Appeal from the United States District Court for the Northern District of California. D.C. No. C-91-2153-BAC. Barbara A. Caulfield, District Judge, Presiding.
Before: Thomas Tang, Stephen S. Trott and Ferdinand F. Fernandez, Circuit Judges. Opinion by Judge Trott.
The plaintiffs filed a class complaint with the Department of Navy alleging racial discrimination. For more than ten years, their case vacillated between the Navy and the Equal Employment Opportunity Commission ("EEOC"), until the Navy cancelled the class complaint for failure to prosecute. The plaintiffs filed in district court pursuant to 42 U.S.C. § 2000e-16(c) (1988). The district court granted the defendant's motion to dismiss for failure to exhaust administrative remedies. Plaintiffs appeal, arguing that because they cooperated in the administrative process for more than 180 days, they were entitled to file in district court, even if they failed to cooperate in the administrative process after the 180 days elapsed. We have jurisdiction pursuant to 28 U.S.C. § 1291, and reverse.
On January 30, 1979, the plaintiffs filed a class complaint with the Department of Navy pursuant to Section 717 of Title VII of the Civil Rights Act. 42 U.S.C. § 2000e-16 (1988). They alleged that the Navy Supply Center Oakland discriminated against African Americans in "promotions, classification decisions, training opportunities, and other terms and conditions of employment." The class complaint was forwarded to an EEOC Examiner to decide whether the action should be accepted as a class complaint. On February 14, 1980, the EEOC Examiner accepted the class complaint and defined the class. Notice was sent to prospective members of the class, so they could opt-out if they so desired.
From June 19, 1980 until August 17, 1984, discovery proceeded. The EEOC Examiner held hearings from September 5, 1984 until February 5, 1985, after which the Examiner issued an opinion finding no discrimination against African Americans as a class or individually. The Navy accepted this finding on October 17, 1985.
Plaintiffs then filed their first appeal to the EEOC Office of Review and Appeals ("ORA") in November of 1985. The ORA issued a decision on December 22, 1987. The ORA stated that the class had been improperly certified, but if the class had been properly certified, there would not have been enough class members to satisfy the numerosity requirement. See 29 C.F.R. § 1613.601(b) (1993). In response, plaintiffs filed a request to have the full commission of the EEOC reopen the case. See 29 C.F.R. § 1613.632 (1993). This request was granted, and on November 29, 1988, the full commission issued its final decision regarding class certification. It concluded that the class met the numerosity requirement and that significant evidence of race discrimination against the defined class existed. The EEOC gave the Navy 60 days to comply with this decision.
The Navy did not comply with the November 1988 decision, but the EEOC ordered it to do so. On February 10, 1989, the Navy issued its final decision, unilaterally redefining the class in the process. Two weeks later, plaintiffs filed their second appeal to the ORA on grounds that the Navy's definition violated the EEOC's November 1988 decision. On July 5, 1989, the ORA held that the Navy's redefinition of the class was improper and remanded to the Navy for further processing. On August 11, 1989, the Navy filed a request to have the full commission reopen the case. The EEOC denied the request on November 17, 1989, admonished the Navy that it found the Navy's actions "to be recalcitrant and defiant" and that the Commission would "not tolerate further such actions," and gave the Navy 60 days to comply with the EEOC's July 1989 decision.
Plaintiffs' counsel then proposed settlement, and settlement Discussions ensued. The Judge determined that on the eve of settlement, plaintiffs' counsel withdrew*fn1 because of differences concerning the adequacy of the proposed settlement. The plaintiffs believed the terms of the proposed settlement were inadequate for the class and for themselves.
On November 13, 1990, the administrative Judge held an emergency status conference. The Judge gave plaintiffs until April 1, 1991 to acquire new counsel. Because plaintiffs had filed a class action, it was imperative they be represented by counsel. See 29 C.F.R. § 1613.601(b)(4); Fed. R. Civ. Pro. 23(a); Brodersen v. Department of the Treasury, ORA No. 08140153 (June 5, 1985). The class representatives attempted to find new counsel but were unable "to locate counsel who would, without fees, take on the Department of the Navy."
On May 13, 1991, the Navy sent a notice of proposed cancellation of complaint to one of the class representatives, Bette Charles. The Navy gave plaintiffs an additional fifteen days to find counsel before the Navy would cancel their complaint for failure to prosecute. Plaintiffs received the notice on May 17, 1991. On June 10, 1991, the Navy cancelled the complaint for failure to prosecute, because plaintiffs did not obtain counsel and were therefore unable to continue their class claim.
On July 15, 1991, plaintiffs filed in the United States District Court for the Northern District of California, pursuant to 42 U.S.C. § 2000e-16 (c).*fn1a The Navy filed a motion to dismiss or summary judgment for failure to exhaust administrative remedies. The district court granted dismissal.
The district court reasoned that plaintiffs were estopped to claim the Navy failed to comply with the 180-day rule because plaintiffs had terminated settlement negotiations on the eve of settlement, asked their attorney to withdraw from the case, and failed to find replacement counsel within six months. The court believed that "a finding that plaintiffs failed to exhaust does not offend the policy of the 180-day rule, which is to prevent victims of discrimination from having to wait indefinitely for a final agency decision." Dist. Ct. ...