Kim Ruiz v. Snohomish County Pud No 1 , 824 F.3d 1161 ( 2016 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
KIM MILLESS RUIZ, No. 14-35030
Plaintiff-Appellant,
D.C. No.
v. 2:13-cv-01702-TSZ
SNOHOMISH COUNTY PUBLIC
UTILITY DISTRICT NO. 1, a local OPINION
government entity; JIM LITTLE,
individually and in his official
capacity,
Defendants-Appellees.
Appeal from the United States District Court
for the Western District of Washington
Thomas S. Zilly, Senior District Judge, Presiding
Argued and Submitted May 5, 2016
Seattle, Washington
Filed June 8, 2016
Before: Susan P. Graber, Marsha S. Berzon,
and Mary H. Murguia, Circuit Judges.
Opinion by Judge Graber
2 RUIZ V. SNOHOMISH CTY. PUD
SUMMARY*
Civil Rights / Res Judicata
The panel affirmed in part and reversed in part the district
court’s dismissal, on res judicata grounds, of an action
brought under 42 U.S.C. § 1983 and state law, alleging sex
discrimination.
Plaintiff sued her former employer in 2011, alleging sex
discrimination for acts that occurred in 2008. The district
court dismissed that action “with prejudice” on two grounds:
lack of personal jurisdiction and untimeliness. In 2013,
plaintiff brought the present action, 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 the present action.
The panel held that – consistent with the Restatement
(Second) of Judgments and at least three sister circuits – an
earlier dismissal on alternative grounds, where one ground is
a lack of jurisdiction, is not res judicata. The panel therefore
held that res judicata did not bar this action. The panel
determined, however, that dismissal of some of plaintiff’s
claims was proper on other grounds, and therefore the panel
affirmed in part, reversed in part and remanded for further
proceedings.
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
RUIZ V. SNOHOMISH CTY. PUD 3
COUNSEL
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.
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
4 RUIZ V. SNOHOMISH CTY. PUD
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.
RUIZ V. SNOHOMISH CTY. PUD 5
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
6 RUIZ V. SNOHOMISH CTY. PUD
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 (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 (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
RUIZ V. SNOHOMISH CTY. PUD 7
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
8 RUIZ V. SNOHOMISH CTY. PUD
‘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 merits”
determination involved complicated legal or factual
questions: the appeal would require substantial expenditure
of resources premised only on a hypothetical future action.
See, e.g., Pizlo, 884 F.2d at 119 (stating that “needless
appeals, wasted judicial resources and increased legal
1
Contrary to the district court’s order in 2012, nothing in the record
suggests that Plaintiff “conceded” that her complaint was untimely. She
simply said nothing on that point.
RUIZ V. SNOHOMISH CTY. PUD 9
expenses to the parties would necessarily result” from
requiring appeals in these circumstances).
We nevertheless need not decide whether to adopt a
general rule for all judgments resting on alternative grounds
where one alternative is not “on the merits.” Here, the court’s
non-merits ruling was for lack of personal jurisdiction,
depriving the court of the authority to rule on the merits. See,
e.g., Costello v. United States, 365 U.S. 265, 285 (1961)
(noting the “fundamental jurisdictional defects which render
a judgment void . . . such as lack of jurisdiction over the
person or subject matter”); Thomas P. Gonzalez Corp. v.
Consejo Nacional de Produccion de Costa Rica, 614 F.2d
1247, 1255 (9th Cir. 1980) (“It is well-established that a
judgment entered without personal jurisdiction over the
parties is void.”). We therefore hold, consistent with
decisions by the Sixth and Seventh Circuits, that res judicata
does not apply to a judgment that rests on both a lack of
jurisdiction and a merits determination. See Remus Joint
Venture v. McAnally, 116 F.3d 180, 184 n.5 (6th Cir. 1997)
(“[T]he state court correctly recognized that when a district
court’s ruling rests on alternative grounds, at least one of
which is based on the inability of the court to reach the
merits, the judgment should not act as a bar in a future
action.”);2 Bunker Ramo Corp. v. United Bus. Forms, Inc.,
713 F.2d 1272, 1279 (7th Cir. 1983) (“Once a court expresses
the view that it lacks jurisdiction, the court thereafter does not
2
A much earlier decision by the Sixth Circuit applied the opposite rule.
Crawford v. Zeitler, 326 F.2d 119, 121–22 (6th Cir. 1964). But the Sixth
Circuit implicitly declined to follow that case in Remus, likely because
Crawford’s analysis did not account for the jurisdictional nature of the
alternative holding; it rested solely on the rule that two alternative merits
holdings bind later courts. One treatise has described Crawford as
“clearly wrong.” 18 Federal Practice § 4421, at 578 n.39.
10 RUIZ V. SNOHOMISH CTY. PUD
have the power to rule on any other matter. Any finding
made by a court when the court has determined that it does
not have subject matter jurisdiction carries no res judicata
consequences.” (citations omitted)); see also 18 Federal
Practice § 4421, at 575–78 (“If a first decision is supported
both by findings that deny the power of the court to decide
the case on the merits and by findings that go to the merits,
preclusion is inappropriate as to the findings on the merits.
A court that admits its own lack of power to decide should
not undertake to bind a court that does have power to decide.”
(footnote omitted)).3
We acknowledge that we have held that a “district court
may decide that a complaint fails to state a claim even when
it does not have personal jurisdiction.” Milton H. Greene
Archives, Inc. v. Marilyn Monroe LLC, 692 F.3d 983, 990 n.6
(9th Cir. 2012); see also Wages v. IRS, 915 F.2d 1230,
1233–35 (9th Cir. 1990) (announcing the rule). We strongly
question the vitality of that rule in light of post-Wages
Supreme Court jurisprudence. See, e.g., Sinochem Int’l Co.
v. Malaysia Int’l Shipping Corp., 549 U.S. 422, 430–31
(2007) (“Steel Co. v. Citizens for Better Environment,
523 U.S. 83 (1998), clarified that a federal court generally
may not rule on the merits of a case without first determining
that it has jurisdiction over the category of claim in suit
(subject-matter jurisdiction) and the parties (personal
jurisdiction). See id. at 93–102. ‘Without jurisdiction the
court cannot proceed at all in any cause’; it may not assume
jurisdiction for the purpose of deciding the merits of the case.
3
Federal Practice discusses the effect of alternative dismissals in a
section devoted to issue preclusion, not claim preclusion. But both the
quoted text and some of the cases cited in the footnote concern claim
preclusion.
RUIZ V. SNOHOMISH CTY. PUD 11
Id. at 94.”). In any event, whatever discretion a district court
may have to announce decisions pursuant to the Wages rule,
it is a separate matter to give res judicata effect to judgments
pronounced without personal jurisdiction. Even assuming
that the district court properly opined on the merits in 2012,
its judgment on the merits had no res judicata effect because
the court lacked personal jurisdiction.4
Defendants argue that, even if we adopt the rule that an
alternative dismissal grounded in part on personal jurisdiction
is not res judicata, the district court’s order here was not, in
fact, a dismissal on alternative grounds. We disagree. As
noted above, the order states: “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.” (Emphasis added.)
Notwithstanding the text of the order, Defendants argue that
the order was a dismissal solely on the timeliness ground; if
the lack of service were the only problem, then a dismissal
“without prejudice” ordinarily would be proper.
Accordingly, Defendants argue, the court must have reached
4
Personal jurisdiction differs from subject matter jurisdiction in some
important ways. For example, a defendant may waive the lack of personal
jurisdiction, but the parties may not waive the lack of subject matter
jurisdiction. But, where the lack of personal jurisdiction is not waived,
those differences are immaterial for the purpose of res judicata. The
Supreme Court has made no distinction between the two types of
jurisdiction when considering the effect of a judgment. See e.g., Costello,
365 U.S. at 285 (noting the “fundamental jurisdictional defects which
render a judgment void . . . such as lack of jurisdiction over the person or
subject matter”). And the underlying logic applies equally to both types
of jurisdiction: if the court lacks power to act, then it may not pronounce
a binding judgment on the merits—regardless of the reason for the court’s
lack of authority to act.
12 RUIZ V. SNOHOMISH CTY. PUD
the issue of untimeliness because the action was dismissed
“with prejudice.”
We see no ambiguity in the judgment. A natural reading
of its text is that the court rested its conclusion on both lack
of jurisdiction and untimeliness. If the court wanted to
ground its decision only on untimeliness, it could have
mentioned the statute of limitations only. The fact that the
dismissal was “with prejudice” means most naturally that the
court’s conclusion rested on both grounds, not that the court
somehow skipped the jurisdictional ground or disagreed with
the parties’ concession that the court lacked jurisdiction.
Even if one views the judgment as ambiguous,
Defendants’ argument still fails. “When interpreting an
ambiguous prior judgment, the reviewing court should
construe a judgment so as to give effect to the intention of the
issuing court. Where the judgment is ambiguous or fails to
express the rulings with clarity, the entire record before the
issuing court and the findings of fact may be referenced in
determining what was decided.” Muckleshoot Tribe v. Lummi
Indian Tribe, 141 F.3d 1355, 1359 (9th Cir. 1998) (citation,
internal quotation marks, and brackets omitted).
For Defendants’ argument to prevail, one must conclude
that the district court either skipped the jurisdictional ground
or silently concluded that it had personal jurisdiction. As
noted above, it would have violated clear Supreme Court
precedent for the district court to have assumed jurisdiction
and skipped to the statute-of-limitations ground. Sinochem,
549 U.S. at 430–31. Moreover, there is no indication
anywhere in the record that the district court disagreed with
the parties’ mutual concession that the court lacked personal
jurisdiction. Indeed, to the contrary, the court logically could
RUIZ V. SNOHOMISH CTY. PUD 13
not reach that conclusion. Plaintiff’s original complaint
would, in fact, have been timely, had she properly served
process on Defendant Little. Only defective service rendered
the complaint untimely. In other words, Defendant Little had
argued that the action was untimely for precisely the same
reason that the court lacked personal jurisdiction. Viewed in
that context, the district court almost certainly did not
conclude, without saying so, that it had personal jurisdiction.
In sum, the district court meant what it said: the dismissal
was on both jurisdictional and timeliness grounds.
Finally, Defendants argue that, even if an alternative
dismissal premised in part on personal jurisdiction ordinarily
is not res judicata, the court’s order here is res judicata for
reasons specific to this case. We categorically reject those
arguments: when one alternative ground for dismissal is
jurisdictional, the original judgment is not res judicata
regardless of other circumstances. Accordingly, we need not
examine any specific circumstances of the original action.
We nevertheless find it appropriate, because the district
court misapprehended the law in this regard, to comment on
Defendants’ circumstance-specific arguments. Citing Owens
v. Kaiser Foundation Health Plan, Inc., 244 F.3d 708, 714
(9th Cir. 2001), the district court held that, because the 2012
dismissal was labeled “with prejudice,” the order necessarily
had res judicata effect. Owens concerned a dismissal with
prejudice for failure to prosecute, which is, as a matter of
black letter law, a dismissal “on the merits.” Id. Owens did
not concern a dismissal for lack of jurisdiction, and it did not
create a bright-line rule that the label “with prejudice” is
dispositive. See id. (“Thus, involuntary dismissal generally
acts as a judgment on the merits . . . .” (emphasis added)
(internal quotation marks omitted)).
14 RUIZ V. SNOHOMISH CTY. PUD
Relatedly, Defendants point out that none of the
authorities cited by Plaintiff concerned voluntary dismissals
under Federal Rule of Civil Procedure 41(a)(2) and that the
district court exercised its discretion in 2012 to describe the
dismissal as one “with prejudice.” Rule 41 generally gives
district courts wide discretion to determine whether the
dismissal is with prejudice or without prejudice. E.g., Hargis
v. Foster, 312 F.3d 404, 412 (9th Cir. 2002). Moreover,
Defendants correctly cite Stewart, 297 F.3d at 956, for the
proposition that “[t]he phrase ‘final judgment on the merits’
is often used interchangeably with ‘dismissal with
prejudice.’” Defendants argue that, accordingly, the
judgment was intended to be “on the merits.”
Those arguments fail for at least two reasons. First, to the
extent that Defendants argue that the district court may
predetermine the res judicata effect of its judgment, they are
mistaken as a matter of law. See Medellin v. Texas, 552 U.S.
491, 513 n.9 (2008) (“A court adjudicating a dispute may not
be able to predetermine the res judicata effect of its own
judgment.” (brackets omitted) (quoting Shutts, 472 U.S. at
805)); id. (“The first court does not get to dictate to other
courts the preclusion consequences of its own judgment.”
(quoting 18 Federal Practice § 4405, at 82)); see also
Matsushita Elec. Indus. Co. v. Epstein, 516 U.S. 367, 396
(1996) (Ginsburg, J., concurring in part and dissenting in
part) (“A court conducting an action cannot predetermine the
res judicata effect of the judgment; that effect can be tested
only in a subsequent action.”). Second, although Stewart
stated that a “dismissal with prejudice” “often” means that the
dismissal is “on the merits,” the opinion then expressly noted
the exception for “a dismissal for lack of jurisdiction.”
297 F.3d at 956 (emphasis in original). In other words, the
“with prejudice” label is not always conclusive for the
RUIZ V. SNOHOMISH CTY. PUD 15
purpose of res judicata and, indeed, does not equate to an
adjudication on the merits when the dismissal is for lack of
jurisdiction.
In sum, the district court erred by holding that the 2012
dismissal was res judicata. Accordingly, we reverse the
dismissal in part. We nevertheless affirm in part, on
alternative grounds. See, e.g., Hamilton v. Brown, 630 F.3d
889, 893 (9th Cir. 2011) (“We may affirm the district court
on any ground supported by the record.”). At oral argument,
Plaintiff’s lawyer clearly and expressly abandoned Plaintiff’s
federal claim. We therefore affirm the dismissal of Plaintiff’s
federal claim. We also affirm the dismissal of Plaintiff’s
state-law claims to the extent that they rely solely on events
that occurred more than three years before the filing of the
complaint in this case. For purposes of the motion to dismiss,
at least two claims are timely: (1) her claim alleging
discriminatory firing in 2010; and (2) a hostile work
environment claim founded in part on actions occurring
within the limitations period. Antonius v. King County,
103 P.3d 729, 737 (Wash. 2005). We express no view on any
issue other than res judicata and timeliness.
AFFIRMED in part, REVERSED in part, and
REMANDED. Costs on appeal awarded to Plaintiff.