O'Donnell v. Vencor, Inc. , 466 F.3d 1104 ( 2006 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ALICE FAYE O’DONNELL, 
Plaintiff-Appellant,
v.
VENCOR INC., aka First Healthcare No. 05-15687
Corporation dba Kachina Point D.C. No.
Health Center; KACHINA POINT CV-01-01836-EHC
HEALTHCARE; DOES, 1 through 25,
inclusive; RED, WHITE, AND BLUE  ORDER
AMENDING
ENTITIES, INCLUSIVE, OPINION AND
Defendants-Appellees, AMENDED
and OPINION
KINDRED NURSING CENTER WEST,
LLC,
Defendant.

Appeal from the United States District Court
for the District of Arizona
Earl H. Carroll, District Judge, Presiding
Argued and Submitted
August 15, 2006—San Francisco, California
Filed October 10, 2006
Amended October 31, 2006
Before: William C. Canby, Jr., David R. Thompson, and
Michael Daly Hawkins, Circuit Judges.
Per Curiam Opinion
18061
18066 O’DONNELL v. VENCOR INC.
COUNSEL
Nicholle Harris and Aeryn Heidermann, Law Students, and
Willie Jordan-Curtis, Supervising Attorney, University of Ari-
zona, Tucson, Arizona, for the plaintiff-appellant.
Thomas L. Hudson, Phoenix, Arizona, for the defendants-
appellees.
ORDER
The panel of judges named above amends, in the following
manner, the per curiam opinion filed October 10, 2006:
A.
At slip opinion page 17370, delete the paragraph that
begins at the top of the page with the words “O’Donnell origi-
nally timely filed her first complaint . . .” and ends with the
words “proceedings on O’Donnell’s EPA claims.” Replace
that deleted paragraph with the following:
O’Donnell originally timely filed her first complaint assert-
ing a claim under Title VII of the Civil Rights Act of 1964,
42 U.S.C. § 2000e, et seq., (“Title VII”), and a claim under
the Age Discrimination in Employment Act, 29 U.S.C. § 621,
et seq., (“ADEA”). She filed that complaint within ninety
days after the issuance of her right-to-sue letter by the EEOC.
See 42 U.S.C. § 2000e-5(f)(1); 29 U.S.C. § 626(e). The defen-
dants thereafter filed for bankruptcy and an automatic stay
was issued. The magistrate judge placed O’Donnell’s case on
inactive status and gave her 180 days to move to lift the stay,
O’DONNELL v. VENCOR INC. 18067
seek to reduce the claims against Defendant to judgment in
the bankruptcy court, or otherwise demonstrate a reasonable
basis to continue the case on inactive status. The magistrate
judge warned O’Donnell that failure to comply would result
in dismissal of her complaint for failure to prosecute under
Federal Rule of Civil Procedure 41(b). Eleven days after the
expiration of the 180-day period, O’Donnell filed an untimely
motion seeking a continuance of her case on inactive status
and requesting an informal status conference. After
O’Donnell failed to appear at the status conference she had
requested, the magistrate judge dismissed O’Donnell’s com-
plaint without prejudice under Rule 41(b). She did not appeal
that dismissal.
After the bankruptcy automatic stay was lifted, O’Donnell
filed a second complaint against the defendants on September
27, 2001, repeating her Title VII and ADEA claims. In an
amendment to that second complaint, which amendment she
filed December 1, 2003, O’Donnell advanced new claims
under the Equal Pay Act, 29 U.S.C. § 206 (“EPA”). The dis-
trict court dismissed O’Donnell’s second complaint with prej-
udice, holding that her claims were time-barred and that she
was not entitled to equitable tolling because her first action
had been dismissed as a result of her own inaction. We affirm
the district court’s dismissal of O’Donnell’s Title VII and
ADEA claims, but reverse and remand for further proceedings
on O’Donnell’s EPA claims.
B.
At slip opinion page 17370, the following paragraphs are
inserted immediately following I. Title VII and ADEA
Claims:
I. Title VII and ADEA Claims
First, although the parties have not raised the issue, we sua
sponte consider whether the magistrate judge’s dismissal of
18068 O’DONNELL v. VENCOR INC.
O’Donnell’s first complaint was void as being entered in vio-
lation of the automatic stay. Although “[t]he general rule is
that actions taken in violation of an automatic stay are void,”
In re Sambo’s Restaurants, Inc., 754 F.2d 811, 816 (9th Cir.
1985) (citing 2 COLLIER ON BANKRUPTCY ¶ 362.11 (15th ed.
1984)), here the dismissal for failure to prosecute was not
void because it did not constitute a “continuation” of a judi-
cial proceeding against the debtor under 11 U.S.C.
§ 362(a)(1).
In dismissing O’Donnell’s first complaint under Rule
41(b), the magistrate judge was not required “to consider
other issues presented by or related to the underlying case.”
Dean v. Trans World Airlines, Inc., 72 F.3d 754, 756 (9th Cir.
1995). In addition, “there was no conceivable way for the
court’s consideration of the [Rule 41(b) dismissal] to harm the
bankrupt [Vencor].” Id. at 756-57. Furthermore, the dismissal
was “consistent with the purpose of [section 362(a)]” because
it did not intrude on Vencor’s “breathing space” or threaten
other creditors by giving preference to O’Donnell. Indep.
Union of Flight Attendants v. Pan Am. World Airways, Inc.,
966 F.2d 457, 459 (9th Cir. 1992) (order). Finally, we note
that this court in Independent Union of Flight Attendants
explicitly adopted the rationale articulated by the Eighth Cir-
cuit in Dennis v. A.H. Robins Co., where the Eighth Circuit
held that the district court has the power to dismiss a case for
docket management purposes under Rule 41(b) notwithstand-
ing an automatic stay. Indep. Union of Flight Attendants, at
458-59 (“[T]he Eighth Circuit has held that § 362(a) does not
‘preclude another court from dismissing a case on its docket
or . . . affect the handling of a case in a manner not inconsis-
tent with the purpose of the automatic stay.’ ” (quoting Den-
nis v. A.H. Robins Co., 860 F.2d 871, 872 (8th Cir. 1988) (per
curiam))). Thus, the magistrate judge’s dismissal of
O’Donnell’s first action under Rule 41(b) does not constitute
a “continuation” of a judicial proceeding under 11 U.S.C.
§ 362(a)(1) such that it is void for having violated the auto-
matic stay.
O’DONNELL v. VENCOR INC. 18069
While we could have considered whether the magistrate
judge abused his discretion in dismissing O’Donnell’s first
complaint had O’Donnell filed an appeal after the automatic
stay was lifted, she failed to file such an appeal. See DeLange
v. Dutra Const. Co., 183 F.3d 916, 919 n.2 (9th Cir. 1999)
(noting that district courts have “broad discretion in interpret-
ing and applying their local rules”); Big Bear Lodging Ass’n.
v. Snow Summit, Inc., 182 F.3d 1096, 1106 (9th Cir. 1999)
(applying abuse of discretion standard to district court’s deci-
sion to impose sanctions pursuant to local rule). Therefore, we
review only the dismissal of O’Donnell’s second complaint.
C.
At slip opinion page 17370, delete the sentence that appears
in the per curiam opinion filed October 10, 2006 immediately
following I. Title VII and ADEA Claims, which sentence
reads as follows: “O’Donnell’s claims under Title VII and the
ADEA are untimely because she filed her second complaint
more than ninety days after the EEOC’s issuance of her right-
to-sue letter.” In place of that deleted sentence, insert: “The
Title VII and the ADEA claims asserted in O’Donnell’s sec-
ond complaint are untimely, however, because she filed her
second complaint more than ninety days after the EEOC’s
issuance of her right-to-sue letter.”
Petitions for rehearing or rehearing en banc may be filed.
OPINION
PER CURIAM:
Pro se plaintiff-appellant Alice Faye O’Donnell
(“O’Donnell”) appeals the district court’s dismissal of her
employment discrimination claims as time-barred. O’Donnell
asserts that the district court should have applied the doctrines
18070 O’DONNELL v. VENCOR INC.
of equitable tolling, equitable estoppel, or laches to excuse her
filing her second action after the statute of limitations had
expired.
We review de novo whether a claim is barred by a statute
of limitations. See Santa Maria v. Pac. Bell, 202 F.3d 1170,
1175 (9th Cir. 2000). Because the facts here are undisputed,
we review de novo whether to apply equitable tolling. See id.
We review for an abuse of discretion the district court’s deci-
sion whether to apply equitable estoppel. See id. at 1176. We
review de novo whether laches is available as a matter of law
and for an abuse of discretion the district court’s decision
whether to apply laches to the facts. See In re Beaty, 306 F.3d
914, 920-21 (9th Cir. 2002).
O’Donnell originally timely filed her first complaint assert-
ing a claim under Title VII of the Civil Rights Act of 1964,
42 U.S.C. § 2000e, et seq., (“Title VII”), and a claim under
the Age Discrimination in Employment Act, 29 U.S.C. § 621,
et seq., (“ADEA”). She filed that complaint within ninety
days after the issuance of her right-to-sue letter by the EEOC.
See 42 U.S.C. § 2000e-5(f)(1); 29 U.S.C. § 626(e). The defen-
dants thereafter filed for bankruptcy and an automatic stay
was issued. The magistrate judge placed O’Donnell’s case on
inactive status and gave her 180 days to move to lift the stay,
seek to reduce the claims against Defendant to judgment in
the bankruptcy court, or otherwise demonstrate a reasonable
basis to continue the case on inactive status. The magistrate
judge warned O’Donnell that failure to comply would result
in dismissal of her complaint for failure to prosecute under
Federal Rule of Civil Procedure 41(b). Eleven days after the
expiration of the 180-day period, O’Donnell filed an untimely
motion seeking a continuance of her case on inactive status
and requesting an informal status conference. After
O’Donnell failed to appear at the status conference she had
requested, the magistrate judge dismissed O’Donnell’s com-
plaint without prejudice under Rule 41(b). She did not appeal
that dismissal.
O’DONNELL v. VENCOR INC. 18071
After the bankruptcy automatic stay was lifted, O’Donnell
filed a second complaint against the defendants on September
27, 2001, repeating her Title VII and ADEA claims. In an
amendment to that second complaint, which amendment she
filed December 1, 2003, O’Donnell advanced new claims
under the Equal Pay Act, 29 U.S.C. § 206 (“EPA”). The dis-
trict court dismissed O’Donnell’s second complaint with prej-
udice, holding that her claims were time-barred and that she
was not entitled to equitable tolling because her first action
had been dismissed as a result of her own inaction. We affirm
the district court’s dismissal of O’Donnell’s Title VII and
ADEA claims, but reverse and remand for further proceedings
on O’Donnell’s EPA claims.
I. Title VII and ADEA Claims
[1] First, although the parties have not raised the issue, we
sua sponte consider whether the magistrate judge’s dismissal
of O’Donnell’s first complaint was void as being entered in
violation of the automatic stay. Although “[t]he general rule
is that actions taken in violation of an automatic stay are
void,” In re Sambo’s Restaurants, Inc., 754 F.2d 811, 816
(9th Cir. 1985) (citing 2 COLLIER ON BANKRUPTCY ¶ 362.11
(15th ed. 1984)), here the dismissal for failure to prosecute
was not void because it did not constitute a “continuation” of
a judicial proceeding against the debtor under 11 U.S.C.
§ 362(a)(1).
[2] In dismissing O’Donnell’s first complaint under Rule
41(b), the magistrate judge was not required “to consider
other issues presented by or related to the underlying case.”
Dean v. Trans World Airlines, Inc., 72 F.3d 754, 756 (9th Cir.
1995). In addition, “there was no conceivable way for the
court’s consideration of the [Rule 41(b) dismissal] to harm the
bankrupt [Vencor].” Id. at 756-57. Furthermore, the dismissal
was “consistent with the purpose of [section 362(a)]” because
it did not intrude on Vencor’s “breathing space” or threaten
other creditors by giving preference to O’Donnell. Indep.
18072 O’DONNELL v. VENCOR INC.
Union of Flight Attendants v. Pan Am. World Airways, Inc.,
966 F.2d 457, 459 (9th Cir. 1992) (order). Finally, we note
that this court in Independent Union of Flight Attendants
explicitly adopted the rationale articulated by the Eighth Cir-
cuit in Dennis v. A.H. Robins Co., where the Eighth Circuit
held that the district court has the power to dismiss a case for
docket management purposes under Rule 41(b) notwithstand-
ing an automatic stay. Indep. Union of Flight Attendants, at
458-59 (“[T]he Eighth Circuit has held that § 362(a) does not
‘preclude another court from dismissing a case on its docket
or . . . affect the handling of a case in a manner not inconsis-
tent with the purpose of the automatic stay.’ ” (quoting Den-
nis v. A.H. Robins Co., 860 F.2d 871, 872 (8th Cir. 1988) (per
curiam))). Thus, the magistrate judge’s dismissal of
O’Donnell’s first action under Rule 41(b) does not constitute
a “continuation” of a judicial proceeding under 11 U.S.C.
§ 362(a)(1) such that it is void for having violated the auto-
matic stay.
While we could have considered whether the magistrate
judge abused his discretion in dismissing O’Donnell’s first
complaint had O’Donnell filed an appeal after the automatic
stay was lifted, she failed to file such an appeal. See DeLange
v. Dutra Const. Co., 183 F.3d 916, 919 n.2 (9th Cir. 1999)
(noting that district courts have “broad discretion in interpret-
ing and applying their local rules”); Big Bear Lodging Ass’n.
v. Snow Summit, Inc., 182 F.3d 1096, 1106 (9th Cir. 1999)
(applying abuse of discretion standard to district court’s deci-
sion to impose sanctions pursuant to local rule). Therefore, we
review only the dismissal of O’Donnell’s second complaint.
[3] The Title VII and the ADEA claims asserted in
O’Donnell’s second complaint are untimely, however,
because she filed her second complaint more than ninety days
after the EEOC’s issuance of her right-to-sue letter. See 42
U.S.C. § 2000e-5(f)(1); 29 U.S.C. § 626(e). O’Donnell’s sec-
ond complaint does not “relate back” to her first complaint
because her second complaint was not an “amendment” to her
O’DONNELL v. VENCOR INC. 18073
first complaint, but rather a separate filing. See FED. R. CIV.
P. 15(c)(2).
[4] Assuming, arguendo, that the doctrine of equitable toll-
ing could be applied to O’Donnell’s situation, it would not
save her Title VII or ADEA claims. “In instances where a
complaint is timely filed and later dismissed, the timely filing
of the complaint does not ‘toll’ or suspend the 90-day limita-
tions period.” Minnette v. Time Warner, 997 F.2d 1023, 1027
(2d Cir. 1993); see also Wei v. State of Hawaii, 763 F.2d 370,
372 (9th Cir. 1985) (per curiam). “In such cases, dismissal of
the original suit, even though labeled as without prejudice,
nevertheless may sound the death knell for the plaintiff’s
underlying cause of action if the sheer passage of time pre-
cludes the prosecution of a new action.” Chico-Velez v. Roche
Prods., Inc., 139 F.3d 56, 59 (1st Cir. 1998). Contrary to
O’Donnell’s assertion, it is irrelevant that the dismissal of her
first complaint without prejudice was “involuntary” rather
than “voluntary.” See Wei, 763 F.2d at 372; see also 8 JAMES
WM. MOORE, ET AL., MOORE’S FEDERAL PRACTICE § 41.50(7)(b)
(3d ed. 1997).
[5] Here, the ninety-day limitations period had run before
the defendants filed for bankruptcy and the automatic stay
was issued. At that point, there was no longer any time left in
the ninety-day limitations period to equitably toll. Therefore,
equitable tolling would not save O’Donnell’s Title VII or
ADEA claims.
[6] The district court did not abuse its discretion in not
applying equitable estoppel based on O’Donnell’s alleged
reliance on the defendants’ notice of the bankruptcy automatic
stay. “Equitable estoppel focuses primarily on the actions
taken by the defendant in preventing a plaintiff from filing
suit . . . .” Santa Maria, 202 F.3d at 1176. “A finding of equi-
table estoppel rests on the consideration of a non-exhaustive
list of factors, including: (1) the plaintiff’s actual and reason-
able reliance on the defendant’s conduct or representations,
18074 O’DONNELL v. VENCOR INC.
(2) evidence of improper purpose on the part of the defendant,
or of the defendant’s actual or constructive knowledge of the
deceptive nature of its conduct, and (3) the extent to which the
purposes of the limitations period have been satisfied.” Id.
Equitable estoppel is not warranted here because there is no
“evidence of improper purpose on the part of the defendant,
or of the defendant’s actual or constructive knowledge of the
deceptive nature of its conduct.” Id.
[7] The defendants’ motion to dismiss based on the statute
of limitations is not barred by laches despite its filing over
two years after O’Donnell’s second complaint. To success-
fully establish laches, a party must show that (1) there was
inexcusable delay in the assertion of a known right and (2) the
party asserting laches has been prejudiced. See Miller v.
Glenn Miller Prods., Inc., 454 F.3d 975, 997 (9th Cir. 2006).
Here, O’Donnell was not prejudiced by the delay because she
had timely notice of the statute of limitations defense from the
defendants’ answer and the delay was reasonable because it
was due to multiple stays entered while the parties pursued
settlement talks and O’Donnell sought an attorney.
[8] We, therefore, affirm the district court’s dismissal of
O’Donnell’s Title VII and ADEA claims as untimely.
II. Equal Pay Act Claims
O’Donnell’s EPA claims, by contrast, are timely because
(1) the December 1, 2003 amendment asserting the EPA
claims “relates back” to the second complaint filed September
27, 2001; and (2) equitable tolling applies, making the second
complaint timely under the EPA statute of limitations.
[9] A later pleading “relates back” to the original pleading
if the claims in the later pleading “arose out of the conduct,
transaction, or occurrence set forth or attempted to be set forth
in the original pleading.” FED. R. CIV. P. 15(c)(2). Although
O’Donnell first raised her EPA claims in the December 1,
O’DONNELL v. VENCOR INC. 18075
2003 amendment, the facts alleged in O’Donnell’s second
complaint filed September 27, 2001 in support of her Title
VII and ADEA claims — that her hours had been given to a
male van driver, that a part-time male driver with less senior-
ity had been promoted and paid a higher salary, and that she
was required to perform more tasks for less pay than male van
drivers — also form the basis for the EPA claims she asserted
in her December 1, 2003 amendment. Because the allegations
and type of evidence necessary for O’Donnell to succeed on
her EPA claims are identical to what she alleged in her second
complaint, see 29 U.S.C. § 206(d)(1) (specifying that jobs are
equal if their performance requires “equal skill, effort, and
responsibility” and they are performed under “similar work-
ing conditions”), the December 1, 2003 amendment “relates
back” to the second complaint which O’Donnell filed Septem-
ber 27, 2001. See In re Markus, 313 F.3d 1146, 1150-51 (9th
Cir. 2002); In re Dominguez, 51 F.3d 1502, 1510 (9th Cir.
1995). Moreover, the second complaint gave the defendants
adequate notice of the substance of O’Donnell’s EPA claims
and thus the defendants cannot show prejudice from the addi-
tion of the EPA claims arising out of the same facts. See San-
tana v. Holiday Inns, Inc., 686 F.2d 736, 739 (9th Cir. 1982).
[10] Because O’Donnell’s assertion of her EPA claims
relates back to the time she filed her second complaint, her
EPA claims were timely filed if the statute of limitations for
those EPA claims was equitably tolled. We hold that it was.
[11] Limitations periods are “customarily subject to ‘equi-
table tolling,’ ” Irwin v. Dep’t of Veterans Affairs, 498 U.S.
89, 95 (1990), unless tolling would be “inconsistent with the
text of the relevant statute,” United States v. Beggerly, 524
U.S. 38, 48 (1998). Equitable tolling is generally applied in
situations “where the claimant has actively pursued his judi-
cial remedies by filing a defective pleading during the statu-
tory period, or where the complainant has been induced or
tricked by his adversary’s misconduct into allowing the filing
deadline to pass.” Irwin, 498 U.S. at 96 (footnotes omitted).
18076 O’DONNELL v. VENCOR INC.
However, the Supreme Court in Young v. United States, 535
U.S. 43, 50-51 (2002), also applied equitable tolling in the sit-
uation where, as here, a bankruptcy petition erected an auto-
matic stay under 11 U.S.C. § 362 which prevented the
claimant from taking steps to protect her claim.
[12] Here, the defendants created the situation which
impeded O’Donnell from pursuing her EPA claims, and they
cannot now claim to be prejudiced by the application of equi-
table tolling. See Baldwin County Welcome Ctr. v. Brown,
466 U.S. 147, 152 (1984) (“absence of prejudice is a factor to
be considered in determining whether the doctrine of equita-
ble tolling should apply once a factor that might justify such
tolling is identified”). Because nothing in the EPA precludes
equitable tolling of the limitations period, Young, 535 U.S. at
47, we hold that the period of time commencing upon the
issuance of the automatic stay and ending thirty days after
notice of termination of the stay, see 11 U.S.C. § 108(c)(2),
must be excluded from the applicable EPA limitations period,
which is two years for a general violation and three years for
a “willful” violation, 29 U.S.C. § 255(a). See also United
States v. Ibarra, 502 U.S. 1, 4 n.2 (1991) (“Principles of equi-
table tolling usually dictate that when a time bar has been sus-
pended and then begins to run again upon a later event, the
time remaining on the clock is calculated by subtracting from
the full limitations period whatever time ran before the clock
was stopped.”).
[13] Each discriminatory paycheck O’Donnell received
constitutes a separate violation of the EPA with a cause of
action accruing (and the running of the limitations period
commencing) upon the receipt of the discriminatory pay-
check. See Bazemore v. Friday, 478 U.S. 385, 395 (1986)
(Brennan, J., concurring in part, joined by all other members
of the Court) (“Each week’s paycheck that delivers less to a
[disadvantaged class member] than to a similarly situated
[favored class member] is a wrong actionable under Title VII
. . . .”); Bartelt v. Berlitz Sch. of Languages of Am., Inc., 698
O’DONNELL v. VENCOR INC. 18077
F.2d 1003, 1007 (9th Cir. 1982) (describing 29 U.S.C. § 255
as rendering employer who commits willful violation under
EPA liable for back pay for up to three years before suit is
filed); Rural Fire Prot. Co. v. Hepp, 366 F.2d 355, 361-62
(9th Cir. 1966) (finding that cause of action accrued at end of
each pay period when minimum and maximum wage provi-
sions of 29 U.S.C. §§ 206, 207 violated). Therefore, although
the EPA violations may have been continuing, the continuing
violation doctrine does not permit O’Donnell to recover back
pay for discriminatory pay periods outside the applicable stat-
ute of limitations period. See Pollis v. New Sch. for Soc.
Research, 132 F.3d 115, 118-19 (2d Cir. 1997); Knight v.
Columbus, 19 F.3d 579, 582 (11th Cir. 1994); Ashley v.
Boyle’s Famous Corned Beef Co., 66 F.3d 164, 168 (8th Cir.
1995) (en banc), abrogation on other grounds recognized by
Madison v. IBP, Inc., 330 F.3d 1051, 1056-57 (8th Cir. 2003);
Brinkley-Obu v. Hughes Training, Inc., 36 F.3d 336, 351 (4th
Cir. 1994); Gandy v. Sullivan County, 24 F.3d 861, 865 (6th
Cir. 1994); E.E.O.C. v. McCarthy, 768 F.2d 1, 3 n. 4 (1st Cir.
1985).
[14] We therefore reverse the district court’s dismissal of
O’Donnell’s EPA claims and remand for further proceedings
to determine whether the defendants violated the EPA and, if
so, to determine the applicable statute of limitations and the
period and amount of back pay recoverable. See 29 U.S.C.
§ 255(a).
The parties shall each bear their own costs on appeal.
AFFIRMED IN PART, REVERSED AND
REMANDED IN PART.