Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
Santa Clara County Super. Ct. No. 1-07-CV081642
Premo, Acting P.J.
Plaintiff Tamra Curtis sued defendant Berliner Cohen Law Firm for wrongful termination in violation of public policy. Defendant successfully demurred to the complaint on the ground of res judicata. On appeal, plaintiff contends that the trial court erred by dismissing the complaint because the prior action was not terminated by a judgment on the merits. We disagree and affirm the judgment.
background
Plaintiff sued defendant in federal district court for wrongful termination in violation of title VII of the Civil Rights Act of 1964. Defendant moved to dismiss under Federal Rule of Civil Procedure (rule) rule 12(b)(6) for failure to state a claim upon which relief can be granted. It grounded the motion on the complaint’s failure to allege that plaintiff had filed a timely administrative claim with the Equal Employment Opportunities Commission (EEOC) and received a right-to-sue letter from the commission. Plaintiff did not oppose the motion, and the district court granted it. The order specifies that dismissal was “for failure to allege that plaintiff filed her claims in a timely manner with the [EEOC], and that she received from the [EEOC] a right to sue letter.”
Plaintiff then filed the instant action against defendant for wrongful termination in violation of state law based on the same facts asserted in the federal action. Defendant demurred to the first amended complaint on the ground of res judicata. The trial court sustained the demurrer without leave to amend.
For simplicity, we have focused on the pivotal causes of action. Strictly speaking, in the federal action, the complaint advanced federal civil rights causes of action for race discrimination and wrongful termination (based on the same facts) and state claims for infliction of emotional distress and defamation--the district court’s dismissal order disposed of all causes of action; in this action, the first amended complaint advances causes of action for wrongful termination based on the same facts alleged in the federal action, assault and battery, and conspiracy--plaintiff ultimately dismissed the assault and battery cause of action and the trial court ultimately dismissed the conspiracy cause of action for plaintiff’s failure to amend after sustaining defendant’s demurrer with leave to amend. At issue here is the wrongful termination cause of action.
discussion
“ ‘The doctrine of res judicata gives certain conclusive effect to a former judgment in subsequent litigation involving the same controversy.’ ” (Busick v. Workmen’s Comp. Appeals Bd. (1972) 7Cal.3d 967, 973.) It is part of the common law of this state (Slater v. Blackwood (1975)15 Cal.3d 791) and is also reflected in statutes such as Code of Civil Procedure section 1908 (a judgment is, in respect to the matter directly adjudged, conclusive between the parties litigating for the same thing under the same title and in the same capacity).
“The doctrine of res judicata has a double aspect. First, it precludes parties or their privies from relitigating the same cause of action that has been finally determined by a court of competent jurisdiction. Second, although a second suit between the same parties on a different cause of action is not precluded by a prior judgment, the first judgment operates as an estoppel or conclusive adjudication as to such issues in the second action as were actually litigated and determined in the first action.” (Frommhagen v. Board of Supervisors (1987) 197 Cal.App.3d 1292,1299.)
The first aspect of res judicata is sometimes referred to as claim preclusion; the second aspect is sometimes referred to as issue preclusion or collateral estoppel. (7 Witkin, Cal. Procedure (5th ed. 2008) Judgment, § 336, pp. 940-941.)
Claim preclusion precludes piecemeal litigation (by splitting a single cause of action) and relitigation of the same cause of action on a different legal theory or for different relief. (Merry v. Coast Community College Dist. (1979) 97 Cal.App.3d 214, 221-222.) “The prior final judgment on the merits settles issues which were not only actually litigated but every issue that might have been raised and litigated in the first action.” (Id. at p. 222.) In short, the claim-preclusion aspect of res judicata precludes the litigation of any claim that could have been raised in the prior action whether it was raised or not. (In re Intl Nutronics, Inc. (9th Cir. 1994) 28 F.3d 965,969.)
The doctrine applies when (1) the issues decided in the prior adjudication are identical with those presented in the later action; (2) there was a final judgment on the merits in the prior action; and (3) the party against whom the plea is raised was a party or was in privity with a party to the prior adjudication. (Citizens for Open Access etc. Tide, Inc. v. Seadrifi Assn. (1998) 60 Cal.App.4th 1053, 1065; Owens v. Kaiser Foundation Health Plan, Inc. (9th Cir. 2001) 244 F.3d 708, 713.)
Plaintiff contends that the prior federal judgment was not on the merits for res judicata purposes.
“California follows the rule that the preclusive effect of a prior judgment of a federal court is determined by federal law, at least where the prior judgment was on the basis of federal question jurisdiction.” (Butcher v. Truck Ins. Exchange (2000) 77 Cal.App.4th 1442, 1452; Limbach v. Hooven & Allison Co. (1984) 466 U.S. 353,361-362 [state court must apply federal law to determine preclusive effect of prior federal question judgment].)
Here, plaintiff’s federal action was based on the federal civil rights law, which presented a federal question. Thus, we look to federal law.
The short answer to plaintiffs’ contention is that “The dismissal for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) is a ‘judgment on the merits.’ ” (Federated Department Stores, Inc. v. Moitie (1981) 452 U.S. 394, 399, fn. 3.) “An involuntary dismissal generally acts as a judgment on the merits for the purposes of res judicata, regardless of whether the dismissal results from procedural error or from the court’s considered examination of the plaintiff’s substantive claims.” (In re Schimmels (9th Cir. 1997) 127 F.3d 875, 884.)
Plaintiff disagrees with this short answer. She points out that rule 41(b) states that “Unless the dismissal order states otherwise, a dismissal under this subdivision (b) and any dismissal not under this rule--except one for lack of jurisdiction, improper venue, or failure to join a party . . . --operates as an adjudication on the merits.” From there, she notes that the federal district court did “state otherwise” in the dismissal order by specifying that dismissal was for failure to exhaust administrative remedies. From there, she urges that a dismissal for failure to exhaust administrative remedies is similar to a dismissal based on a statute of limitations. She then cites California case law for the proposition that termination of an action based on the statute of limitations is a technical or procedural rather than a substantive determination and, thus, not a termination on the merits.
Plaintiff, however, overlooks that (1) we are looking to federal law to determine the effect of the federal judgment at issue, (2) rule 41(b) “dictates that all but certain enumerated dismissals [jurisdiction, venue, joinder] will be considered ‘on the merits,’ and the Rule does not exempt a dismissal on [technical or procedural] grounds from its general operation” (PRC Harris, Inc. v. Boeing Co. (2nd Cir. 1983) 700 F.2d 894, 896), (3) federal law is that a dismissal on statute of limitations grounds is an adjudication on the merits for purposes of res judicata (id. at pp. 896-897, fns. 1 & 2), and (4) federal law is that “a timely charge of discrimination with the EEOC is not a jurisdictional prerequisite to suit in federal court, but a requirement [akin to] a statute of limitations” (Zipes v. Trans World Airlines, Inc. (1982) 455 U.S. 385, 393). Plaintiff’s argument therefore fails.
Numerous other courts have held that a rule 41(b) limitations dismissal is a judgment on the merits. (See, e.g., Murphy v. Klein Tools, Inc. (10th Cir. 1991) 935 F.2d 1127, 1129; Shoup v. Bell & Howell Co. (4th Cir. 1989) 872 F.2d 1178, 1179-1181; Steve D. Thompson Trucking v. Dorsey Trailers (5th Cir. 1989) 870 F.2d 1044, 1046; Rose v. Town of Harwich (1st Cir. 1985) 778 F.2d 77, 80; Johnson v. Burnley (4th Cir. 1989) 887 F.2d 471, 474; Nilsen v. City of Moss Point, Miss. (5th Cir. 1983) 701 F.2d 556, 562; Nathan v. Rowan (6th Cir. 1981) 651 F.2d 1223, 1226; Cemer v. Marathon Oil Co. (6th Cir. 1978) 583 F.2d 830, 832; Chang v. Northwestern Memorial Hosp. (N.D.Ill. 1982) 549 F.Supp. 90, 95.)
Plaintiff next argues that the adjudication-on-the-merits language in rule 41(b) does not necessarily refer to a judgment entitled to res judicata effect. She relies on the following language from Semtek Int’l Inc. v. Lockheed Martin Corp. (2001) 531 U.S. 497, 503 (Semtek): “it is no longer true that a judgment ‘on the merits’ is necessarily a judgment entitled to claim-preclusive effect.” Plaintiff’s analysis is erroneous.
In Semtek,a California federal court in a diversity case dismissed a complaint on statute-of-limitations grounds. The plaintiff then filed the same action in Maryland state court, where a longer limitations period had not yet expired. The Maryland court dismissed the second action on claim-preclusion grounds, reasoning that federal law governed the preclusive effect of the first dismissal, and that the first dismissal on limitations grounds would be considered a judgment on the merits under federal common law governing claim preclusion. In reversing, the Supreme Court framed the issue before it as follows: “This case presents the question whether the claim-preclusive effect of a federal judgment dismissing a diversity action on statute-of-limitations grounds is determined by the law of the State in which the federal court sits.” (Semtek, supra, 531 U.S. at p. 499.) It then confirmed that, not only is the claim-preclusive effect of a federal diversity judgment a question of federal law, but further stated that the claim-preclusive effect of all federal judgments is a question of federal law ultimately decided by the Supreme Court. It continued, however, by stating that the best federal rule for the claim-preclusive effect of a federal diversity judgment is to adopt “the law that would be applied by state courts in the State in which the federal diversity court sits.” (Id. at p. 508.) It remanded and directed the Maryland court to apply California claim preclusion law to determine the res judicata effect of the California federal court decision.
The above quoted language is part of the Supreme Court’s discussion rejecting the respondent’s contention that rule 41(b) controlled the outcome. The court concluded on this point that the adjudication-on-the-merits language in rule 41(b) referred to the concept of a dismissal with prejudice rather than the concept of a dismissal having a claim-preclusive effect. “We think, then, that the effect of the ‘adjudication upon the merits’ default provision of Rule 41(b). . . is simply that, unlike a dismissal ‘without prejudice,’ the dismissal in the present case barred refiling of the same claim in the United States District Court for the Central District of California. That is undoubtedly a necessary condition, but it is not a sufficient one, for claim-preclusive effect in other courts.” (Semtek, supra,531 U.S. at p. 506.)
In short, Semtek stands for the propositions that (1) “federal common law governs the claim-preclusive effect of a dismissal by a federal court sitting in diversity” and (2) the “federally prescribed rule of decision” requires application of “the law that would be applied by state courts in the State in which the federal diversity court sits.” (Semtek, supra,531 U.S. at p. 508.) By no means does Semtek negate the principle enunciated in Moitie that a federal judgment dismissing a federal cause of action for failure to state a claim is a judgment on the merits for res judicata purposes. In fact, Semtek cites Moitie as an example of a case that illustrates the principle and invites comparison with cases from jurisdictions that do not give res judicata effect to judgments that do not pass on the substantive merits of a claim. (Id. at p. 502.) It is true that the dismissal in Moitie was based on affirmative allegations that demonstrated the nonexistence of any cause of action. But plaintiff cites no federal authority for the proposition that the two types of insufficient complaints (substantive and nonsubstantive insufficiency), both of which are necessarily dismissible under rule 12(b)(6) for failure to state a claim, are treated differently for res judicata purposes.
Plaintiff finally urges that res judicata is an equitable doctrine that should not be applied hypertechnically and archaically to negate the strong public policy that seeks to dispose of litigation on the merits rather than on procedural grounds. She asserts that “it would be unfair to give res judicata effect which deprives Plaintiff her right to have a fair trial on the issues in controversy.”
But plaintiff had a right to have a fair trial on the issues in controversy. She could have joined her state discrimination claim with her federal discrimination claims as she did her state emotional distress and defamation claims. Plaintiff’s argument could be made in any case where res judicata applies so as to negate the principle altogether. A similar argument has been rejected as follows.
In Harper Plastics v. Amoco Chemicals Corp. (7th Cir. 1981) 657F.2d 939, 946, the court considered whether res judicata bars a litigant from bringing a contract claim in state court following a dismissal on the merits of a federal antitrust claim where the litigant did not join the contract claims in the original federal action pursuant to the court’s supplemental jurisdiction. The plaintiff argued that it is unfair to require a plaintiff to join state theories of relief in a federal complaint where those state claims could only be entertained under the doctrine of supplemental jurisdiction. Moreover, the plaintiff asserted that because supplemental jurisdiction is discretionary, a plaintiff cannot know with certainty that the federal court will elect to hear supplemental claims, and therefore a plaintiff should not be expected to plead them all. Finally, the plaintiff argued that in light of burgeoning court dockets, federal policy should not operate to “force” supplemental state claims on the federal courts.
The court rejected the plaintiff’s contentions, holding that “[w]e fail to discern the unfairness in requiring a plaintiff to join all relevant theories of relief in a single proceeding.” (Harper Plastics v. Amoco Chemicals Corp., supra,657 F.2d at p. 946.) It explained: “The uncertainty over whether a trial judge would exercise pendent jurisdiction does not justify permitting the institution of a multiplicity of proceedings which may have the effect of harassing defendants and wasting judicial resources. If appellant entertained any doubts at the pleading stage, they should have been resolved in favor of joinder. . . . [¶] A dismissal of the claims for relief under federal law in a complaint to which pendent state claims have been joined does not of itself end the litigation. ‘[I]f it appears that the state issues predominate, whether in terms of proof, of the scope of issues raised, or the comprehensiveness of the remedy sought, the state claims may be dismissed without prejudice and left for resolution to state tribunals.’ [Citation.] Conversely, if the district judge finds that the federal claims are insubstantial, the entire action may be dismissed and the plaintiff will be permitted to pursue the common law claims in a state tribunal. [Citation.] In this light, appellant’s assertion that including the state contract claim might have prevented it from arguing that claim on the merits in the event of a dismissal from federal court is clearly incorrect. To the contrary, if appellant wished to preserve that claim, Rule 18 joinder was the proper device. [¶] Finally, we must reject appellant’s contention that it is unfair to force pendent claims on federal trial courts. If this were so, then one may as well argue that the entire doctrine of pendent jurisdiction is unfair, since the effect of its application is to busy the federal court with matters of state law. The primary purpose of the doctrine is to promote fairness to litigants and judicial economy by disposing of a controversy in a single proceeding. . . . This, combined with the broad joinder provisions of the federal rules, gives appellant’s argument a hollow ring.” (Ibid.)
“The doctrine of res judicata rests upon the ground that the party to be affected, or some other with whom he is in privity, has litigated, or had an opportunity to litigate the same matter in a former action in a court of competent jurisdiction, and should not be permitted to litigate it again to the harassment and vexation of his opponent. Public policy and the interest of litigants alike require that there be an end to litigation.” (Panos v. Great Western Packing Co. (1943) 21 Cal.2d 636,637.)
disposition
The judgment is affirmed.
WE CONCUR: Elia, J., Duffy, J.