Raymond M. Cornwell

RAYMOND M. CORNWELL,
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Cornwell also appeals the district court's order denying his motion to reopen discovery so that Cornwell could depose an additional witness to oppose summary judgment.We have jurisdiction pursuant to 28 U.S.C. § 1291.We affirm in part and reverse in part.

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1Because we are reviewing a district court's order granting summary judgment, our statement of the facts accepts Cornwell's version of events where the record shows dispute, and our statement gives to Cornwell all reasonable inferences in his favor.See United States v. City of Tacoma, 332 F.3d 574, 578 (9th Cir. 2003).

Electra Central Credit Union (Electra) is a not-for-profit cooperative that provides financial services, including banking and lending, to its members.On August 30, 1993, Electra hired Raymond Cornwell, who is African-American, as its Director of Lending.Cornwell supervised the nine employees who worked in Electra's loan department and managed Elec-tra's lending operations until Cornwell was promoted to Vice President and Chief Operating Officer in 2000.Thereafter, Cornwell managed Electra's branches and cash operations in addition to Electra's lending business.

During Cornwell's stewardship of Electra's lending operations, the value of Electra's loan portfolio grew from just over $65 million in December 1997 to more than $85 million in December 2000.Although the portfolio's value decreased by about four percent, to about $80 million, between December 2000 and December 2001, the record on summary judgment, viewed most favorably to Cornwell, does not suggest that a deficiency in Cornwell's management caused this decrease.

When Cornwell joined Electra, it sold financial products individually.
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At his deposition, Cornwell testified that during the early months of Sharp's tenure, Sharp excluded Cornwell from meetings at which the management team discussed issues within the scope of Cornwell's responsibilities as Vice President and Chief Operating Officer.
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At his deposition, Cornwell testified that during the early months of Sharp's tenure, Sharp excluded Cornwell from meetings at which the management team discussed issues within the scope of Cornwell's responsibilities as Vice President and Chief Operating Officer.
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On November 9, 2001, during a meeting of Electra's management team at Sharp's home, Sharp made comments about women that Cornwell considered "unprofessional" and "close to sexual harassment."
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Three days later, Cornwell told Bonnie Cottrell, Electra's Vice President of Human Resources, about Sharp's comments.
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Although Sharp discussed his reorganization plans with members of Electra's management team over the next few weeks, Cornwell testified that Sharp did not include Cornwell in these meetings, or notify him about them, even though a reorganization would affect Cornwell's responsibilities and opportunities.
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Although Sharp discussed his reorganization plans with members of Electra's management team over the next few weeks, Cornwell testified that Sharp did not include Cornwell in these meetings, or notify him about them, even though a reorganization would affect Cornwell's responsibilities and opportunities.
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As a result of these changes, Cornwell would retain responsibility for Electra's lending operations but lose responsibility for Electra's branches and cash operations and he would manage fewer employees.Sharp explained to Cornwell that Sharp wanted Cornwell to focus on Electra's lending operations to correct problems with the sales culture and with lending, including the decrease in the value of Electra's loan portfolio.Sharp explained to Cornwell that Sharp wanted Cornwell to focus on Electra's lending operations to correct problems with the sales culture and with lending, including the decrease in the value of Electra's loan portfolio.
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Cornwell asked why he had not been included in the reorganization planning process.Sharp did not answer, but offered to help Cornwell find employment with a different firm in the financial industry if Cornwell did not want to continue working for Electra.2
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Cornwell was the only African American member of the management team, and the only executive whom Sharp demoted.
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Cornwell felt "blind-sided," "embarrassed," and "humiliated" by Sharp's request that Cornwell publicly endorse his own demotion.Every member of the management team agreed to support the reorganization, except Cornwell, who said that he supported Electra, but not Sharp's "process" or "system."

After this meeting, Cornwell again complained to Bonnie Cottrell about Sharp's behavior at the November 9 meeting, and now also about the reorganization.
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Cornwell asked Cottrell whether race had played a role in Sharp's decision to demote Cornwell.
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Cornwell asked Cottrell whether race had played a role in Sharp's decision to demote Cornwell.
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Soon thereafter, Cornwell spoke to Bob Pearson, a member of Electra's Board of Directors.
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At Cornwell's deposition, Electra's counsel asked if Cornwell told Pearson that Cornwell thought race had influenced Sharp's decision to demote Cornwell.
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At Cornwell's deposition, Electra's counsel asked if Cornwell told Pearson that Cornwell thought race had influenced Sharp's decision to demote Cornwell.
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In response, Cornwell testified: No.
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Cornwell also told Pearson about Sharp's alleged inappropriate sexual comments.
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According to Cornwell, Pearson responded that the Board would "investigate" and "find out" Sharp's motives for the demotion.
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On February 13, 2002, Cornwell met with Bob Potter, the chairman of Electra's Board of Directors, regarding the concerns Cornwell expressed to Pearson when they met in December.
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Potter gave Cornwell a memorandum, in which the Board of Directors "ratified" Sharp's reorganization and endorsed Sharp's authority to alter Electra's management structure to improve the credit union's financial performance.
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This memorandum advised Cornwell that the Board of Directors had instructed Sharp not to discuss personal private or sexual issues with Electra's employees unless there was a business-related reason to do so.
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Although the memorandum purported to resolve Cornwell's concerns, it did not address in any way Sharp's motivation for demoting Cornwell.

During their meeting, Cornwell and Potter discussed the motivation underlying Sharp's decision to demote Cornwell.During their meeting, Cornwell and Potter discussed the motivation underlying Sharp's decision to demote Cornwell.
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Cornwell testified that:

[Potter] indicated that he did not question [Sharp's] motives.I said, I'm concerned whether the motives are illegal or not.I said, is it because I said something in November about his sexual harassment issues, is it because of the color of my skin, is it because he doesn't like me, and I said all these things to [Potter] direct. [Potter] said, you're raising a different issue now and it's not one that we address here.

Cornwell's provocative questions, viewed in the light most favorable to Cornwell in this summary judgment setting, fairly raised racial discrimination as an issue, and yet the summary judgment record does not show whether Potter or the Board of Directors investigated Cornwell's concerns that Sharp's motivation for demoting Cornwell was illegal.Cornwell's provocative questions, viewed in the light most favorable to Cornwell in this summary judgment setting, fairly raised racial discrimination as an issue, and yet the summary judgment record does not show whether Potter or the Board of Directors investigated Cornwell's concerns that Sharp's motivation for demoting Cornwell was illegal.
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Potter did, however, send Cornwell a letter in June 2002, in which Potter asserted to Cornwell that "[y]our race has never been a factor in any decisions regarding your employment."
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Potter did, however, send Cornwell a letter in June 2002, in which Potter asserted to Cornwell that "[y]our race has never been a factor in any decisions regarding your employment."
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On May 23, 2002, Cornwell wrote a letter to Potter and the Board of Directors, a copy of which Cornwell sent to Sharp.
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In it, Cornwell

Raymond Cornwell, who is African-American, was a Vice President and Chief Operating Officer for Electra, an Oregon-based credit union.Cornwell was in charge of both branch operations and lending operations.He was the company's only African-American executive.
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At a November 2001 meeting at Sharp's home, Sharp made comments about women which Cornwell considered "close to sexual harassment."
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A few days later, Cornwell told the V.P. of Human Resources, Bonnie Cottrell, about Sharp's comments.
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Cornwell asked Cottrell if race had played a role in Sharp's decision to demote him.
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Cornwell than spoke to a Board member, Bob Pearson.
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Cornwell testified:
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In February 2002, Cornwell met with Bob Potter, the Chairman of Electra's Board, who gave him a memorandum stating that the board ratified Sharp's reorganization plan and endorsed Sharp's authority to reorganize in order to improve Electra's financial performance.
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Cornwell testified as to the following exchange with Potter:
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On May 23, 2002, Cornwell wrote Potter a letter - with a copy to Sharp - offering to "sign a release" in exchange for a specified severance package which included two years salary.
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On June 5, 2002, Sharp placed Cornwell on paid administrative leave pending resolution of severance negotiations.
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On June 21, when Cornwell had apparently still failed to respond, Potter sent an email which again urged Cromwell to schedule a meeting by June 25, and repeated the demand that Cornwell turn over any evidence of employment discrimination.
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On July 3, 2002, when Cornwell had apparently still failed to respond, Cottrell sent him a letter terminating his employment for "actions inconsistent with [his] duties as a management level employee."
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Cornwell filed an action in federal court alleging race discrimination and retaliation in violation of Title VII and Oregon law.The trial court granted Electra's motion for summary judgement, holding that the evidence of pretext which Cornwell produced - all of which was circumstantial evidence - was not sufficiently "specific" and "substantial" to raise an inference that Electra demoted or terminated Cornwell because he is African-American.Cornwell appealed.

1. In Dicta, the Ninth Circuit Questions Whether Circumstantial Evidence of Pretext Must Be "Specific and Substantial" to Defeat Summary Judgment.

In its majority opinion, the Ninth Circuit set out the elements of the burden-shifting framework under McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973).
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The majority went on to hold that even under the Godwin standard, Cornwell produced "specific" and "substantial" evidence of pretext sufficient to survive summary judgment.For this reason, the majority's statements on the continuing vitality of the Godwin standard may be viewed as mere dicta.

2. Cornwell Produced "Specific and Substantial" Evidence That Electra's Reorganization Was a Pretext for Race Discrimination.

The majority held that Cornwell offered circumstantial evidence from which a reasonable jury could conclude that Electra demoted Cornwell because of his race.
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3. Cornwell Did Not Produce Sufficient Evidence to Create a Triable Issue of Fact that Electra Terminated Him On The Basis of Race, or That It Demoted or Terminated Him On the Basis of Protected Activity.

The court held that Electra presented admissible evidence that it terminated Cornwell because he disregarded the Board's repeated requests for a meeting, and its demand that he turn over any evidence he had of race discrimination.Cornwell produced no evidence undermining the credibility of this explanation.
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Judge Bea, concurring separately, opined that the only evidence which supported an inference of pretext was Sharp's offer to help Cornwell find a different job in response to Cornwell's question as to why he wasn't included in planning the reorganization.A reasonable trier of fact could find that this response was inconsistent with Electra's proffered nondiscriminatory reason for demoting Cornwell, i.e., that Sharp wanted him to stay with the company and focus on lending operations.
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However, Judge Bea disagreed that any of the other evidence cited by the majority - e.g., that Cornwell was the only African-American manager, that he was the only senior manager demoted or that he was kept out of meetings where his demotion was discussed - raised any inference that Sharp's explanation that it wanted Cornwell to focus on lending operations was a pretextual.

Electra Central Credit Union (ECCU), located in Oregon, hired Raymond Cornwell, an African American, as its director of lending in 1993.By 2000, ECCU's loan portfolio had grown by $20 million under his leadership, and he was promoted to vice president and chief operating officer (COO) that year.
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During the early months of his tenure, Sharp excluded Cornwell from meetings at which the management team discussed issues within the scope of his responsibilities as vice president and COO.
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Cornwell finally went to Sharp and asked him directly about his reorganization plans.Sharp responded that he intended to create a new management position, promote Virginia Hall (a Caucasian) to fill it, and reassign responsibility for the credit union's branches and cash operations to Hall, who previously hadn't been a member of the management team.He also said he intended to eliminate the COO title entirely and change Cornwell's title to vice president of lending.His explanation for that change, which resulted in a demotion, was that he wanted Cornwell to focus on ECCU's lending operations.

When Cornwell asked why he wasn't included in the reorganization planning, Sharp's only answer was to offer to help him find employment with a different firm in the financial industry if he didn't want to continue working for ECCU.The very next day, he Ànnounced the reorganization publicly during a management team meeting.Cornwell had been the only African-American member of the management team, and he was the only executive Sharp demoted.

Is anyone listening?

After the management meeting, Cornwell complained to Bonnie Cottrell, vice president of HR, about the reorganization and asked her whether race had played a role in Sharp's decision to demote him.
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Cornwell eventually filed a complaint against ECCU alleging his demotion was motivated by race discrimination, among other things.

Things go OK at first . . .

The district court found that Cornwell had made a case for race discrimination because he is an African American who had performed his job adequately but was demoted and treated differently than similarly situated white employees who weren't demoted.But the court also found that ECCU offered a legitimate, nondiscriminatory reason for his demotion.Specifically, it helped facilitate the credit union's implementation of a "sales culture" and allowed him to focus on the lending business.

The trial judge concluded that Cornwell didn't produce enough evidence to create a genuine question about whether ECCU demoted him because he is African American.As a result, the court tossed out the case and granted judgment in ECCU's favor.Cornwell appealed that decision to the Ninth Circuit.

But not so fast . . .

The appeals court disagreed, however, finding that the facts created an inference that Sharp treated Cornwell differently than he treated white executives and that different treatment occurred because of his race.Consequently, the Ninth Circuit thought his case was good enough to be heard by a jury and that the trial court shouldn't have tossed it out so fast.

The court reasoned that Cornwell, the lone African-American member of ECCU's management team, was the only senior executive demoted.
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Sharp also apparently attempted to avoid an unpleasant conversation with Cornwell about the planned reorganization rather than facing it head-on and including him in the discussions.

Raymond Cornwell joined Electra Central Credit Union in 1993.In 2000 he was promoted to vice president and chief operating officer.
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Sharp never told Cornwell about any performance problems or other reasons for his exclusions from officers' meetings.
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Cornwell was included in a meeting the next day--,and asked to support his own demotion.When he confronted Sharp, the CEO quickly offered to help him find a job with another financial institution.Cornwell answered with a proposal for a 2-year severance package, which Sharp took as his resignation. (continued) [HR.BLR.com]