Ruiz v. Snohomish Cnty. Pub. Util. Dist. No. 1,

• Decision Date: 08 June 2016
• Docket Number: No. 14-35030,14-35030
• Citation: 824 F.3d 1161
• Parties: Kim Milless Ruiz, Plaintiff–Appellant, v. Snohomish County Public Utility District No. 1, a local government entity; Jim Little, individually and in his official capacity, Defendants–Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

824 F.3d 1161

Kim Milless Ruiz, Plaintiff–Appellant

v.Snohomish County Public Utility District No. 1, a local government entity; Jim Little, individually and in his official capacity, Defendants–Appellees.

No. 14-35030

United States Court of Appeals, Ninth Circuit.

Argued and Submitted May 5, 2016 Seattle, Washington

Filed June 8, 2016

Michael A. Jacobson (argued), Michael A. Jacobson, PS Inc., Seattle, Washington, for Plaintiff–Appellant.

Christopher M. Huck (argued), Michael A. Goldfarb, and R. Omar Riojas, Kelley, Goldfarb, Huck & Roth, PLLC, Seattle, Washington, for Defendants–Appellees.

Before: Susan P. Graber, Marsha S. Berzon, and Mary H. Murguia, Circuit Judges.

OPINION

GRABER, Circuit Judge:

Plaintiff Kim Milless Ruiz worked for Defendant Snohomish County Public Utility District No. 1 (“the District”) from 1998 until her termination in 2010. In 2011, she sued Defendant Jim Little, the Executive Director of Employee Relations at the District, alleging sex discrimination for acts that had occurred in 2008. But, as Plaintiff conceded, she failed to effect service on Little. The district court dismissed that action “with prejudice” on two grounds: lack of personal jurisdiction and untimeliness.

In 2013, Plaintiff brought the present action against both Defendants, alleging sex discrimination claims, under state and federal law, stemming in part from her termination in 2010. The district court held that the earlier dismissal was res judicata and that, accordingly, it barred this action. Plaintiff timely appeals. Reviewing de novo, Stewart v. U.S. Bancorp , 297 F.3d 953, 956 (9th Cir. 2002), we hold—consistent with the Restatement (Second) of Judgments and at least three sister circuits—that an earlier dismissal on alternative grounds, where one ground is a lack of jurisdiction, is not res judicata. Res judicata therefore does not bar this action. Because dismissal of some of Plaintiff's claims nevertheless was proper on other grounds, we affirm in part, reverse in part, and remand for further proceedings.

FACTUAL AND PROCEDURAL HISTORY

Because this appeal challenges the grant of a motion to dismiss, we accept as true all facts alleged in the complaint. Daniels–Hall v. Nat'l Educ. Ass'n , 629 F.3d 992, 998 (9th Cir. 2010). Plaintiff worked for the District from 1998 to 2010. The District fired her on June 10, 2010, acting on false assertions made against Plaintiff by Defendant Little. Male co-workers who engaged in conduct similar to Plaintiff's purported conduct were not disciplined.

In 2011, acting pro se, Plaintiff filed a lawsuit against Defendant Little in state court. Plaintiff alleged that, in 2008, Defendant Little filed a false disciplinary report against her. The complaint did not mention the 2010 firing.

Defendant Little removed the case to federal court in 2012, expressly noting that he did not waive any defenses, including sufficiency of service. He then filed a motion to dismiss that asserted a lack of personal jurisdiction, because Plaintiff failed to serve him properly, and untimeliness. In the timeliness section, Defendant Little explained that, had Plaintiff served him properly, the claim would have been timely because it was filed within three years of the 2008 false disciplinary report. But the complaint was untimely under Washington law, according to Defendant Little, because Plaintiff's service was deficient, and an improperly served complaint neither constitutes the commencement of an action nor tolls the statute of limitations.

Plaintiff then filed two motions: (1) a motion for extension of time to respond to the motion to dismiss and (2) a motion for voluntary dismissal. The motion for an extension of time stated that “Plaintiff cannot answer the issues of the defendant['s] motion to dismiss without hiring a counsel” because Defendant's motion “is complex and plaintiff is not legally trained for civil rights law.” The motion for voluntary dismissal stated that Plaintiff “did not serve [Defendant] with the lawsuit papers within 120 days of filing suit. There is a lack of jurisdiction over the person.”

Defendant Little filed a response to both motions, each stating that Defendant did not oppose dismissal but arguing that the dismissal should be with prejudice because of the untimeliness of the action. Three weeks later, the district court dismissed the action with prejudice, stating in full:

This matter comes before the Court on Plaintiff's motion for voluntary dismissal. (Dkt. No. 9.) Defendant does not oppose dismissal, and requests that the dismissal be with prejudice. (Dkt. No. 12.) Plaintiff does not object. The motion is GRANTED. Because Plaintiff concedes that the Court lacks personal jurisdiction over Defendant and that the claims are barred by the statute of limitations, this matter is DISMISSED with prejudice.

Plaintiff did not appeal that 2012 dismissal.

On June 7, 2013, Plaintiff filed this action in state court against Little and the District, asserting sex-discrimination claims under the Washington Law Against Discrimination and 42 U.S.C. § 1983. Defendants removed the case to federal court. Defendants then moved to dismiss the action on three grounds: (1) res judicata or claim preclusion; (2) untimeliness; and (3) failure to state a claim. The district court held that res judicata bars the action, dismissed the case for that reason, and expressly declined to reach Defendants' other two arguments. Plaintiff timely appeals.

DISCUSSION

“The preclusive effect of a federal-court judgment is determined by federal common law.” Taylor v. Sturgell , 553 U.S. 880, 891, 128 S.Ct. 2161, 171 L.Ed.2d 155 (2008). “Res judicata applies when there is: (1) an identity of claims; (2) a final judgment on the merits; and (3) identity or privity between parties.” Stewart , 297 F.3d at 956 (internal quotation marks omitted). We consider whether the 2012 dismissal was “a final judgment on the merits.”

The 2012 dismissal rested on two grounds: lack of personal jurisdiction and untimeliness. Considered separately, those reasons have opposite claim-preclusive effects. A “dismissal on statute of limitations grounds is a judgment on the merits” that operates as res judicata. Tahoe–Sierra Pres. Council, Inc. v. Tahoe Reg'l Planning Agency , 322 F.3d 1064, 1081 (9th Cir. 2003). By contrast, a dismissal for want of personal jurisdiction is not a judgment “on the merits” for the purpose of res judicata. See, e.g. , Phillips Petro. Co. v. Shutts , 472 U.S. 797, 805, 105 S.Ct. 2965, 86 L.Ed.2d 628 (1985) (“[A] judgment issued without proper personal jurisdiction over an absent party is not entitled to full faith and credit elsewhere and thus has no res judicata effect as to that party.”); Martin v. N.Y. State Dep't of Mental Hygiene , 588 F.2d 371, 373 n.3 (2d Cir. 1978) (per curiam) (“A dismissal for failure of service of process, of course, has no Res judicata effect.”); Restatement (Second) of Judgments (“Restatement”) § 20(1) (1982) (“A personal judgment for the defendant, although valid and final, does not bar another action by the plaintiff on the same claim: (a) When the judgment is one of dismissal for lack of jurisdiction....”); accord 18A Charles Alan Wright et al., Federal Practice and Procedure: Jurisdiction (“Federal Practice ”) § 4436, at 154, 168–70 (2d ed. 2002).

We have not decided the res judicata effect of an order—like the one at issue here—that contains two holdings, one “on the merits” and the other not “on the merits.” But the Restatement and at least one sister circuit have concluded that, in those circumstances, the earlier judgment is not res judicata because it was not “on the merits.” See Restatement § 20 cmt. e (“A dismissal may be based on two or more determinations, at least one of which, standing alone, would not render the judgment a bar to another action on the same claim. In such a case, ... it should not operate as a bar ... [e]ven if another of the determinations, standing alone, would render the judgment a bar....”); Pizlo v. Bethlehem Steel Corp. , 884 F.2d 116, 119 (4th Cir. 1989) (“When a dismissal is based on two determinations, one of which would not render the judgment a bar to another action on the same claim, the dismissal should not operate as a bar.”).

Two related reasons are commonly given for the rule. First, the “on the merits” determination “may not have been as carefully or rigorously considered as it would have if it had been necessary to the result, and in that sense it has some of the characteristics of dicta.” Restatement § 20 cmt. e. Second, “of critical importance, the losing party, although entitled to appeal from both determination[s], may be dissuaded from doing so as to the determination going to the ‘merits' because the alternative determination [ ], which in itself does not preclude a second action, is clearly correct. The rules of res judicata should not encourage or foster appeals in such instances.” Id.

This case nicely illustrates both points. Plaintiff declined to brief the timeliness issue because of its complexity and, instead, requested additional time to hire a lawyer with “civil rights law expertise.” The district court's order provided no analysis on the timeliness issue, and the court apparently never ruled on the request for additional time. The court's determination on the timeliness issue “may not have been as carefully or rigorously considered as it would have if it had been necessary to the result.”¹ Restatement § 20 cmt. e.

Defendants assert that Plaintiff could have appealed the 2012 dismissal to challenge the timeliness ruling. But we agree with the Restatement that “[t]he rules of res judicata should not encourage or foster appeals” in these circumstances. Id. It would be an inefficient use of judicial resources to encourage litigants to appeal judgments for the sole purpose of preserving their ability to potentially bring the same claims again, in a hypothetical future action. That concern would be heightened where the “on the...