Owens v. Kaiser Foundation Health Plan, No. 99-56466

CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)
Writing for the CourtALARCON
Citation244 F.3d 708
Parties(9th Cir. 2001) CHRISTOPHER OWENS; CYNTHIA HUTCHINS,Plaintiffs-Appellants, v. KAISER FOUNDATION HEALTH PLAN,INC., a California corporation,Defendant-Appellee
Docket NumberNo. 99-56466
Decision Date26 March 2001

Page 708

244 F.3d 708 (9th Cir. 2001)
CHRISTOPHER OWENS; CYNTHIA HUTCHINS,Plaintiffs-Appellants,
v.
KAISER FOUNDATION HEALTH PLAN,INC., a California corporation,Defendant-Appellee.
No. 99-56466
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
Argued and Submitted March 8, 2001
Filed March 26, 2001

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Copyrighted Material Omitted

Page 710

David G. Spivak and David L. Ross, Ross, Rose & Hammill, LLP, Beverly Hills, California, for the plaintiffs-appellants.

James A. Breslo, Seyfarth, Shaw, Fairweather & Geraldson, Los Angeles, California, for the defendant-appellee.

Appeal from the United States District Court for the Central District of California William D. Keller, District Judge, Presiding. D.C. No.CV 97-04898-WDK

Before: Arthur L. Alarcon, Melvin Brunetti, and Michael Daly Hawkins, Circuit Judges.

ALARCON, Circuit Judge:

Appellants Christopher Owens and Cynthia Hutchins appeal from the district court's order dismissing their Title VII action against Kaiser Foundation Health Plan, Inc. ("Kaiser") based on the doctrine of res judicata. We affirm because we conclude that the application of the doctrine of res judicata is not barred merely because they did not receive "right to sue" letters from the Equal Employment Opportunity Commission ("EEOC") until after their earlier action had been dismissed with prejudice.

I

Appellants are African-Americans who were employed as regional chartroom

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clerks in Kaiser's facility in Downey, California. Kaiser relocated the facility from Downey to Ontario, California in February, 1994, at which time Appellants' employment was terminated. Thereafter, Appellants filed discrimination charges with both the EEOC and the California Department of Fair Employment and Housing, alleging that Kaiser failed to relocate them to another facility because of their race.

On February 14, 1995, Appellants filed an action in California state court against Kaiser, two individual supervisors, and Appellants' union, asserting causes of action for breach of implied-in-fact contract, breach of the implied covenant of good faith and fair dealing, intentional infliction of emotional distress, and fraud. The Defendants removed the action to federal court. Kaiser moved to dismiss the action based on federal preemption and the applicable statute of limitations. Appellants stipulated to a dismissal. The court dismissed without prejudice on June 19, 1995. On November 3, 1995, Appellants amended their charges of discrimination with the EEOC, adding allegations of hostile work environment and racial discrimination.

On November 22, 1995, Appellants filed a second action in state court against the same Defendants. They alleged the same causes of action, with the addition of a claim for breach of the duty of fair representation. The complaint alleged that Kaiser filled positions "with less qualified non-Blacks" and that this action was not based on seniority, "but was instead arbitrary and discriminatory against several African American employees . . . ." Defendants again removed the action to federal court and Kaiser moved to dismiss. Appellants did not file a response to Kaiser's motion. The district court, noting that no opposition had been filed and that Appellants' attorney had failed to respond to the court's repeated inquiries, dismissed the action with prejudice on October 25, 1996.

On April 4 and May 9, 1997, respectively, Owens and Hutchins received their "right to sue" letters from the EEOC. Shortly thereafter, they filed a pro se action in federal court solely against Kaiser, alleging that their terminations were unlawfully based on race. Kaiser moved to dismiss the action for failure to state a claim. The district court granted Kaiser's motion, and dismissed the complaint with leave to amend.

Appellants, now represented by counsel, filed an amended complaint on May 12, 1998 alleging that Kaiser had violated Title VII. Specifically, they alleged that Kaiser permitted a "racially discriminatory and hostile work environment" and that their terminations were "the result of racial, color, and cultural discrimination." The district court denied Kaiser's motion to dismiss the amended complaint for failure to state a claim. Kaiser filed its answer on August 31, 1998, and discovery commenced. The court stayed all proceedings from November 9, 1998 to January 13, 1999, however, in order to investigate whether Appellants' attorney was licensed to practice law.

On May 10, 1999, after discovery had resumed, Appellants moved to file a second amended complaint seeking to add claims for harassment and discrimination under state law. On May 20, 1999, before the district court had ruled on Appellants' motion, Kaiser moved to file an amended answer to assert res judicata as an affirmative defense and for judgment on the pleadings based on that doctrine. Kaiser argued that the court's dismissal with prejudice of Appellants' previous action barred any further action by Appellants based on the same underlying facts. The district court granted Kaiser's motion to amend its answer, denied Appellants' motion to amend their complaint as moot, and dismissed the action based on res judicata. Appellants filed a timely notice of appeal. We have jurisdiction pursuant to 28 U.S.C.S 1291.

II

Appellants contend that the district court abused its discretion by permitting

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Kaiser to amend its answer to assert res judicata as an affirmative defense. They contend that Kaiser's motion was untimely, submitted in bad faith, and prejudicial. We review the district court's decision to permit Kaiser to amend its answer for an abuse of discretion. Islamic Republic of Iran v. Boeing Co., 771 F.2d 1279, 1286 (9th Cir. 1985). "A district court may abuse its discretion if it does not apply the correct law or if it rests its decision on a clearly erroneous finding of material fact." Bogovich v. Sandoval, 189 F.3d 999, 1001 (9th Cir. 1999) (quoting United States v. Plainbull, 957 F.2d 724, 725 (9th Cir. 1992)).

A district court "shall grant leave to amend freely `when justice so requires.' " Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (en banc) (quoting Fed. R. Civ. P. 15(a)). We have stated that "this policy is to be applied with extreme liberality." Morongo Band of Mission Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir. 1990); see also Griggs v. Pace Am. Group, Inc., 170 F.3d 877, 880 (9th Cir. 1999) (noting that inferences should be drawn "in favor of granting the motion"). In determining whether leave to amend is appropriate, the district court considers "the presence of any of four factors: bad faith, undue delay, prejudice to the opposing party, and/or futility." Griggs, 170 F.3d at 880.

Appellants contend that Kaiser acted in bad faith because Kaiser failed "to offer a plausible explanation for their delayed res judicata application." We disagree. Kaiser offered substantial competent evidence to explain the delay. Kaiser substituted counsel shortly after Appellants filed their first amended complaint, and offered evidence that new counsel had not represented Kaiser in the prior action and was not aware that the prior action had been dismissed with prejudice. Moreover, Kaiser's new counsel offered a credible explanation for his belated discovery that Appellants' action was barred by res judicata: He researched the procedural history of the action in the course of determining whether to oppose Appellants' motion to file a second amended complaint. Immediately upon learning of the availability of the res judicata defense, Kaiser moved to amend its answer. The...

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1478 practice notes
  • Greenstein v. Wells Fargo Bank, N.A. (In re Greenstein), Case No.: 1:12–bk–15099–MB
    • United States
    • United States Bankruptcy Courts. Ninth Circuit. U.S. Bankruptcy Court — Central District of California
    • October 25, 2017
    ...have been raised" in a prior action between the same parties or their privies. 576 B.R. 159 Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 713 (9th Cir. 2001). The doctrine "serves to promote judicial efficiency by preventing multiple lawsuits and to enable the parties to rely on t......
  • Juliana v. United States, Case No. 6:15-cv-01517-AA
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Oregon)
    • October 15, 2018
    ...in the pleadings as true, the moving party is entitled to judgment as a matter of law." Owens v. Kaiser Found. Health Plan, Inc. , 244 F.3d 708, 713 (9th Cir. 2001) (quotation marks omitted). To survive a motion for judgment on the pleadings, "the non-conclusory ‘factual content’ [of the co......
  • Hart v. Larson, Case No.: 3:16–cv–01460–BEN–MDD
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Southern District of California)
    • February 3, 2017
    ..." Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003) (quoting Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 2001) ). Courts consider "undue delay, bad faith, dilatory motive, repeated failure to cure deficiencies by previous amendments, undue ......
  • Gilley v. Madden, No. 2:18-cv-1162 JAM KJN P
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • December 8, 2020
    ...established Federal law, as determined by the Supreme Court of the United States." 28 U.S.C. § 2253(d)(1); see also LaPage 49 Crosse, 244 F.3d at 708 ("Given the divergence of opinion on this issue and the lack of clear guidance from the United States Supreme Court, we cannot say that the C......
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1507 cases
  • Greenstein v. Wells Fargo Bank, N.A. (In re Greenstein), Case No.: 1:12–bk–15099–MB
    • United States
    • United States Bankruptcy Courts. Ninth Circuit. U.S. Bankruptcy Court — Central District of California
    • October 25, 2017
    ...have been raised" in a prior action between the same parties or their privies. 576 B.R. 159 Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 713 (9th Cir. 2001). The doctrine "serves to promote judicial efficiency by preventing multiple lawsuits and to enable the parties to rely on t......
  • Hart v. Larson, Case No.: 3:16–cv–01460–BEN–MDD
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Southern District of California)
    • February 3, 2017
    ..." Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003) (quoting Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 2001) ). Courts consider "undue delay, bad faith, dilatory motive, repeated failure to cure deficiencies by previous amendments, undue ......
  • Villarino v. Comm'r: Soc. Sec. Admin., CASE NO. CV F 12-1225 LJO BAM
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • August 3, 2012
    ...raised' in a prior action." Stewart v. U.S. Bancorp, 297 F.3d 953, 956 (9th Cir. 2002) (quoting Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 713 (9th Cir. 2001) (emphasis in original)). Res judicata serves "the dual purpose of protecting litigants from the burden of relitigating ......
  • Gonzalez v. Cnty. of Merced, Case No. 1:16–cv–01682–LJO–SAB
    • United States
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    • December 7, 2017
    ...1051 (9th Cir. 2003). "This policy is ‘to be applied with extreme liberality.’ " Id. (quoting Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 2001) ). Leave to amend should be freely given in the absence of any apparent or declared reason, such as undue delay, bad fait......
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