision from a district court in South Carolina. See e.g., Johnson v. SEPTA, 192 F. App'x 147 (3d Cir. 2006) (affirming district court's refusal to allow evidence regarding an alleged comparator where there were material differences in their situations — both troopers were accused of misusing police cars but only plaintiff used car to drop off his daughter at school and made an arrest with a civilian in the car.); Lawrence v.Veolia Transp. Servs., Inc., No. C.A. No. 2:07-2722-MBS, 2009 WL 857394, at *16 (D.S.C. Mar. 30, 2009) (although two incidents, one involving running a personal business during company time and the other involving paying personal bills and running personal errands on company time, could both be classified as "theft of time," court held employer had right to view and treat misconduct of running a side business on company time as a more serious offense warranting more severe discipline.); Graham v. Best Buy Stores, 298 F. App'x 487, 495 (6^th Cir. 2008) (court recognized that employer could discipline more harshly an employee who tried to purchase merchandise at an improperly low price than an employee who inappropriately attempted to earn additional perks on a legitimate purchase, because even though they violated same general policy prohibiting employee theft, they did not engage in the exact same act.). However, in each of these cases, the determination of whether the comparators were similarly situated appears to turn on the gravity of the misconduct. Here, as explained below, no material differences exist in the gravity of the misconduct between the employees charged with theft of time and insurance benefit fraud and Nguyen.

It is important to note that at the prima facie stage of the analysis, the Court is not required to engage in a fact specific finding to determine whether a comparator is similarly situated to Plaintiff. Brooks v. USX Corp., No. Civ. A. 05-47, 2006 WL 2547342, at *5 (W.D.Pa. Aug. 31, 2006). Rather, all that is required at this stage is an inquiry based on a few generalized factors. Id. (citing Simpson, 142 F.3d at 646); see also Burdine, 450 U.S. at 253; Hicks, 509 U.S. at 516.

Applying this standard to the case at bar, it is clear from the plain language of the Asset Protection Policy that the Company views theft of any and all Company property as a breach of honesty and violation of the same Company Policy, without any differentiation as to the seriousness of the infraction or discipline to be imposed. Indeed, the Company's own labor relations representative, Michael Seyler, acknowledged that "theft is theft," "stealing is stealing," and a "falsehood is a falsehood." (Seyler Dep. at 55-57.) Therefore, the Court finds no distinction between Nguyen and the alleged comparators based on the kind of property stolen. See Cange v. Philadelphia Parking Auth., Civ. A. No. 08-3480, 2009 WL 3540784, at *9 (E.D.Pa. Oct. 30, 2009) (where plaintiff, who was terminated for sleeping on duty in cashier's booth, attempted to show she was similarly situated to another employee who was accused of loafing while on duty but not terminated, court concluded their conduct was similar because both violations were punishable by termination, and therefore, refused to preclude the employee as a valid comparator). In addition, the Company's written communications with the employees charged with theft of time supports this finding. (Exhibits attached to Hobaugh Aff., Tab 4 of J.A., ECF No. 41.)

The Handbook specifically provides that stealing includes the commission of "[a]ny action contrary to the company Asset Protection Policy." (Handbook at 76, Ex. 1 to Frisbee Dep., J.A. at Tab 3, ECF No. 41.)

Moreover, the test for determining whether a comparator is proper does not require the misconduct to be identical, but only that the comparator's misconduct be similar without such differentiating or mitigating circumstances as would diminish his or her conduct or the employer's treatment of such. Therefore, simply because the asset stolen was different in kind or type does not, without more, eliminate an employee from the list of potential comparators. Indeed, to consider only employees who stole exactly the same property as potential comparators would place too onerous a burden on plaintiffs at the prima facie stage of the analysis, contrary to the Supreme Court's holding in Hicks and Burdine.

Next, the Company submits that the alleged comparators are distinguishable from Nguyen on two other bases: (1) the weight or conclusiveness of its proof of misconduct; and (2) the gravity of the misconduct, i.e., whether the unauthorized taking was intentional or unintentional. The Company contends that Nguyen is the only employee for whom it possessed conclusive proof of commission of the theft in the form of an admission and documentary evidence, as well as conclusive proof of intent, again based on Nguyen's admission to taking the property. In all of the other theft cases, the Company maintains it possessed only circumstantial evidence of commission of the thefts, did not obtain admissions of wrongdoing from the employees, and lacked proof of intent. The Company maintains, therefore, that it may impose more severe discipline on the employee for whom it possesses greater evidence of guilt. While this last statement may be true generally, here the summary judgment record belies such a finding with regard to Nguyen.

In support of this argument, AK Steel relies on Abel v. Dubberly, 210 F.3d 1334, 1139 (11^th Cir. 2000), and Shontz v. Rite Aid of Pennsylvania, 619 F.Supp. 2d 197, 206-07 (W.D.Pa. 2008).

A close examination of the comparators reveals that the Company did possess conclusive evidence of misconduct in several of the other theft cases. In particular, the exhibits attached to Hobaugh's affidavit demonstrate that the Company possessed documentary evidence that JM-2 and JB knowingly received improper payments after their supervisor found their explanations not credible. The evidence further shows that RM and JM-1 submitted false time reports and gave explanations that were simply not credible and incredible, respectively. In addition, when JM-2 and JB were confronted with proof, they admitted to wrongdoing. Moreover, the same direct supervisor (Schmidt) and same labor relations representative at the works management hearings (Harris) concluded that JB, RM and JM-2 committed theft and lied about it. Therefore, the Company's attempt to distinguish these cases based on the weight of the evidence fails to pass muster.

Next, with regard to proof of intent, the Company attempts to argue that Nguyen's admission to stealing the scrap conclusively establishes intent, and thus, distinguishes him from the other theft cases, in which proof of intent was lacking. This argument lacks merit for two reasons. First, it assumes, incorrectly, that an admission of taking property allegedly belonging to another ipso facto proves that the taking was intentional. However, if that were true, it would improperly eliminate the accuser's burden of proof and leave the accused without a defense. Theft, as defined in BLACK'S LAW DICTIONARY at 1324 (5^th ed. 1979), is the "obtaining or exerting unauthorized control over property" and "done with intent to deprive the owner permanently of the possession, use or benefit of his property[.]" (Emphasis added.) Thus, intent is a separate element which must be proven in addition to proving the taking of another's property. Here Nguyen has adduced sufficient proof that he too lacked intent.

Nguyen has consistently maintained that he believed the scrap belonged to the crane contractor, as he had been approached by one of the contractor's employees and asked if he was interested in buying some of the scrap. (Pl.'s Dep. at 86; Affidavit of Tung Nguyen dated 8/24/09 ("Pl.'s Aff."), ¶ 3, ECF No. 32-4; Arb. Hrg. Tr. at 118-19, Ex. 16 in Pl.'s App., ECF No. 32-4; Kish Dep. at 11; Crawford Aff., ¶ 4; Weckerly Aff., ¶ 7; Cossitor Aff., ¶¶ 8.) Eventually, after the scrap remained on the floor for several months, Nguyen took it upon himself to clean up the area by removing the scrap from the slab conditioning department without obtaining permission from the Company, with the intent to recycle the scrap. (Arb. Hrg. Tr. at 67-68, 118-120; Pl.'s Dep. at 84.) Nguyen did not believe he needed to obtain permission from the Company because in his mind the property belonged to the contractor, having been approached by the contractor's employee about purchasing the scrap, and subsequently abandoned. (Pl.'s Aff., ¶ 3; Cossitor Aff., ¶ 13.) Plaintiff's belief is supported by the following statement of Brian Cossitor:

I have reviewed the AK Steel policies relating to the removal of trash, debris and other materials by contractors at the completion of a job, and, in light of Mr. Nguyen's explanation concerning what the contractor's employees told him, and their offer to sell the brass to him, I do not believe that the AK Steel theft policies were violated, but rather that Mr. Nguyen had a "guilty conscience" because he felt he should have paid the contractor's employee for the material the contractor left behind.

Cossitor Aff., ¶ 13. Therefore, giving Nguyen the benefit of all reasonable inferences, this evidence is sufficient to show that like the other comparators, he too lacked intent to steal, and therefore, contrary to the Company's argument, intent does not provide a basis upon which to distinguish Nguyen from the other comparators.

Second, when the Court takes away the presumption of intent, sufficient evidence exists in the record from which a jury could reasonably conclude that Nguyen provided the Company with evidence that he lacked intent to steal the property — that at the time he took the scrap, he lacked knowledge that he was stealing the property, as he believed the scrap had been abandoned since it had been laying on the floor of his department for over two months, and prior to that, the crane contractor had offered to sell some of the scrap to him. This information was presented to the Company at the investigatory meeting, as well as at the works management and Step III hearings. Inexplicably, the Company refused to further investigate or review Nguyen's explanation which, if believed, would prove lack of intent, while it did consider such evidence in the other theft cases. It attempts to get around this impropriety by arguing that the employees in the other theft cases are not valid comparators. However, as the evidence demonstrates, this argument is unavailing.

In the end, the Court finds that Plaintiff has identified four valid comparators, i.e., nonmembers of the protected class who were not discharged for similar misconduct without differentiating or mitigating circumstances: JM-1, RM, JB, and JM-2. Like Nguyen, JM-1, RM, JB, and JM-2 work in the stab conditioning department of Butler Works (Hobaugh Aff., ¶ 12), were supervised directly by Bill Schmidt (Schmidt Dep. at 25-27), were charged with intentionally stealing Company property (Ex. A to Seyler Aff.), requested works management hearings which were all conducted by the same labor relations representative, Harry Harris (Hobaugh Aff., ¶ 12), proceeded to Step III hearings, all of which were conducted by the same labor relations representative, Michael Seyler ( id.), and were subject to the same ultimate labor relations decision maker, Rick Winter ( id.; see also Leyland Aff., ¶¶ 4, 6; Gallagher Aff., ¶¶ 5-6).

The Court finds that the insurance fraud cases are not valid comparators because although Michael Seyler was the labor relations manager in those cases (Hobaugh Aff., ¶ 7), the decision to offer last chance agreements was made by Company officials at corporate headquarters (Seyler Dep. at 64, 66-67); in the case at bar, the labor relations manager at Butler Works and key decision maker was Rick Winter (Hobaugh Aff., ¶ 12). In any event, the Court has no problem finding that the misconduct involved in the insurance fraud cases is not different in kind or magnitude from the other theft cases. As discussed above, it is clear from the Company Asset Protection Policy that the Company views theft of any Company property as a breach of honesty and a violation of the same Company Policy. See Note 11, supra.

The four comparators were charged with intentionally obtaining pay for time not worked (Ex. A to Seyler Aff.).

A fifth potential comparator, MK (1539400) (hereinafter "MK"), also meets all of these criteria, but a differentiating circumstance exists that distinguishes her from the group, thus precluding her as a valid comparator. MK initially challenged her discharge and filed a grievance, but subsequently withdrew it, even though she provided evidence of her innocence to the Company, after seeking and procuring other employment, because, as a single parent, she could not afford financially to go through the six month grievance process without any income. (Leyland Aff., ¶¶ 4-5; Hobaugh Aff., ¶ 11.)

In addition, each of the four comparators denied that they knowingly obtained pay for time not worked and proffered explanations, which the Company rejected as not credible. Ultimately, however, the Company mitigated its discipline in all four cases, even though it possessed written documentation containing demonstrable proof of instances of theft compounded by lying, and considered all four cases to be "violations of trust such as breach of employee honesty and business ethics involving theft of time", which it deemed serious matters warranting discharge. (Hobaugh Aff., ¶ 13; Exs. attached to Hobaugh Aff., Tab 4 in J.A.) In addition, JM-2 and JB admitted to the misconduct after being presented with proof of the over payments. (Step III Ans. dated 4/24/07 at 2, Grievance No. BU-07-028; Step III Ans. dated 4/26/07 at 2, Grievance No. BU-07-036 (Exs. attached to Hobaugh Aff., Tab 4 in J.A.).) Nonetheless, the Company still offered to mitigate their discharges to suspensions. JM-2 and JB proceeded to arbitration only because they refused to accept the mitigated discipline offered by the Company. (Hobaugh Aff., ¶ 13; Leyland Aff., ¶ 7.) At arbitration, their grievances were sustained and they were returned to work with full back pay. (Ex. A to Seyler Aff.; Exs. attached to Hobaugh Aff., Tab 4 in J.A.) RM entered into a confidential settlement with the Company at arbitration, and returned to work. ( Id.) JM-1 entered into a memorandum of understanding with the Company prior to the arbitration hearing, wherein the disciplinary discharge was converted to a 30-day suspension with partial back pay. ( Id.) Similar to JM-1, JB, RM, and JM-2, Nguyen initially maintained that he did not steal Company property, and after being presented with proof, admitted to taking the scrap brass, but not to taking the scrap with the intent to steal from the Company.

Accordingly, the Court finds this evidence is sufficient to establish an inference of discrimination at the prima facie stage of the analysis. Nguyen has shown that he was discharged for stealing Company property in violation of the Company Policy and Asset Protection Policy, while four similarly situated employees from outside the protected class were not discharged for similar conduct which violated the same policies. 2. Other Evidence of Discrimination

The Court finds no merit to AK Steel's argument that the list of comparators is under-inclusive. Neither RC (1491900), RD (1540300), MT (1537400), nor MK (1539400) are valid comparators. RC was discharged for stealing a co-worker's wallet and using a stolen credit card from that wallet. However, RC and Nguyen did not share the same labor relations decision maker, as Bill Gonce occupied that position at the time of RC's misconduct, while Rick Winter was the labor relations manager at the time of Nguyen's misconduct. (Hobaugh Aff., ¶¶ 5, 12; Gallagher Aff., ¶ 15.) In addition, Nguyen has steadfastly maintained he believed the scrap had been abandoned by the contractor and, thus, did not belong to the Company, and he never confessed to stealing Company property (contrary to AK Steel's assertion), while the Company possessed conclusive evidence (video surveillance) of RC using the stolen credit card. RD and MT are not valid comparators because they too were disciplined by a different decision maker — Bill Gonce. MK is not a valid comparator for the reasons set forth above. See Note 14, supra.

AK Steel also argues that, to the extent Nguyen attempts to argue that a discriminatory animus can be inferred from derogatory comments and graffiti by his co-workers regarding his ethnicity, such argument is unavailing for several reasons. First, derogatory comments and graffiti made by co-workers regarding Nguyen's ethnicity were not made by decision-makers, and therefore, constitute stray remarks. Second, Nguyen never complained to supervisors about the remarks or graffiti. Third, none of the decision-makers, i.e., Kish, Harris, Seyler, or Winter, had any knowledge of the offensive comments or graffiti. However, Plaintiff has not raised this argument in his responsive brief, and therefore, the Court assumes that he has conceded this point. In any event, the Court agrees with AK Steel that the evidence does not show that any of the Company's labor relations decision makers were aware of the graffiti or derogatory comments, except for possibly Bill Schmidt, but he did not have ultimate decision making authority.

AK Steel submits that Nguyen has failed to adduce any other evidence of discrimination. AK Steel contends there is no merit to Plaintiff's argument that Winter's focus of the investigation on an "Asian male" suggests that the investigation was discriminatory from its inception. In support, AK Steel submits that the facts show the scrap dealer provided a physical description of the seller as an "Asian male, possibly Korean," and a sales receipt bearing Nguyen's signature and a license plate number registered to Nguyen. The Court agrees with AK Steel and finds that Winter's focus on an Asian male was due to information provided by an unbiased third party, and not on an improper discriminatory motive. Accordingly, Plaintiff's reliance on this factor to infer a discriminatory animus is misplaced.

B. AK Steel's Legitimate, Non-Discriminatory Reasons For Terminating Nguyen Were Pretextual

In order to rebut the presumption of discrimination, AK Steel has offered legitimate, nondiscriminatory reasons for the termination: Nguyen admitted to stealing Company property, selling it for a profit, and then lied about the incident. Thus, the burden now shifts back to Nguyen to show that the legitimate, non-discriminatory reasons articulated by AK Steel are pretextual.

To survive a motion for summary judgment at the third step of the burden shifting analysis, Nguyen must present some evidence, either direct or circumstantial, from which a jury could reasonably either: "(1) disbelieve the employer's articulated legitimate reasons; or (2) believe that an invidious discriminatory reason was more likely than not a motivating or determinative cause of the employer's action." Fuentes v. Perskie, 32 F.3d 759, 764 (3d Cir. 1994) (citing Hicks, 509 U.S. at 510-11; Ezold v. Wolf, Block, Schorr Solis-Cohen, 983 F.2d 509, 523 (3d Cir. 1992)). The two prongs of the Fuentes test are distinct, and therefore, the Court will analyze both prongs to determine whether Nguyen has presented sufficient evidence to withstand summary judgment.

With regard to circumstantial evidence, the court of appeals explained:

To establish such circumstantial proof, the plaintiff first must present evidence that each of the defendant's reasons is pretextual, viz, each reason was "a post hoc fabrication or otherwise did not actually motivate the employment action." Fuentes v. Perskie, 32 F.3d 759, 765 (3d Cir. 1994). This proof of pretext then may be combined by the factfinder with the evidence used to support the plaintiff's prima facie case of age discrimination, and from this union, the factfinder may reasonably infer that the defendant discriminated against the plaintiff because of his age. Hicks, 509 U.S. at 511, 113 S.Ct. at 2749.

Ryder v. Westinghouse Elec. Corp., 128 F.3d 128, 136 (3d Cir. 1997) (footnote omitted).

1. First Prong of Fuentes Test

The first prong of the Fuentes test focuses on whether Nguyen has submitted evidence from which a fact-finder could reasonably disbelieve AK Steel's articulated legitimate reasons for discharging him. To satisfy this prong and discredit AK Steel's proffered reasons, Nguyen:

cannot simply show that his employer's decision was wrong or mistaken, since the factual dispute at issue is whether discriminatory animus motivated the employer, not whether the employer is wise, shrewd, prudent, or competent." Rather, [Nguyen] must demonstrate such weaknesses, implausibilities, inconsistencies, incoherencies, or contradictions in the employer's proffered legitimate reasons for its action that a reasonable factfinder could rationally find them "unworthy of credence," and hence infer "that the employer did not act for [the asserted] nondiscriminatory reasons."

Id. at 765 (quoting Ezold, 983 F.2d at 531) (other internal quotations omitted). In other words, Nguyen must prove "not merely that [AK Steel]'s proffered reason was wrong, but that it was so plainly wrong that it cannot have been [AK Steel]'s real reason." Keller v. Orix Credit Alliance, Inc., 130 F.3d 1101, 1109 (3d Cir. 1997) (en banc). Thus, in analyzing this prong, "`federal courts are not arbitral boards ruling on the strength of `cause' for discharge. The question is not whether the employer made the best, or even a sound business decision; it is whether the real reason is [discrimination].'" Id. (quoting Carson v. Bethlehem Steel Corp., 82 F.3d 157, 159 (7^th Cir. 1996)).

In this case, AK Steel's proffered reasons for terminating Nguyen were that Nguyen stole Company property, lied about it, and then admitted that he stole Company property. Generally, an employee's admission of misconduct will provide a sufficient foundation for the employer's good faith belief that the employee engaged in the misconduct. Abel, 210 F.3d at 1338 (citing Jones v. Gerwens, 874 F.2d 1534, 1540-41 (11^th Cir. 1989)); see also Gupta v. Sears, Roebuck Co., Civ. A. No. 07-243, 2009 WL 890585, at *17 n. 5 (W.D.Pa. Mar. 26, 2009) (finding that because plaintiff admitted that she was terminated for misconduct, she failed to offer evidence of pretext under the first prong of Fuentes); Shontz, 619 F.Supp. 2d at 207-08 (finding plaintiff failed to prove pretext under the first prong of Fuentes where he admitted he had violated company policy and failed to offer any evidence of implausibilities or inconsistencies to otherwise discredit the employer's proffered reason).

In the case at bar, Nguyen admitted to taking the scrap brass, which the Company has construed as an admission that he stole "Company" property, in violation of Company policy prohibiting theft. Thus, Nguyen's admission, even though allegedly misconstrued by AK Steel, provides a sufficient foundation for the Company's good faith belief that he engaged in the misconduct, because it is not enough to show merely that AK Steel's decision was wrong or mistaken. Fuentes, 32 F.3d at 765. Accordingly, to show pretext under the first prong of Fuentes, Nguyen must come forward with other evidence to show that the Company's reasons for terminating him are so plainly wrong or implausible that they cannot be the real reasons.

Nguyen maintains that he believed that the scrap belonged the contractor but had been abandoned, and that in taking the scrap without paying for it, he stole it from the crane contractor, not AK Steel.

Initially, AK Steel submits that Nguyen cannot prove pretext under the first prong of Fuentes because he has offered no evidence (1) to contradict or otherwise controvert the Company's articulated reasons, or (2) to show the Company has given inconsistent or contradictory explanations for terminating his employment. AK Steel further submits that it is not implausible that it would terminate Nguyen for his admitted theft. Stealing is explicitly prohibited by Company policies and therefore Nguyen cannot possibly establish that it made up its reasons for terminating his employment. Even if Nguyen could show he was innocent (which Defendant submits is impossible given his admission and Company policies that prohibit removal of material regardless of who owns it), AK Steel submits that such evidence cannot assist him in proving pretext, because the relevant issue is not whether the Company's reasons are factually correct, but whether they are honest. Abramson v. William Paterson Coll. of N.J., 260 F.3d 265, 283 (3d Cir. 2001); Kariotis v. Navistar Int'l Transp. Corp., 131 F.3d 672, 677 (7^th Cir. 1997). Therefore, in order to succeed at this stage, Defendant contends Nguyen must prove that it lied when it declared he was terminated for stealing Company property. The Court disagrees with Defendant's assessment of the record evidence and, for the reasons set forth below, finds that Plaintiff has met his burden.

AK Steel also argues that Nguyen cannot establish pretext by personally disagreeing with its assessment of the severity of his misconduct based on the value of the property stolen, or by arguing that he is entitled to leniency. Although the Court does not perceive Nguyen to be predicating his pretext argument on these two factors, the Court agrees that neither of these factors is dispositive of whether Plaintiff has met his burden of showing pretext. Keller, 130 F.3d at 1109.

The first indicia of weakness and/or implausibility asserted by Nguyen consists of the record evidence establishing that he never admitted to stealing Company property prior to his cross-examination at the arbitration hearing. Therefore, Nguyen submits that the Company's reliance on his so-called admission as the basis for its decision to discharge him prior to the arbitration hearing is completely unfounded. In response, the Company argues that Nguyen admitted he lied when he claimed he purchased the brass from a contractor. (Def.'s App., Ex. O at 127.) Thus, the Company submits that Nguyen's attempt to fault the Company for not following up on his lies is irrelevant to the veracity of the Company's articulated reasons for terminating him. (Def.'s Resp. to Pl.'s Stmt. of Add'l Facts, ¶ 152, ECF No. 37.) The Court disagrees with Defendant.

Although the Court recognizes that an inference of discrimination cannot be inferred simply from a wrong or mistaken business decision, Abramson, 260 F.3d at 283, here Nguyen has presented sufficient evidence to show that a reasonable jury could rationally find the Company's explanation for discharging him — its alleged reliance on his so-called admission — unworthy of credence. At the time of issuance of its notice of intent to discharge, Nguyen had not yet admitted to taking the scrap. The day after the investigatory meeting, however, Nguyen contacted his union representative, and advised him that he had taken the scrap after the contractor had offered to sell it to him, but without paying the contractor for it, and he felt guilty about stealing the scrap from the contractor. (Pl.'s Aff., ¶ 3; Arb. Hrg. Tr. at 127-28; Cossitor Aff., ¶¶ 8, 13.) Even after Nguyen came forward to explain his actions, the Company still did not possess an admission from Nguyen to stealing Company property. Rather, the Company possessed information which, if verified, could confirm Nguyen's belief that the property he took once belonged to the crane contractor and had been abandoned, and thus, the taking of the brass was not a theft at all. In addition, throughout the works management hearing, Step III hearing, and grievance process, the record shows that Nguyen did not admit to stealing Company property at any time prior to his cross-examination at the arbitration hearing. (Crawford Aff., ¶¶ 3, 5; Weckerly Aff., ¶¶ 3-7; Cossitor Aff., ¶ 7, 9.) Yet, AK Steel continued to proffer Nguyen's admission to stealing Company property as the basis for affirming his discharge. This evidence, when considered together with the other evidence of pretext delineated below, is sufficient to raise a material issue of fact with regard to the Company's motive for discharging Nguyen.

In addition, Nguyen explained that it was his remorse over taking scrap from the contractor without paying for it that motivated him to apologize to his co-workers and his supervisor, Bill Schmidt (Arb. Hrg. Tr. at 128), and to admit to taking the scrap at the works management and Step III hearings, not on a belief that he stole from the Company (Pl.'s Aff., ¶ 3; Arb. Hrg. Tr. at 127-28; Cossitor Aff., ¶¶ 8, 13).

Moreover, even though Nguyen admitted that he lied when he denied taking the scrap at the investigatory meeting, he provided an explanation the very next day for why he initially denied taking the scrap. There is no evidence in the record to suggest that Nguyen's explanation was false, and indeed, that is a credibility determination that a jury must decide. In any event, the record also shows that some of the comparators were also suspected of lying but yet that did not prevent the Company from following up and conducting further review to determine their culpability.

Winter's refusal to consider Nguyen's evidence of lack of intent when Winter considered intent an important, if not the deciding factor, in offering mitigated discipline to the comparators who were also accused of theft, casts doubt on the Company's proffered reasons and thus raises at least an inference that the Company investigated Nguyen's alleged misconduct differently based on his national origin. Although an honest, non-discriminatory reason for discharge, even though based on an improper or inadequate investigation, will not, alone, suffice to show pretext, where the plaintiff comes forward with evidence to show the company investigated him differently because of his national origin, an inference of discrimination can be drawn. See Kariotis, 131 F.3d at 677 (declining to find evidence of pretext where plaintiff's main argument was that the company was careless in not checking its facts before terminating her because even if the company was careless and its decision was wrong, she failed to present any evidence that the company approached her case differently than others). Here, evidence exists to show that the Company did conduct further review of the culpability of the comparators in ultimately determining to mitigate the discipline from discharge to suspension, while Nguyen's discharge determination was issued the day after the investigatory interview, without any further investigation or review. (Hasty Dep. at 37; Winter Dep. at 37.)

Compounding the Company's questionable motivation in relying on Nguyen's so called admission and alleged disparate treatment in investigating Plaintiff's explanation for taking the scrap is Nguyen's second asserted indicia of weakness/implausibility — Winter's alleged fabrication of a two-part test to justify the Company's disciplinary action towards Nguyen. During his deposition on May 5, 2009, Winter stated that he applies a two-part test at each step of the process — investigatory hearing, works management hearing, Step III, Step IV, and arbitration — which asks (1) was the Company convinced that an offense occurred, and (2) could it be proven to a third party. (Winter Dep. at 43-45.)

The record evidence raises substantial doubt as to whether such two-part test was actually being applied by Winter and his subordinates, from February 2007 to May 2009, or whether, in fact, it even existed at all. In Arbitrator Witt's final award in another grievance against the Company (case no. BU-07-217), issued on February 23, 2009 or approximately two months before Winter's May 5, 2009 deposition, she specifically found the Company was wrong to refuse to consider evidence of innocence proffered after discipline was imposed, even if developed as late as the arbitration hearing. (Hobaugh Aff., ¶ 18 Ex. C thereto at 5-6; Affidavit of William N. Henry, Jr. dated 9/25/09 ("Henry Aff."), ¶ 5 Ex. B thereto at 5-6.) In case no. BU-07-217, Arbitrator Witt rejected Seyler's conclusion in the Step III Answer dated January 30, 2008 that his review was limited to the "information available at the time the discipline was issued." (Step III Answer dated 1/30/08, case no. BU-07-217, Ex. B to Hobaugh Aff. at 2; Ex. A to Henry Aff. at 2.) Moreover, in the case at bar, neither Harris, who conducted the works management hearing, nor Seyler, who conducted the Step III hearing, applied such a two-part test to Nguyen's case, and in fact, Harris was not aware of such test prior to Winter's testimony given at his deposition on May 5, 2009. (Harris Aff., ¶ 4.) Likewise, none of the union representatives had heard of such two-part test before Winter's deposition. (Leyland Aff., ¶¶ 11, 13; Henry Aff., ¶¶ 6-7.)

The exhibits to the Hobaugh and Henry affidavits were filed under seal and are contained in the Joint Appendix of Confidential Documents Filed Under Seal (ECF No. 41) at Tabs 4 and 5, respectively.

See Note 22, supra.

The Company attempts to downplay Winter's testimony regarding the two-part test by arguing that Winter was merely providing a pragmatic description of the process and considerations relevant to issuing employee discipline and, if applicable, resolving disputes challenging such discipline. Moreover, AK Steel contends that Winter provided this explanation in response to questions at his deposition seeking to elicit a description of how the Company goes about deciding on an appropriate courts of action in disciplinary cases. In fact, Winter's two-part test was recited in response to questions regarding Policy # 4.00, and whether corporate officials have the power under that policy to override the decision at the plant level to discharge an employee. In particular, Winter was asked what constitutes extenuating circumstances under Policy # 4.00, and in response to that question, Winter articulated the two-part test. (Winter Dep. at 43-44.)

Defendant completely fails to address Plaintiff's evidence regarding Arbitrator Witt's finding in case no. BU-07-217, the timing of these events, and the fact that Winter's two-part test is not supported by either management or the union. In light of this evidence, the Court finds the Company's argument lacking in merit and concludes that a jury could reasonably infer the Company's explanation regarding the two-part test is unworthy of credence.

The next indicia of weakness and/or implausibility is Winter's explanation for not offering Plaintiff a last chance agreement. Winter was asked on two separate occasions to consider a last chance agreement for Nguyen — once by Brian Cossitor in July 2007, a couple of days prior to the arbitration hearing, and again by Hank Leyland after the arbitration hearing, but before the arbitrator issued her decision. In discussing his request for a last chance agreement with Winter, Cossitor contends Winter compared Nguyen to Cossitor, who was well known throughout the plant due to Cossitor's position as Vice President of the union, which Cossitor construed to mean that because of Nguyen's national origin, he was highly visible. (Cossitor Dep. at 17-19.) Because Nguyen was "widely known," Winter told Cossitor could not offer Nguyen a last chance agreement; Winter explained that he was not worried about Nguyen, but was "worried about the 1400 other people." ( Id.) Based on this discussion, Cossitor believed that Nguyen's national origin was an issue in Winter's declining to offer him a last chance agreement. ( Id.)

In response, AK Steel contends that Winter's comments are innocuous on their face. Moreover, AK Steel submits that Cossitor admits certain types of misconduct are far more visible amongst employees, such as drug/alcohol violations, fighting and theft. In this case, AK Steel contends Nguyen apologized to his co-workers and, consequently, he was even more visible because he admitted to his co-workers that he stole.

While AK Steel's suppositions have some superficial appeal, they are based mostly on conjecture, not evidence. Cossitor's acknowledgement that certain types of misconduct create heightened visibility is, at best, a generalized comment and does not specifically address the visibility of Plaintiff's case in particular. Moreover, this generalized comment is not sufficient where, as here, Nguyen has presented specific evidence to show that he was not well known outside of the slab conditioning department where he worked. For example, Gallagher confirmed that the department where Nguyen worked was located in an isolated part of the plant, in which only a dozen employees worked at a given time. (Gallagher Aff., ¶ 16.) In addition, Leyland stated he was not aware of any particular notice being paid to Nguyen's case by bargaining unit personnel any more than any other case. (Leyland Aff. ¶ 12.) In addition, Hobaugh stated that Nguyen's case was not widely known outside the slab conditioning department where he worked and was not, to his knowledge, the subject of much discussion or notoriety outside of the union officials working on his case. (Hobaugh Aff., ¶ 15.)

As to Hank Leyland's subsequent request, on Nguyen's behalf, for a last chance agreement, Winter stated he denied the request based on his "feeling" that Nguyen's case was being closely watched by other hourly bargaining unit employees. (Winter Dep. at 62-64.) When asked how he came to this "feeling," Winter responded that in the past, he had received an anonymous letter describing an incident of theft involving another employee, and hourly bargaining unit employees have made private comments off the record to him about discipline imposed on certain cases. ( Id. at 65.) Based on these communications, Winter claims he had a "feeling" people were looking at Nguyen's case because it was a theft case. ( Id. at 65-66.) But when asked if he ever received any anonymous letters/communications or off the record comments from anyone specifically regarding Nguyen's case, Winter responded in the negative. ( Id. at 65.) The statements of Hank Leyland and Keith Hobaugh, mentioned above, also cast doubt upon Winter's so-called "feeling." Accordingly, given the lack of an evidentiary basis for Winter's "feeling," as well as the evidence proffered by Plaintiff from Cossitor, Gallagher, Leyland and Hobaugh, a jury could reasonably find that Winter's explanation for declining to offer Nguyen a last chance agreement is unworthy of credence.

Other evidence proffered by Nguyen to show weakness in the Company's articulated reasons is the alleged violation of Corporate Policy # 4.00, which states that where dishonesty results in discharge, the results of the investigation and any consequent disciplinary action will be reported to various enumerated officers of the corporation, yet Winter did not make any such report with regard to Nguyen. In response, AK Steel argues that Nguyen has failed to establish he was treated differently than similarly situated comparators with respect to the application of Corporate Policy # 4.00. While that may be relevant for purposes of showing pretext under the second prong of Fuentes, AK Steel's argument ignores the relevance of its practice with regard to the first prong of Fuentes. Thus, while Winter's failure to notify corporate headquarters is likely insufficient alone to render the Company's proffered reasons unworthy of credence, when considered together with the other indicia of implausibility, the totality of the pretext evidence is sufficient for the factfinders to reasonably infer that the Company's proffered reasons are unworthy of credence.

As AK Steel suggests, it is not implausible that an employer would terminate an employee for admitted theft of company property, but that conclusion is based on proof of culpability. However, as explained above, that is not the case presented here. Rather, AK Steel possessed and ignored the evidence presented by Nguyen demonstrating his lack of culpability. Under these circumstances, and based on the weaknesses identified above, the Court finds that a reasonable jury could find that it is implausible that AK Steel terminated Nguyen for the proffered legitimate, non-discriminatory reasons. Accordingly, the Court finds that Nguyen has presented sufficient evidence of pretext under the first prong of Fuentes from which a "`reasonable factfinder could rationally find [the Company's proffered reasons] unworthy of credence,' and hence infer `that [AK Steel] did not act for [the asserted] nondiscriminatory reasons." Fuentes, 32 F.3d at 765 (quoting Ezold, 983 F.2d at 531).

2. Second Prong of Fuentes Test

Under the second prong of the Fuentes test, Nguyen must identify evidence in the summary judgment record that "`allows the fact finder to infer that discrimination was more likely than not a motivating or determinative cause'" of his discharge. Keller, 130 F.3d at 1111 (quoting Fuentes, 32 F.3d at 762). Nguyen can meet this burden by proving that AK Steel either: (1) "previously discriminated against [him]," (2) "discriminated against other persons within the [P]laintiff's protected class or within another protected class," or (3) treated similarly situated individuals outside the protected class more favorably than Plaintiff. Simpson, 142 F.3d at 645 (citing Fuentes, 32 F.3d at 765).

In support of his claim that the Company's legitimate non-discriminatory reasons for his discharge are merely pretext, Nguyen has proffered evidence that several individuals outside of his protected class were treated more favorably for similar policy violations. As the Chief Judge of this district so aptly noted in Brooks v. USX Corp.:

Plaintiff's burden at the pretext stage of the analysis is to show with a level of specificity that the comparators were in fact treated more favorably. Simpson, 142 F.3d at 646. When establishing pretext, Plaintiff's claim cannot rest on the favorable treatment of a single non-class member, and Plaintiff cannot pick and choose a person perceived to be a valid comparator while ignoring comparators who were treated the same or less favorably than him. Id. at 646-47. Finally, when evaluating comparators, the focus is on the particular criteria identified by the employer as the reason for the adverse action. Id. at 647.

2006 WL 2547342, at *8. Thus, in determining whether the comparators were, in fact, treated more favorably than Nguyen, the Court begins its analysis by focusing on the particular criteria identified by AK Steel for discharging Nguyen.

The misconduct for which Nguyen was discharged is theft of Company property in violation of the Company's Asset Protection Policy. In determining the appropriate discipline in such cases, AK Steel claims it considers whether the employee knowingly engaged in the misconduct and the strength of the evidence, direct or circumstantial, showing that the employee intended to steal Company property. In the case at bar, AK Steel has maintained that it based its decision to discharge Nguyen on what it contends is objective and conclusive evidence of Nguyen's theft of Company property — Nguyen's own admission that he stole the brass scrap. According to AK Steel, Nguyen unquestionably knew that he was not permitted to remove material from the facility without supervisory approval. Consequently, AK Steel maintains this conclusive proof of Nguyen's intent distinguishes his case from the other theft cases in which it agreed to mitigate discipline.

To this end, Defendant posits that Nguyen's attempt to show pretext through examples of similarly situated employees treated more favorably must fail, as he has not identified a single instance where the Company declined to discharge an employee who admittedly stole and sold Company property. According to AK Steel, it is immaterial that the cases asserted by Plaintiff as valid comparators, broadly speaking, involved allegations of various misconduct falling under

the same policy. Rather, Defendant contends Plaintiff must demonstrate that employees from outside the protected class, who committed the same misconduct and were similarly situated in all other material respects, including the weight of the evidence against them, were treated differently, which he has not and cannot do. According to AK Steel, evidence showing that some employees admitted wrongdoing simply fails to establish that the employees were similarly situated to Nguyen, who admitted to knowingly taking crane parts from the plant, as opposed to the putative comparators who submitted inaccurate information on an insurance form. Therefore, the Company maintains, evidence of intent, the critical element necessary to distinguish theft from mistake, did not exist in the other cases. On the other hand, the Company submits, the uncontroverted evidence shows that in the only instance where it had conclusive evidence of theft (video surveillance of an employee using a stolen credit card), the employee was discharged.

The Court rejects AK Steel's argument because, as this Court concluded above, the Company possessed conclusive proof of theft on the part of the comparators, and yet, offered to, and did, mitigate discipline with regard to these other, similarly situated, employees. Moreover, several of the employees charged with insurance benefit fraud admitted wrongdoing after being presented with documented evidence of wrongdoing (Ihlenfeld Aff., ¶ 10), and yet were given last chance agreements, unlike Plaintiff, who was twice refused a last chance agreement by the Company. The Company's handling of the insurance benefit fraud cases, even though not true comparators (since the ultimate decision to offer last chance agreements came from corporate headquarters), does provide additional evidence that the Company's basis for distinguishing the other comparators from Nguyen — that he was the only one who admitted wrongdoing — is suspect.

As to Defendant's last point concerning the only true comparator who was also discharged, RC, the Court finds Defendant's argument unavailing. A reasonable jury could find that in taking scrap brass, Nguyen believed the property belonged to the contractor, but had been abandoned, and therefore, he lacked the intent necessary to constitute a theft. In any event, Nguyen's conduct, lacking such intent, can hardly be likened to a theft of an employee's wallet, which was clearly intentional. And, as discussed above, the decision maker in RC's case was Bill Gonce, Rick Winter's predecessor. See Note 16, supra. Employees are not considered comparable where the discipline was imposed by different decision makers. Ogden, 226 F.Supp. 2d at 603; Peirick, 510 F.3d at 688. Therefore, contrary to AK Steel's assertion, Nguyen did not pick and choose his comparators; rather, the four comparators whose discharges were not mitigated, RC, RD, MT and MK, are materially distinguishable, and thus, are not true comparators. See Note 16, supra.

Finally, AK Steel argues that Nguyen cannot prove pretext by submitting an affidavit in support of his opposition to summary judgment that contradicts his sworn testimony at the arbitration hearing. Defendant's argument, in this regard, is two-fold: First, the Court should disregard Nguyen's affidavit based on the sham affidavit doctrine; and second, even if Nguyen's affidavit is allowed to stand, he cannot create a triable issue of fact by now arguing that although he took the brass, he did not "steal it," but rather, the brass had been abandoned by contractors and no longer belonged to the Company. Such evidence, AK Steel contends, even if allowed, shows only that it erroneously determined that Nguyen stole Company property, and therefore, does not prove pretext. To the contrary, the Court finds such evidence demonstrates Nguyen's lack of intent and thus is material to establishing that Nguyen is similarly situated to the four comparators who stole time but were not discharged.

The relevant portion of Nguyen's affidavit provides:

During my testimony in the arbitration hearing I testified that I stole the property, and that the property belonged to the Company. Although I testified that I stole company property, I never believed that the brass I took belonged to the Company. The reason that I testified that I stole company property is because I had been told, repeatedly, by the company officials who confronted me, that I had stolen company property and I decided that if the Company insisted I stole its property, I would agree and throw myself on its mercy.

Pl.'s Aff., ¶ 7.

AK Steel correctly observes that the sham affidavit doctrine, pursuant to which a district court may disregard an offsetting affidavit submitted in opposition to a motion for summary judgment when the affidavit contradicts the affiant's prior deposition testimony without explaining the contradiction, has been recognized in this circuit. In re CitX Corp., Inc., 448 F.3d 672, 679 (3d Cir. 2006) (citing Baer v. Chase, 392 F.3d 609, 623-24 (3d Cir. 2004)). However, a district court is not required to disregard the affidavit in all cases merely because there is a discrepancy between the affidavit and the prior deposition testimony. Baer, 392 F.3d at 624 (citations omitted). If the plaintiff provides a legitimate reason for the inconsistency, such as "`[w]here the witness was confused at the earlier deposition or for some other reason misspoke, the subsequent correcting or clarifying affidavit may be sufficient to create a material issue of fact.'" Id. at 625 (quoting Martin v. Merrell Dow Pharm., Inc., 851 F.2d 703, 705 (3d Cir. 1998)). Also, courts have generally refused to disregard the affidavit where independent evidence exists in the record to bolster an otherwise questionable affidavit. Id. (citing Bushnell v. Wackenhut Int'l, Inc., 731 F.Supp. 1574, 1578 (S.D.Fla. 1990) (deposition testimony of third party can provide corroborating evidence as to substance of subsequent affidavit); Palazzo ex rel. Delmage v. Corio, 232 F.3d 38, 43-44 (2d Cir. 2000) (documentary evidence introduced to support contradictory statements in subsequent affidavit); Delaney v. Deere Co., 219 F.3d 1195, 1196 n. 1 (10^th Cir. 2000) (good faith basis for inconsistency may be established by new evidence)).

Applying this law to the case at bar, the Court declines AK Steel's invitation to disregard Nguyen's affidavit based on the sham affidavit doctrine. Whether Nguyen admitted to stealing Company property, i.e., property that he knew belonged to AK Steel, was at issue prior to Nguyen's submission of his affidavit. Indeed, Nguyen has maintained all along that he believed the scrap belonged to the crane contractor and was subsequently abandoned, and thus, has not asserted that fact for the first time in his affidavit. (Crawford Aff., ¶ 4; Weckerly Aff., ¶ 7; Cossitor Aff., ¶ 8; Nguyen Dep. at 83-85, 106-08.) Thus, this is not a case where a party has submitted a self-serving affidavit to create an issue of fact at the summary judgment stage, which practice is clearly improper. But rather, in the Court's view, Plaintiff's affidavit is proffered to supplement and clarify a position he has maintained since February 2007, when he was confronted about the brass scrap at issue. See Cossitor Aff., ¶¶ 9-13. In addition, as noted above, the record contains other evidence to support Nguyen's position; he does not rely merely on his affidavit to create an issue of fact. Finally, Plaintiff's conflicting testimony and the reasons

While the Court is cognizant of the fact that in deciding a motion for summary judgment "it is not the role of the trial judge `to weigh the evidence and determine the truth of the matter," neither may a plaintiff "manufacture an issue of disputed fact by relying `upon mere allegations, general denials, or [] vague statements.'" Stiles v. Synchronoss Tech., Inc., Civ. A. No. 07-CV-1923, 2008 WL 3540483, *3 (E.D.Pa. Aug. 12, 2008) (quoting Anderson., 477 U.S. at 250, and Quiroga v. Hasbro, Inc., 934 F.2d 497, 500 (3d Cir. 1991)). "[C]onclusory, self-serving affidavits are insufficient to withstand a motion for summary judgment." Kirleis v. Dickie, McCamey Chilcote, P.C., 560 F.3d 156, 161 (3d Cir. 2009) (citing Blair v. Scott Specialty Gases, 283 F.3d 595, 608 (3d Cir. 2002); Maldonado v. Ramirez, 757 F.2d 48, 51 (3d Cir. 1985)).
This is not a situation where Nguyen is attempting to rely merely on his own self-serving assertions to create a material issue of fact. Rather, substantial evidence submitted by Nguyen, in addition to his affidavit, supports his position. See Anderson, 477 U.S. at 252 ("The mere existence of a scintilla of evidence in support of the [plaintiffs'] position will be insufficient; there must be evidence on which the jury could reasonably find for the [plaintiffs]"). See also Nationwide Mut. Ins. Co. v. Roth, 252 F. App'x 505, 508 (3d Cir. 2007) (holding plaintiff could not rely on his self-serving affidavit to avoid summary judgment where the overwhelming documentary record evidence supported a contrary conclusion) (citing Blair, 283 F.3d at 608) (other citation omitted).

therefor require a credibility determination, which should be made by the triers of fact, not the Court.

In summary, the proper inquiry here is not whether the Company wrongfully concluded that Nguyen stole Company property, but rather, whether the Company's decisions to terminate Nguyen and, subsequently, to refuse to mitigate the discipline, were based on a discriminatory motive. After reviewing the voluminous documents in the summary judgment record, the Court concludes that Nguyen has presented sufficient evidence to raise material issues of fact as to the legitimacy of the Company's decision-making process on two fronts: (1) whether the Company's proffered reasons are unworthy of credence, and (2) whether the Company treated Nguyen less favorably than similarly situated employees outside the protected group. Thus, as the Supreme Court explained in Reeves v. Sanderson Plumbing Products, Inc.:

"The factfinder's disbelief of the reasons put forward by the defendant (particularly if disbelief is accompanied by a suspicion of mendacity) may, together with the elements of the prima facie case, suffice to show intentional discrimination. Thus, rejection of the defendant's proffered reasons will permit the trier of fact to infer the ultimate fact of intentional discrimination."

530 U.S. 133, 147 (2000) (quoting Hicks, 509 U.S. at 511). The Supreme Court went on to find:

In appropriate circumstances, the trier of fact can reasonably infer from the falsity of the explanation that the employer is dissembling to cover up a discriminatory purpose. Such an inference is consistent with the general principle of evidence law that the factfinder is entitled to consider a party's dishonesty about a material fact as "affirmative evidence of guilt." Wright v. West, 505 U.S. 277, 296, 112 S.Ct. 2482, 120 L.Ed.2d 225 (1992); see also Wilson v. United States, 162 U.S. 613, 620-621, 16 S.Ct. 895, 40 L.Ed. 1090 (1896); 2 J. Wigmore, Evidence § 278(2), p. 133 (J. Chadbourn rev. 1979). Moreover, once the employer's justification has been eliminated, discrimination may well be the most likely alternative explanation, especially since the employer is in the best position to put forth the actual reason for its decision. Cf. Furnco Constr. Corp. v. Waters, 438 U.S. 567, 577, 98 S.Ct. 2943, 57 L.Ed.2d 957 (1978) ("[W]hen all legitimate reasons for rejecting an applicant have been eliminated as possible reasons for the employer's actions, it is more likely than not the employer, who we generally assume acts with some reason, based his decision on an impermissible consideration"). Thus, a plaintiff's prima facie case, combined with sufficient evidence to find that the employer's asserted justification is false, may permit the trier of fact to conclude that the employer unlawfully discriminated.

Id. at 147-48. In the case at bar, Plaintiff has presented sufficient evidence from which a reasonable jury could find that the Company's proffered reasons are false, and thus, infer the ultimate fact that the Company unlawfully discriminated against Nguyen.

IV. CONCLUSION

For the reasons set forth above, the Court finds that material issues of fact exist precluding summary judgment. Therefore, the Court will deny Defendant's Motion for Summary Judgment.

An appropriate order will follow.