Plaintiff Liberty of Oklahoma Corporation sued defendant Apera Tobiason in the United States District Court for the Western District of Oklahoma seeking a declaratory judgment that a settlement agreement reached during EEOC mediation is valid and enforceable. Defendant Apera Tobiason moved to dismiss plaintiff’s claims under Rule 12(b)(1) and 12(b)(6).
Factual Overview
Tobiason, a former employee of Liberty, filed a charge of discrimination with the EEOC in September 2023, claiming sex discrimination and retaliation in violation of Title VII. The parties participated in EEOC-administered mediation via Zoom in November 2023. Liberty alleges that a settlement was reached during this mediation, evidenced by exchanged emails. However, when Liberty circulated a formal settlement agreement in December 2023, Tobiason had fired her counsel and intended to repudiate the settlement.
On January 23, 2024, Tobiason filed a state court action against Liberty, alleging only state law claims. Two days later, Liberty filed this federal action seeking a declaratory judgment that the EEOC mediation settlement is valid and enforceable. Liberty claimed federal question jurisdiction based on the settlement’s connection to Title VII claims.
Legal Analysis
Subject Matter Jurisdiction: The court first addressed whether it had subject matter jurisdiction over the case. Tobiason argued that the dispute involved only a state law contract question. The court, however, found that it had jurisdiction under Title VII. The court reasoned that while the Tenth Circuit had not directly addressed this issue, other circuits have held that suits involving breach of EEOC-negotiated agreements are “brought under” Title VII. The court distinguished this case from precedent involving private settlement agreements, noting that EEOC involvement implicates a greater degree of congressional concern.
Failure to State a Claim: Tobiason argued that Liberty’s complaint failed to allege sufficient facts to establish mutual consent between the parties. The court, applying state contract law principles, found that Liberty had alleged sufficient facts to demonstrate a plausible claim of mutual consent.
Abstention: Finally, the court considered whether to abstain from hearing the case in favor of the ongoing state court action. Applying the factors from State Farm Fire & Casualty Co. v. Mhoon, the court determined that abstention was appropriate. The court found that the declaratory action would not settle the entire controversy, might increase friction between federal and state courts, and that the state court action provided a better and more effective remedy.
The court granted Tobiason’s motion to dismiss to the extent it requested abstention, dismissing Liberty’s complaint and action without prejudice.
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