National Ass'n of Government Employees v. City Public Service Bd. of San Antonio, Tex.

• Decision Date: 06 December 1994
• Docket Number: No. 92-5549,92-5549
• Citation: 40 F.3d 698
• Parties: 67 Fair Empl.Prac.Cas. (BNA) 1013, 63 USLW 2378 NATIONAL ASSOCIATION OF GOVERNMENT EMPLOYEES, et al., Plaintiffs-Appellants, v. CITY PUBLIC SERVICE BOARD OF SAN ANTONIO, TEXAS, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 698

40 F.3d 698

67 Fair Empl.Prac.Cas. (BNA) 1013, 63 USLW 2378

NATIONAL ASSOCIATION OF GOVERNMENT EMPLOYEES, et al Plaintiffs-Appellants, v. CITY PUBLIC SERVICE BOARD OF SAN ANTONIO, TEXAS, et al Defendants-Appellees.

No. 92-5549.

United States Court of Appeals Fifth Circuit.

Dec. 6, 1994.

Larry R. Daves, San Antonio, TX, for appellant.

J. Joe Harris, Judy K. Jetelina, Craig Anthony Arnold, Matthews & Branscomb, San Antonio, TX, for appellee.

Appeal from the United States District Court for the Western District of Texas.

Before JOHNSON, GARWOOD and JONES, Circuit Judges.

GARWOOD, Circuit Judge:

Plaintiffs-appellants Eustacio B. Diaz (Diaz), Guillermo R. Gaona (Gaona), and the National Association of Government Employees (collectively Plaintiffs) brought this putative class action against defendant-appellee the City of San Antonio, Texas, acting by and through the City Public Service Board (CPS). In 1977, Plaintiffs filed charges with the Equal Employment Opportunity Commission (EEOC), alleging that CPS discriminated against its Mexican-American and Mexican alien workers on the basis of their national origin in hiring, promotion, discipline, and other terms and conditions of employment. ¹ After efforts at conciliation failed in 1980, the EEOC referred the case to the Department of Justice and informed Plaintiffs that the Department of Justice would either notify them of its intention to prosecute the case or issue a right to sue letter. Nothing more happened until late 1989, when Plaintiffs determined that the Department of Justice had no record of their case, obtained a right to sue letter, and filed this suit in the district court below. Plaintiffs alleged violations of Title VII, 42 U.S.C. Secs. 1981 and 1983, and the Texas constitution. CPS moved to dismiss the Title VII claim on the basis of laches and to dismiss the section 1981 claim either on summary judgment or for failure to state a claim on which relief may be granted. The magistrate judge to whom the case had been referred recommended that both these motions be granted and in addition recommended denial of class certification and dismissal with prejudice of Plaintiffs' Title VII claims and dismissal without prejudice of their section 1981, section 1983, and state law claims. The district court adopted the recommendation of the magistrate judge, and Plaintiffs appeal that judgment. We find no error and therefore affirm.

Facts and Proceedings Below

Although the present suit was filed November 29, 1989, the controversy began more than twelve years earlier. On February 18, 1977, Plaintiffs filed employment discrimination charges with the EEOC, alleging that CPS discriminated against Mexican-Americans and Mexican aliens in hiring, promotion, job classification, and other terms and conditions of employment. ² The EEOC issued a Reconsideration of Determination on October 31, 1979, ³ in which it found that there was reasonable cause to support some of Plaintiffs' allegations with respect to hiring and promotion. ⁴ The parties then attempted conciliation, but that effort failed. On June 24, 1980, the EEOC formally informed Plaintiffs in writing that conciliation was unsuccessful, that no further efforts to conciliate would be made, and that it was referring their charges to the Department of Justice for review in anticipation of a possible enforcement action.

Although Plaintiffs retained counsel to represent them in August 1980 and have been represented by counsel continuously since that time, ⁵ no further action was taken in the case. The attorney who represented Plaintiffs from 1983 to 1987 did call a press conference in San Antonio during September 1984 at which he "accused the EEOC of failing to move against CPS after finding evidence of discrimination" and announced that he would file suit against CPS in four to six weeks. However, no suit was filed at that time. In 1989, Plaintiffs contacted the Department of Justice to determine where the case stood. The Department of Justice informed them that it had no record of a referral from the EEOC and therefore had not made any review of the case. Plaintiffs thereafter requested and received right to sue letters from the EEOC and filed this suit on November 29, 1989. They alleged causes of action under Title VII and section 1981. In addition, they moved for certification of the suit as a class action. A subsequent amended complaint added claims under section 1983 and the due course of law and equal protection provisions of the Texas constitution.

On February 8, 1990, CPS moved to dismiss, claiming that it was not a suable entity separate and apart from the City of San Antonio. Plaintiffs requested and were ultimately granted leave to file an amended complaint to name the City as defendant. On March 8, 1990, CPS moved to dismiss Plaintiffs' section 1981 claims either on summary judgment or for failure to state a claim on which relief may be granted. While that motion was pending, the magistrate judge to whom the case had been assigned granted the parties an extension of time to conduct further discovery on the issues of laches and class certification. On November 15, 1991, CPS moved to dismiss Plaintiffs' Title VII claims on the basis of laches.

The magistrate judge considered all these motions and entered his report and recommendation on January 30, 1992. He recommended that the district court dismiss Plaintiffs' Title VII claims on the basis of laches, finding that the long delay in filing suit "was manifestly unreasonable, inadequately explained and inexcusable" and had substantially prejudiced CPS's ability to conduct an adequate defense. The magistrate judge also recommended that the motion to dismiss Plaintiffs' section 1981 claims be granted and that that claim be dismissed without prejudice. As to the section 1981 claim, the magistrate judge reasoned: (1) that most of Plaintiffs' allegations (e.g., the tolerance of racial and ethnic slurs in the workplace, discriminatory disciplinary practices) were not cognizable under section 1981; (2) that the discriminatory hiring claims were not properly analyzed under section 1981 because "[Plaintiffs] do not contend that anyone was denied employment with CPS because he or she is Mexican-American" ⁶; and (3) that Plaintiffs' pleadings and proof with respect to their discriminatory promotion claims failed to show the denial of an opportunity for a new and distinct employer-employee relationship as required by Patterson v. McLean Credit Union, 491 U.S. 164, 109 S.Ct. 2363, 105 L.Ed.2d 132 (1989).

The magistrate judge also recommended that any request to amend the complaint to plead sufficient facts not be allowed. He reasoned that, not only had Plaintiffs already been granted leave to file a second amended complaint after CPS moved to dismiss the section 1981 claim for failure to state a claim, but that the summary judgment evidence established that Plaintiffs could not amend their complaint to state a section 1981 claim. Referencing Plaintiffs' answers to interrogatories, the magistrate judge found only two CPS employees--Alejandro Ramirez and Jesse Tello--as to whom the responses could be construed to allege a denial of promotion within the applicable statute of limitations. The magistrate judge found nothing in the summary judgment evidence to show that either of these men were in fact denied promotions within the limitations period or to establish that the duties, compensation, and benefits of the jobs for which they were allegedly denied promotion created a new and distinct relationship with the employer. In contrast, the magistrate judge noted that CPS had come forward with evidence to show that Ramirez had been promoted in 1986 and that Tello had declined three promotions in the late 1970s and early 1980s. Similarly, the magistrate judge found that only two of Plaintiffs' affidavits could be construed to demonstrate a denial of promotion. Assuming in the absence of evidence that these claims arose within the two-year statute of limitations, the magistrate judge found that one of the affiants complained primarily of sexual harassment, not national origin discrimination, and that the other failed to show that the promotion he was denied would have created a new and distinct employment relationship.

Finally, with regard to Plaintiffs' motion for class certification, the magistrate judge found that there were only eleven putative class members whose claims of discrimination were tied to events occurring within the two-year statute of limitations period. He found this number insufficient to satisfy the numerosity requirement of Federal Rule of Civil Procedure 23(a)(1). He therefore recommended denial of class certification and dismissal of Plaintiffs' section 1983 and state law claims without prejudice.

Over Plaintiffs' objections, the district court adopted the magistrate judge's findings and recommendations on February 24, 1992. It therefore denied class certification and dismissed Plaintiffs' Title VII claim with prejudice and their section 1981, section 1983, and state law claims without prejudice. Plaintiffs now appeal that judgment.

Discussion

I. Appellate Jurisdiction

At oral argument, Plaintiffs for the first time contended that this Court lacks jurisdiction to hear their appeal because the district court's judgment is not final. With limited exceptions not relevant here, we are empowered to review only final decisions of the district courts. 28 U.S.C. Sec. 1291. A decision is "final" when it "dispose[s] of the entire controversy and leave[s] nothing further for the court to do in the cause." Anastasiadis v. S.S. Little John, 339 F.2d 538, 539 (5th Cir.1964). In the present case, Plaintiffs contend that the district court's order is not final because it did not dispose of what they assert is a Title VI claim included in their second amended complaint. We are unpersuaded by this argument because we conclude that, to the...