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Axelrod v. Board of Regents of University of New Mexico

United States District Court, D. New Mexico

October 3, 2018

MELISSA AXELROD and JULIE SHIGEKUNI, on behalf of themselves and other employees similarly situated, Plaintiffs,
v.
BOARD OF REGENTS OF THE UNIVERSITY OF NEW MEXICO, Defendant.

          PROPOSED FINDINGS AND RECOMMENDED DISPOSITION

          GREGORY B. WORMUTH UNITED STATES MAGISTRATE JUDGE

         THIS MATTER comes before me pursuant to the Court's Order of Reference (doc. 20), referring Defendant's Motion to Dismiss Plaintiffs' Complaint for Damages for Violation of Fair Pay Laws (doc. 4) and the attendant briefing (docs. 5, 14, 15) to me for analysis, proposed findings, and recommended disposition. For the following reasons, I RECOMMEND that the Court DENY the Motion to Dismiss as it pertains to Plaintiffs' claims arising under the Fair Pay for Women Act (“FPWA”). Further, I RECOMMEND that the Court DENY the Motion to Dismiss as it pertains to the EPA claims and instead permit Plaintiffs leave to amend their Complaint to better articulate why their Equal Pay Act (“EPA”) claims are not barred by the statute of limitations due to the federal discovery rule.[1]

         I. Background

         Defendant removed this action from the Second Judicial District Court, County of Bernalillo, State of New Mexico to this Court on May 4, 2018. Doc. 1. Plaintiffs filed their First Amended Complaint-the operative Complaint in this action-in state court below on April 17, 2018, alleging that Defendant violated the New Mexico Fair Pay for Women Act[2] (“FPWA”), the New Mexico Human Rights Act[3] (“NMHRA”), and the federal Equal Pay Act[4] (“EPA”). Plaintiffs are women who are current or past employees of the University of New Mexico (“UNM”) and hold positions as professors, department chairs, and other upper-level academic positions. Doc. 1-3 at 1. Plaintiffs' asserted factual basis for their claims is that they were paid less than male employees of UNM performing similar work, under similar conditions, utilizing similar skills, effort, and responsibility as Plaintiffs, and that these sex-based pay disparities violate both state and federal law, entitling Plaintiffs to compensatory and punitive damages. Id. at 3-7. Plaintiffs received letters from the Equal Employment Opportunity Commission (“EEOC”) dated June 27, 2017, informing them of the EEOC's determination, following a “direct charge” investigation, that Defendant's pay practices with regard to each Plaintiff violated the EPA. Id. at 2, 4; see also doc. 5 at 1; doc. 5-2; doc. 14 at 8-9, 17-25. In these letters, the EEOC disclosed to each Plaintiff specific amounts of back wages and interest that she was due based on pay disparities between 2007 and 2014, according to the EEOC's investigation. Doc. 14 at 23-25. Plaintiffs assert that Defendant Board of Regents of UNM is the governing body ultimately responsible for such discriminatory and unlawful pay disparities. Id. at 1.

         Following removal, on May 25, 2018, Defendant filed a Motion to Dismiss and a Memorandum in Support (docs. 4, 5), which are now before me pursuant to the Court's Order of Reference. Doc. 20.

         II. Parties' Positions

         Defendant argues that Plaintiffs' FPWA claims are barred because Defendant is a state entity and the FPWA contains no waiver of state immunity. See doc. 5 at 4-7. Plaintiffs argue that the FPWA does apply to state employers such as Defendant, because the FPWA is part of the same statutory scheme as the NMHRA, which explicitly allows employment discrimination claims to be brought against state employers. Doc. 14 at 4-7. Both parties acknowledged that whether the FPWA applies to state employers was a question then pending before the New Mexico Court of Appeals in the consolidated cases of Tafoya Lucero v. N.M. Corrs. Dep't, Ct. App. 35, 438, Dist. Ct. No. D-101-CV-2013-03206 (Briefing Complete as of 10-7-16), and Wolinsky v. N.M. Corrs. Dep't, Ct. App. No. 35, 762, Dist. Ct. No. D-101-CV-2016-01005 (Briefing Complete as of 3-29-17). In those cases, state district court judges reached opposing conclusions on the issue. See doc. 5 at 4 n.1; doc. 14 at 5; see also Gonzales v. Cty. of Taos & Taos Cty. Bd. of Comm'rs, Order Granting in Part and Denying in Part Defendants' Motion for Summary Judgment, doc. 58 at 32-33 in 17-cv-0582 NF/KHR (D.N.M. Aug. 1, 2018).

         Due to the fact that this matter of first impression under New Mexico law was, at the time of Plaintiffs' Response, pending before a state court, Plaintiffs presented several alternative options to the Court: (1) decide the state law question based on the parties' briefing; (2) certify the question to the New Mexico Supreme Court pursuant to N.M.R.A. 12-607(A)(1); or (3) reserve ruling on the question, pending the outcome of the Wolinsky/Lucero cases. Doc. 14 at 5-6. Defendant urged this Court to decide the issue directly and presented its legal arguments that the FPWA claims do not apply to state employers and should thus be dismissed. Doc. 5 at 4-7; doc. 15 at 2-5.

         Regarding the EPA claims, Defendant contends that Plaintiffs' EPA claims are untimely, because Plaintiffs failed to bring these claims within the applicable statute of limitations period. Id. at 13-15. In response, Plaintiffs argue that, because they were unaware of the disparate pay forming the basis of their claims until they received the June 2017 EEOC letters, these claims are timely filed based upon the federal “discovery rule, ” which delays the accrual of a claim until a plaintiff knew or should have known the facts necessary to establish her cause of action. Doc. 14 at 9-11; see also Varnell v. Dora Consol. Sch. Dist., 756 F.3d 1208, 1216 (10th Cir. 2014) (describing the federal discovery rule). Further, Plaintiffs argue that the “continuing violation” doctrine also applies and makes their claims timely. Doc. 14 at 12-13. Under the continuing violation doctrine, “a plaintiff may recover for discriminatory acts that occurred prior to the statutory limitations period if they are ‘part of a continuing policy or practice that includes the act or acts within the statutory period.'” Davidson v. Am. Online, Inc., 337 F.3d 1179, 1183 (10th Cir. 2003) (quoting Mascheroni v. Bd. of Regents of the Univ. of Cal., 28 F.3d 1554, 1561 (10th Cir. 1994)). Accordingly, Plaintiffs request that the Court deny Defendant's motion to dismiss the EPA claims outright, or, in the alternative, that the Court grant Plaintiffs leave to amend their First Amended Complaint in order “to more artfully plead the elements of delayed discovery under the Discovery Rule and/or a continuing violation of the EPA, under the Ledbetter Fair Pay Act[.]” Doc. 14 at 15. In its Reply, Defendant contends that neither the continuing violation doctrine nor the discovery doctrine is applicable to toll the statutory limitations period governing Plaintiffs' EPA claims, making leave to amend futile.

         III. Analysis

         A. The Court should deny the motion to dismiss as it applies to Plaintiffs' FPWA claims.

         At the time of briefing, the question of whether FPWA claims can be brought against state entities was a matter of first impression in New Mexico and remained pending before the New Mexico Court of Appeals. See Gonzales, Order Granting in Part and Denying in Part Defendants' Motion for Summary Judgment, doc. 58 at 32-33 in 17- cv-0582 NF/KHR (D.N.M. Aug. 1, 2018) (discussing the pending New Mexico Court of Appeals consolidated cases and reserving ruling on the same issue in part because “the reach of the FPWA appears to be an issue of significant state importance, including issues of state sovereignty.”). On August 30, 2018, the New Mexico Court of Appeals filed its opinion in the consolidated Wolinsky/Lucero cases.[5] Wolinsky v. New Mexico Corrections Dep't, No. A-1-CA-35762 (N.M. Ct. App. August 30, 2018). The Wolinsky court held that the state has no sovereign immunity from liability under the FPWA, and the legislature intended the state to be subject to FPWA claims. Id.

         The existence of sovereign immunity under the FPWA (and thus the viability of Plaintiffs' FPWA claim) is a question to be resolved by reference to state law. “‘A federal court sitting in diversity applies the substantive law, including choice of law rules, of the forum state.' This rule also applies when a federal court exercises supplemental jurisdiction over state law claims in a federal question lawsuit.” BancOklahoma Mortg. Corp. v. Capital Title Co., 194 F.3d 1089, 1103 (10th Cir. 1999) (quoting Barrett v. Tallon, 30 F.3d 1296, 1300 (10th Cir. 1994) (internal citations omitted)). In ruling directly on Defendant's motion to dismiss the FPWA claims, the Court must predict the decision of the state's highest court. Armijo v. Ex Cam, Inc., 843 F.2d 406, 407 (10th Cir. 1988) (“If the state's highest court has not addressed the issue presented, the federal court must determine what decision that state court would make if faced with the same facts and issue.”). The Court does so by considering “state court decisions, decisions of other states, federal decisions, and the general weight and trend of authority.” Id. Where the state's highest court has not issued a controlling decision, “a decision by an intermediate court should be followed by the Federal court, absent convincing evidence that the highest court would decide otherwise.” Black & Veatch Corp. v. Aspen Ins. (UK) Ltd., 882 F.3d 952, 967 (10th Cir. 2018).[6] In the case before the Court, there has been a clear decision by the New Mexico Court of Appeals. While the defendant in Wolinsky has noticed an appeal to the New Mexico Supreme Court, Defendant in the instant case has presented no evidence or argument that the New Mexico Supreme Court would decide differently. Consequently, for the purposes of the motion to dismiss, it is proper for the Court to adopt the New Mexico Court of Appeals' interpretation of state law as articulated in Wolinsky.[7]

         Turning to Defendant's dismissal argument, Defendant contends that Plaintiffs have failed to state a claim under the FPWA because FPWA claims against the state are barred by sovereign immunity. Doc. 5 at 4. The Court may dismiss a complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Fed.R.Civ.P. 12(b)(6). In ruling on 12(b)(6) motion, the Court must accept as true all well-pleaded factual allegations in the complaint and must view them in the light most favorable to the nonmoving party. Sutton v. Utah State Sch. for the Deaf & Blind, 173 F.3d 1226, 1236 (10th Cir. 1999). The Court should not grant a 12(b)(6) motion “unless it appears beyond doubt that the plaintiff can prove no set of facts in ...


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