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Opela v. Window

United States District Court, W.D. Wisconsin

August 31, 2017

MICHAEL P. OPELA, SR., Plaintiff,



         Plaintiff Michael Opela, Sr., brings this action against defendants Apogee Enterprises, Inc., and its subsidiaries for infringement of the whistleblowing protections contained in the Consumer Product Safety Improvement Act (“CPSIA”), 15 U.S.C. § 2087, and in the Sarbanes-Oxley Act, 18 U.S.C. § 1514. The complaint alleges that defendants violated Sarbanes-Oxley and CPSIA by terminating Opela's employment after he raised concerns about potentially defective manufacturing materials. Before the court is defendants' motion to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). (Dkt. #6.)[1] For the reasons stated below, the court will grant defendants' motion to dismiss as to claims asserted against defendant Apogee Enterprises and certain of it subsidiaries, but will deny the motion with respect to defendant Apogee Wausau Group, Inc. d/b/a Wausau Window and Wall.


         A. Defendants' Corporate Structure

         Apogee Enterprises, Inc., (“Apogee”) is a publicly-traded Minnesota corporation and wholly owns all other defendants. Apogee Wausau Group, Inc. (“AWG”) is a Wisconsin corporation, while Tubelite, Inc. (“Tubelite”), Harmon, Inc. (“Harmon”) and Alumicor, Ltd. (“Alumicor”) are incorporated in Michigan, Minnesota, and Ontario, Canada, respectively. Finally, although separately named as defendants, Wausau Window and Wall is actually a separate business unit of AWG, operating as a separate business under that name (“Wausau” for short), and Linetec is actually the inventory department of AWG. Neither Wausau nor Linetec are separate legal entities.

         According to the complaint, Wausau “provides aluminum window and wall products for a variety of buildings.” (Compl. (dkt. #1) ¶ 14.) These products include window frames, bolts and curtain wall products and are used in schools, hospitals, condominiums, offices, commercial buildings and government structures. Among other companies, Wausau sells its products to Harmon, Tubelite and Alumicor.

         Apogee's Vice President, Gary Johnson, asserts by declaration that the parent company Apogee does not produce any products whatsoever. He further states that all defendants (besides Apogee) customarily sell their products -- including the window frames, bolts and curtain wall products manufactured by Wausau -- to contractors and subcontractors, not to the consumers through “big box” stores. (Decl. of Gary Johnson (dkt. #8) ¶ 6.)[3]

         B. Opela's Employment and Internal Complaints

         Opela began working for AWG as a Structural Engineer Manager in its Wausau business unit in December 2013, and he received his salary from AWG and Apogee. During the course of his employment, Opela discovered that Wausau was manufacturing window frames, bolts and curtain wall products using materials that did not meet the strength requirements set out by the Occupational Safety and Health Administration (“OSHA”). Wausau also received no certification from its suppliers regarding the strength of these materials. Nevertheless, Wausau used the materials in window frames, bolts and curtain wall products that were then distributed to Harmon, Alumicor, Tubelite and other companies. Opela believed that Wausau's non-compliant products had already been installed in offices, condominiums and government structures, and that they posed a safety risk to consumers at those locations. Additionally, Opela believed that Wausau, AWG and Apogee had misstated their finances by failing to disclose to shareholders its use of defective materials.

         Opela reported his concerns about the defective materials and financial statements to several of his superiors at Wausau. Meetings with management occurred the week of September 15 to September 20, 2014, which included Opela's immediate supervisor at Wausau, as well as Wausau's Vice President of Continuous Improvement, Wausau's President and four other Wausau employees. These meetings prompted no remedial action from management, although Wausau's Purchasing Manager, Victor Corungi, did confirm that the suppliers and Linetec had not properly tested the materials used by Wausau.

         Four days after Opela's meetings with management had concluded, a Wausau HR representative approached him about information she had received suggesting that Opela had failed to disclose a previous employer when he applied to work for Wausau. Although Opela provided evidence that he had in fact disclosed his previous employer during the application process, Wausau terminated his employment the next day, September 25, 2014, ostensibly because of this failure to disclose.

         Following his termination, Opela pursued reinstatement through Apogee's internal appeal process. That process involved meeting with Apogee's Vice President of Human Resources, Warren Planitzer, to whom Opela again relayed his concerns regarding faulty materials and financial misconduct. According to the complaint, Planitzer described the meeting as a “SOX” meeting, and he later acknowledged that Opela had disclosed his former employer before beginning work. Still, Planitzer stated that Wausau would not reinstate Opela because “management did not support” his return to work. (Compl. (dkt. #1) ¶ 49.)

         C. Administrative and Other Court Proceedings

         In October of 2014, Opela filed a complaint with OSHA in which he alleged that his termination from Wausau had been unlawful retaliation for identifying defective materials used in manufacturing its products. The original OSHA complaint named “Apogee International, ” Wausau and Tubelite as defendants and alleged a violation of SOX (Sarbanes-Oxley) by “Apogee International” and a violation of CPSIA by Wausau and Tubelite; it did not allege a violation of both SOX and CPSIA by any single company. (Decl. of Alex Hontos, Ex. 1 (dkt. #9-1) 1.)[4]

         The defendants in the OSHA complaint responded in a joint position statement on January 23, 2015. The position statement accurately informed OSHA of the relationship between Apogee, Wausau, Tubelite and AWG, clarifying that “Apogee International” is not a known legal entity. In a footnote, however, the January 23 position statement expressly included AWG and Apogee in the proceedings:

Although Mr. Opela has not named Apogee Wausau Group, Inc., or Apogee Enterprises, Inc., in his Complaint, as Wausau Window and Wall's parent companies, each of these entities deny any wrongful conduct against Mr. Opela and this Position Statement is filed on their behalf as well.

(Hontos Decl., Ex. 2 (dkt. #9-2) 2) (emphasis added).) While Opela's response to the position statement requested that the administrative complaint be amended to include “Apogee Enterprises and its subsidiaries, ” (id., Ex. 3 (dkt. #9-3) 1), the response itself named only Apogee, Harmon, Wausau, Tubelite, Alumicor and Linetec (among other entities not party to this suit), without specifically identifying Apogee Wausau Group in its list of known subsidiaries (id.).

         OSHA dismissed Opela's complaint on June 17, 2016, determining that he had not engaged in activity protected under CPSIA or Sarbanes-Oxley. Opela appealed that decision to the Department of Labor's Office of Administrative Law Judges on July 14, 2016. On February 2, 2017, the ALJ dismissed the SOX claim against Apogee because the administrative complaint had failed to allege sufficient connection between the defective materials used by Wausau and potential shareholder fraud. The ALJ also dismissed the CPSIA claims against all entities except Wausau on the basis that Opela had not alleged that they were his employers within the meaning of the statute.[5] As a result, the CPSIA case proceeded solely against Wausau, with a trial before the ALJ scheduled for March 21, 2017. Instead, Opela filed this lawsuit in the Western District of Wisconsin on February 21, 2017 -- 19 days after the ALJ had dismissed all defendants except Wausau. In response to the filing of this lawsuit and Opela's motion, the ALJ dismissed the remaining CPSIA claim against Wausau on February 23.

         Defendants filed a motion to dismiss in this court on April 13, 2017, arguing (among other things) that the ALJ's order of February 2 constituted the final order of the Secretary of Labor and could only be reviewed in the Court of Appeals. On May 4, 2017, Opela filed a brief in opposition to defendants' motion to dismiss, which did not contest defendants' premise that the court lacked jurisdiction to review the ALJ's order of February 2. Rather, Opela argued that this court could hear the claims against Wausau and AWG. On April 17, 2017, four days after defendants filed their motion to dismiss, Opela also filed a petition for review of the ALJ's order of February 2 in the Court of Appeals for the Seventh Circuit. Both Opela and defendants filed jurisdictional memoranda in the Seventh Circuit addressing the question of whether the February 2 order constituted the final order of the Secretary of Labor, since it had dismissed all defendants except Wausau. The Secretary added to these submissions, his own separate jurisdictional memorandum on May 17, similarly arguing (among other things) that the February 2 order could not operate as the final order of the Secretary because review in the Seventh Circuit would violate the Department of Labor's precedent on interlocutory appeals from some but not all of the administrative claims. Nevertheless, on June 5, the Seventh Circuit ordered that the appellate case against Apogee, Tubelite, Harmon, Alumicor and Linetec proceed, although it asked the parties to address jurisdiction again in their briefs. Opela v. Acosta, No. 17-1788 (7th Cir. June 5, 2017) (dkt. #20). On August 8, 2017, Opela then moved for voluntarily dismissal of the appellate case, and the Seventh Circuit granted that motion on the same day under Federal Rule of Appellate Procedure 42(b).


         I. Subject Matter Jurisdiction

         In evaluating a motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), the court must accept uncontested factual allegations in the complaint as true, but may look to other documents submitted by the parties, including affidavits, to determine whether jurisdiction is appropriate. Leveski v. ITT Educ. Servs., 719 F.3d 818, 828 (7th Cir. 2013). In doing so, the court will draw all reasonable inferences in the plaintiff's favor. Massey v. Wheeler, 221 F.3d 1030, 1034 (7th Cir. 2000).

         Defendants challenge the subject matter jurisdiction of the court on three grounds. First, defendants argue that the ALJ's decision of February 2, 2017, operates as the final decision of the Secretary of Labor and is thus reviewable only in the Seventh Circuit, which would prevent this court from exercising jurisdiction over any party dismissed in that order. Second, defendants argue that plaintiff never named AWG as a defendant in the administrative proceedings at the Department of Labor and, therefore, neither exhausted his administrative remedies with respect to that specific defendant, nor alleged in his complaint that he had administratively exhausted his claim. Third, defendants submit that they do not manufacture “consumer products, ” as that term is defined in the Consumer Product Safety Act (“CPSA”), [6] which precludes this court's exercise of subject matter jurisdiction over any claims arising under that statute. The court addresses each of these arguments below.

         A. Claims Dismissed in the ALJ's Order of February 2, 2017

         Since the ALJ dismissed all claims against defendants except the CPSIA claim against Wausau in his order of February 2, 2017, defendants first argue that plaintiff's claims against these defendants, Apogee, Tubelite, Harmon, Alumicor and Linetec, can only be reviewed in the Seventh Circuit.[7] The court agrees.

         A plaintiff bringing a whistleblowing claim under CPSIA or Sarbanes-Oxley must initially file a complaint with OSHA. 18 U.S.C. § 1514(b); 49 U.S.C. § 42121(b); 29 C.F.R. § 1980.103; 15 U.S.C. § 2087(b). After OSHA makes an initial determination, either party may appeal that decision to the Office of Administrative Law Judges. A party wishing to appeal the decision of an ALJ must file a petition for review with the Administrative Review Board (“ARB”). 29 C.F.R. § 1980.109(e); 29 C.F.R. § 1983.109(e). The Secretary of Labor issues a final decision in a case either through the ARB or, if no petition for review is filed with the ARB, 14 days after the date of the ALJ's decision. Id. A party can only appeal the final order of the Secretary to the appropriate Circuit Court. 15 U.S.C. § 2087(b)(5); 18 U.S.C. 42121(b)(4). As an alternative route, if the Secretary does not issue a final decision within 210 days of the filing of a CPSIA claim, or within 180 days of the filing of a SOX claim, the complainant may bring an action for de novo review in the appropriate district court. 15 U.S.C. § 2087(b)(4); 18 U.S.C. § 1514A(b)(1)(B).

         Here, the ALJ dismissed all defendants in the administrative complaint except Wausau on February 2, 2017. By plain operation of the statute, that order became the final order of the Secretary 14 days later, on February 16. Plaintiff acknowledged as much by filing his petition for review in the Seventh Circuit and by failing to dispute that very argument in his original opposition brief to defendants' motion to dismiss.[8] Accordingly, the claims against Apogee, Harmon, Tubelite, ...

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