1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 CHERYL YOUNG, Case No. 19-cv-01411-JCS
8 Plaintiff, ORDER DENYING MOTION FOR 9 v. SUMMARY JUDGMENT
10 PETE BUTTIGIEG, Re: Dkt. No. 69 Defendant. 11
12 I. INTRODUCTION 13 Plaintiff Cheryl Young, pro se, seeks de novo review of discrimination and retaliation 14 claims where she prevailed on the merits in administrative proceedings but was dissatisfied with 15 position offered for reinstatement, which the Equal Employment Opportunity Commission 16 (“EEOC”) ultimately held, over Young’s objection, to be equivalent to her past position with the 17 U.S. Department of Transportation (“DOT”). The Court previously dismissed the case with 18 prejudice, in part based on the applicable statute of limitations, but the Ninth Circuit reversed as to 19 that issue. Defendant Pete Buttigieg, the Secretary of Transportation (the “Secretary”), moves for 20 summary judgment or again to dismiss, arguing again that Young’s claims are barred by the 21 statute of limitations, and asserting for the first time that Young cannot proceed on de novo review 22 without disgorging funds she received from the administrative ruling in her favor. The Court held 23 a hearing on October 29, 2021 and requested supplemental briefing. For the reasons discussed 24 below, the Secretary’s motion is DENIED.1 25 26 27 1 II. BACKGROUND 2 A. Procedural History 3 Young prevailed in administrative proceedings, where the EEOC ordered the DOT to 4 reinstate her to an equivalent position and provide back pay. The DOT offered her a position, but 5 Young did not agree that it was equivalent to previous job, and she filed a petition for 6 enforcement. The EEOC granted that petition in part, finding some fault with the DOT’s 7 documentation and payment of back pay, but concluding that the position the DOT offered Young 8 was sufficiently similar to her past position to be equivalent, and that Young was only entitled to 9 back pay through March 17, 2017, when she “effectively rejected said offer.” 2nd Am. Compl. 10 (“SAC,” dkt. 44) Ex. 40 at 8. The EEOC Office of Federal Operations (“OFO”) initially issued 11 that decision on November 30, 2018, but issued an errata on December 14, 2018 to remove an 12 erroneous reference to a right to request reconsideration. SAC Exs. 39, 40. Both the versions of 13 the decision included the following paragraph:
14 PETITIONER’S RIGHT TO FILE A CIVIL ACTION (R0610)
15 This is a decision requiring the Agency to continue its administrative processing of your complaint. However, if you wish to file a civil 16 action, you have the right to file such action in an appropriate United States District Court within ninety (90) calendar days from the date 17 that you receive this decision. In the alternative, you may file a civil action after one hundred and eighty (180) calendar days of the date 18 you filed your complaint with the Agency, or filed your appeal with the Commission. . . . Filing a civil action will terminate the 19 administrative processing of your complaint. 20 SAC Ex. 39 at 11; id. Ex. 40 at 10. 21 Young filed this action pro se, seeking to enforce the EEOC’s decision as she understood 22 it, which would require either offering a different position for reinstatement or providing front pay 23 if no such position was available. See Compl. (dkt. 1). The case was assigned to the Honorable 24 Elizabeth Laporte. The Secretary moved to dismiss, and the Court dismissed Young’s 25 enforcement claim with prejudice under Rule 12(b)(1) because the EEOC had determined that the 26 Secretary complied with its decision. See Order Granting Mot. to Dismiss (dkt. 31) at 6.2 To the 27 1 extent Young might seek de novo review, the Court dismissed such a claim as untimely:
2 In the alternative, if Plaintiff had been seeking de novo review, she filed her lawsuit too late. Therefore, dismissal with prejudice is also 3 appropriate under Rule 12(b)(6) because Plaintiff filed her Complaint outside of the 90 day statute of limitations set forth in 42 U.S.C. 4 § 2000e-16(c). 5 Id. After Judge Laporte retired from the Court, the case was reassigned to the undersigned 6 magistrate judge in October of 2019. See dkt. 34. 7 Young appealed, and the U.S. Court of Appeals for the Ninth Circuit affirmed the decision 8 to dismiss the claim Young actually asserted (which sought to enforce the EEOC’s final order) 9 because the DOT had complied with that order, relying on Carver v. Holder, 606 F.3d 690 (9th 10 Cir. 2010), which held that a plaintiff who prevailed on liability in administrative proceedings but 11 was unsatisfied with the EEOC’s decision on a petition for enforcement (where, as here, the 12 EEOC concluded that the defendant agency had complied with its previous order and no further 13 action was necessary) could not “parse his action to increase the remedy without relitigating the 14 liability issue in pursuing his claim in federal court.” Carver, 606 F.3d at 692; see generally 15 Young v. Chao, 816 F. App’x 154 (9th Cir. 2020).3 The Ninth Circuit reversed the denial of leave 16 to amend, however, holding that Young should be permitted to amend her complaint to pursue de 17 novo review of the EEOC’s decision if she could allege that she received the EEOC’s December 18 14, 2018 errata and corrected final decision within ninety days before she brought this action. 19 Young, 816 F. App’x at 154–55. In reaching that conclusion, the panel relied on the fact that “the 20 EEOC’s errata, dated December 14, 2018, stated that the corrected final decision attached thereto 21 was the EEOC’s final decision.” Id. 22 Young filed her first amended complaint (dkt. 41) on November 6, 2020, and by 23 stipulation of the parties, she filed her operative second amended complaint on December 7, 2020. 24 In it, she raises claims under Title VII and the ADEA for race and age discrimination, hostile work 25
26 replaced former Secretary of Transportation Elaine Chao as the defendant in this case under Rule 25(d) of the Federal Rules of Civil Procedure. Citations herein to this Court’s previous orders 27 refer to page numbers of the versions filed in the Court’s ECF docket. 1 environment, and retaliation, seeking de novo review of the administrative decision. See generally 2 2d Am. Compl. (“SAC”) ¶¶ 40–94. She seeks the following relief: (1) compensatory damages in 3 the amount of $60,000; (2) reinstatement to the OAI IT modernization project with backpay 4 retroactive to September 9, 2008; and (3) costs and fees. Id. ¶¶ 95–97. 5 The Secretary moved once again to dismiss. The Court denied that motion in large part, 6 holding that Young could proceed on all claims except that she was denied a particular position in 7 2016 and 2017 on account of her race. Order re Mot. to Dismiss SAC (dkt. 56).4 Ms. Young did 8 not amend that claim, and the Secretary filed an answer to her second amended complaint. 9 B. The Parties’ Arguments 10 The Secretary now moves for summary judgment or again to dismiss, arguing for the first 11 time that neither the original nor corrected 2018 EEOC decision on enforcement was the 12 appropriate starting point for the ninety-day statute of limitations for de novo review, which 13 instead ran from the EEOC’s decision on the merits in 2016. Mot. at 6–11. The Secretary 14 contends that an alternative track for de novo challenges after seeking enforcement is not available 15 here because the EEOC determined that the Department of Transportation had complied with its 16 previous orders. Id. at 11–14. In the alternative, the Secretary argues that Ms. Young must return 17 the funds she received from the EEOC proceedings if she wishes to seek de novo review. Id. at 18 14–20. 19 Young contends that the statute of limitations for this case has already been resolved by the 20 Ninth Circuit, the Secretary failed to raise it in previous motions to dismiss, and the Secretary’s 21 current position contradicts positions taken in the initial motion to dismiss and before the Ninth 22 Circuit. Opp’n (dkt. 70) at 2–5. She also argues that the 2018 decision marked the conclusion of 23 administrative proceedings and the start of the statute of limitations. Id. at 5–9. Young argues 24 that she should not be required to return the funds she received from the administrative 25 proceedings, because nothing in the statute requires such disgorgement as a precondition for suit, 26 no resolution has yet been reached to supersede the EEOC’s assessment of liability, and Young’s 27 1 award from the administrative proceedings can either be deducted from any judgment in her favor 2 or ordered returned at the conclusion of this case if its outcome is less favorable to her. Id. at 10– 3 17. 4 The Secretary contends in his reply that the question of which EEOC order started the 5 statute of limitations was not squarely before the Ninth Circuit, has not been decided, and was not 6 required to be raised in any earlier motion. Reply (dkt. 73) at 1–5. He argues that judicial 7 estoppel does not apply because he did not prevail, id. at 5–7, and that the weight of authority 8 supports disregarding the enforcement decision for the purpose of the statute of limitations for de 9 novo review, which as a waiver of sovereign immunity must be construed strictly, id. at 7–13. He 10 contends that circuit decisions declining to require disgorgement of administrative awards are 11 distinguishable and the nature of de novo review requires disgorgement here, although he 12 disclaims any argument that it is strictly required by the statute or presents a jurisdictional bar to 13 Young’s claims. Id. at 13–15. 14 At the Court’s request, the parties submitted supplemental briefing addressing: (1) the 15 Court’s authority to order funds placed in escrow and; and (2) the amount of funds Ms. Young 16 received from administrative proceedings. See generally Def.’s Supp’l Br. (dkt. 76); Pl.’s Supp’l 17 Br. (dkt. 77). 18 III. ANALYSIS 19 A. Legal Standard 20 Summary judgment on a claim or defense is appropriate “if the movant shows that there is 21 no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of 22 law.” Fed. R. Civ. P. 56(a). In order to prevail, a party moving for summary judgment must show 23 the absence of a genuine issue of material fact with respect to an essential element of the non- 24 moving party’s claim, or to a defense on which the non-moving party will bear the burden of 25 persuasion at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). 26 Once the movant has made this showing, the burden then shifts to the party opposing 27 summary judgment to designate “‘specific facts showing there is a genuine issue for trial.’” Id. 1 disputed must support the assertion by . . . citing to particular parts of materials in the record 2 . . . .”). “[T]he inquiry involved in a ruling on a motion for summary judgment . . . implicates the 3 substantive evidentiary standard of proof that would apply at the trial on the merits.” Anderson v. 4 Liberty Lobby Inc., 477 U.S. 242, 252 (1986). The non-moving party has the burden of 5 identifying, with reasonable particularity, the evidence that precludes summary judgment. Keenan 6 v. Allan, 91 F.3d 1275, 1279 (9th Cir. 1996). Thus, it is not the task of the court “‘to scour the 7 record in search of a genuine issue of triable fact.’” Id. (citation omitted); see Carmen v. S.F. 8 Unified Sch. Dist., 237 F.3d 1026, 1031 (9th Cir. 2001); Fed. R. Civ. P. 56(c)(3). 9 A party need not present evidence to support or oppose a motion for summary judgment in 10 a form that would be admissible at trial, but the contents of the parties’ evidence must be amenable 11 to presentation in an admissible form. See Fraser v. Goodale, 342 F.3d 1032, 1036–37 (9th Cir. 12 2003). Neither conclusory, speculative testimony in affidavits nor arguments in moving papers 13 are sufficient to raise genuine issues of fact and defeat summary judgment. Thornhill Publ’g Co., 14 Inc. v. GTE Corp., 594 F.2d 730, 738 (9th Cir. 1979). On summary judgment, the court draws all 15 reasonable factual inferences in favor of the non-movant, Scott v. Harris, 550 U.S. 372, 378 16 (2007), but where a rational trier of fact could not find for the non-moving party based on the 17 record as a whole, there is no “genuine issue for trial” and summary judgment is appropriate. 18 Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986). 19 For the present motion, the parties’ arguments turn primarily on issues of law, without 20 relying on a factual record beyond a declaration summarizing the administrative proceedings, the 21 contents of which are not meaningfully in dispute. 22 B. Young’s Claim Is Not Untimely 23 A federal employee who is unsatisfied with the outcome of administrative proceedings on 24 a discrimination claim may bring a civil action “[w]ithin 90 days of receipt of notice of final 25 action taken by a department, agency, or unit referred to in subsection (a), or by the Equal 26 Employment Opportunity Commission upon an appeal from a decision or order of such 27 department.” 42 U.S.C. § 2000e-16. Here, the Secretary does not dispute that Young filed this 1 Secretary contends that neither version of the decision on Young’s petition for enforcement was 2 the appropriate starting point for the statute of limitations, which instead began from the OFO’s 3 February 23, 2016 decision denying the DOT’s request for reconsideration on the merits. See 4 Mot. at 8. 5 On its merits, the Secretary’s position that the statute of limitations expired in 2016 has 6 some support in caselaw. As far as this Court is aware, every other court to consider the issue 7 directly has held that an enforcement decision does not restart the statute of limitations, which 8 instead begins from the EEOC’s final decision on the merits. E.g., Laber v. Geren, 316 F. App’x 9 266, 270 (4th Cir. 2009); Stumm v. Wilkie, No. 12-cv-057-wmc, 2021 WL 65447, at *2 (W.D. 10 Wis. Jan. 7, 2021), aff’d on other grounds sub nom. Stumm v. McDonough, 859 F. App’x 741 (7th 11 Cir. 2021)5; Vandesande v. Potter, No. 08-60689-CIV, 2009 WL 10699891, at *6 (S.D. Fla. Feb. 12 19, 2009); Adcock v. Roche, No. 5:04-CV-208(DF), 2006 WL 1285045, at *6 (M.D. Ga. May 5, 13 2006); Kloock v. Potter, No. 04-73610, 2005 WL 1593448, at *2 (E.D. Mich. July 6, 2005); 14 Puckett v. Potter, 342 F. Supp. 2d 1056, 1064 (M.D. Ala. 2004). Some decisions have also 15 accepted the Secretary’s argument that boilerplate notices of appeal rights included in enforcement 16 decisions or similar administrative orders may be disregarded. Vandesande, 2009 WL 10699891, 17 at *3 n.5; Adcock, 2006 WL 1285045, at *6; Kloock, 2005 WL 1593448, at *2. None of those 18 decisions are binding on this Court, however, and all of them are inconsistent with the Ninth 19 Circuit’s decision on appeal. If the Secretary believed the Ninth Circuit decided this issue 20 incorrectly, the Secretary could have sought rehearing or certiorari, but this Court cannot disregard 21 the decision on appeal that the relevant question for the statute of limitations was when Young 22 received the December 2018 corrected decision on her enforcement petition. 23 Even if the Court were to confront the issue anew, it is not clear that the consensus view is 24 correct. An order for reinstatement after success in administrative proceedings leaves open the 25
26 5 The Seventh Circuit affirmed summary judgment in Stumm because the plaintiff failed to present coherent arguments on appeal after rejecting a court-appointed lawyer, and concluded that 27 “[r]esolution of the timeliness question, to the extent it affects other litigants, is left for another 1 significant question of what position will be offered and whether it is actually equivalent to the 2 plaintiff’s previous job—a question that might often go unanswered until more than ninety days 3 after the decision on the merits. The possibility that a plaintiff has no further recourse if the 4 EEOC finds a significantly inferior position sufficient is at the very least unsatisfying, and perhaps 5 conflicts with the statute’s structure of allowing for judicial review. The concern of some courts 6 that allowing de novo review after an enforcement decision could serve to indefinitely extend the 7 statute of limitations for “stale claim[s],” see, e.g., Vandesande, 2009 WL 10699891, at *4, likely 8 overestimates the typical plaintiff’s willingness to put their initial victory in jeopardy through de 9 novo review, and regardless might be better addressed by other doctrines like laches, or looking to 10 whether the enforcement petition was frivolous or taken in bad faith. Here, the Secretary has not 11 argued that Young’s enforcement petition was groundless or stemmed from anything other than a 12 good faith dispute as to whether the position she was offered was equivalent. 13 Some of those decisions are also potentially distinguishable. In Laber, for example, the 14 Fourth Circuit rejected the plaintiff’s argument that he was seeking review of the subsequent order 15 on a petition for clarification rather than the earlier final decision on the merits, holding that “the 16 present action does not seek to review the March 10, 2003 decision on the petition for clarification 17 but rather for reconsideration of the merits and for additional remedies.” 316 F. App’x at 270. 18 Similarly, in Puckett, the plaintiff took issue with the initial conclusion on the merits that she was 19 not entitled to overtime pay, which she belatedly sought to challenge after the EEOC again 20 declined to require backpay at an overtime rate on an enforcement petition. 342 F. Supp. 2d at 21 1064. Here, there is no real question that Young is primarily dissatisfied with the EEOC’s 2018 22 conclusion on her enforcement petition that a particular position offered to her was equivalent to 23 her prior role, and is willing to relitigate the merits of her discrimination claim only because 24 precedent requires her to do so if she wishes to challenge the EEOC’s implementation of a 25 remedy. 26 In Massingill v. Nicholson, 496 F.3d 382 (5th Cir. 2007), the Fifth Circuit allowed a de 27 novo review to proceed despite having been filed only after a petition for enforcement. See 496 1 rather than improperly attempting to challenge only the remedy. See id. at 385–86. In reaching 2 the conclusion that the complaint could be construed as seeking an allowable de novo review, 3 however, the court noted that “the plaintiff ha[d] ninety days to sue, and she d[id] so within that 4 time.” Id. at 386. The Vandesande decision distinguished Massingill on the basis that “the 5 complaint was only truly final when the damages were fully determined and awarded in 2003 and 6 then affirmed in May 2005.” Vandesande, 2009 WL 10699891, at *5. This case in some ways 7 resembles Massingill, in that one component of the relief Young would receive on her claims—the 8 particular position to which she would be allowed to return—was not finalized until resolution of 9 her petition for enforcement. 10 Laber also relied on the EEOC’s identification of its earlier decision as the final decision, 11 with no indication that the subsequent decision on clarification included language indicating that it 12 was a final decision from which the plaintiff could seek judicial review. 316 F. App’x at 269–70. 13 Here, the December 2018 errata specifically stated that the enforcement decision was “the 14 Commission’s final decision,” and the corrected decision included with that errata instructed 15 Young that “if she wish[ed] to file a civil action, [she] ha[d] the right to file such action in an 16 appropriate United States District Court within ninety (90) calendar days from the date that [she] 17 receive[d] this decision.” SAC Ex. 40. 18 The Secretary contends that the “boilerplate” inclusion of right-to-file language in the 19 enforcement decisions, which the Secretary asserts is “not specifically tailored to the posture of 20 the OFO decision in which it appeared,”6 cannot alter the statutory limitations period set by 21 Congress as a limited waiver of sovereign immunity. Reply at 10–11. As noted above, some 22 district courts have accepted that position. In Irwin v. Department of Veterans Affairs, 498 U.S. 23 89 (1990), however, the case on which the Secretary relies for the rule that Title VII’s statute of 24 limitations is a waiver of sovereign immunity, the Court held that equitable considerations 25 applicable to suits between private litigants also apply to this statute of limitations. 498 U.S. at 26 6 The Secretary’s assertion that this language was included as a matter of course without regard for 27 its accuracy is in some tension with the OFO’s decision to issue an errata removing similar 1 95–96.7 The Secretary cites no binding authority suggesting that either a private or governmental 2 defendant cannot waive a statute of limitations by specifically instructing a plaintiff of their right 3 to seek judicial review. 4 Regardless of how this Court would decide these question—at least some of which are 5 closer than the Secretary suggests—if presented on a blank slate, the Ninth Circuit has already 6 decided that the EEOC’s December 2018 corrected decision was the appropriate starting point for 7 the statute of limitations, based in part on the errata’s statement that it was the EEOC’s final 8 decision. That decision is the law of the case.
9 The law of the case doctrine is a judicial invention designed to aid in the efficient operation of court affairs. Lockert v. United States Dept. 10 of Labor, 867 F.2d 513, 518 (9th Cir. 1989). Under the doctrine, a court is generally precluded from reconsidering an issue previously 11 decided by the same court, or a higher court in the identical case. Richardson v. United States, 841 F.2d 993, 996 (9th Cir.), amended, 12 860 F.2d 357 (9th Cir. 1988). For the doctrine to apply, the issue in question must have been “decided explicitly or by necessary 13 implication in [the] previous disposition.” Liberty Mutual Ins. Co. v. E.E.O.C., 691 F.2d 438, 441 (9th Cir. 1982). 14 15 Milgard Tempering, Inc. v. Selas Corp. of Am., 902 F.2d 703, 715 (9th Cir. 1990) (alteration in 16 original). 17 Judge Laporte previously dismissed with prejudice any claim for de novo review that 18 Young might have brought because Young “filed her lawsuit too late,” “outside of the 90 day 19 statute of limitations set forth in 42 U.S.C. § 2000e-16.” Order Granting Mot. to Dismiss at 6. 20 Judge Laporte’s order does not make clear whether she based that holding on the pre-correction 21 November 2018 enforcement decision or the February 2016 decision denying reconsideration. On 22 appeal, the Ninth Circuit reversed the denial of leave to because “the EEOC’s errata, dated 23 December 14, 2018, stated that the corrected final decision attached thereto was the EEOC’s final 24 decision.” Young, 816 F. App’x at 154. The Ninth Circuit acknowledged that it was “not 25 7 Based on the Supreme Court’s decisions in United States v. Wong, 575 U.S. 402 (2015), and 26 Fort Bend County v. Davis, 139 S. Ct. 1843 (2019), this Court has previously held that Title VII’s claims processing requirements do not constitute jurisdictional bars, even when applied to claims 27 against the United States. Williams v. Wolf, No. 19-cv-00652-JCS, 2019 WL 6311381, at *6 1 absolutely clear” whether Young could amend her complaint to allege that it was timely, but the 2 only reason the Ninth Circuit identified for that lack of clarity was that “it [was] not clear when 3 Young received the corrected final decision.” Id. 4 According to the Secretary, the “specific issue decided by the [Ninth Circuit] was whether 5 the operative date of the final decision on Plaintiff’s 2018 petition for enforcement was November 6 30, 2018 or December 14, 2018.” Reply at 2. To the contrary, the “specific issue” before the 7 Ninth Circuit was whether the Court erred in denying Young leave to amend based on the statute 8 of limitations, which turned on which EEOC order constituted the “notice of final action” for the 9 purpose of § 2000e-16(c). All relevant facts were apparent from the record on the original motion 10 to dismiss, where Young’s opposition brief attached all of the EEOC decisions at issue. See dkt. 11 20. If the statute of limitations had expired in 2016, the Ninth Circuit could have affirmed 12 dismissal with prejudice, since a party is not entitled to leave to amend to assert a legally futile 13 argument. Alternatively, the Circuit could have remanded with instructions for this Court to 14 consider more clearly in the first instance whether the 2016 reconsideration decision or the 2018 15 enforcement decision marked the start of the statute of limitations. It did not, and its holding that 16 Judge Laporte erred in denying leave to amend necessarily rests on the conclusion that the 17 December 2018 decision was the final decision for the purpose of § 2000e-16. See Milgard 18 Tempering, 902 F.2d at 715 (explaining that the law of the case doctrine encompasses issues 19 decided “by necessary implication”). 20 The Secretary relies on Hall v. City of Los Angeles (“Hall II”), 697 F.3d 1059 (9th Cir. 21 2012), to argue that treating the 2018 corrected enforcement decision as the start of the statute of 22 limitations is not law of the case because the Ninth Circuit did not specifically consider whether 23 the 2016 decision was the appropriate starting point. In Hall, the Ninth Circuit held on a first 24 appeal that the district court erred in applying collateral estoppel to a § 1983 claim under a 25 particular doctrine relating to prosecution based on false evidence, “Devereaux prong (2),” and 26 remanded for further proceedings. Hall v. City of Los Angeles (“Hall I”), No. 07-56853, 2009 WL 27 2020851, at *1 (9th Cir. July 13, 2009). On remand, the district court determined that Devereaux 1 against a plaintiff, did not apply to alleged coercion of the plaintiff himself, and granted summary 2 judgment for the defendants on that basis. Hall II, 697 F.3d at 1066. The Ninth Circuit held that 3 the district court’s consideration of that issue was not foreclosed by law of the case, because the 4 previous decision on appeal decided only the question of collateral estoppel and “did not then go 5 on to analyze whether Devereaux prong (2) applied to Hall's coercive interrogation claim.” Id. at 6 1067. 7 Unlike in this case, nothing in the first Hall decision necessarily relied on the proposition 8 that Deveraux prong (2) applied to the claim at issue. Here, in contrast, the initial denial of leave 9 to amend was based on the proposition that Young’s claim was untimely—for reasons not 10 specifically stated in Judge Laporte’s order—while the Ninth Circuit’s reversal of that decision 11 was based explicitly on its conclusion that Young could satisfy the statute of limitations if she 12 received the December 2018 decision within ninety days before filing this action. This Court is 13 not free to reconsider that conclusion. 14 There is no question that this issue was not well presented to the Ninth Circuit. The Ninth 15 Circuit did not explicitly consider whether the 2016 decision was the appropriate starting point 16 because the Secretary did not raise it, instead arguing specifically—and contrary to his current 17 position—that the November 30, 2018 enforcement decision was the “Final Order” from which 18 the ninety-day limitations period began to run, and that both that November decision and the 19 December 2018 correction included “the correct information regarding appeal rights.” Answering 20 Br. on Appeal at 28–30, Young v. Chao, No. 19-16829, ECF Doc No. 6 (9th Cir. Jan. 16, 2020). 21 The question of whether the December 2018 corrected order was the final decision for the purpose 22 of the statute of limitations was nevertheless necessary to the Ninth Circuit’s conclusion that 23 Judge Laporte erred in denying leave to amend, and there is no injustice in holding the Secretary 24 to that conclusion when it stemmed from the Secretary’s own framing of the statute of limitations 25 in previous briefing to this Court and the Ninth Circuit. 26 C. Young Need Not Return Funds Before Judgment 27 As the Secretary notes, one decision from the Southern District of California and a 1 novo review after accepting monetary relief from an EEOC proceeding, or at least that the plaintiff 2 must return or offer to return those funds before proceeding. Some of those cases are 3 distinguishable, while others rest on a shaky foundation. 4 The only in-circuit decision, Thompson v. Donahoe, cites no Ninth Circuit authority and 5 instead relies primarily on the district court’s conclusion that the plaintiff who had accepted 6 monetary relief before filing claim for de novo review was “trying to use the OFO’s award as a 7 floor on his damages,” which the court considered “repugnant to the requirement that a 8 complainant choose between filing an enforcement action or a de novo action for discrimination.” 9 Thompson v. Donahoe, No. 10-CV-2165 W(RBB), 2013 WL 144271, at *4 (S.D. Cal. Jan. 9, 10 2013). The Thompson court also cited the Eastern District of New York’s decision in St. John v. 11 Potter, 299 F. Supp. 2d 125, 129 (E.D.N.Y. 2004), and the Eastern District of Virginia’s decision 12 in Legard v. England, 240 F. Supp. 2d 538, 545 (E.D. Va. 2002). 13 St. John is distinguishable. In that case, the Eastern District of New York relied on the 14 defendant’s reasonable expectation that a plaintiff accepting “payment rendered in full satisfaction 15 of a valid order of an administrative agency,” “without reserving any rights with regard to either of 16 the checks,” would not seek to set aside the agency’s decision. 299 F. Supp. 2d at 129. The court 17 also noted that the plaintiff did not file a brief in opposition to the defendant’s motion for 18 summary judgment. Here, Young has sought to challenge at every turn at least the particular 19 position offered for reinstatement. When the DOT made its first payments in March and April of 20 2016, Sanchez Decl. (dkt. 69-1) ¶ 10, it had offered her a position for reinstatement and Young 21 had “informed DOT that she accepted the offer as partial implementation of the final EEO 22 decision but requested details regarding the position, her responsibilities, and her supervisor,” id. 23 ¶ 12, and the DOT was still trying to determine whether it could actually reinstate Young in light 24 of her having accepted a voluntary retirement incentive in the intervening years,8 id. ¶ 13. At the 25 time the DOT provided additional payments in March and May of 2017, the DOT had offered 26 Young an entirely different position, and Young had rejected that position based on her view that 27 1 it was not equivalent. Id. ¶¶ 15–16. When the DOT made its final payments after the enforcement 2 action in February and March of 2019, Young had already unsuccessfully requested review of the 3 enforcement decision, signaling her continued dissatisfaction with the outcome. Id. ¶¶ 18–19. 4 Young filed this action in mid-March of that year. See Compl. This case is not like St. John, 5 where the court found that the plaintiff’s conduct indicated that she accepted the outcome of 6 administrative proceedings. 7 The Eastern District of Virginia’s decision in Legard rests on an earlier decision by that 8 court, Miller v. Peters, which Legard characterized as foreclosing review where a plaintiff 9 “accepted some of his administrative relief and seeks review of the remaining portions.” Legard, 10 240 F. Supp. 2d at 546 (citing Miller v. Peters, Civ. No. 00-480-A, 2000 U.S. Dist LEXIS 22762 11 (E.D. Va. June 9, 2000)). In Miller, however, the court did not hold—or at least not clearly—that 12 a plaintiff was required to return any monetary relief before seeking de novo review, but instead 13 that the plaintiff in that case was not actually seeking de novo review and impermissibly sought 14 “review solely of [his] compensatory damage award[],” which Title VII does not permit. 2000 15 U.S. Dist LEXIS 22762, at *2. Regardless, Legard dismissed for lack of subject matter 16 jurisdiction as a result of the plaintiff’s acceptance of monetary relief, a position that the Secretary 17 specifically disclaims in this case. See Reply at 13 (“But Defendant is not taking the position that 18 disgorgement is required by statute or that this Court lacks jurisdiction to consider Plaintiff’s de 19 novo claim . . . .”); cf. also Mayfield v. U.S. Dep’t of Veterans Affs., No. CIV.A.05 2598, 2007 WL 20 625827, at *3 (E.D. La. Feb. 27, 2007) (citing with approval Legard’s jurisdictional holding in the 21 alternative to the court’s primary conclusions that the plaintiff had not sought de novo review and 22 had not shown good cause to alter a scheduling order to permit amendment). 23 In Clegg v. West, another Eastern District of Virginia decision, the court noted that the 24 plaintiff impermissibly sought simultaneously to enforce the EEOC’s determination and to obtain 25 de novo review that might yield additional damages. Clegg v. West, No. CIV.A. 97-986-A, 1997 26 WL 1168697, at *5 (E.D. Va. Oct. 20, 1997), aff’d without opinion, 199 F.3d 1326 (4th Cir. 1999) 27 (table of decisions). Looking to the Black’s Law Dictionary definition of a de novo proceeding, 1 simultaneously accept part of the benefit of the EEOC order, that is, the back pay he has received 2 and not offered to repay and, at the same time, raise de novo his discrimination claim.” Id. The 3 court cited no other authority for the proposition that a plaintiff cannot retain payments already 4 received while seeking de novo review, and did not rely solely on that issue, instead dismissing 5 based on the internal inconsistency of the plaintiff’s complaint, “the fact that plaintiff may not 6 seek further enforcement of the EEOC order because there is conclusive evidence on this record 7 that defendant complied fully with it,” and failure to exhaust administrative remedies. Id. at *5–6. 8 Some decisions have held that disgorgement would be required only in the alternative to 9 their primary conclusions that plaintiffs’ claims were untimely. Harley v. Chao, No. 1:07-CV- 10 1881-RWS-JFK, 2008 WL 11407328, at *12 (N.D. Ga. Jan. 24, 2008), recommendation adopted, 11 2008 WL 11407398 (N.D. Ga. Apr. 3, 2008); Vandesande, 2009 WL 10699891, at *6–7; Kloock, 12 2005 WL 1593448, at *2. Vandesande relied on caselaw addressing the effect of payment 13 provided in exchange for an explicit release, and noted that the plaintiff in the case at hand had 14 stipulated to damages before seeking de novo review. 2009 WL 10699891, at *3, *6–7 (citing 15 Faris v. Williams WPC-I, Inc., 332 F.3d 316, 322–23 (5th Cir. 2003)). There is no indication that 16 the parties ever agreed to any resolution of Young’s claims here. Both Vandesande and Kloock 17 also relied on the lack of timeliness of the plaintiff’s claims as grounds to enforce repose based on 18 past payments, but as discussed above, the Ninth Circuit has already effectively determined that 19 Young’s claim here is timely. 20 Two published opinions by appellate courts have declined to require a plaintiff to return 21 funds before seeking de novo review, noting the lack of any support for that rule in the statute. 22 The Fifth Circuit addressed the issue as follows:
23 Furthermore, we do not think that Massingill must disgorge or offer to disgorge the money she has received so far for her case to proceed. 24 We recognize that, as the district court noted, two district courts [St. John and Legard] have held otherwise. Indeed, one of those courts 25 [Legard] held that the defendant’s performance of the injunctive remedy and sending to plaintiff of checks for compensatory damages 26 and attorneys’ fees precluded relief, even though plaintiff had returned the former check and offered to return the latter or post a 27 bond for it and the checks were sent after plaintiff had filed suit but suit if the award has been partially or even completely rendered. 1 Defendants might complain that, having rendered an award, they are entitle to repose, but § 2000e-16(c) gives plaintiffs only ninety days 2 after the final agency disposition to sue, and it’s not unreasonable to delay such repose for three months. This is not a situation involving 3 the common-law defense of satisfaction of a debt, settlement, or judgment from some time ago, it is situation where the administrative 4 scheme has played out, the plaintiff has ninety days to sue, and she does so within that time. We do not mean to encourage plaintiffs to 5 accept awards and then file suit, but we cannot conclude that Massingill has forfeited her rights under § 2000e-16(c) in the present 6 circumstances.
7 Of course, the VA here can counterclaim against Massingill for the amounts already paid, obtaining offset against any recovery by 8 Massingill and judgment against Massingill if no liability is found or the offset is greater than the recovery. 9 10 Massingill, 496 F.3d at 386 (footnote omitted); see also Smith-Jackson v. Chao, No. 1:15-cv- 11 1688-WSD, 2017 WL 3575003, at *7 (N.D. Ga. Aug. 18, 2017) (following Massingill on this 12 issue).9 13 The D.C. Circuit recently reached the same conclusion:
14 In this case, Farrar has also expressed no such intent [to return funds]. But so what? Farrar sued under the Rehabilitation Act, which gives 15 employees 90 days from the Commission’s decision—without referring to its award—to file a civil action. 42 U.S.C. § 2000e-16(c). 16 The Act says nothing about requiring an employee to first disgorge, or offer to disgorge, an administrative remedy already received. 17 Although Farrar could have returned, or offered to return, his award before filing suit, the statute doesn’t require it. And we cannot read 18 that requirement into the statute without rewriting it. 19 Farrar v. Nelson, 2 F.4th 986, 988 (D.C. Cir. 2021). That court noted that the EEOC specifically 20 ordered the defendant agency to pay the plaintiff before the time to seek de novo review had 21 expired, and had rejected comments in rulemaking seeking a requirement that plaintiffs certify a 22 lack of intent to seek de novo review before ordering payment. Id. at 989. As in Massingill, the 23 9 One district court decision explicitly declined to follow Massingill, holding instead that a 24 plaintiff’s acceptance of funds from administrative proceedings barred her claim, and dismissing for lack of subject matter jurisdiciton. Jones v. Rogers, No. 15-10222-CIV, 2017 WL 6397353, at 25 *3 (S.D. Fla. June 29, 2017), recommendation adopted, 2017 WL 6395664 (S.D. Fla. Aug. 14, 2017). The Eleventh Circuit vacated that dismissal and remanded in an unpublished decision, 26 holding that it “need not decide whether Jones’ return of the EEOC award to the NSA is a precondition to Jones’ entitlement to her de novo trial” because she had in fact agreed to return the 27 funds, and noting that “[w]hether or not that might be a precondition, it is certainly not a matter of 1 D.C. Circuit noted that the plaintiff ultimately “risked losing his previously-awarded damages 2 when he filed his civil action,” as the defendant “could file a counterclaim to recover the 3 administrative award.” Id. 4 The Secretary contends that even though Young made clear her dissatisfaction with the 5 reinstatement position offered, the DOT was nevertheless entitled to rely on her acceptance of 6 monetary payments as disclaiming any intent to seek de novo review of the decision as a whole. 7 Reply at 14. Along the same lines, the Secretary seeks to distinguish cases where appellate courts 8 held that plaintiffs could proceed despite accepting payments because those courts held that 9 agencies could not reasonably expect repose when they made payments before the time to seek de 10 novo review had expired, while in the Secretary’s view, that period expired years before Young 11 sought review here. Id. at 13–14. As discussed above, the Ninth Circuit held to the contrary with 12 respect to the statute of limitations. Regardless, it is difficult to believe that the DOT actually 13 believed the matter was settled and beyond further review when the Secretary specifically argued 14 to this Court and the Ninth Circuit that that statute of limitations for de novo review began with 15 the EEOC’s November 2018 enforcement decision. See 1st. Mot. to Dismiss (dkt. 15) at 1010; 16 Answering Br. on Appeal at 28–30. Moreover, there is no indication that the DOT would have 17 behaved any differently had it known Young intended to pursue de novo review if her concerns 18 regarding reinstatement were not addressed to her satisfaction. 19 In this Court’s view, the circuit decisions Massingill and Farrar have the better of this 20 question. The claims at issue are governed by a comprehensive statutory and regulatory scheme, 21 no part of which requires a plaintiff to return funds received in administrative proceedings before 22 seeking de novo judicial review. A court “cannot read that requirement into the statute without 23 rewriting it.” Farrar, 2 F.4th at 988. While the Secretary is correct that those decisions did not 24 foreclose the possibility that equitable considerations or defenses might require repayment in some 25
26 10 “On November 30, 2018, the OFO issued its Final Order. The Final Order, which is referenced throughout and attached to Plaintiff’s complaint with the Errata, clearly set forth the 90-day period 27 in which Plaintiff had to file suit. The certificate of mailing shows the Final Order was mailed to 1 circumstances, the Secretary’s equitable arguments rest almost entirely on the district court 2 authority that Massingill and Farrar rejected,11 or that were based on distinguishable facts where a 3 plaintiff either failed to present a de novo challenge or more clearly accepted the results of 4 administrative proceedings. 5 Notwithstanding whatever claim the Secretary might have to Young’s administrative 6 award if Young fails to prevail in this action, this Court follows Massingill and Farrar in holding 7 that Young’s continued possession of those funds is not grounds for dismissal of her claim for de 8 novo review. 9 D. Other Avenues to Secure Funds Pending Resolution of This Case 10 At the hearing on this motion, the Court requested supplemental briefing as to whether— 11 even if not required by the nature of her claim—“the Court has authority to order Ms. Young to 12 place funds in escrow or post a bond pending resolution of de novo review.” Civil Minute Order 13 (dkt. 75). In his supplemental brief, the Secretary contends that basic principles of restitution call 14 for a return of funds previously paid to Young “[b]ecause the money paid to Plaintiff was made 15 pursuant to an administrative disposition that is now a legal nullity by reason of Plaintiff’s de novo 16 action.” Def.’s Supp’l Br. at 1–3. But as Young notes in her response, the Secretary cites no 17 authority for the proposition that the administrative disposition is already a nullity, in the same 18 manner as a judgment that has been vacated on appeal, merely by virtue of Young filing this 19 action and before any determination here as to whether the decision was correct. 20 The Secretary also argues that the Court has equitable authority to order funds placed in 21 escrow pending resolution of the case, relying primarily on United States v. Cal-Almond, Inc., 102 22 F.3d 999 (9th Cir. 1996). In that case, “Cal-Almond mistakenly paid the Almond Board all back- 23 due advertising and promotion assessments for the 1992–93 and 1993–94 seasons” despite its 24 belief that those assessments were unconstitutional, a question that Cal-Almond was actively 25 litigating in administrative proceedings at the time, where it had received an initial favorable 26 ruling that was then on administrative appeal. 102 F. 3d at 1002. In an enforcement action 27 1 brought by the United States in a district court while the administrative proceedings were still 2 pending, “Cal-Almond moved for return of the money,” and the district court ordered the funds 3 placed in escrow. Id. The Ninth Circuit affirmed, treating the escrow order as a component of the 4 district court’s decision to exercise inherent authority to stay the United States’ enforcement 5 action, which was justified by “unusual” circumstances including unreasonable delay in 6 adjudicating the administrative proceedings and potential bad faith by the United States, as well as 7 its failure to pay a previous judgment in related litigation. Id. at 1003–05. 8 This case does not contain the unusual factors of Cal-Almond. The Secretary has offered 9 no evidence of bad faith, unreasonable delay, or failure to meet legal obligations on Young’s part. 10 The Secretary is nevertheless likely correct that the inherent power recognized in that case 11 includes authority to order funds placed in escrow if the Secretary has a colorable claim to them 12 and is likely to face difficulty collecting if successful. Such authority is also available in at least 13 some circumstances under California law through a writ of possession or attachment, with that law 14 incorporated here by Rule 64 of the Federal Rules of Civil Procedure, which provides that “every 15 remedy is available that, under the law of the state where the court is located, provides for seizing 16 a person or property to secure satisfaction of the potential judgment.” Fed. R. Civ. P. 64; see Cal. 17 Civ. Proc. Code § 512.010 (writ of possession); Cal. Civ. Proc. Code § 485.210 (writ of 18 attachment). 19 Any such preliminary relief, however, would depend on the Secretary actually asserting a 20 claim to the funds at issue. Both Massingill and Farrar—the only published appellate decisions 21 addressing the question of whether a plaintiff under similar circumstances must returns funds 22 obtained through administrative proceedings—contemplated that the government must bring a 23 counterclaim to reclaim such funds. See Massingill, 496 F.3d at 386–87 (“Of course, the VA here 24 can counterclaim against Massingill for the amounts already paid, obtaining offset against any 25 recovery by Massingill and judgment against Massingill if no liability is found or the offset is 26 greater than the recovery.”); Farrar, 2 F.4th at 989 (“The district court may find no liability on his 27 claim, and NASA could file a counterclaim to recover the administrative award, although we 1 counterclaim here. See generally Answer (dkt. 58). The Court agrees with Massingill and Farrar 2 that the Secretary cannot recover funds at issue without affirmatively bringing a claim for them. 3 In the absence of any counterclaim, it is premature to consider whether to grant preliminary relief 4 to secure the funds that might be recoverable through such a counterclaim. The Court therefore 5 declines to order such relief at this time. 6 IV. CONCLUSION 7 For the reasons discussed above, the Secretary’s motion is DENIED. If she chooses to 8 proceed here, Young faces a risk that she might be required to repay the substantial funds12 that 9 she received in administrative proceedings. But that is her decision to make, and she is not 10 required to repay those funds as a condition of bringing her claim. In the event that the Secretary 11 brings a counterclaim for restitution, he may have a strong argument for requiring Young to place 12 funds in escrow, particularly given the difficulties of collecting a potential judgment that Young 13 might only be able to satisfy through the sale of her home, as she represented at the hearing. To 14 date, however, no such counterclaim has been filed, and any question of whether the funds should 15 be placed in escrow is not a basis for summary judgment on Young’s claims against the 16 Secretary—the only motion currently before the Court. 17 If the Secretary wishes to pursue any counterclaim and a request for preliminary relief to 18 secure the funds at issue, he must file his counterclaim no later than February 11, 2022, and 19 Young shall answer or move to dismiss the counterclaim no later than March 4, 2022. The 20 Secretary may move for requiring funds to be placed in escrow or the posting of a bond no sooner 21 than Young files an answer to the counterclaim,13 and no later than fourteen days thereafter. 22 Young is cautioned that depending on the outcome of any such counterclaim and the court’s 23
24 12 The parties’ supplemental briefing indicates a significant disagreement as to the amount of the funds at issue, the basis for which is not clear on the current record. The parties are ORDERED to 25 meet and confer to attempt to resolve at least the question of how much money was awarded in administrative proceedings, with the intent that even if they cannot reach a resolution, each side 26 will be better equipped to defend their view and address their opponent’s position if the Court is required to resolve this disagreement. 27 13 To be clear, if Young moves to dismiss the counterclaim in lieu of filing an answer, she would ] decision on whether repayment is required, one possible result in this case is that Young would be 2 || ordered to return all of the money paid to her pursuant to the administrative proceedings. 3 IT ISSO ORDERED. 4 || Dated: January 25, 2022 5 c a J PH C. SPERO 6 ief Magistrate Judge 7 8 9 10 1]
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