Gerson v. Logan River Acad.

• Decision Date: 14 December 2021
• Docket Number: No. 20-4074,20-4074
• Citation: 20 F.4th 1263
• Parties: Samantha GERSON, Plaintiff - Appellant, v. LOGAN RIVER ACADEMY, d/b/a Maple Rise Academy, Defendant - Appellee, and Does, 1 through 11, Defendants.
• Court: U.S. Court of Appeals — Tenth Circuit

20 F.4th 1263

Samantha GERSON, Plaintiff - Appellant,

v.LOGAN RIVER ACADEMY, d/b/a Maple Rise Academy, Defendant - Appellee,andDoes, 1 through 11, Defendants.

No. 20-4074

United States Court of Appeals, Tenth Circuit.

FILED December 14, 2021

Alan S. Mouritsen (Michael W. Young with him on the briefs), Parsons Behle & Latimer, Salt Lake City, Utah, for Appellant.

Molly M. Loy (Thomas E. Beach with her on the brief), Beach Law Group, LLP, Oxnard, California, for Appellees.

Before HARTZ, BRISCOE, and CARSON, Circuit Judges.

ORDER

This matter is before the court on (1) Appellant's Petition for Rehearing or Rehearing En Banc; (2) Appellant's Motion for Leave to Attach Two Additional Documents to Petition for Rehearing or Rehearing En Banc; (3) Appellee's Motion for Leave to Attach Declaration of Jeff Smith to Appellee's Response to Appellant's Petition for Rehearing or Rehearing In Banc; and (4) Appellee's Response to Appellant's Petition for Rehearing or Rehearing In Banc. As an initial matter, the parties’ motions are DENIED. Upon careful consideration of Appellant's petition and Appellee's response, we direct as follows.

Pursuant to Fed. R. App. P. 40, the petition for panel rehearing is denied by a majority of the members of the merits panel. Judge Briscoe would grant panel rehearing.

However, we sua sponte amend our original opinion dated August 30, 2021 as reflected in the attached revised opinion. The court's August 30, 2021 opinion is withdrawn and replaced by the attached revised opinion. The Clerk of Court is directed to issue the attached revised opinion effective nunc pro tunc to the date the original opinion was filed.

The petition for rehearing en banc and the attached revised opinion were transmitted to all judges of the court who are in regular active service. As no member of the panel and no judge in regular active service requested that the court be polled, Appellant's request for rehearing en banc is denied. See Fed. R. App. P. 35(f).

HARTZ, Circuit Judge.

At the age of 15, Plaintiff Samantha Gerson was allegedly sexually abused by an employee (the Perpetrator) at Logan River Academy, a residential treatment facility in Logan, Utah. She filed suit against Logan River a decade later in the United States District Court for the Central District of California (the Central District), from which the case was transferred to the United States District Court for the District of Utah. Logan River moved to dismiss on the ground that the suit was barred by Utah's applicable statute of limitations. Ms. Gerson responded that the suit was timely under California law. The district court applied California's choice-of-law doctrine, determined that Utah's statute of limitations governed, and granted the motion to dismiss. We have jurisdiction under 28 U.S.C. § 1291 and affirm.

I. BACKGROUND

Because this case comes to us on review of a dismissal under Fed. R. Civ. P. 12(b)(6) for failure to state a claim, we accept as true the well-pleaded allegations in Ms. Gerson's complaint. See Brooks v. Mentor Worldwide LLC , 985 F.3d 1272, 1281 (10th Cir. 2021). Although the statute of limitations is an affirmative defense, see Fed. R. Civ. P. 8(c)(1), a dismissal on that ground is permissible if "the complaint itself admits all the elements of the affirmative defense by alleging the factual basis for those elements." Fernandez v. Clean House, LLC , 883 F.3d 1296, 1299 (10th Cir. 2018).

Ms. Gerson was a California resident and high school student in Beverly Hills. On October 15, 2008, Logan River staff members came to her school and transported her to Logan River. Ms. Gerson claims she was taken from California involuntarily and against her will.¹ While at Logan River, the Perpetrator repeatedly sexually abused Ms. Gerson until April 2009. She continues to suffer physically and emotionally from her ordeal.

In June 2019 Ms. Gerson—then 25—filed suit in the Central District² against Logan River and 11 unknown and unnamed individuals and entities, not including the Perpetrator. She pleaded eight causes of action based on allegations that the defendants knew or had reason to know of the Perpetrator's unlawful sexual conduct but covered it up and failed to properly supervise the Perpetrator. Logan River responded by moving to dismiss the complaint or, alternatively, transfer the case to federal court in Utah. The Central District granted the motion to transfer because Ms. Gerson could have brought her action in Utah and because on balance the convenience of the parties and witnesses, as well as the interest of justice, favored transfer. See 28 U.S.C. § 1404(a). Once in Utah, Logan River again moved to dismiss, arguing that Utah law governed and the applicable Utah statute of limitations barred the claims. In response, Ms. Gerson did not dispute that her claims would be barred under Utah law but argued that California law governed and her claims were timely under the applicable California statute of limitations. The district court agreed with Logan River. Applying California choice-of-law principles, it decided that Utah substantive law governed because it was the State whose interests would be more significantly impaired if its law were not applied to this case. It dismissed the complaint as time-barred under Utah law.

II. DISCUSSION

The sole issue on appeal is whether Utah's or California's statute of limitations applies. There is much debate about how to decide which State's substantive law should govern a dispute that has connections with more than one State, with one leading commentator having identified seven approaches in use among the 50 States. See Symeon C. Symeonides, Choice of Law in the American Courts in 2019: Thirty-Third Annual Survey , 68 Am. J. Comp. L. 235, 259 (2020) (2019 Annual Survey ). A highly influential approach is that adopted by the Restatement (Second) of Conflict of Laws, whose guiding principle for tort claims is to apply the law of the State with the "most significant relationship" to the parties and the occurrence with respect to the issue in question. Restatement (Second) of Conflict of Laws §§ 6, 145 (1971) ; see Gregory E. Smith, Choice of Law in the United States , 38 Hastings L.J. 1041, 1044–46 (1987). But that approach is far from universally accepted. See Symeonides, 2019 Annual Survey at 259 (cataloging each State's choice-of-law approach and identifying 25 States that follow Restatement (Second) of Conflict of Laws for tort claims). Accordingly, our first task is to determine what choice-of-law rules apply to this case.

When exercising diversity jurisdiction under 28 U.S.C. § 1332, a district court ordinarily applies the choice-of-law rules of the State in which it sits. See Klaxon Co. v. Stentor Elec. Mfg. Co. , 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941) ; Brooks , 985 F.3d at 1278 n.1. But when, as here, a case lands in a forum by way of transfer under 28 U.S.C. § 1404(a) on a motion by the defendant, the transferee court generally must use the choice-of-law rules that would have prevailed in the transferor court. See Ferens v. John Deere Co. , 494 U.S. 516, 519, 110 S.Ct. 1274, 108 L.Ed.2d 443 (1990) ; Van Dusen v. Barrack , 376 U.S. 612, 639, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964). But see Atl. Marine Const. Co. v. U.S. Dist. Ct. for W. Dist. of Texas , 571 U.S. 49, 65–66, 134 S.Ct. 568, 187 L.Ed.2d 487 (2013) (when transfer is ordered to effectuate a valid contractual forum-selection clause, the choice-of-law rules of the transferee court apply). Because Ms. Gerson initially filed this case in the Central District, we use California's choice-of-law rules to determine which State's law should apply. We review de novo the district court's choice-of-law determination. See Carolina Cas. Ins. Co. v. Burlington Ins. Co. , 951 F.3d 1199, 1207 (10th Cir. 2020).

A. California's Choice-of-Law Rules

California has long been recognized as the leading proponent of so-called governmental-interest analysis to resolve conflicts of laws arising from tort claims. See McCann v. Foster Wheeler LLC , 48 Cal.4th 68, 105 Cal.Rptr.3d 378, 225 P.3d 516, 524 (2010) ; see also Symeonides, 2019 Annual Survey at 259 (cataloging California as the only State (along with the District of Columbia) that presently uses governmental-interest analysis for tort claims). This approach involves three steps. See McCann , 105 Cal.Rptr.3d 378, 225 P.3d at 527. A court must first determine "whether the relevant law of each of the potentially affected jurisdictions" differs with regard to the particular issue before it. Id. (internal quotation marks omitted). This requirement is satisfied if the outcome depends on which jurisdiction's law is applied. See id. , 105 Cal.Rptr.3d 378, 225 P.3d at 527–28 ; Kearney v. Salomon Smith Barney, Inc. , 39 Cal.4th 95, 45 Cal.Rptr.3d 730, 137 P.3d 914, 933 (2006).

If the laws differ, the court proceeds to step two, which requires it to determine "each jurisdiction's interest in the application of its own law under the circumstances of the particular case to determine whether a true conflict exists." McCann , 105 Cal.Rptr.3d 378, 225 P.3d at 527 (internal quotation marks omitted). A "true conflict" is said to exist if each jurisdiction has a "real and legitimate interest" in having its law applied. Id. 105 Cal.Rptr.3d 378, 225 P.3d at 527, 531–32. A jurisdiction may not have the requisite interest if, for example, it has an "unusual and outmoded statute," Offshore Rental Co. v. Cont'l Oil Co. , 22 Cal.3d 157, 148 Cal.Rptr. 867, 583 P.2d 721, 728 (1978), or has "exhibited little concern" about whether its law is applied in the relevant context, id. ; see Kearney , 45 Cal.Rptr.3d 730, 137 P.3d at 934, or the party that would benefit from application of the jurisdiction's law is not a resident of the jurisdiction, see Hurtado v. Superior Ct. , 11 Cal.3d 574, 114 Cal.Rptr. 106, 522 P.2d 666, 668, 670 (1974) (no true conflict in wrongful-death suit by Mexican plaintiffs against...