Handy v. Maximus ( 2022 )

Appellate Case: 21-1192 Document: 010110643569 Date Filed: 02/10/2022 Page: 1
FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT February 10, 2022
_________________________________
Christopher M. Wolpert
Clerk of Court
ASHLEE M. HANDY,
Plaintiff - Appellant,
v. No. 21-1192
(D.C. No. 1:20-CV-03235-LTB-GPG)
MAXIMUS INC.; SHARON DORCAS; (D. Colo.)
SCOTT CLOUD; PRIME SOURCE
STAFFING; NICHOLAS WERNER,
Defendants - Appellees.
_________________________________
ORDER AND JUDGMENT*
_________________________________
Before McHUGH, MORITZ, and ROSSMAN, Circuit Judges.
_________________________________
Ashlee M. Handy appeals the district court’s dismissal of her employment
discrimination lawsuit during the 28 U.S.C. § 1915 screening process. Exercising
jurisdiction under 28 U.S.C. § 1291, we reverse the dismissal of Ms. Handy’s First
Amended Complaint (“FAC”) and remand for further proceedings consistent with
this Order and Judgment.
*
After examining the briefs and appellate record, this panel has determined
unanimously to honor the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
submitted without oral argument. This order and judgment is not binding precedent,
except under the doctrines of law of the case, res judicata, and collateral estoppel. It
may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1
and 10th Cir. R. 32.1.
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I. Facts1
Maximus Inc. operates a call center specializing in open enrollment for
health-insurance benefits. Prime Source Staffing is a staffing agency that provides
employees to Maximus. In August 2018, Prime Source hired Ms. Handy to work as a
customer-service representative for Maximus. Ms. Handy understood she would
work at Maximus during the open-enrollment period from November 1 to
December 15, when Maximus promised to hire her as a permanent employee. She
successfully completed training and received high quality-assurance scores.
On December 5, Ms. Handy advised Sharon Dorcas, the Maximus office
manager who had trained her, that she was experiencing domestic violence. She
shared this information in case she would need to take time off from work.
Ms. Handy knew several coworkers had experienced and reported similar
domestic-violence issues, and Ms. Dorcas had provided them with accommodations.
Ms. Handy then left work early. The next day, Ms. Dorcas informed Ms. Handy that
her husband had come to the Maximus office with a gun looking for her. At
Ms. Dorcas’s direction, Ms. Handy filed a police report.
Ms. Handy alleges she was terminated as of December 7 via letters dated
December 5 (from Ms. Dorcas) and December 6 (from Scott Cloud, another
supervisor at Maximus), but she did not learn about her termination until
December 10. The letters stated Ms. Handy was being terminated because open
1
The following facts derive from the FAC.
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enrollment—and thus the contract period—ended. But she believes she was
terminated for “being a white woman” and “for being a victim of domestic violence,”
given that her minority coworkers faced no repercussions at work for experiencing
domestic-violence issues. R. at 40.
II. Procedural History
Ms. Handy filed a complaint against Maximus, Prime Source, and three
supervisors: Ms. Dorcas; Mr. Cloud; and Nicholas Werner, the Prime Source
employee who hired her. She asserted claims for (1) employment discrimination
based on race and sex in violation of 42 U.S.C. § 1981; (2) employment
discrimination based on race and sex in violation of Title VII of the Civil Rights Act
of 1964; (3) employment discrimination based on race and sex in violation of
42 U.S.C. § 1983; (4) a due process violation under § 1983; (5) state-law negligence;
and (6) state-law negligence per se.
Because Ms. Handy was proceeding in forma pauperis (IFP), the district court
screened her complaint under 28 U.S.C. § 1915. On December 2, 2020, it entered an
“Order Directing Plaintiff to File Amended Complaint” (“Order to Amend”), R. at
26. The district court found the complaint did not comply with the pleading
requirements of Rule 8 of the Federal Rules of Civil Procedure because it was
repetitive, failed to allege facts that might state a cognizable claim, and did not
include either a copy of the discrimination charge filed with the Equal Employment
Opportunity Commission (EEOC) or a right-to-sue letter from the EEOC.
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Ms. Handy filed a timely FAC. She dropped her Title VII and § 1983 claims
and asserted claims for a § 1981 violation, state-law negligence, and state-law
negligence per se. For the § 1981 claim, she amended the allegations and added
headings that align with the elements of the claim.
This appeal centers on the allegations relating to the first element of the
§ 1981 claim: membership in a protected class. See Hampton v. Dillard Dep’t
Stores, Inc., 247 F.3d 1091, 1101-02 (10th Cir. 2001) (The elements of a § 1981
discrimination claim are: “(1) that the plaintiff is a member of a protected class;
(2) that the defendant had the intent to discriminate on the basis of race; and (3) that
the discrimination interfered with a protected activity as defined in § 1981.” (internal
quotation marks omitted)). In her initial complaint, Ms. Handy alleged that “Plaintiff
is a white woman in her thirties, and a victim of domestic violence, which makes her
a member of a protected class.” R. at 7-8 (Original Complaint ¶ 4). But in the FAC,
she alleged that “[her] race as a white person makes her a member of a protected
class under § 1981.” R. at 37 (capitalization standardized).
The district court entered a referral order under 28 U.S.C. § 636(b) and Rule
72 of the Federal Rules of Civil Procedure. In his report and recommendation, the
magistrate judge stated that the factual allegations in the FAC generally remained the
same, but also observed Ms. Handy had added several new allegations to her § 1981
claim:
In support of the § 1981 claim, Plaintiff sets forth the same facts that she
did in the original Employment Discrimination Complaint filed to initiate
this case. The only additional allegation, in an attempt to comply with the
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December 2 Order to Amend, is that Defendants Doreas, Cloud, and
Maximus “set out deliberately to advantage Black and Mexican women
over [Ms.] Handy, although [Ms.] Handy was similarly situated to
the Black and Mexican women.” Plaintiff also now contends that
“[Ms.] Handy” is similarly situated to Black and Mexican women because
of her and their need to have time off from work to address “domestic
violence victimization.” She further contends in the Amended Complaint
that the Black and Mexican women were not terminated, like she was, due
to the need to be off work to address domestic violence issues.
R. at 58 (citations omitted). The magistrate judge did not note the change in
Ms. Handy’s allegation regarding membership in a protected class. Without further
reasoning, the magistrate judge concluded that Ms. Handy “failed to comply with the
. . . Order to Amend” because she “fail[ed] to set forth that a ‘White’ person[] who is
a victim of domestic violence is a member of a protected class” “as required under
28 U.S.C. § 1981.” Id. The magistrate judge then recommended that the district
court dismiss the FAC without prejudice for failure to comply with the Order to
Amend and decline to exercise supplemental jurisdiction over the state-law claims.
Based on its understanding that Ms. Handy had not filed timely objections, the
district court adopted the report and recommendation and entered judgment against
Ms. Handy. But Ms. Handy had filed timely objections, so the case was reopened.
Once again, the district court adopted the report and recommendation and dismissed
the case without prejudice.
Ms. Handy moved to alter or amend the judgment under Rule 59(e) of the
Federal Rules of Civil Procedure contending the district court misunderstood the
facts, her position, and the controlling law. Ms. Handy explained she “clearly
allege[d] her race (White) as a protected class” in the FAC to “cure[]” the
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“deficiency” identified by the district court. R. at 82. And she raised the
domestic-violence issue only “to demonstrate how she was treated less favorably
[than] similarly situated white women . . . to support an inference of intentional
discrimination.” R. at 82-83. The district court denied the Rule 59(e) motion. This
appeal followed.
III. Jurisdiction
Because the district court dismissed the FAC and the action without prejudice,
we first must determine whether this court has appellate jurisdiction. See Amazon,
Inc. v. Dirt Camp, Inc., 273 F.3d 1271, 1274 (10th Cir. 2001) (noting this court has
“an independent duty to examine our own jurisdiction”). We have jurisdiction over
“final decisions of the district courts.” 28 U.S.C. § 1291. “Although a dismissal
without prejudice is usually not a final decision, where the dismissal finally
disposes of the case so that it is not subject to further proceedings in federal
court, the dismissal is final and appealable.” Amazon, 273 F.3d at 1275 (holding
district court’s decision to dismiss the entire action and to decline supplemental
jurisdiction and dismiss state claims without prejudice for refiling in state court
effectively disposed of entire action).
This court has taken a “[p]ractical approach to § 1291 finality.” Moya v.
Schollenbarger, 465 F.3d 444, 448 (10th Cir. 2006). “The critical determination
. . . is whether plaintiff has been effectively excluded from federal court under
the present circumstances.” Amazon, 273 F.3d at 1275 (internal quotation marks
omitted). For instance, “[a] dismissal of the complaint is ordinarily a non-final,
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nonappealable order (since amendment would generally be available), while a
dismissal of the entire action is ordinarily final.” Moya, 465 F.3d at 449 (internal
quotation marks omitted).
Here, the district court “expressly and unambiguously dismisse[d]
[Ms. Handy’s] entire action, [so] that order is final and appealable,” id. at 450.
See R. at 74 (“[T]he [FAC] and the action are dismissed without prejudice for
failure to comply with the . . . Order to Amend.” (emphasis added)). And, like in
Amazon, the district court “decline[d] to exercise supplemental jurisdiction over
any remaining state law claims and dismisse[d] these claims without prejudice.”
Id. The denial of the Rule 59(e) motion is further evidence of finality. We thus
proceed to the merits.
IV. Analysis
The district court appears to have dismissed Ms. Handy’s complaint under
Rule 41(b) of the Federal Rules of Civil Procedure, even though it did not
specifically reference that Rule.2 Rule 41(b) allows for involuntary dismissal “[i]f
the plaintiff fails . . . to comply with these rules or a court order.” Fed. R. Civ. P.
2
We encourage the district court to specify the basis for dismissing a case on
screening—Rule 41(b) or 28 U.S.C. § 1915(e)—because it affects the standard of
review. Section 1915(e) mandates dismissal during screening “at any time if the
court determines that . . . the action . . . fails to state a claim on which relief may be
granted.” § 1915(e)(2)(B)(ii). The more rigorous de novo standard of review applies
to § 1915(e) dismissals. See McBride v. Deer, 240 F.3d 1287, 1289 (10th Cir. 2001).
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41(b).3 Here, the district court dismissed Ms. Handy’s complaint “for failure to
comply with the . . . Order to Amend.” R. at 74. The Order to Amend, in turn,
referenced noncompliance “with the pleading requirements of Rule 8.” R. at 27. See
also Nasious v. Two Unknown B.I.C.E. Agents, 492 F.3d 1158, 1161 (10th Cir. 2007)
(“[A] failure to satisfy Rule 8 can supply a basis for dismissal: Rule 41(b)
specifically authorizes a district court to dismiss an action for failing to comply with
any aspect of the Federal Rules of Civil Procedure.”).
On appeal, Ms. Handy challenges both the district court’s dismissal order and
its order denying her Rule 59(e) motion. We review both orders for an abuse of
discretion. See Nasious, 492 F.3d at 1161 (abuse-of-discretion standard applies to a
dismissal under Rule 41(b)); Elm Ridge Expl. Co. v. Engle, 721 F.3d 1199, 1216
(10th Cir. 2013) (abuse-of-discretion standard applies to a ruling on a Rule 59(e)
motion). “We will find an abuse of discretion when the district court bases its ruling
on an erroneous conclusion of law or relies on clearly erroneous fact findings.”
Hamric v. Wilderness Expeditions, Inc., 6 F.4th 1108, 1119 (10th Cir. 2021) (internal
quotation marks omitted). We liberally construe a pro se litigant’s pleadings but do
not serve as their advocate. Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir. 1991).
3
The plain text of Rule 41(b) requires a defendant’s motion to dismiss, but this
case was dismissed on screening before any defendant even entered an appearance.
The lack of a defense motion is not relevant because “the Rule has long been
interpreted to permit courts to dismiss actions sua sponte for a plaintiff’s failure to
prosecute or comply with the rules of civil procedure or court’s orders.” Olsen v.
Mapes, 333 F.3d 1199, 1204 n.3 (10th Cir. 2003).
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Under Rule 8(a)(2), a complaint must contain a “short and plain statement of
the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2).
Dismissals under Rules 8 and 41(b) typically involve unusually long, prolix, or
incomprehensible complaints—essentially, cases that fail to satisfy the “short and
plain” portion of Rule 8(a)(2). See, e.g., Nasious, 492 F.3d at 1160 (plaintiff
“nam[ed] at least 20 individual defendants, as well as scores of John and Jane Doe
defendants, in a 42-page complaint that is, through much of the document, often
difficult to comprehend”); see also Mann v. Boatright, 477 F.3d 1140, 1148
(10th Cir. 2007) (“Rule 8 serves the important purpose of requiring plaintiffs to state
their claims intelligibly so as to inform the defendants of the legal claims being
asserted.”). Here, the FAC runs nineteen pages on a court-approved form, names five
defendants, and makes clear the claims Ms. Handy asserts with regard to each set of
facts. Moreover, Ms. Handy streamlined the FAC by removing claims the district
court indicated were unlikely to succeed and by adding headings that align with the
elements of the remaining Section 1981 claim.
The magistrate judge provided essentially no reasoning to support its
conclusion that Ms. Handy failed to comply with the Order to Amend, and the district
court adopted this recommendation with no additional explanation. Without
adequate legal analysis, we cannot discern whether the district court applied the correct
legal standard and properly exercised its discretion. See United States ex rel. Grynberg v.
Praxair, Inc., 389 F.3d 1038, 1059 (10th Cir. 2004) (“In order to provide meaningful
appellate review, we require an articulation of the district court’s rationale.”); accord
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In re Bolar Pharm. Co. Sec. Litig., 966 F.2d 731, 732 (2d Cir. 1992) (per curiam) (“If we
are to be satisfied that a district court has properly exercised its discretion, we must be
informed by the record of why the district court acted as it did.”).
Equally problematic, the very limited reasoning the magistrate judge did
provide is based on a clearly erroneous factual finding. The magistrate judge
misstated Ms. Handy’s claim and failed to account for the significant change she
made to her allegations of membership in a protected class. Ms. Handy filed a timely
objection on this ground, but the district court adopted the report and
recommendation in its entirety. And when Ms. Handy again alerted the district court
to this misunderstanding in her Rule 59(e) motion, it simply recited the applicable
standard and summarily denied the motion—again without articulating its reasoning.
See R. at 86 (“Plaintiff does not demonstrate that the Court has misapprehended the
facts, her position, or the controlling law. The Court, therefore, will deny the
Motion.”).
Under these circumstances, where the district court provided an inadequate
articulation of its rationale and based its decision on a clearly erroneous factual
finding, we conclude the district court abused its discretion.
V. Conclusion
We reverse the district court’s dismissal without prejudice of Ms. Handy’s
FAC and action. We remand to the district court to reevaluate the FAC in a manner
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consistent with this Order and Judgment. We grant Ms. Handy’s motion for leave to
proceed without prepayment of fees and costs.
Entered for the Court
Veronica S. Rossman
Circuit Judge
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