Adams v. State of California

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

AVRIL ADAMS, 
Plaintiff-Appellant,
v.
STATE OF CALIFORNIA
DEPARTMENT OF HEALTH SERVICES,
a public entity; DONNATA No. 04-56880
MORELAND; OAKTREE
INVESTIGATIONS, a business entity  D.C. No.
CV-04-07313-GAF
and consumer reporting agency;
LAURENCE A. CORBIN, individually OPINION
as an investigator for Oak Tree
Investigations; PATRICA ECHARD;
LETTE BAKER; PATRICK KENNELLY,
individually and as a supervisor;
LAVONNE COEN,
Defendants-Appellees.

Appeal from the United States District Court
for the Central District of California
Gary A. Feess, District Judge, Presiding

Submitted December 5, 2006*
Pasadena, California

Filed February 13, 2007

Before: Harry Pregerson, David R. Thompson, and
Richard C. Tallman, Circuit Judges.

*This panel unanimously finds this case suitable for decision without
oral argument. See Fed. R. App. P. 34(a)(2).

1803
1804 ADAMS v. STATE OF CALIFORNIA
Opinion by Judge Thompson
 ADAMS v. STATE OF CALIFORNIA 1807

COUNSEL

B. Kwaku Duren, Los Angeles, California, for the appellant.

Martin H. Milas, Deputy Attorney General, Los Angeles, Cal-
ifornia, for the appellees.

OPINION

THOMPSON, Senior Circuit Judge:

Appellant Avril Adams appeals the district court’s dis-
missal with prejudice of her complaint against Appellees the
California Department of Health Services (“CDHS”); CDHS
employees Donnata Moreland, La Vonne Coen, Patricia
Echard, Paulette Baker, and Patrick Kennelly; and Oaktree
Investigations and its employee, Laurence Corbin. We have
jurisdiction under 28 USCA § 1291, and we affirm the district
court’s dismissal of Adams’s complaint.

I. BACKGROUND

In January 2001, Adams applied for a food and drug
inspector (“FDI”) position with CDHS. Food and drug inspec-
tors are peace officers and carry firearms, investigate viola-
tions, make arrests, and travel to food storage, processing
facilities and farms. Adams was offered the position she
sought, but her actual hiring was conditioned upon her suc-
cessful completion of a background investigation, including
medical and psychological evaluations.
1808 ADAMS v. STATE OF CALIFORNIA
Adams passed the psychological evaluation, but Dr. Ste-
phen G. Weyers notified her that he had recommended restric-
tions on her ability to perform activities that required maximal
exertion and balance. CDHS then advised Adams it was
unable to accommodate her medical restrictions and it with-
drew the conditional job offer. Thereafter, Adams took a new
treadmill stress test, and Dr. Weyers medically approved her
without limitation for the food and drug investigator position.

CDHS then withdrew its medical disqualification of Adams
and notified her it would resume her selection process. Adams
objected to further investigation. Thereafter, CDHS notified
her that it rescinded its conditional offer of employment. Four
days later, the State Personnel Board (“SPB”) ruled on
Adams’s appeal of Dr. Weyers’s decision to disqualify her for
medical reasons. Because Dr. Weyers subsequently approved
her, SPB granted Adams’s appeal and advised her she would
be appointed to the FDI position within 120 days unless she
was unsuccessful in the balance of the selection process.

On April 1, 2003, Adams filed a petition for rehearing with
the SPB. CDHS filed a response to Adams’s petition, stating
that it withdrew Adams’s conditional offer of employment the
second time because, during the completion of the investiga-
tion process, questions arose regarding Adams’s suitability as
a peace officer. The response detailed Adams’s behavior dur-
ing the selection process, which included challenging a CDHS
employee to a race during the SPB hearing, making numerous
phone calls, and sending emails and letters to CDHS employ-
ees in which Adams’s tone was “rude,” “discourteous,”
“abrupt,” “angry,” and “challenging in a demeaning way.”
The response concluded that Adams did not possess the inter-
personal skills, sound judgment, or the ability to follow direc-
tions necessary for being an effective peace officer. The SPB
denied Adams’s petition for rehearing on June 17, 2003.

Adams filed a complaint in state court on November 10,
2003, naming CDHS, Coen, Moreland, and Dr. Weyers as
 ADAMS v. STATE OF CALIFORNIA 1809
defendants. Adams asserted claims for (1) retaliation in viola-
tion of 42 USCA § 1983; (2) violations of the Americans with
Disabilities Act, 42 U.S.C. § 12101 et seq., and the California
Fair Employment and Housing Act, Cal. Gov’t Code § 12900
et seq.; (3) denial of due process and civil rights in violation
of 42 USCA §§ 1981, 1983, 1985; (4) breach of contract; (5)
breach of the implied covenant of good faith and fair dealing;
(6) negligence; and (7) declaratory relief. Adams sought dam-
ages and a declaration from the court that CDHS’s withdrawal
of the conditional offer of employment was unlawful.

Adams’s complaint also detailed the facts behind the
reopening of the background investigation to support her
claims for negligence, violations of 42 USCA §§ 198142
U.S.C. §§ 1981, 1983, 1985, breach of contract, and declara-
tory relief. In her complaint, Adams did not allege separate
claims under the Fair Credit Reporting Act (“FCRA”), 15
USCA § 1681 et seq., or state privacy law, although she
alleged that the act of resuming the background investigation
was prejudicial, illegal, unreasonable, discriminatory, retalia-
tory, and arguably illegal in violation of the FCRA and due
process.

Adams’s action was removed to federal court on December
8, 2003. Adams v. Cal. Dep’t of Health Servs., No. CV-03-
8920 (C.D. Cal. filed Dec. 8, 2003). The district court issued
a scheduling order setting March 26, 2004, as the deadline for
filing motions to amend the complaint or add additional par-
ties.

On July 1, 2004, well past the March 26, 2004 deadline set
in the scheduling order, Adams filed a motion for leave to
amend her complaint. Adams wanted to add as defendants
Oaktree Investigations and Oaktree investigator Corbin, as
well as CDHS employees Echard, Baker, and Kennelly. In her
proposed amended complaint she alleged four additional
claims: (1) violation of the FCRA; (2) violation of the Califor-
nia Investigative Consumer Reporting Agencies Act
1810 ADAMS v. STATE OF CALIFORNIA
(“ICRA”), CA CIVIL § 1786 et seq.; (3) infringement of her
civil and constitutional rights in violation of 42 USCA
§§ 198142 U.S.C. §§ 1981, 1983, 1985; and (4) declaratory
relief.

Finding that Adams failed to demonstrate good cause for
the undue delay in seeking leave to amend, and that granting
her motion to amend would prejudice the defendants already
named in her complaint, the district court denied Adams’s
motion as untimely. The action then proceeded to trial and a
jury found in favor of the defendants. Adams appealed the
denial of her motion for leave to amend, among other issues,
to our court. In a memorandum disposition filed February 7,
2007, we have affirmed the district court’s decisions and the
judgment in that first case. Adams v. State of Cal.Dep’t of
Health Servs., No. 05-56857 (9th Cir. filed February 7, 2007).

On September 2, 2004, after the district court denied her
motion for leave to amend in the first case, Adams filed the
complaint in this present case. In her complaint in this case,
Adams set forth the four additional claims she had sought to
add by her previously denied motion for leave to amend her
complaint in the first case. In the present case, the district
court determined that Adams’s newly filed complaint was
duplicative of the complaint she had previously filed in the
other case, and the court dismissed the new complaint with
prejudice. This appeal followed.

II. STANDARD OF REVIEW

District courts retain broad discretion to control their dock-
ets and “[i]n the exercise of that power they may impose sanc-
tions including, where appropriate, default or dismissal.”
Thompson v. Hous. Auth. of City of Los Angeles, 782 F.2d
829, 831 (9th Cir. 1986); see also Link v. Wabash R.R. Co.,
370 U.S. 626, 629-30 (1962). We review for abuse of discre-
tion the district court’s dismissal of Adams’s complaint. A
district court has discretion to dismiss a later-filed action, to
 ADAMS v. STATE OF CALIFORNIA 1811
stay that action pending resolution of the previously filed
action, or to consolidate both actions. See Curtis v. Citibank,
N.A., 226 F.3d 133, 138-39 (2d Cir. 2000); Walton v. Eaton
Corp., 563 F.2d 66, 70 (3d Cir. 1977) (en banc) (cited with
approval in Russ v. Standard Ins. Co., 120 F.3d 988, 990 (9th
Cir. 1997)).

III. DISCUSSION

[1] The rule against duplicative litigation is distinct from,
but closely related to, the doctrine of claim preclusion, and the
two doctrines serve many of the same policies. Dismissal of
a duplicative lawsuit, like claim preclusion (sometimes
referred to as res judicata) serves judicial economy and the
“comprehensive disposition of litigation.” Kerotest Mfg. Co.
v. C-O-Two Fire Equip. Co., 342 U.S. 180, 183 (1952). More-
over, dismissal of a duplicative suit protects the parties from
vexatious and expensive litigation and serves the societal
interest in bringing an end to disputes. Cf. Allen v. McCurry,
449 U.S. 90, 94 (1980) (res judicata relieves parties of cost
of multiple lawsuits, conserves judicial resources, and encour-
ages reliance on adjudication); Brown v. Felsen, 442 U.S.
127, 131 (1979) (res judicata “encourages reliance on judicial
decisions, bars vexatious litigation, and frees the courts to
resolve other disputes”); 18 Moore’s Federal Practice
¶ 131.12 (3d ed. 1999).

Dismissal of a duplicative suit is an appropriate remedy
because plaintiffs have “no right to maintain two separate
actions involving the same subject matter at the same time in
the same court and against the same defendant.” Walton, 563
F.2d at 70; see also Curtis, 226 F.3d at 138-39; Oliney v.
Gardner, 771 F.2d 856, 859 (5th Cir. 1985); Zerilli v. Evening
News Ass’n, 628 F.2d 217, 222 (D.C. Cir. 1980); Sutcliffe
Storage & Warehouse Co. v. United States, 162 F.2d 849, 851
(1st Cir. 1947).

[2] The test for whether a suit is duplicative and subject to
dismissal is substantially equivalent to the test for claim pre-
1812 ADAMS v. STATE OF CALIFORNIA
clusion. As the Supreme Court stated in United States v. The
Haytian Republic, “the true test of the sufficiency of a plea of
‘other suit pending’ in another forum [i]s the legal efficacy of
the first suit, when finally disposed of, as ‘the thing
adjudged,’ regarding the matters at issue in the second suit.”
154 U.S. 118, 124 (1894). The doctrine of claim preclusion
bars “ ‘all grounds for recovery which could have been
asserted, whether they were or not, in a prior suit between the
same parties . . . on the same cause of action, if the prior suit
concluded in a final judgment on the merits.’ ” Int’l Union of
Operating Eng’rs-Employers Constr. Indus. Pension, Welfare
& Training Trust Funds v. Karr, 994 F.2d 1426, 1429 (9th
Cir. 1993) (alteration in original) (quoting Ross v. Int’l Bhd.
of Elec. Workers, 634 F.2d 453, 457 (9th Cir. 1980)); see also
Mpoyo v. Litton Electro-Optical Sys., 430 F.3d 985, 987 (9th
Cir. 2005).

[3] Thus, to determine whether the district court abused its
discretion in dismissing Adams’s present complaint with prej-
udice because it was duplicative of her first complaint, we
assess what claim preclusive effect the judgment on the merits
in her first action would have on the present action.

A. Same Cause of Action

[4] We examine first whether the claims in Adams’s pres-
ent action were based on the same claims asserted in her first
action. In determining whether successive claims are the
same, we consider four criteria:

(1) whether rights or interests established in the prior
judgment would be destroyed or impaired by prose-
cution of the second action; (2) whether substantially
the same evidence is presented in the two actions;
(3) whether the two suits involve infringement of the
same rights; and (4) whether the two suits arise out
of the same transactional nucleus of facts.
 ADAMS v. STATE OF CALIFORNIA 1813
Constantini v. Trans World Airlines, 681 F.2d 1199, 1201-02
(9th Cir. 1982). “The last of these criteria is the most impor-
tant.” Id. at 1202.

[5] We use a transaction test to determine whether the two
suits share a common nucleus of facts. “Whether two events
are part of the same transaction or series depends on whether
they are related to the same set of facts and whether they
could conveniently be tried together.” Western Sys., Inc. v.
Ulloa, 958 F.2d 864, 871 (9th Cir. 1992) (citing Restatement
(Second) Judgments § 24(1) (1982)).

[6] Here, it is clear that the two actions share a common
transactional nucleus of facts. The first complaint detailed the
factual allegations surrounding the reopening of Adams’s
background investigation and used those allegations to sup-
port claims under the legal theories of negligence, violations
of 42 USCA §§ 198142 U.S.C. §§ 1981, 1983, 1985, breach
of contract, and declaratory relief. Adams’s first complaint
specifically cited as support for her claims against Coen,
Moreland, and Dr. Weyers under 42 USCA §§ 198142 U.S.C.
§§ 1981, 1983, 1985, the same negative comments from
CDHS employees during the selection process that she used
to support her claims in the present action. The present com-
plaint differs only in that it identifies the CDHS employees
who made the negative comments, names those CDHS
employees and Corbin and Oaktree Investigations as defen-
dants, and advances two new legal theories of recovery under
the FCRA and the ICRA. The two other claims — one under
42 U.S.C. §§ 1981, 1983, 1985 and one seeking declaratory
relief — are identical to those asserted in the first complaint.
As Adams herself concedes, the claims in both complaints
relate to the same set of facts and form a convenient trial unit
because they “disclose[ ] a cohesive narrative” of Adams’s
relationship with CDHS and the disputed withdrawal of the
conditional job offer after the continuation of the background
investigation. Mpoyo, 430 F.3d at 987.
1814 ADAMS v. STATE OF CALIFORNIA
[7] That the additional legal theories of recovery under the
FCRA and ICRA were not raised as separate claims in
Adams’s first complaint does not by itself permit her to pres-
ent those claims in a subsequent complaint, because a litigant
“is not permitted to fragment a single cause of action and to
litigate piecemeal the issues which could have been resolved
in one action.” Flynn v. State Bd. of Chiropractic Examiners,
418 F.2d 668, 668 (9th Cir. 1969) (per curiam). “Res judicata
[or claim preclusion] prevents litigation of all grounds for, or
defenses to, recovery that were previously available to the
parties, regardless of whether they were asserted or deter-
mined in the prior proceeding.” Brown, 442 U.S. at 131.
Adams “cannot avoid the bar of res judicata merely by alleg-
ing conduct by the defendant not alleged in [her] prior action
or by pleading a new legal theory.” McClain v. Apodaca, 793
F.2d 1031, 1034 (9th Cir. 1986).

[8] It is clear that the FCRA and ICRA theories of recovery
were available to Adams in the first action because Adams
obtained the report on the reopened background investigation
from the discovery materials provided by CDHS prior to the
deadline set for filing a motion to amend the complaint.
Adams admits that she obtained this report on January 17,
2004, more than two months prior to the deadline for amend-
ing the complaint. Moreover, Adams herself posited in the
first complaint that the reopening of the background investi-
gation was “arguably illegal based upon the Fair Credit
Reporting Act.” Therefore, the principle that “[c]laim preclu-
sion bars the assertion of any theory of recovery that could
have been asserted in the first action,” Fund for Animals, Inc.
v. Lujan, 962 F.2d 1391, 1398 (9th Cir. 1992), applies with
particular force here.

[9] In addition, any judgment in the present action neces-
sarily could destroy or impair rights and interests established
by the judgment in the first action. As Adams alleges in her
present complaint, both the FCRA and the ICRA require con-
sent to and disclosure of an investigation. See 15 U.S.C.
 ADAMS v. STATE OF CALIFORNIA 1815
§ 1681b(b); Cal. Civil Code §§ 1786.10-.12. However, the
central issues raised in the present complaint surrounding the
legality of the reopening of Adams’s background investiga-
tion — whether the selection process was complete after
Adams was medically cleared, whether CDHS lost the right
to resume the background investigation when it rescinded for
the first time Adams’s conditional offer of employment, or
whether the background investigation had never been com-
pleted and Adams’s consent to the investigation remained
valid — were squarely raised and argued by Adams in her
claim for declaratory relief in the first complaint.

Furthermore, although Adams argues that the additional
report she uncovered on January 17, 2004, containing the affi-
davits from Kennelly, Echard, and Baker, is new evidence,
the additional evidentiary detail surrounding Echard’s and
Baker’s comments “is scarcely enough to establish that the
instant lawsuit arises out of a different ‘transactional nucleus
of facts’ than that which generated the [first] suit.” Constan-
tini, 681 F.2d at 1202. “The fact that some different evidence
may be presented in this action . . . does not defeat the bar of
res judicata.” Karr, 994 F.2d at 1430.

Significantly, the key evidence presented during trial in the
first action regarding Adams’s claim of retaliation was the
testimony of CDHS employees Moreland and Coen regarding
Adams’s behavior during the selection process. In addition,
Kennelly, Echard, Baker and Corbin all submitted declara-
tions in the first action regarding the information gathered
during the reopened background investigation in support of
CDHS’s motion for summary judgment. As the district court
stated in its order denying Adams’s motion for a new trial in
the first action, “[t]his case largely turned on the jury’s assess-
ment of the credibility of the defendants, who explained why
they determined not to finalize their conditional offer of
employment to [Adams].”

Finally, although the FCRA and the ICRA establish distinct
rights enforceable by litigants, this factor alone does not
1816 ADAMS v. STATE OF CALIFORNIA
defeat the preclusive effect of the first action. See Derish v.
San Mateo-Burlingame Bd. of Realtors, 724 F.2d 1347, 1349
(9th Cir. 1983), overruling on other grounds recognized by
Eichman v. Fotomat Corp., 759 F.2d 1434, 1437 (9th Cir.
1985). Indeed, we have applied the doctrine of claim preclu-
sion on the ground that two claims arose out of the same
transaction, without relying upon other factors. See, e.g.,
Karr, 994 F.2d at 1430-31; Ulloa, 958 F.2d at 871; C.D.
Anderson & Co. v. Lemos, 832 F.2d 1097, 1100 (9th Cir.
1987).

[10] It is clear that the claims in Adams’s present complaint
arise out of the same transactional nucleus of facts asserted in
her first action and that rights established by the judgment in
the first action could be destroyed or impaired by a judgment
in the present action. It is also plain that substantially the
same evidence was and would be presented in both actions.

B. Final Judgment on the Merits

[11] Although the district court’s order denying as untimely
Adams’s motion to amend does not satisfy the claim preclu-
sion requirement of a final judgment, the preclusive bar here
is based not on the decision denying leave to amend, but
rather on the transactional nucleus of the facts underlying the
claims asserted in the two actions, and the requirement that a
plaintiff must bring at one time all claims against a defendant
relating to the same transaction or event. See N. Assur. Co. of
Am. v. Square D Co., 201 F.3d 84, 88 (2d Cir. 2000); Nilsen
v. City of Moss Point, 701 F.2d 556, 564 (5th Cir. 1983) (en
banc); Restatement (Second) of Judgments § 25, cmt. b
(1982) (“It is immaterial that the plaintiff in the first action
sought to prove the acts relied on in the second action and was
not permitted to do so because they were not alleged in the
complaint and an application to amend the complaint came
too late.”). As the Third Circuit stated, “ ‘the fact that the
plaintiff was denied leave to amend does not give h[er] the
right to file a second lawsuit based on the same facts.’ ” Huck
 ADAMS v. STATE OF CALIFORNIA 1817
v. Sea Air Shuttle Corp., 106 F.3d 45, 50 (3d Cir. 1997) (quot-
ing Sendi v. NCR Comten, Inc., 624 F. Supp. 1205, 1207
(E.D. Pa. 1986)).

C. Same Parties or Privies

[12] While Adams’s present complaint names five addi-
tional defendants, the privity requirement of claim preclusion
is satisfied because these defendants were “virtually repre-
sented” by the defendants in the first action. Although the
concept of privity traditionally applied to a narrow class of
relationships in which “a person [is] so identified in interest
with a party to former litigation that he represents precisely
the same right in respect to the subject matter involved,” we
have 419 F.3d 989 expanded the concept to include a broader
array of relationships which fit under the title of “virtual rep-
resentation.” Kourtis v. Cameron, 419 F.3d 989, 996 (9th Cir.
2005) (internal quotation marks omitted). The necessary ele-
ments of virtual representation are an identity of interests and
adequate representation. 419 F.3d 989Id. Additional features
of a virtual representation relationship include “ ‘a close rela-
tionship, substantial participation, and tactical maneuver-
ing.’ ” Id. (quoting Irwin v. Mascott, 370 F.3d 924, 930 (9th
Cir. 2004)).

[13] Here, three of the new defendants — Patricia Echard,
Paulette Baker, and Patrick Kennelly — were employees of
CDHS at the time of the events described in both of Adams’s
complaints and had a close relationship with the defendants
named in the first complaint. See Irwin, 370 F.3d at 930-31
(finding senior corporate officer virtually represented by his
corporation). In addition, all three participated in the first
action by submitting in support of CDHS’s motion for sum-
mary judgment declarations regarding their participation in
Adams’s background investigation. Moreover, their interests
were identical to those of the defendants in the first action.

[14] Furthermore, although the last two new defendants,
Laurence Corbin and Oaktree Investigations, were not
1818 ADAMS v. STATE OF CALIFORNIA
employees of CDHS, they maintained a close relationship
with CDHS as agents hired to conduct the background inves-
tigation and possessed an identity of interest with CDHS. Cor-
bin and Oaktree Investigations also participated in the first
action by submitting declarations in support of CDHS’s
motion for summary judgment.

[15] Finally, CDHS and the other defendants named in the
first complaint adequately represented the five new defen-
dants named in the present action by consistently maintaining
that both the reopening of the background investigation and
the withdrawal of Adams’s job offer were legal and proper
under the circumstances. Cf. Kourtis, 419 F.3d at 998 (con-
cluding no virtual representation existed where an agency
relationship existed, but the interests of the parties were
adverse).

D. Full and Fair Opportunity to Litigate

[16] Adams filed her present complaint in an attempt to
avoid the consequences of her own delay and to circumvent
the district court’s denial of her motion for leave to amend her
first complaint. Application of claim preclusion to dismiss
Adams’s present complaint does not unfairly deprive Adams
of her day in court because Adams had a full and fair opportu-
nity to raise and litigate in her first action the claims she now
asserts in this action. Cf. Parklane Hosiery Co. v. Shore, 439
U.S. 322, 328 (1979) (“[T]he requirement of determining
whether the party against whom an estoppel is asserted had a
full and fair opportunity to litigate is a most significant safe-
guard.” (internal quotation marks omitted)); Ross, 634 F.2d at
458 (“The question [before applying res judicata to bar the
second suit] is . . . whether [plaintiff] had a fair opportunity
to litigate that claim before a competent court prior to bring-
ing it to the court below.”).
 ADAMS v. STATE OF CALIFORNIA 1819
CONCLUSION

[17] The district court did not abuse its discretion by dis-
missing with prejudice the duplicative complaint Adams filed
in this case.

AFFIRMED.