Tuesday, August 19, 2008

9th Circuit Joins Pack on Accrual Rule in Echo of Ledbetter

Gavel_t Via CCH Workweek comes Lukovsky v. City and County of San Francisco, a public employment discrimination case brought under 42 U.S.C. §§ 1981, 1983, 1985, and 1986. At issue was not the merits of the plaintiffs' claim (preferential hiring of Asian and Fillipino workers) but was whether the statute of limitations had run on the plaintiffs' claims, and to decide that, the court had to decide when those claims had accrued.

The plaintiffs argued that they had no reason to suspect that discrimination was the reason they were not hired until several years after the instances in which they weren't hired and that therefore, their cause of action did not accrue until they did receive information that would point to that unlawful motivation.

The Ninth Circuit rejected that argument, joining seven other circuits on the issue. From the opinion,

Accrual is the date on which the statute of limitations begins to run; under federal law, a claim accrues “when the plaintiff knows or has reason to know of the injury which is the basis of the action.” Id. (quoting Two Rivers v. Lewis, 174 F.3d 987, 991 (9th Cir. 1999)).

Plaintiffs argue that their claims did not accrue until they knew both that they were not being hired and of the Defendants’ alleged discriminatory intent. In other words, plaintiffs contend that knowledge of “injury” includes both the actual injury (failure to hire) and the legal wrong (racial discrimination). The Zolotarev plaintiffs assert they had no reason to know of the legal injury until informed years later by a MUNI employee that allegedly unqualified Asians and Filipinos had been hired; the Glassman plaintiffs claim they had no reason to know of the Defendants’ discriminatory conduct until they received the letter informing them of the Zolotarev lawsuit.

Plaintiffs frame their argument in terms of the “discovery rule,” which postpones the beginning of the limitations period from the date the plaintiff is actually injured to the date when he discovers (or reasonably should discover) he has been injured. . . . The real question, as noted above, is what do we mean by “injury,” that is, what must the plaintiffs “discover”—that there has been an adverse action, or that the employer acted with discriminatory intent in performing that act?

In answering the question, the Ninth Circuit joined the Third, Fourth, Fifth, Sixth, Seventh, Eighth, and Tenth Circuits in holding that "the claim accrues upon awareness of the actual injury, i.e., the adverse employment action, and not when the plaintiff suspects a legal wrong." The court further noted that this holding was consistent with the Supreme Court's recent decision in Ledbetter. The court did leave open the possibility that equitable tolling might extend the limitations period where a reasonable plaintiff would not have known of a possible claim and that equitable estoppel might bar a defendant who actively hid facts from asserting the statute of limitations defense. Neither was applicable in this case, however.

The Ninth Circuit was certainly on solid ground joining seven other circuits on this issue. It still leaves me with a lingering feeling that the result is not a particularly good one because this formulation of the discovery rule would seem to lead to an increase in litigation by employees. The employer has something of a monopoly on access to information about why a particular action was taken. It's almost as if the courts are telling employees or applicants to file a suit just in case even if they don't suspect discrimination was behind the employer's decision because they will lose the opportunity to do so in the future. This type of discovery rule works well where the injury nearly always gives rise to a cause of action--I'm thinking here of the classic case of forceps or a sponge left in a person's abdomen after surgery. The person's cause of action accrues there not when the surgery was performed but when the foreign object is discovered, and I can't imagine a situation like that in which no one would be liable. 

In the employment context, only very few adverse actions give rise to a cause of action, and there are several different causes of action governed by different statutes. In other words, there are few legal harms. But employees are injured by all adverse employment actions. And the illegality of the action isn't always clear right away even though the harm (or at least much of the harm) is experienced right away. And with the separate laws, what should employees do? File claims under all of them? My favorite example of the difficulty this poses for employees comes from a case I had in practice. The only two female employees of a county sherriff's department were fired. They brought a sex discrimination lawsuit against the sherriff, and in his deposition, he said "I didn't fire them because they were women. I fired them because they were trying to organize a union." That was about the easiest unfair labor practice case you can imagine after that. Still, you can't always depend on the employer to be so forthcoming.

In the end, I have to think that many people never realize that they have a cause of action, and at the same time, some hyper-vigilant employees or applicants may file claims without a lot of good evidence of legally cognizable wrongdoing, just in case. What a terrible system.



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Marcia McCormick of Workplace Prof Blogs comments on a case recently handed down by the 9th circuit that she says has "echoes of Ledbetter." The case, Zolotarev v. City of San Francisco, involves a suit against San Francisco for allegedly giving pref... [Read More]

Tracked on Aug 20, 2008 9:56:29 AM


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