Joseph v. HDMJ

10-1366
Joseph v. HDMJ
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
_______________
August Term, 2010
(Submitted: October 28, 2010 Question Certified: August 5, 2011)
Docket No. 10-1366-cv
_______________
GERMELIA JOSEPH,
Plaintiff-Appellee,
—v.—
GEORGE ATHANASOPOULOS, GUS ATHANASOPOULOS, PETER ATHANASOPOULOS,
Defendants,
HDMJ RESTAURANT, INC.,
Defendant-Appellant.
_______________
Before:
KATZMANN and HALL, Circuit Judges, and JONES, District Judge.*
_______________
Interlocutory appeal from an order of the United States District Court for the Eastern
District of New York (Seybert, J.) granting in part and denying in part defendant’s motion to
dismiss on res judicata grounds. Question certified.
*
The Honorable Barbara S. Jones of the United States District Court for the Southern
District of New York, sitting by designation.
_______________
Germelia Joseph, pro se, Baldwin, N.Y., for Plaintiff-Appellee.
David S. Feather, Garden City, N.Y., for Defendant-Appellant.
_______________
KATZMANN, Circuit Judge:
Defendant-Appellant HDMJ Restaurant, Inc. (“HDMJ”) appeals from an order of the
United States District Court for the Eastern District of New York (Seybert, J.) insofar as that
order denied HDMJ’s motion to dismiss Plaintiff-Appellee Germelia Joseph’s claims alleging
discrimination and retaliation in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C.
§ 2000e et seq., and the Americans with Disabilities Act of 1990 (“ADA”), 42 U.S.C. § 12112 et
seq. This appeal calls upon us to resolve a question of New York’s law of res judicata1: Does a
New York court’s judgment dismissing on timeliness grounds a plaintiff’s Article 78 petition
seeking review of an adverse administrative determination of her employment discrimination
claims preclude the plaintiff from bringing federal discrimination claims in federal court? For
the reasons that follow, we believe that this question, as restated at the conclusion of our opinion,
warrants certification to the New York Court of Appeals.
BACKGROUND
The following factual allegations are drawn from Joseph’s complaint and records of
related state proceedings.
1
“Under both New York law and federal law, the doctrine of res judicata, or claim
preclusion, provides that [a] final judgment on the merits of an action precludes the
parties . . . from relitigating issues that were or could have been raised in that action.” Duane
Reade, Inc. v. St. Paul Fire & Marine Ins. Co., 600 F.3d 190, 195 (2d Cir. 2010) (alterations in
original) (internal quotation marks omitted). This opinion uses the terms “res judicata” and
“claim preclusion” interchangeably.
2
Joseph is a black female of Haitian origin. She worked as a waitress at HDMJ, a Nassau
County restaurant known as Yesterday’s Diner, between March 2004 and January 2006. Joseph
alleges that defendants George, Gus, and Peter Athanasopoulos, all brothers, owned HDMJ in
part and supervised Joseph while she worked there.
According to Joseph, the individual defendants “constantly” made racial slurs towards
her and at numerous times demanded sexual favors. App. 22. After complaining to Gus
Athanasopoulos about a busboy’s request for fellatio, Joseph was suspended from work for
twelve days. At one point, Joseph asserts, Peter Athanasopoulos pulled a knife from his pocket
and told her that he used the knife to cut the throats of waitresses who would not perform fellatio
on him.
Joseph also avers that in February 2005, she injured her knee in a car accident. Although
this injury was known to the defendants, Peter Athanasopoulos allegedly grabbed Joseph’s hand
and pulled her downstairs to the restaurant’s basement to berate her for complaining that he was
directing customers away from the area that she served. Joseph told him that going downstairs
would aggravate her injury, but he responded that he did not care. On the day after Joseph
complained about this incident to Gus Athanasopoulos, George Athanasopoulos terminated
Joseph and told her never to return to the premises.
On March 7, 2006, Joseph filed a charge of discrimination with the Equal Employment
Opportunity Commission (“EEOC”) and a verified complaint with the New York State Division
of Human Rights (“DHR”) alleging that HDMJ had violated the New York State Human Rights
Law (“NYSHRL”), N.Y. Exec. Law § 290 et seq. The DHR investigated the allegations in the
complaint and found probable cause to believe that HDMJ had engaged in unlawful employment
3
practices. On April 12, 2007, the DHR held a public hearing at which HDMJ failed to appear.
The DHR then issued an order sustaining the complaint and awarding monetary damages.
HDMJ appealed from that order on the basis that it did not receive proper notice of the hearing.
In 2007, the New York Supreme Court, Nassau County, vacated the order and remanded for
further proceedings.
On January 16 and 17, 2008, Administrative Law Judge (“ALJ”) Thomas S. Protano held
further hearings, at which HDMJ appeared, where the ALJ received the testimony of Joseph, the
individual defendants, and other waitresses who worked at the restaurant. Joseph was
represented at the hearings by a DHR attorney. In June 2008, the ALJ issued a report and
recommendation concluding that Joseph’s claims were not credible. He found that, inter alia,
Joseph never complained to George Athanasopoulos that his brothers had harassed her; Peter
Athanasopoulos neither carried a knife nor made any crude statements or threats to Joseph; Peter
Athanasopoulos did not drag Joseph down a flight of stairs while her knee was injured; George
Athanasopoulos investigated Joseph’s allegation that a busboy had propositioned her for fellatio
and fired the busboy; and Joseph repeatedly engaged in loud, disruptive behavior and otherwise
acted inappropriately at work. On July 30, 2008, the DHR adopted the ALJ’s report and issued
an order dismissing the case. The order stated that any appeal to the New York Supreme Court
must be filed within sixty days of the order’s service.
Joseph, acting pro se, filed an Article 78 petition in New York Supreme Court, Nassau
County, challenging the DHR’s order. Joseph’s petition was dated October 22, 2008, and was
accompanied by a verification sworn on October 24, 2008. HDMJ moved to dismiss on the
ground that the petition was untimely under N.Y. Exec. Law § 298, which provides that any such
4
proceeding must be initiated within sixty days of service of the challenged order. In an order and
judgment dated March 9, 2009, the Nassau County Supreme Court granted that motion.
Although there was no documentary evidence that the DHR order was actually served on Joseph,
Joseph admitted that she had received that order on August 2, 2008. The court thus concluded
that the petition was untimely because it was not filed within sixty days of August 2, 2008.
Joseph received a right-to-sue letter from the EEOC on November 18, 2008. On January
20, 2009, while her Article 78 proceeding was pending, Joseph filed in federal court a complaint
alleging violations of Title VII, the ADA, the NYSHRL, and the New York Labor Law, arising
from substantially the same factual allegations that were the subject of the administrative
proceedings. The individual defendants moved to dismiss the Title VII and ADA claims against
them on the ground that they could not be held liable in their individual capacities under those
statutes. Following the Nassau County Supreme Court’s dismissal of Joseph’s Article 78
proceeding, all defendants filed a second motion to dismiss the complaint on the basis of res
judicata.
On October 19, 2009, the district court issued a Memorandum and Decision on the
motions to dismiss. That ruling granted the individual defendants’ motion to dismiss the Title
VII and ADA claims, granted the second motion to dismiss on the basis of res judicata with
respect to Joseph’s state law claims, denied that motion with respect to Joseph’s Title VII and
ADA claims, and suggested that the aforementioned denial was suitable for immediate
interlocutory appeal pursuant to 28 U.S.C. § 1292(b). See Joseph v. HDMJ Rest., Inc., 685 F.
Supp. 2d 312, 318 (E.D.N.Y. 2009). Accordingly, HDMJ requested that the district court certify
such an appeal. The court granted that request and certified for interlocutory appeal the
5
question: “Does res judicata bar Plaintiff’s Title VII and ADA claims?”. A motions panel of
this court granted HDMJ’s motion for leave to appeal from the order. This appeal followed.
DISCUSSION
“We review de novo the district court’s application of the principles of res judicata.”
O’Connor v. Pierson, 568 F.3d 64, 69 (2d Cir. 2009) (internal quotation marks omitted).
I.
The question presented in this appeal is one of interjurisdictional preclusion: when a
New York court enters a judgment dismissing as untimely a plaintiff’s challenge to the DHR’s
rejection of her discrimination claim, does that state court judgment bar the plaintiff from
bringing in federal court federal statutory claims arising from the same alleged discriminatory
acts?
Our analysis begins with the full faith and credit statute, 28 U.S.C. § 1738, which
provides in pertinent part that “[t]he . . judicial proceedings of any court of any . . . State . . .
shall have the same full faith and credit in every court within the United States . . . as they have
by law or usage in the courts of such State.” The Supreme Court has held that § 1738 “requires
federal courts to give the same preclusive effect to state court judgments that those judgments
would be given in the courts of the State from which the judgments emerged.” Kremer v. Chem.
Constr. Corp., 456 U.S. 461, 466 (1982).
In Kremer, the Supreme Court addressed whether “Congress intended Title VII to
supersede the principles of comity and repose embodied in § 1738,” and in particular, “whether a
federal court in a Title VII case should give preclusive effect to a decision of a state court
upholding a state administrative agency’s rejection of an employment discrimination claim as
6
meritless when the state court’s decision would be res judicata in the State’s own courts.” Id. at
463.1 The Court concluded neither the text, history, nor purpose of Title VII demonstrated any
congressional intent to create an exception to § 1738. Id. at 476.2
The Supreme Court has since held that for purposes of Title VII claims, the rule of
preclusion set forth in Kremer does not extend to administrative determinations when the
plaintiff has not sought judicial review in state court. University of Tennessee v. Elliott, 478 U.S.
788 (1986), presented the question of whether unreviewed state administrative findings were
entitled to preclusive effect in federal court when the plaintiff asserted discrimination claims
under various federal statutes, including Title VII. The Court concluded that § 1738 does not
govern whether federal courts must give state administrative proceedings (as opposed to state
court judgments) preclusive effect. Id. at 795. The Court then declined to fashion a common
law rule affording preclusive effect to these unreviewed administrative determinations in the
Title VII context, finding that such a rule would be inconsistent with Congress’s intent that Title
VII plaintiffs receive a trial de novo in federal court following state administrative proceedings.
Id. at 795-96.
Kremer and Elliott make clear that in determining the res judicata effect of a state court
1
In states such as New York that have agencies analogous to the EEOC, aggrieved
employees must present their Title VII claim to that state agency before seeking relief in federal
court. See Kremer, 456 U.S. at 463-64 (citing 42 U.S.C. § 2000e-5(c)). The ADA incorporates
these same enforcement procedures. See 42 U.S.C. § 12117(a).
2
Kremer noted that in order to be entitled to preclusive effect, state administrative
proceedings must satisfy the minimum requirements of the Fourteenth Amendment’s Due
Process Clause. 456 U.S. at 481-82. The Kremer Court expressed “no hesitation” in holding
that the “panoply of procedures” available in the DHR proceedings at issue, which were
“complemented by administrative as well as judicial review,” comported with the Due Process
Clause. Id. at 484. There is no claim in this appeal that New York’s administrative procedures
were inconsistent with due process.
7
judgment on a plaintiff’s federal statutory claims, the federal court must give that judgment the
same preclusive effect as would the courts of the state rendering that judgment. Thus, the
question here is whether New York courts would hold that a judgment dismissing on timeliness
grounds a challenge to the DHR’s order precludes the assertion of federal statutory claims in a
forum where those claims are not untimely.
Our court has struggled with this question. In Bray v. New York Life Insurance, 851 F.2d
60 (2d Cir. 1988), we confronted a factual scenario identical in all material respects to what is
presented here. Evelyn Bray, a black female who was terminated from her job, filed
discrimination claims with the DHR and EEOC. On April 25, 1985, the DHR issued a
determination and order concluding that there was no probable cause to believe that Bray’s
employer had engaged in the alleged discriminatory practice.3 On June 25, 1985, Bray, acting
pro se, filed an Article 78 action challenging the DHR’s determination. Meanwhile, she
received a right-to-sue letter from the EEOC and initiated a federal action raising claims under
Title VII. The New York Supreme Court, Westchester County, dismissed the Article 78 petition
as untimely by one day. The federal district court concluded that the state court’s dismissal
3
This order also included the following warning:
PLEASE TAKE FURTHER NOTICE that a complainant who seeks state judicial review,
and receives an adverse decision therein, may lose his or her right to proceed
subsequently in federal court under Title VII, by virtue of Kremer v. Chemical
Construction Co., 456 U.S. 461 (1982).
Bray, 851 F.2d at 61; see also, e.g., Francis v. Elmsford Sch. Dist., 442 F.3d 123, 125 (2d Cir.
2006) (discussing DHR order containing identical warning). Unlike the DHR orders in Bray and
Francis, the DHR order dismissing Joseph’s complaint did not address the possible preclusive
consequences of seeking judicial review in state court. It strikes us that absent such a warning,
the risks that accompany a decision to seek state judicial review are unlikely to be fully
appreciated by a pro se litigant.
8
would be given preclusive effect by New York courts and therefore must be given the same
effect in federal court. Id. at 61-62.
Our court affirmed. As an initial matter, we noted that the case “seems to fall somewhere
between the rule governing application of § 1738 as set out in Kremer and the policy underlying
Elliott.” Id. at 62. We concluded, however, that Elliott was inapplicable because “[w]hen a
plaintiff has sought state judicial review of an agency decision, Kremer requires that we look to
the preclusive effect that New York would give to the judgment of its court,” even if the state
court dismissed the challenge on timeliness grounds and did not review the underlying
administrative findings. Id. at 63. Turning to New York’s law of res judicata, we noted that
“New York considers a dismissal on statute of limitations grounds ‘at least sufficiently close to a
decision on the merits to bar a second action.’” Id. at 64 (citing Smith v. Russell Sage College,
429 N.E.2d 746 (N.Y. 1981), and a number of other decisions by New York’s appellate courts).
For these reasons, we held:
Because New York treats a dismissal on statute of limitations grounds as a
final judgment on the merits for res judicata purposes, Bray is precluded from
relitigating her sex and race discrimination claims in federal court. We recognize
the unfairness of precluding Bray from having a court reach the merits of her
claim, but there is no principled basis upon which to distinguish her case from the
governing New York law. Unfortunately for Bray, “[t]he crucial factor is that
[she] chose to submit her case to the state courts for review.” Once a plaintiff has
entered the state court system, she is bound by the preclusion rules governing that
system, and the federal courts in turn must respect the finality of the judgments
that issue from the state court.
Id. at 64 (alterations and emphasis in original) (citation omitted).
Twenty-one years later, this court revisited Bray’s conclusion that New York courts treat
the dismissal of a claim on timeliness grounds as a decision “on the merits” such that the
judgment is entitled to preclusive effect. In Cloverleaf Realty of New York, Inc. v. Town of
9
Wawayanda, 572 F.3d 93 (2d Cir. 2009), the plaintiffs owned parcels of land that became subject
to a New York town’s special assessment of a property tax. The plaintiffs brought a state-court
declaratory judgment action challenging the substantive basis of the assessment and contending
that procedural due process required actual notice of a public hearing, which the town did not
provide. The state court found that the plaintiffs’ claims were subject to a four-month statute of
limitations and dismissed the complaint as untimely. The plaintiffs then brought an action in
federal district court under 42 U.S.C. § 1983 contending that the failure to provide notice
violated the Due Process Clause. Although the complaint was filed within the three-year
limitations period applicable to § 1983 actions against New York officials, the district court
dismissed the federal claim as precluded by the state court’s dismissal. Id. at 94-95.
The “difficulty” in Cloverleaf, we observed, “arises from the circumstance that
[plaintiffs’] procedural due process claim was untimely under the law applied by the New York
courts, but timely under the law applied by the federal courts.” Id. at 95.4 Notwithstanding
Bray, we agreed with the plaintiffs that the district court had erred “in failing to apply an
exception to claim preclusion where the first claim was dismissed solely for lack of timeliness
and the second claim is brought in another state or jurisdiction.” Id. To the extent that
Bray suggested otherwise, we determined that Bray’s holding was no longer binding, because
the New York Court of Appeals had since indicated in Tanges v. Heidelberg North America,
Inc., 710 N.E.2d 250 (N.Y. 1999), that the expiration of the time period enumerated in a statute
4
This difficulty, of course, was also present in Bray, where the plaintiff’s Article 78
challenge was untimely under the applicable New York statute of limitations, but her Title VII
claim was timely under the applicable federal limitations period, which provides ninety days
from the plaintiff’s receipt of a right-to-sue letter from the EEOC for the plaintiff to bring a civil
action. See Bray, 851 F.2d at 61-62; see also 42 U.S.C. § 2000e-5(f)(1).
10
of limitations would not bar an otherwise available federal court remedy. Cloverleaf, 572 F.3d at95-96 & n.2.
Against this background, the district court here acknowledged that under Bray, the
defendants would have prevailed in their motion to dismiss Joseph’s federal claims on the basis
of res judicata. Joseph v. HDMJ Rest., Inc., 685 F. Supp. 2d 312, 315-16 (E.D.N.Y. 2009). The
court went on to observe, however, that Cloverleaf “appears to eviscerate the basis for Bray’s
long-standing holding that a dismissal of an Article 78 petition for untimeliness constitutes a
decision ‘on the merits’ which creates a res judicata bar to a subsequent Title VII suit in federal
court.” Id. at 316. Because the Nassau County Supreme Court dismissed Joseph’s Article 78
petition as untimely and did not address the substance of the DHR’s findings, the district court
held that this dismissal was not “on the merits” and that it therefore did not preclude Joseph’s
claims under Title VII or the ADA. Id. at 316-17.5
II.
To resolve this appeal, we must reconcile the seemingly divergent holdings of Bray and
Cloverleaf. While we are as a general matter “bound to abide by our most recent precedent,”
Doctor’s Assocs., Inc. v. Distajo, 66 F.3d 438, 456 (2d Cir. 1995), the facts of Bray are more
closely analogous to Joseph’s predicament than those of Cloverleaf. The latter case, as the
5
As to the ADA claim, the district court applied a preclusion analysis identical to that
pertaining to the Title VII claim. Neither of the parties takes issue with that determination, and
we are aware of no distinction between these two statutes that would require affording a state
court judgment a different preclusive effect. See, e.g., Staats v. Cnty. of Sawyer, 220 F.3d 511,
514 (7th Cir. 2000) (“Although [plaintiff’s] claims arise under the ADA and the Rehabilitation
Act, not Title VII, we think the logic of Kremer and Elliott applies equally to other federal
anti-discrimination statutes.”); Thomas v. Contoocook Valley Sch. Dist., 150 F.3d 31, 39 n.5 (1st
Cir. 1998) (“[T]he ADA incorporates the same Title VII deferral procedures, see 42 U.S.C. §
12117 (incorporating 42 U.S.C. § 2000e-5), on which the Supreme Court relied in Kremer and
Elliott; therefore, those holdings apply with equal force in the ADA context.”).
11
district court here noted, “did not concern a plaintiff who filed an untimely Article 78 petition
challenging a New York state agency’s administrative findings,” and thus did not expressly
overrule Bray as applied to this scenario. Joseph, 685 F. Supp. 2d at 316. In Bray, as here, the
DHR reviewed the substance of the plaintiffs’ discrimination claims; in Cloverleaf, there was no
state administrative or judicial review of the substance of the procedural due process claim.
Given the lack of clarity as to whether Cloverleaf or Bray should bind this panel, we find it
appropriate to examine the distinct views of New York’s preclusion law underlying those
decisions.
Bray’s holding rests on the proposition, which derives principally from Russell Sage, that
New York courts consider a dismissal on timeliness grounds to be “at least sufficiently close to a
decision on the merits to bar a second action.” 851 F.2d at 64 (internal quotation marks
omitted). While Russell Sage suggests as much, it does not clearly so hold. The plaintiff in that
case, a former administrator at a junior college, brought two successive actions asserting various
fraud and contract claims arising from an alleged oral employment agreement, an exchange of
letters regarding that agreement, and his eventual termination. In the first action, the state trial
court, treating the college’s motion to dismiss as a motion for summary judgment, dismissed the
portion of the suit that was based on the alleged oral agreement as barred by the statute of frauds
and dismissed the remainder of the suit as barred by the applicable one-year statute of
limitations. In the second suit, the plaintiff asserted additional fraud claims arising from
conversations between the plaintiff and the college’s president regarding the same agreement.
The Court of Appeals concluded that res judicata barred the second action. 429 N.E.2d at 746-
50.
12
Of particular relevance to us is Russell Sage’s discussion of “whether the dismissal of the
plaintiff’s prior action on Statute of Limitations and Statute of Frauds grounds was ‘on the
merits’ for claim preclusion purposes.” Id. at 750. In that regard, the court noted:
[T]he impact of the Statute of Limitations, though often denominated as
procedural, in a practical sense may also be said to be substantive; as we have had
occasion to observe, “while a time bar is usually said to affect the remedy . . . its
interposition is at least as often the difference between life or death for the right
as well” as the remedy.
Id. (omission in original). The Court of Appeals concluded:
Suffice it to say that a dismissal on these grounds [i.e., based on the statute of
frauds and the statute of limitations] is at least sufficiently close to the merits for
claim preclusion purposes to bar a second action, especially where the motion to
dismiss the first action was treated as one for summary judgment on which the
court considered submissions of the parties dehors the pleadings.
Id.
The Cloverleaf court detected three aspects of “ambiguity” as to whether Russell
Sage should be read to imbue a state court’s dismissal on timeliness grounds with
interjurisdictional preclusive force. First, because the initial dismissal in Russell Sage implicated
both the statute of limitations and the statute of frauds, Cloverleaf did not read Russell Sage’s
holding “as a statement that a dismissal for lack of timeliness is, standing alone, a judgment ‘on
the merits.’” Cloverleaf, 572 F.3d at 96. Second, Cloverleaf noted that in Russell Sage, the
motion to dismiss the first action was treated as one for summary judgment, which made
preclusion “especially” appropriate in the view of the Court of Appeals. Id. As to the third
distinction, Cloverleaf stated:
[T]he court in Russell Sage was not confronted by the situation we face: a
dismissal for lack of timeliness by a court in another jurisdiction with a shorter
statute of limitations. Since that decision did not confront the question of whether
a claim originally dismissed as time-barred should be precluded when later
13
reasserted in another jurisdiction with a longer statute of limitations, it should not
be understood as having settled that question.
Id. at 96.6
This takes us to the decision of the Court of Appeals in Tanges, which Cloverleaf read as
undermining Russell Sage. Tanges came to the Court of Appeals on a certified question from
this court as to whether a product liability suit brought by a New York plaintiff was barred by a
Connecticut statute setting forth time limitations on when product liability claims must be
brought. To answer the certified question, the Court of Appeals first considered whether the
statute at issue was “procedural” or “substantive” under New York’s choice-of-law rules. The
court held that the statute at issue was a statute of repose constituting part of Connecticut’s
substantive law. 710 N.E.2d at 251. In reaching that conclusion, the court contrasted statutes of
repose with statutes of limitation:
In New York, Statutes of Limitation are generally considered procedural because
they are “[v]iewed as pertaining to the remedy rather than the right.” The
expiration of the time period prescribed in a Statute of Limitations does not
extinguish the underlying right, but merely bars the remedy. Nicely summarized
elsewhere, “[t]he theory of the statute of limitations generally followed in New
York is that the passing of the applicable period does not wipe out the substantive
right; it merely suspends the remedy.” Siegel, N.Y. Prac[tice] § 34, at 38 [2d ed.].
6
Indeed, certain of the authorities relied on by Bray and Russell Sage for the proposition
that a dismissal on statute of limitations grounds was sufficiently close to a decision on the
merits can be read to support this same distinction. See, e.g., De Crosta v. A. Reynolds Constr.
& Supply Corp., 364 N.E.2d 1129, 1130 (N.Y. 1977) (“Where a plaintiff brings an action to
enforce a claim and is barred from proceeding thereon because of a Statute of Limitations’
defense which has been interposed, the judicial decision is on the merits and plaintiff is
precluded from thereafter maintaining another action to enforce the claim in the same State.”
(emphasis added)); Spindell v. Brooklyn Jewish Hosp., 317 N.Y.S.2d 963, 965 (App. Div. 2d
Dep’t 1970) (dismissal on statute of limitations grounds “may be considered to be on the merits,
at least as far as the courts of New York are concerned, as to the point it decided”); David D.
Siegel, New York Practice § 34 (4th ed. 2005) (“[T]he application of the statute of limitations
usually dismisses the action as permanently as a final judgment on the merits, at least insofar as
further suit in New York is concerned.”).
14
Id. at 253 (alterations in original) (other citations omitted).
Tanges, to be sure, was concerned with a choice-of-law issue, not the claim-preclusive
effects of a dismissal based on a statute of limitations. Cloverleaf nonetheless read Tanges to
indicate that the Court of Appeals does not take the view that a dismissal on timeliness grounds
is “on the merits” for res judicata purposes. Such a reading of Tanges derives support from a
passage in Semtek International, Inc. v. Lockheed Martin Corp., 531 U.S. 497 (2001), a decision
of the Supreme Court of the United States, describing the claim-preclusive effect of dismissals
on statute of limitations grounds: “[T]he traditional rule is that expiration of the applicable
statute of limitations merely bars the remedy and does not extinguish the substantive right, so
that dismissal on that ground does not have claim-preclusive effect in other jurisdictions with
longer, unexpired limitations periods.” Id. at 504 (emphasis added) (citing Restatement
(Second) of Conflict of Laws §§ 142(2), 143 (1969); Restatement of Judgments § 49 cmt. a
(1942)).7 Therefore, insofar as in New York, the expiration of the statute of limitations does not
terminate the underlying right, it would follow from the “traditional rule” described in Semtek
that a dismissal on timeliness grounds is not entitled to res judicata effect in jurisdictions where
the applicable limitations period has not yet expired. Cf. 18A Charles Alan Wright et al.,
Federal Practice and Procedure § 4441 (2d ed. 2002) (noting the “general conclusion that
dismissal on limitations grounds merely bars the remedy in the first system of courts, and leaves
a second system of courts free to grant a remedy that is not barred by its own limitations rules”);
Restatement (Second) of Judgments § 19 cmt. f (1982) (same).
7
The Court made these observations in the context of holding that the claim-preclusive
effect of dismissals by federal courts exercising diversity jurisdiction is governed by a federal
common law rule that in turn incorporates the forum state’s law of res judicata. See 531 U.S. at
509.
15
Our task in resolving Bray and Cloverleaf is further complicated by the fact that
notwithstanding Cloverleaf’s reading of Tanges, many decisions of the Appellate Division have
continued to invoke Russell Sage,8 and no New York court that we are aware of has relied on
Tanges to conclude that a statute-of-limitations dismissal was not “on the merits.” Then again,
none of these courts appears to have had occasion to consider whether a dismissal based on the
expiration of a statute of limitations should be given preclusive effect in another jurisdiction
where the claim would not be untimely.
III.
Given our reading that neither Russell Sage nor Tanges supplies the rule of decision for
the case at bar and the significant and outcome-determinative nature of the question presented,
we think certification is warranted.
Our discretion to certify is “principally guided by three factors”:
First, certification may be appropriate if the New York Court of Appeals
has not squarely addressed an issue and other decisions by New York courts are
insufficient to predict how the Court of Appeals would resolve it. . . .
Second, the question on which we certify must be of importance to the
state, and its resolution must require value judgments and important public policy
choices that the New York Court of Appeals is better situated than we to
make. . . .
Third, we may certify if the question is determinative of a claim before us.
8
See, e.g., Daved Fire Sys. Inc. v. N.Y.C. Health & Hosps. Corp., 847 N.Y.S.2d 195, 196
(1st Dep’t 2007); Sosa v. JP Morgan Chase Bank, 822 N.Y.S.2d 122, 124 (2d Dep’t 2006); Palm
Mgmt. Corp. v. Goldstein, 815 N.Y.S.2d 670, 674 (2d Dep’t 2006); Ferranti v. N.Y.C. Prop.
Clerk’s Office, 773 N.Y.S.2d 876, 876 (1st Dep’t 2004); Cold Spring Harbor Area Civic Ass’n v.
Bd. of Zoning Appeals of Town of Huntington, 762 N.Y.S.2d 392, 393 (2d Dep’t 2003); Karmel
v. Delfino, 740 N.Y.S.2d 373, 374 (2d Dep’t 2002); Marinelli Assocs. v. Helmsley-Noyes Co.,
705 N.Y.S.2d 571, 574 (1st Dep’t 2000); see also Simmons v. N.Y.C. Health & Hosps. Corp.,
894 N.Y.S.2d 750, 750 (1st Dep’t 2010) (concluding that judgment dismissing prior action on
statute of limitations grounds had claim-preclusive effect).
16
10 Ellicott Square Court Corp. v. Mountain Valley Indem. Co., 634 F.3d 112, 125-26 (2d Cir.
2011) (internal quotation marks, other ellipses, and citations omitted).
In our view, each of these factors counsels in favor of certification. First, based on our
reading of Russell Sage and Tanges, we conclude that the Court of Appeals has not “squarely
addressed” whether a New York court’s judgment dismissing a case based on the expiration of a
New York limitations period should have preclusive effect in another jurisdiction with a longer,
unexpired limitations period. Second, we think that the Court of Appeals is well situated to
address that significant question.9 Third, the answer to the question we certify will fully resolve
our disposition of this appeal.
“We have greatly benefited on many occasions from the guidance of the New York Court
of Appeals,” O’Mara v. Town of Wappinger, 485 F.3d 693, 699 (2d Cir. 2007), including on
matters of New York’s preclusion law, see, e.g., Green v. Montgomery, 245 F.3d 142, 143 (2d
Cir. 2001) (per curiam). In accordance with our preference that states determine the meaning of
their own laws in the first instance, see Allstate Ins. Co. v. Serio, 261 F.3d 143, 150 (2d Cir.
2001), and because the outcome of this case turns on the answer to this significant question of
New York law, we certify to the Court of Appeals the question stated below.
9
Although the Supreme Court has recognized a federal interest in a Title VII plaintiff’s
ability to receive a trial de novo in federal court, see Elliott, 478 U.S. at 795-96, it is equally
clear that this interest does not trump the preclusion rule of § 1738 when there is a prior state
court judgment. The statutory directive that this court look to state preclusion law is unabated by
the fact that the state’s preclusion rules may impede the plaintiff’s ability to bring her federal
claims in a federal forum. See, e.g., San Remo Hotel, L.P. v. City & Cnty. of S.F., 545 U.S. 323,
344-45 (2005); Marrese v. Am. Acad. of Orthopaedic Surgeons, 470 U.S. 373, 381-82 (1985).
17
CONCLUSION
For the foregoing reasons and pursuant to New York Court of Appeals Rule 500.27 and
Local Rule 27.2 of this court, we respectfully certify to the Court of Appeals the following
question:
When a plaintiff brings a discrimination claim before the New York State
Division of Human Rights (“DHR”) and commences an untimely Article 78
proceeding challenging the DHR’s adverse determination of that claim, does the
state court’s dismissal of the Article 78 proceeding pursuant to the time
limitations set forth in N.Y. Exec. Law § 298 amount to an adjudication “on the
merits” for res judicata purposes, such that the plaintiff cannot litigate her claim
in another jurisdiction with a longer, unexpired limitations period?
“As is our practice, we do not intend to limit the scope of the Court of Appeals’ analysis through
the formulation of our question, and we invite the Court of Appeals to expand upon or alter this
question as it should deem appropriate.” 10 Ellicott Square Court Corp., 634 F.3d at 126.
It is hereby ORDERED that the Clerk of this Court transmit to the Clerk of the New
York Court of Appeals this opinion as our certificate, together with a complete set of the briefs,
the appendix, and the record filed in this court by the parties. HDMJ shall bear all fees and costs
that may be imposed by the New York Court of Appeals in connection with this certification.
This panel will resume its consideration of this appeal after the disposition of this certification by
the New York Court of Appeals.
18