Rederford v. U.S. Airways, Inc.

• Citation: 589 F.3d 30
• Decision Date: 14 December 2009
• Docket Number: No. 09-1005.,09-1005.
• Parties: Janelle REDERFORD, Plaintiff, Appellant, v. US AIRWAYS, INC., Defendant, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

589 F.3d 30

Janelle REDERFORD, Plaintiff, Appellant, v. US AIRWAYS, INC., Defendant, Appellee.

No. 09-1005.

United States Court of Appeals, First Circuit.

Heard November 5, 2009.

Decided December 14, 2009.

Howard Moore, Jr. with whom Moore & Moore was on brief for the appellant.

Daniel E. Farrington with whom The Farrington Law Firm, LLC was on brief for the appellee.

Before LYNCH, Chief Judge, BOUDIN, Circuit Judge, and SAYLOR,^* District Judge.

LYNCH, Chief Judge.

In 2008, Janelle Rederford brought suit under the Americans with Disabilities Act ("ADA") for events occurring in 2002 in federal district court against U.S. Airways, Inc. The court dismissed the suit on the grounds that the ADA claims had been disallowed and also had been discharged as "claims" under the Bankruptcy Code in the airline's 2003 bankruptcy. The federal court also rejected Rederford's arguments that she was nonetheless entitled to relief based on the equitable doctrines of judicial estoppel and unclean hands. Rederford v. U.S. Airways, Inc., 586 F.Supp.2d 47, 51-54 (D.R.I.2008). Rederford, who had worked for U.S. Airways for approximately twenty-four years as a Customer Service Representative and suffered from Systemic Lupus Erythematosus ("lupus"), claimed that U.S. Airways' January 31, 2002, termination of her employment violated her rights under the ADA. The issues, involving the interplay between the Bankruptcy Code's definition of "claims" and causes asserted under federal employment discrimination law, are novel for us. We affirm the dismissal.

I.

Because Rederford's claim was dismissed under Fed.R.Civ.P. 12(b)(6), we accept the well-pleaded facts in her complaint as true, drawing all reasonable inferences in her favor. Sutliffe v. Epping Sch. Dist., 584 F.3d 314, 325 (1st Cir. 2009). Rederford's claims raise pure questions of law. The underlying facts are not disputed.

Throughout most of Rederford's twenty-four-year employment as a Customer Service Representative at U.S. Airways she suffered from lupus, which was diagnosed in 1979. Lupus is an inflammatory connective tissue disease with variable and often disabling features. During the month before the termination of her employment, Rederford was absent from work from January 2 to January 5, 2002, due to a lupus-related illness. Rederford's supervisor required that she submit a certification from a health care provider regarding her medical condition. The supervisor was not satisfied with the initial certification and requested an amended one by January 26. After the supervisor did not receive the amended certification by the extended deadline of January 28, U.S. Airways terminated Rederford's employment on January 31, 2002, at T.F. Green Airport in Warwick, Rhode Island.¹

On April 25, 2002, Rederford filed a charge of discrimination with the Equal Employment Opportunity Commission ("EEOC"), which was also cross-filed with the Rhode Island Human Rights Commission ("RIHRC"). On May 10, 2002, she also filed a charge of discrimination against U.S. Airways with the RIHRC.

In the meantime, U.S. Airways was itself suffering financial difficulties. On August 11, 2002, U.S. Airways filed a Voluntary Petition for Relief under Chapter 11 in the Bankruptcy Court for the Eastern District of Virginia. Around October 1, 2002, Rederford was notified of the bankruptcy proceeding and was provided a proof of claim form. The notice informed Rederford that if she did not submit a proof of claim by the November 4, 2002 bar date she would be "forever barred, estopped and enjoined from" asserting her claims against U.S. Airways.

Rederford returned her proof of claim form on October 31, 2002. In it, Rederford stated her belief that she had been discriminated against on the basis of disability and been denied reasonable accommodation. She estimated her claim to be valued at one million dollars, including punitive damages.

On January 24, 2003, U.S. Airways filed its Second Omnibus Objection to a number of different classes of claims, including "contingent and unliquidated claims for which [US Airways] den[ied] any liability." Rederford's discrimination claim was listed within this class.

US Airways' Objection also contained language stating that "to the extent any such litigation claims are completely covered by any of the Debtors' applicable insurance policies as described in paragraph 4 above, the Debtors object to such claimants receiving any distribution under the Plan since such claimants will recover the full amount of their claims, if they are so entitled, from available insurance proceeds." Paragraph four of the Objection described U.S. Airways' insurance policies as covering "personal injury tort claims" and stated that nearly all of them provide "first dollar" coverage, meaning that U.S. Airways would not have to pay a deductible. It also stated that, under an "Insurance Stipulation Order," U.S. Airways could grant relief from the automatic stay of claims to "personal injury tort claimants" who, "subject to certain notice and filing procedures," released and waived claims against U.S. Airways and agreed to limit recovery to insurance proceeds.

Rederford was served notice of the Objection on January 28, 2003, and was informed that her claim would be disallowed unless she filed a request for a hearing by February 28, 2003. She did not file such a request. Rederford alleged at oral argument that she did not believe she needed to file the request, because she thought her claims were covered by U.S. Airways' insurance policies. On March 17, 2003, the bankruptcy court entered an order sustaining the Objection, thereby disallowing Rederford's claim.

The following day, the bankruptcy court issued an order confirming U.S. Airways' reorganization plan. This order discharged all claims arising before the plan's effective date, March 31, 2003, and permanently enjoined suit pursuant to those claims. This injunction applied to any claims Rederford had against U.S. Airways whether or not she had filed a proof of claim.

Over a year later, and two years after Rederford filed her initial complaint with the RIHRC, the RIHRC, on May 7, 2004, issued a Complaint and Notice of Hearing regarding Rederford's charges of employment discrimination. On July 29, 2004, the RIHRC found that there was probable cause to believe that U.S. Airways had discriminated against Rederford. US Airways subsequently filed a motion to dismiss with the RIHRC, asserting that Rederford's claims had been discharged in bankruptcy.² The RIHRC conditionally granted U.S. Airways' motion to dismiss. Rederford then filed a late appeal to the State of Rhode Island Superior Court, which was dismissed as untimely.³

On May 1, 2008, after the EEOC had earlier issued a Notice-of-Right to Sue, Rederford filed a federal complaint alleging her January 31, 2002 termination violated Title I of the ADA, 42 U.S.C. §§ 12111-12117, and seeking reinstatement, compensatory, special, and punitive damages, and attorney's fees. Specifically, the complaint alleged that U.S. Airways failed to grant Rederford reasonable accommodation for her disability, made prohibited inquiries—which where not job-related or consistent with business necessity—regarding the nature and severity of Rederford's disability, failed to interact in good faith with Rederford to reach a reasonable accommodation instead of terminating her employment, and engaged in acts of retaliation and coercion.

In early July 2008, U.S. Airways filed a motion to dismiss, asserting that Rederford's suit was barred by the bankruptcy court's permanent injunction. The district court granted the motion in November 2008. Rederford, 586 F.Supp.2d at 49. The court first concluded that Rederford's claim, even if it sought the equitable relief of reinstatement, was barred by the bankruptcy court injunction because it was a claim reducible to a payment. Id. at 52-53. The court then rejected Rederford's argument that U.S. Airways was judicially estopped from invoking the bankruptcy court's injunction, finding that U.S. Airways had not taken any positions in the bankruptcy court that contradicted its positions in this litigation. Id. at 53-54. Finally, the court found that Rederford's attempt to use the doctrine of unclean hands failed because U.S. Airways had not engaged in misconduct. Id. at 54. This appeal followed.

II.

We review an order granting a motion to dismiss under Fed.R.Civ.P. 12(b)(6) de novo. Sutliffe, 584 F.3d at 325. In doing so, we accept the well-pleaded facts as true, viewing factual allegations in the light most favorable to the plaintiff. Id. "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)); Sutliffe, 584 F.3d at 325. We may consider not only the complaint but also "facts extractable from documentation annexed to or incorporated by reference in the complaint and matters susceptible to judicial notice." Jorge v. Rumsfeld, 404 F.3d 556, 559 (1st Cir.2005). Rederford pursues pure issues of law, which require interpretation of provisions of the Bankruptcy Code.

We note at the outset that the ADA claims Rederford raises in this case were disallowed by the bankruptcy court and that her appeal to this court amounts to a collateral attack on the bankruptcy court's order. Nonetheless, U.S. Airways has not defended on these grounds, perhaps because it wants to resolve the larger statutory interpretation issues that the claims raise.

A. Whether Rederford's ADA Cause of Action is a "Claim" for Purposes of the Discharge Provisions of the Bankruptcy Code

Rederford concedes that, to the extent her initial claims would obligate U.S. Airways to pay money damages, they are barred by the bankruptcy court's...