Harris v. County of Orange

FILED
FOR PUBLICATION JUN 08 2012

MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

GAYLAN HARRIS; JERRY JAHN; No. 11-55669
JAMES MCCONNELL, on behalf of
themselves and others similarly D.C. No. 8:09-cv-00098-AG-MLG
situated,

Plaintiffs - Appellants, OPINION

v.

COUNTY OF ORANGE,

Defendant - Appellee.

Appeal from the United States District Court
for the Central District of California
Andrew J. Guilford, District Judge, Presiding

Argued and Submitted October 11, 2011
Pasadena, California

Before: PREGERSON and D.W. NELSON, Circuit Judges, and LYNN, District
Judge.*

Opinion by Judge Barbara M. G. Lynn

LYNN, District Judge:

*
The Honorable Barbara M.G. Lynn, United States District Judge for
the Northern District of Texas, sitting by designation.
 Named plaintiffs, on behalf of thousands of retired County employees

participating in County-sponsored health care plans (collectively, the “Retirees”),

filed this lawsuit against the County of Orange (the “County”), challenging

changes it made to the structure of two health benefits. The Retirees appeal the

district court’s order granting a motion for judgment on the pleadings filed by the

County. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we reverse and

remand. To decide this case, we must address four issues: (1) whether we take

judicial notice of a declaration and five Memoranda of Understanding (“MOUs”);

(2) whether the district court erred in holding that the Retirees’ Subsidy claim was

barred by claim preclusion; (3) whether the district court erred in holding that there

was no explicit authority requiring the County to provide a benefit in perpetuity;

and (4) whether the district court erred in holding that the Retirees failed to exhaust

their administrative remedies.

I. Factual and Procedural Background

The Retirees allege that the County’s restructuring of their health benefits

violated the United States and California Constitutions, and was a breach of

contract, and constituted discrimination against the Retirees on account of their

age, in violation of California’s Fair Employment and Housing Act, California

Government Code § 12940 et seq. (“FEHA”).

2
A. Retiree Health Benefits

From 1985 through 2007, the County subsidized health insurance premiums

for its retired employees by pooling active and retired employees into one

collective group of health plan participants (the “Retiree Premium Subsidy” or the

“Subsidy”). Although the County’s program provided retirees and active

employees the same benefits at the same costs, the pooling of the two groups had

the effect of lowering retiree premiums below what their actual rates would

otherwise have been, i.e., the program subsidized retired employees. From 1993

through 2007, retired employees also received a monthly grant to be applied

toward the cost of their health insurance coverage, referred to as the Retiree

Medical Grant (the “Grant”). The terms and conditions of the Grant were set forth

in separate sections of the collective bargaining agreements, known as MOUs,

governing the relationship between the County and its active and retired

employees. For the small number of retirees not represented by unions, the terms

and conditions were described in Personnel and Salary Resolutions. The monthly

grant for retirees was calculated by multiplying the employees’ years of service at

the time of retirement by a fixed-dollar amount (“the Grant Multiplier”). The

initial Grant Multiplier was $10, but it increased every year by up to 5% to reflect

inflation.

3
B. The County Restructures the Retiree Medical Program

Beginning in 2004, the County engaged in negotiations with labor unions to

restructure its retiree medical program,1 which was underfunded and in danger of

insolvency. On September 12, 2006, the County’s Board of Supervisors formally

approved an agreement with the Orange County Employees Association. The

agreement provided, in pertinent part, that effective January 2008, (1) the County

would separate retired and active employees into different health plans or pools to

set premiums; (2) the maximum increase for the Grant Multiplier would be reduced

from 5% to 3%; and (3) once a Retiree became eligible for Medicare, the Grant

would be reduced by 50%. In order to obtain the unions’ agreement to forego the

pooling structure that created the Subsidy and to reduce the Grant benefits, the

County agreed to pay active employees higher wages, but the Retirees received

nothing. The Retirees allege that as a result of the County’s decision to stop

pooling active and retired employees and to reduce the Grant, their health care

premiums increased significantly. The Retirees allege they cannot afford the

increases and that they have had to abandon their County-sponsored health

insurance plans, and obtain coverage that costs less but provides lesser benefits.

1
The retiree medical program refers to all retiree health benefits, including
the Subsidy and Grant.
4
C. The Retired Employees Association of Orange County, Inc. (“REAOC”)
Lawsuit

On November 5, 2007, REAOC, a California non-profit corporation

representing more than 4,600 County retirees and their spouses, filed suit in the

Central District of California on behalf of thousands of retired County employees,

challenging only the County’s decision to stop pooling active and retired

employees, and seeking declaratory and injunctive relief. REAOC alleged the

existence of an implied promise to continue the Subsidy. On December 14, 2007,

the County moved to dismiss REAOC’s suit, alleging, in part, that REAOC lacked

standing to sue for damages on behalf of its members. The district court, in

denying the County’s Motion to Dismiss, observed that REAOC’s Complaint did

not and could not seek damages. On December 22, 2008, REAOC and the County

argued cross-motions for summary judgment. On June 19, 2009, the district court

granted the County’s Motion for Summary Judgment, finding that the County was

not contractually obligated to provide Retirees with pooling throughout their

lifetimes, because there was no evidence of “any explicit legislative or statutory

authority” requiring the County to do so, and because that obligation could not

arise by implication from past practices and course of dealing. Retired Emps.

Ass’n of Orange Cnty., Inc. v. Cnty. of Orange, 632 F. Supp. 2d 983, 987 (C.D.

5
Cal. 2009). REAOC appealed that judgment to this Court. On June 29, 2010, after

oral argument, this Court certified to the California Supreme Court the question of

whether, as a matter of California law, a California county and its employees can

form an implied contract that confers on retired county employees vested rights to

health benefits, and the appeal from the district court was stayed pending the

California Supreme Court’s determination of the certified question. See Retired

Emps. Ass’n of Orange Cnty., Inc. v. Cnty. of Orange, 610 F.3d 1099 (9th Cir.

2010). On November 21, 2011, the California Supreme Court answered the

certified question, holding that under California law, a vested right to health

benefits for retired county employees can be implied, under certain circumstances,

from a county ordinance or resolution. See Retired Emps. Ass’n of Orange Cnty.,

Inc. v. Cnty. of Orange, 266 P.3d 287, 301 (Cal. 2011).

D. Retirees’ Lawsuit

On January 22, 2009, while summary judgment motions were pending in the

REAOC lawsuit, the Retirees filed a class action in the Central District of

California, and it was assigned to the same district judge presiding over the

REAOC lawsuit. The Retirees filed an amended complaint on February 3, 2009,

alleging, on behalf of thousands of retirees (including REAOC members and non-

members), that the County’s restructuring of its retiree medical program

6
constituted an impairment of contract and denial of due process, in violation of the

United States and California Constitutions, and was a breach of contract, and

constituted discrimination against the Retirees on account of their age, in violation

of the FEHA. The Retirees sought damages and injunctive and declaratory relief.

They alleged that the Subsidy was an implied term of the MOUs and that they had

a contractual right to receive the Grant, as its terms were reflected in the MOUs in

place on the dates they retired. The suits filed by the Retirees and REAOC

overlapped, to the extent both sought declaratory and injunctive relief related to the

County’s elimination of the Subsidy, alleging the same theories of contract and

constitutional law. One of the class representatives, James McConnell, had filed a

timely administrative complaint with the California Department of Fair

Employment and Housing on December 30, 2008. In his administrative

complaint, he stated that:

For 23 years the county maintained one set of health care plans for active
and retired employees, and charged premiums for coverage under those
plans based on a combined pool of all active and retired employees.
Beginning in 2008 the county removed retired employees from the plans and
‘split the pool,’ for the express purpose of eliminating ‘older, less healthy’
participants from the plans. The premiums for retired employees rose
dramatically as a result, including my own premiums, which increased by
hundreds of dollars per month.

7
 On April 7, 2010, the County moved, pursuant to Federal Rule of Civil

Procedure 12(c), for judgment on the pleadings. On March 29, 2011, the district

court granted the motion, without giving the Retirees leave to amend. The district

court found that the Retirees’ Subsidy claims were barred by claim preclusion,

because there was an identity of claims between those in the Retirees’ lawsuit and

the REAOC lawsuit, and because there was privity between the Retirees and

REAOC. The district court determined that the Retirees had been adequately

represented by REAOC, because the Retirees’ and REAOC’s interests were

aligned and because REAOC understood itself to be acting in a representative

capacity. The district court also found that the Retirees’ Grant claims should be

dismissed, because the Retirees had not pled that any “explicit legislative or

statutory authority” required the County to provide the Grant in perpetuity.

Finally, the district court found, for purposes of the FEHA claim, that the Retirees

failed to exhaust administrative remedies because Mr. McConnell’s administrative

complaint did not state it was “on behalf of” other class members. The Retirees

timely appealed.

II. Standard of Review

We review de novo a district court’s grant of a Rule 12(c) motion for

judgment on the pleadings. United States ex rel. Cafasso v. Gen. Dynamics C4

8
Sys., Inc., 637 F.3d 1047, 1053 (9th Cir. 2011). The Court inquires whether the

complaint at issue contains “sufficient factual matter, accepted as true, to state a

claim of relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009) (internal quotation marks and citation omitted); Cafasso, 637 F.3d at 1054

n.4 (finding Iqbal applies to Rule 12(c) motions because Rule 12(b)(6) and Rule

12(c) motions are functionally equivalent). The Court may find a claim plausible

when a plaintiff pleads sufficient facts to allow the Court to draw a reasonable

inference of misconduct, but the Court is not required “to accept as true a legal

conclusion couched as a factual allegation.” Iqbal, 556 U.S. at 678 (internal

quotation marks and citation omitted). Similarly, we review de novo a district

court’s dismissal based on claim preclusion. Stewart v. U.S. Bancorp, 297 F.3d

953, 956 (9th Cir. 2002). “Dismissal with prejudice and without leave to amend is

not appropriate unless it is clear on de novo review that the complaint could not be

saved by amendment.” Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048,

1052 (9th Cir. 2003) (per curiam).

III. Discussion

A. Request for Judicial Notice

The Retirees request that we take judicial notice of (1) a declaration filed by

the County in the REAOC litigation, and (2) five of the MOUs that were attached

9
as exhibits to that declaration. The County has not opposed the request for judicial

notice.

Under Federal Rule of Evidence 201, "[t]he court may judicially notice a

fact that is not subject to reasonable dispute because it: (1) is generally known

within the court’s territorial jurisdiction; or (2) can be accurately and readily

determined from sources whose accuracy cannot reasonably be questioned." Fed.

R. Evid. 201. We may take judicial notice of undisputed matters of public record,

Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001), including documents

on file in federal or state courts. See Bennett v. Medtronic, Inc., 285 F.3d 801, 803

n.2 (9th Cir. 2002). Moreover, documents not attached to a complaint may be

considered if no party questions their authenticity and the complaint relies on those

documents. Lee, 250 F.3d at 688.

Therefore, pursuant to Rule 201 and Ninth Circuit authorities, we take

judicial notice of these documents that are on file in federal court in the REAOC

litigation and because the Retirees make reference to the MOUs in their Complaint.

B. Retirees’ Appeal of the District Court’s Dismissal of the Subsidy Claims

The Retirees contend that the district court erred by holding that the REAOC

litigation precluded them from pursuing their claims for damages related to the

10
County's elimination of the Subsidy because, among other reasons, REAOC could

not adequately represent the Retirees. We agree.

Claim preclusion requires three things: (1) identity of claims; (2) a final

judgment on the merits; and (3) the same parties, or privity between the parties.

Cell Therapeutics, Inc. v. Lash Grp. Inc., 586 F.3d 1204, 1212 (9th Cir. 2010)

(amended).

A court is to apply four criteria to decide whether there is an identity of

claims: "(1) whether rights or interests established in the prior judgment would be

destroyed or impaired by prosecution 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 right; and (4) whether the two suits arise out

of the same transactional nucleus of facts." United States v. Liquidators of

European Fed. Credit Bank, 630 F.3d 1139, 1150 (9th Cir. 2011). The fourth

criterion is the most important. Id. at 1151.

The Retirees challenge the County's decision to no longer pool active and

retired employees for purposes of determining health premiums, thereby

eliminating the Subsidy, and assert that the County's past practice of pooling

created an implied contract to continue pooling. The Retirees acknowledge that

the County's elimination of the Subsidy is also the subject of the REAOC

11
litigation. We find that there is an identity of claims in the two cases with respect

to the Subsidy.

The second factor for claim preclusion is also met, because there was a final

summary judgment on the merits in the REAOC litigation. Retired Emps. Ass'n of

Orange Cnty., Inc. v. Cnty. of Orange, 632 F. Supp. 2d 983 (C.D. Cal. 2009); see

also Tripati v. Henman, 857 F.2d 1366, 1367 (9th Cir. 1988) (per curiam) (stating

that "[t]he established rule in the federal courts is that a final judgment retains all

of its res judicata consequences pending decision of the appeal") (quoting 18 C.

Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 4433, at 308

(1981)) (internal quotation marks omitted).

However, we find that REAOC and the Retirees are not in privity, so the

third factor is not met. Although the Retirees were not named parties to the

REAOC litigation, "in certain limited circumstances, a nonparty may be bound by

a judgment because she was adequately represented by someone with the same

interests who [wa]s a party to the suit." Taylor v. Sturgell, 553 U.S. 880, 894

(2008) (internal quotation marks omitted). "A party's representation of a nonparty

is 'adequate' for preclusion purposes only if, at a minimum: (1) the interests of the

nonparty and [the] representative are aligned; and (2) either the party understood

12
[itself] to be acting in a representative capacity or the original court took care to

protect the interests of the nonparty." Id. at 900 (internal citation omitted).

Relying on Anderson v. Waddle, 474 F. Supp. 2d 1116 (E.D. Mo. 2007), the

Retirees argue that REAOC could not adequately represent them because, as an

association, REAOC lacked the legal capacity to seek damages on their behalves,

and thus, the interests of REAOC and the Retirees are not aligned. In Anderson,

individual members of an association sought damages, when the association had

previously brought suit for injunctive and declaratory relief for the same alleged

violation. Id. at 1118–19. The defendant urged dismissal of the individual

plaintiffs' claims based on claim preclusion. Id. The court held that preclusion did

not apply because, under the doctrine of associational standing as set forth in

Warth v. Seldin, 422 U.S. 490 (1975), an association may only seek injunctive or

declaratory relief, and therefore, the association could not adequately represent its

individual members in claiming damages. Id. at 1119.

The Restatement (Second) of Judgments § 26(1)(c) is also relied on by the

Retirees. Section 26(1)(c) states that claim preclusion "does not apply to

extinguish [a] claim, and part or all of the claim subsists as a possible basis for a

second action by the plaintiff against the defendant" when:

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 [t]he plaintiff was unable to rely on a certain theory of the case or to seek a
certain remedy or form of relief in the first action because of the limitations
on the subject matter jurisdiction of the courts or restrictions on their
authority to entertain multiple theories or demands for multiple remedies or
forms of relief in a single action, and the plaintiff desires in the second
action to rely on that theory or to seek that remedy or form of relief.

The Comment to the provision explains that the doctrine of claim preclusion:

is largely predicated on the assumption that the jurisdiction in which the first
judgment was rendered was one which put no formal barriers in the way of a
litigant's presenting to a court in one action the entire claim[,] including any
theories of recovery or demands for relief that might have been available to
him under applicable law.

Restatement (Second) of Judgments, § 26(1)(c) cmt. c.

We find the reasoning of Anderson and Section 26(1)(c) persuasive.

Therefore, we conclude that claim preclusion does not bar a second action for

damages, where a damages remedy was unavailable in the first action. See

Bio-Tech. Gen. Corp. v. Genentech, Inc., 80 F.3d 1553, 1563 (Fed. Cir. 1996)

(finding that "where a plaintiff was precluded from recovering damages in the

initial action by formal jurisdictional or statutory barriers, not by plaintiff's choice,

a subsequent action for damages will not normally be barred by res judicata even

where it arises from the same factual circumstances as the initial action") (quoting

Burgos v. Hopkins, 14 F.3d 787, 790 (2d Cir. 1994)). The County cites to United

14
States v. Tohono O’Odham Nation, 131 S. Ct. 1723, 1730–31 (2011), Feminist

Women’s Health Center v. Codispoti, 63 F.3d 863, 868 (9th Cir. 1995), McClain v.

Apodaca, 793 F.2d 1031, 1034 (9th Cir. 1986), and Jackson v. Hayakawa, 605

F.2d 1121, 1125 (9th Cir. 1979) to support its contention that claim preclusion

does not turn on the requested relief. However, both suits in those cases involved,

or were treated as involving, the same parties, and no formal barriers precluded

pursuit of a specific remedy.2

We find that the interests of REAOC and the Retirees are not aligned

because associational standing rules prevent REAOC from pursuing damages. The

County recognized the limits of REAOC's authority when it proactively moved to

dismiss REAOC's claims, arguing that REAOC lacked standing to sue for

damages. The district court denied the motion because no such claims were

asserted by REAOC, but in doing so, the Court recognized the limits of REAOC's

2
In Jackson v. Hayakawa, named plaintiffs in the first and second actions
were different. However, the Court found the parties to be the same for purposes
of claim preclusion because the first action was brought on behalf of a class and
was treated by the court as a class action. Further, although named plaintiffs in the
first action sought only declaratory and injunctive relief, no formal barriers
prevented them from seeking the damages that the named plaintiff in the second
action sought. 605 F.2d at 1125–26.
15
standing. Therefore, we find that the district court erred when it ruled that the

Retirees' Subsidy claims for damages are barred by claim preclusion.3

Although the parties dispute whether the district court ruled on the merits of

the Subsidy claim, we decline to reach this issue. In the REAOC litigation, we

certified the question of whether an implied contract to continue the pooling

benefits was formed under state law. Retired Emps. Ass’n of Orange Cnty., Inc. v.

Cnty. of Orange, 610 F.3d 1099, 1101 (9th Cir. 2010). On November 21, 2011, the

California Supreme Court answered the certified question, holding that under

California law, a vested right to health benefits for retired county employees can be

implied, under certain circumstances, from a county ordinance or resolution. See

Retired Emps. Ass’n of Orange Cnty., Inc. v. Cnty. of Orange, 266 P.3d 287, 301

(Cal. 2011). Consistent with this Court’s decision reached in the REAOC litigation

after the California Supreme Court’s decision, we remand the Retirees’ Subsidy

claims so that the district court may reassess those claims in light of the California

Supreme Court’s opinion, and coordinate those claims with the REAOC litigation.

3
At oral argument, counsel for the Retirees stated that the Retirees are only
pursuing their damages claims. Therefore, we decline to decide here whether
claims by the Retirees for declaratory and injunctive relief are barred by the
REAOC litigation.
16
C. Retirees’ Appeal of the District Court’s Dismissal of the Grant Claims

The Retirees argue that the district court erred when it dismissed the Grant

claim, finding that there was no explicit legislative or statutory authority requiring

the County to provide the Grant in perpetuity. We do not disagree with the district

court’s conclusion to that effect, but find that the district court should have granted

the Retirees leave to amend.

Under California law, in the public employment context, a contract with

employees must be created by a resolution or ordinance formally enacted by a

majority of the Board of Supervisors. Cal. Gov’t Code § 25300; Cnty. of Sonoma

v. Superior Court, 93 Cal. Rptr. 3d 39, 56 (Cal. Ct. App. 2009); see also Glendale

City Emps. Ass’n v. City of Glendale, 540 P.2d 609, 613–17 (Cal. 1975) (stating

that once an MOU is approved by a governmental body, it becomes a binding

agreement). In order to state a claim for a contractual right to the Grant, the

Retirees must plead specific resolutions or ordinances establishing that right.

Sonoma Cnty. Ass'n of Retired Emps. v. Sonoma Cnty., No. 09-04432, 2010 WL

1957463, at *3–4, 5 (N.D. Cal. May 14, 2010) ("Sonoma I"); Sonoma Cnty. Ass'n

of Retired Emps. v. Sonoma Cnty., No. 09-04432, 2010 U.S. Dist. LEXIS 143345,

at *9, 27 (N.D. Cal. Nov. 23, 2010) ("Sonoma II") (dismissing case with prejudice,

17
where none of the Board resolutions or Board-certified MOUs "explicitly

provide[d] that Sonoma agreed to provide health insurance benefits to retirees in

perpetuity, [and so] a contract to do so has not been formed").

Although the Retirees did not plead in their Complaint the specific

resolutions or ordinances providing a continued right to the Grant, nor refer to any

such resolution or ordinance in their opposition to the Rule 12(c) motion, they have

requested judicial notice of a limited number of MOUs, two of which are

accompanied by a Board of Supervisors Resolution adopting those MOUs "as

detailed in [the] submitted Attachment." There are no terms or provisions in the

MOUs, or in the Board resolutions adopting them, that guarantee the Grant will

continue as that Grant existed in the MOUs in place on the dates of retirements.

Further, the referenced MOUs, including those adopted by the Board of

Supervisors, contain durational language.4 Sonoma II, 2010 U.S. Dist. LEXIS

143345, at *15-21 (finding that each proffered MOU had durational language and

that there was no explicit language in any of them providing that the benefits

would survive the term of any MOU). The Retirees argue that they do not have to

4
For example, one MOU states: “This Memorandum of Understanding sets
forth the terms of agreement reached . . . for the period beginning July 23, 1993
through June 23, 1994.”
18
identify specific terms in the MOUs for purposes of a Rule 12(c) motion, and that

the "durational" terms are merely generic statements that should not be considered

for purposes of reviewing a Rule 12(c) motion. Retirees' arguments are without

merit. While the Court must accept as true the facts pled by the nonmovant

Retirees, the Retirees have failed to plead facts that suggest that the County

promised, in the MOUs or otherwise, to maintain the Grant as it existed on the

Retirees' respective dates of retirement. The Retirees also argue that the durational

clause in the MOUs is not an indication of when the terms of the MOUs expire.

That may be so, but the durational clause surely cannot be the source of a claim

that the benefits survive indefinitely.

The question remains whether the Retirees should be granted leave to amend

their Complaint to set forth facts establishing their claimed right to receive the

Grant in perpetuity. Dismissal without leave to amend is appropriate only when

the Court is satisfied that an amendment could not cure the deficiency. See

Eminence Capital, 316 F.3d at 1052. Because there are MOUs adopted by the

Board of Supervisors in resolutions, the terms of which are not all before the

Court, we find that the Retirees should be given an opportunity to amend their

19
Complaint to set out specifically the terms of those MOUs on which their claim is

predicated.

D. Retirees’ Appeal of the District Court’s Dismissal of the FEHA Claim

The district court dismissed the Retirees’ FEHA claim for failure to exhaust

administrative remedies. The Retirees argue that the single filing rule permits

them to “piggyback” on the timely filed administrative complaint of James

McConnell, one of the named plaintiffs. We agree.

A plaintiff asserting claims of discrimination pursuant to the FEHA must

exhaust the statute's administrative remedies before filing a lawsuit. Rojo v.

Kliger, 801 P.2d 373, 384 (Cal. 1990) ("exhaustion of the FEHA administrative

remedy is a precondition to bringing a civil suit on a statutory cause of action")

(emphasis omitted). This requirement applies to class actions as well. Cal. Gov't

Code § 12961; Holloway v. Best Buy Co., No. C-05-5056 PJH, 2009 U.S. Dist.

LEXIS 50994, at *15, 26–27 (N.D. Cal. May 28, 2009). For purposes of the

FEHA, administrative remedies are exhausted by the filing of an administrative

complaint with the Department of Fair Employment and Housing ("DFEH") and

obtaining from the DFEH a notice of right to sue. Okoli v. Lockheed Technical

Operations Co., 43 Cal. Rptr. 2d 57, 61 (Cal. Ct. App. 1995).

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 Here, James McConnell timely filed a complaint of discrimination with

DFEH, stating:

For 23 years the county maintained one set of health care plans for active
and retired employees, and charged premiums for coverage under those
plans based on a combined pool of all active and retired employees.
Beginning in 2008 the county removed retired employees from the plans and
'split the pool,' for the express purpose of eliminating 'older, less healthy'
participants from the plans. The premiums for retired employees rose
dramatically as a result, including my own premiums, which increased by
hundreds of dollars per month.

Mr. McConnell received a right to sue letter from the agency on the same day, and

the County was served with the administrative complaint and the letter on or about

January 21, 2009.

In the absence of any state authority on the issue of whether the single filing

rule applies to FEHA claims, we look to Title VII and ADEA cases in other federal

circuits. See State Dep't of Health Servs. v. Superior Court, 79 P.3d 556, 562 (Cal.

2003) (stating that "California courts often look to Title VII in interpreting the

FEHA"); E.E.O.C. v. NCL America Inc., 504 F. Supp. 2d 1008, 1012 (D. Hawaii

2007) (citing authority that Hawaii courts find federal precedent under Title VII

and other similar laws persuasive in interpreting Hawaii's age discrimination

statute). In Title VII and ADEA cases, federal courts have found that so long as

21
one plaintiff timely files an administrative complaint, a class of similarly-situated

plaintiffs may "piggyback" on that complaint, thereby satisfying the exhaustion

requirement. See Bean v. Crocker Nat'l Bank, 600 F.2d 754, 759 (9th Cir. 1979);

E.E.O.C. v. Catholic Healthcare W., 530 F. Supp. 2d 1096, 1107 (C.D. Cal. 2008).

This single filing rule is based on the observation that it would be duplicative and

wasteful for complainants with similar grievances to have to file identical notices

of intent to sue with a governmental agency. Bean, 600 F.2d at 760 n.15.

The County argues against the single filing rule by relying on Inda v. United

Air Lines, Inc., 565 F.2d 554 (9th Cir. 1977). The County maintains that an

administrative complaint must say "class action" or "on behalf of others similarly

situated" before it can qualify for the single filing rule. In Inda, two women sued

United Airlines, alleging unlawful employment practices based on sex. Both filed

complaints with the EEOC, but not within 90 days of the alleged unlawful

employment practice, as required by statute. They argued that their claims should

not be barred for failing to exhaust administrative remedies, because two other

women, who each had separate lawsuits pending in another federal court, had

already filed complaints with the EEOC. We held that the fact that someone else

had filed an administrative complaint based on the same violation did not excuse

22
plaintiffs from filing their own administrative complaints with the EEOC. Inda,

565 F.2d at 558–59. However, Inda should be limited to its specific facts—"where

a plaintiff sought to rely on an administrative charge [i.e., complaint] of an

individual employee in a separate action." E.E.O.C. v. Cal. Psychiatric

Transitions, Inc., 644 F. Supp. 2d 1249, 1265 n.11 (E.D. Cal. 2009); Dukes v.

Wal-Mart Stores Inc., 2002 WL 32769185, at *3–6 (N.D. Cal. Sept. 9, 2002).

Here, the other named plaintiffs are part of the same action asserted by McConnell,

and are not seeking to rely on the administrative complaint of another retiree in a

separate individual lawsuit. Further, Inda does not expressly say that the words

"on behalf of" or "class action," as opposed to words expressing the same concept,

must be stated in the administrative complaint for the single filing rule to apply.

Further, California state law in other contexts suggests that not all named

plaintiffs must exhaust administrative remedies. In Friends of Mammoth v. Board

of Supervisors of Mono Cnty., 502 P.2d 1049, 1062–63 (Cal. 1972), disapproved

on other grounds by Kowis v. Howard, 838 P.2d 250 (Cal. 1992), which involved a

putative class action challenging a local commission's decision to grant a use

permit to a developer, the named plaintiffs had not exhausted their administrative

remedies, but some members of the putative class had done so. The California

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Supreme Court held that the purposes underlying the exhaustion doctrine had been

satisfied, and that the action could move forward. The court determined that

requiring named plaintiffs to exhaust their remedies, when others in the class had

already done so, would serve no useful purpose. See also Leff v. City of Monterey

Park, 267 Cal. Rptr. 343 (Cal. Ct. App. 1990) (finding exhaustion where only two

of the three plaintiffs participated in the administrative review process, because the

two plaintiffs who had exhausted their administrative remedies shared a common

interest with the one who had not). Therefore, we find that Mr. McConnell's

timely filed administrative complaint is sufficient to establish exhaustion of

administrative remedies for all class members.5

IV. Conclusion

For the reasons stated above, we reverse and remand for further proceedings

consistent with this opinion, and with the answer provided by the California

Supreme Court to the certified question in the REAOC litigation. A summary of

5
The County argues, as it did below, that the FEHA does not apply to retired
employees. By finding administrative remedies had not been exhausted, the
district court did not have an opportunity to address this argument. Therefore, we
decline to reach this issue.
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our decision follows. First, we take judicial notice of the documents. Second, we

REVERSE the district court’s dismissal of the Retirees’ Subsidy claims and

REMAND so that the district court may reassess those claims in light of the

California Supreme Court’s opinion, and coordinate those claims with the REAOC

litigation. Third, we REVERSE the district court’s dismissal of the Retirees’ Grant

claims because we find that the Retirees should be given an opportunity to amend

their Complaint to set out specifically the terms of those MOUs on which their

claim is predicated. Finally, we REVERSE the district court’s dismissal of the

Retirees’ FEHA claim because we find that Mr. McConnell’s timely filed

administrative complaint is sufficient to establish exhaustion of the administrative

remedies for all class members.

Should there be another appeal, this panel will retain jurisdiction and will

give scheduling priority to the appeal.

REVERSED AND REMANDED.

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 COUNSEL
G. Scott Emblidge, Rachel J. Sater, Michael P. Brown, Moscone Emblidge & Sater
LLP, San Francisco, California, for Plaintiffs-Appellants

Arthur A. Hartinger, Jennifer L. Nock, Meyers, Nave, Riback, Silver & Wilson,
Oakland, California, for Defendant-Appellee

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