Cada v. Baxter Healthcare Corp.

Decision Date17 January 1991
Docket NumberNo. 90-1888,90-1888
Citation920 F.2d 446
Parties54 Fair Empl.Prac.Cas. 961, 55 Empl. Prac. Dec. P 40,424, 59 USLW 2411 Joseph F. CADA, Plaintiff-Appellant, v. BAXTER HEALTHCARE CORPORATION, Defendant-Appellee.
CourtU.S. Court of Appeals — Seventh Circuit

John A. Cook and Mercedes Matias, Hough, Cook, Weatherhead & Kinsella, Chicago, Ill., for plaintiff-appellant.

David J. Parsons, Dana S. Connell, and Kathryn A. Mrkonich, Wildman, Harrold, Allen & Dixon, Chicago, Ill., for defendant-appellee.

Before WOOD, Jr., POSNER and EASTERBROOK, Circuit Judges.

POSNER, Circuit Judge.

The plaintiff, Joseph Cada, complains that the defendant, Baxter Healthcare, fired him in violation of the Age Discrimination in Employment Act, 29 U.S.C. Secs. 621 et seq. The district court granted summary judgment for the defendant on the ground that the suit was time-barred, and dismissed the suit. The appeal presents fascinating and important questions regarding statutes of limitations generally and the age discrimination statute of limitations in particular.

Cada was the manager of Baxter's "creative services" department, the principal function of which was to produce the catalog of the company's drug products (the "armamentarium," as such catalogs are known). On the catalog project Cada reported to Jim Becks, the company's director of sales and marketing, although in all other respects he reported to Jim Stauner, the vice president for marketing. In April 1987 Becks was promoted to vice president for business planning and development but retained supervisory authority over the catalog project. The project was chronically behind schedule and over budget, and shortly after his promotion Becks asked Cada for a comprehensive report. Armed with this report Becks discussed the project with the company's president and the other vice presidents in a series of meetings late in April. They decided that the department should be reorganized to emphasize more aggressive tactics for marketing Baxter's products and that Cada was not the man to head up the reorganized department. On May 5 Becks met with Cada to inform him that the department would be reorganized and that he assumed Cada would be retiring because he was approaching 65. When Cada responded that he was not planning to retire Becks told him that in that event he would be terminated about two weeks after a new manager for the department was hired, probably in July. Cada claims that he did not believe Becks had the authority to fire him and was even unsure whether Becks was attempting to fire him, as distinct from urging him to take early retirement.

Right after the meeting with Becks, Cada did two things. He went to the company's human resources department and obtained a packet of outplacement and benefit forms, which he filled out a few days later. And he tried to see Stauner, whom he considered his real supervisor. Stauner was unavailable and it was not till May 22 that they were able to meet. At that meeting Stauner told him that the decision to fire Cada had been made by Becks and that he, Stauner, could do nothing about it. On July 7 Cada's replacement appeared. She was a young woman. Three weeks after she started work, Cada was terminated. He filed his complaint with the Equal Employment Opportunity Commission on March 4, 1988, which was more than 300 days after his meeting with Becks on May 5, 1987, but less than 300 days after his meeting with Stauner on May 22. The administrative statute of limitations in the age discrimination law is 300 days for cases filed in Illinois. Davidson v. Board of Governors, 920 F.2d 441, 442 (7th Cir.1990).

In Delaware State College v. Ricks, 449 U.S. 250, 101 S.Ct. 498, 66 L.Ed.2d 431 (1980), the question was whether a cause of action for discrimination accrued when the plaintiff was denied tenure, allegedly on discriminatory grounds, or when his employment contract expired a year later; the Court held that it was the former. Baxter argues that, similarly, the date on which Cada was told he was terminated--May 5--was the date on which the statute of limitations started to run, not May 22 when the termination was confirmed by Stauner, or the end of July when Cada actually left Baxter's employ. Against this argument, which persuaded the district judge, Cada hurls a barrage of counterarguments: that Becks had no authority to fire Cada, so there was no adverse personnel action on May 5--the decision to terminate was made by Stauner on May 22 when he met with Cada; that whatever Becks's actual authority, Cada sincerely and reasonably believed that Becks was not authorized to fire him; and that not until Cada learned that his replacement was young and relatively inexperienced did he realize he was a victim of age discrimination, so the statute of limitations did not begin to run until then (July 7).

To Cada's point about Becks's authority to fire him on May 5, Baxter's first reply is that all that matters is that a reasonable person in Cada's position would have thought he was being fired. This cannot be right. Suppose someone had forged a letter from Becks to Cada, announcing that Cada was fired, which Cada received on May 1. Would the statute of limitations have begun to run on May 1? Surely no, though at argument Baxter's counsel said yes. Or suppose a year earlier Cada had gone to a fortune teller, who had gazed into her crystal ball and there seen Cada drawing unemployment benefits. Would the statute of limitations have begun to run on that day? Again the answer is no. The statute of limitations does not begin to run until the defendant takes some action, whatever the plaintiff knows or thinks. Ricks does not hold that the statute of limitations begins to run as soon as the handwriting is on the wall. The point was not that when Ricks was denied tenure he knew his days were numbered. The point was that the denial of tenure was an adverse personnel action forbidden if done for discriminatory reasons; it was irrelevant that the full consequences of the action were not felt till later, when Ricks, unprotected by tenure, was let go upon the expiration of his employment contract. In our forged-letter and crystal-ball cases the employee learned his fate before any adverse personnel action was taken, and until it is taken his claim has not accrued and the statute of limitations has not begun to run. Compare In re UNR Industries, Inc., 725 F.2d 1111, 1119 (7th Cir.1984).

So if Becks was merely telling Cada that he had better take early retirement because he, Becks, was going to advise Stauner, Cada's direct superior, to fire him, then no adverse personnel action was taken at the May 5 meeting and the statute of limitations did not begin to run then, any more than it would have begun to run in Ricks if and when a faculty member had told Ricks a month before the vote on tenure that he was going to vote against him. But Baxter submitted to the district court a mass of testimonial material all to the effect that, before May 5, the president of the division of Baxter in which Cada worked had authorized Becks to reorganize the creative services department and in the process to jettison Cada. This evidence, which was not contradicted, showed that Becks was authorized to fire Cada and that he did so at the May 5 meeting. By Cada's own version of the meeting of May 22 with Stauner, Stauner merely made clear at that meeting that Becks had been acting within his actual authority when he fired Cada. The May 5 meeting was the equivalent of the tenure vote in Ricks. It was the making and communication to Cada of the decision to fire him effective within a few weeks after Cada's replacement came on board.

We just said "communication," but suppose the decision was not clearly communicated to Cada. Suppose, as Cada's deposition suggests, that Becks pussyfooted around and as a result Cada failed to get the message until his interview with Stauner on May 22. And suppose further that until his replacement appeared on July 7, Cada could not be reasonably confident that he had been fired because of his age. Would it not be unreasonable to hold that the statute of limitations began to run before he was in full possession of the information--that he had indeed been fired and that he had been replaced by a much younger person--which he needed in order to decide whether he had a claim against Baxter under the age discrimination law?

Unfortunately it is not possible to answer this question with a simple yes or no. We must first distinguish between the accrual of the plaintiff's claim and the tolling of the statute of limitations, then between two doctrines of tolling, last between different kinds of information that Cada may or may not have possessed. Accrual is the date on which the statute of limitations begins to run. It is not the date on which the wrong that injures the plaintiff occurs, but the date--often the same, but sometimes later--on which the plaintiff discovers that he has been injured. The rule that postpones the beginning of the limitations period from the date when the plaintiff is wronged to the date when he discovers he has been injured is the "discovery rule" of federal common law, which is read into statutes of limitations in federal-question cases (even when those statutes of limitations are borrowed from state law) in the absence of a contrary directive from Congress. Suslick v. Rothschild Securities Corp., 741 F.2d 1000, 1004 (7th Cir.1984), overruled on other grounds in Short v. Belleville Shoe Mfg. Co., 908 F.2d 1385 (7th Cir.1990); Jensen v. Snellings, 841 F.2d 600, 606 (5th Cir.1988); Cullen v. Margiotta, 811 F.2d 698, 725 (2d Cir.1987); Nichols v. Hughes, 721 F.2d 657, 659 (9th Cir.1983); Trotter v. International Longshoremen's & Warehousemen's Union, 704 F.2d 1141, 1143 (9th Cir.1983) (per curiam). The discovery rule is implicit in the holding of Ricks that the...

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