This week, the Court tackles the jurisdictional implications of California's attempt to limit the abusive filing of Unruh Act claims with heightened procedural requirements applied only in state court.
ARROYO JR. v. ROSAS
The Court holds that a district court can decline to
exercise supplemental jurisdiction over state-law claims that are
filed in federal court to evade special state-law procedural
requirements, but that the district court here abused its
discretion in declining jurisdiction after the plaintiff
established his entitlement to relief.
The panel: Judges Baldock (CA10), Berzon, and Collins, with Judge Collins writing the opinion.
Key highlight: "Comity principles counsel against, for example, 'step[ping] on the toes of the state courts' by imposing gratuitous and unnecessary burdens on them. . . . Here, we are presented with a converse comity concern—namely, that retention of supplemental jurisdiction over ADA-based Unruh Act claims threatens to substantially thwart California's carefully crafted reforms in this area and to deprive the state courts of their critical role in effectuating the policies underlying those reforms."
Background: California's Unruh Act prohibits any business from denying accommodations required by the federal Americans with Disabilities Act (ADA). Unlike the ADA, the Unruh Act provides not only for injunctive relief, but also (sometimes substantial) damages. Concerned that the Unruh Act was being abused by a "small number of plaintiffs' attorneys," the California Legislature enacted a number of special procedural requirements. Among other things, Unruh Act plaintiffs must now meet heightened pleading standards, and certain "high-frequency litigant[s]" must pay an addition $1,000 filing fee. Presumably as a result, Unruh Act plaintiffs began filing their claims in federal court, where these procedural requirements have not been applied. In 2013, only 419 such claims were filed in the Central District of California. In 2019 that figure was 3,374—amounting to nearly 22% percent of the district's civil cases.
Plaintiff Raphael Arroyo was an Unruh Act "high-frequency litigant," having filed 38 such cases in the preceding 12 months. A paraplegic who uses a wheelchair, Arroyo visited a liquor store owned by defendant Carmen Rosas. After encountering various obstacles to equal access—including inadequate handicapped parking, an excessively high counter, and narrow, obstructed aisles—Arroyo sued Rosas in federal court, alleging claims under the ADA and the Unruh Act.
The district court granted Arroyo's unopposed motion for summary judgment on the ADA claim. But having done so, the district court then declined to exercise supplemental jurisdiction over Arroyo's Unruh Act claim. Invoking 28 U.S.C. § 1367(c)(4)—which permits courts exercising federal-question jurisdiction to decline to exercise supplemental jurisdiction over state-law claims in "exceptional circumstances"—the court concluded that Arroyo's evasion of the Unruh Act's heightened procedural requirements was a "compelling reason" to dismiss this claim without prejudice. Arroyo appealed.
Result: The Ninth Circuit reversed. The Court agreed with the district court that the likelihood that California's special procedural scheme would become ineffectual constituted "exceptional circumstances" warranting invocation of Section 1367(c)(4). The Court explained that the phrase "exceptional circumstances" encompasses "highly unusual situations that threaten to have a substantial adverse impact on the . . . values of economy, convenience, fairness, and comity." And, the Court continued, "the recent confluence of several California-law rules have combined to create a highly unusual systemic impact on ADA-based Unruh Act cases that clearly threatens to have a significant adverse impact on federal-state comity." While a mere concern with federal-court docket congestion would not be a basis for declining jurisdiction, the Court rejected Arroyo's argument that such congestion had been the sole ground for the district court's order; instead, the "district court rested its decision squarely on the comity-based concerns that California's policy objectives in this area were being wholly thwarted." The Ninth Circuit thus held that the district court had not abused its discretion in finding that plaintiffs' attempted end-run around California's procedural limitations on Unruh Act claims provided a basis for declining supplemental jurisdiction.
But the Court held that the district court had abused its discretion in "making a case-specific judgment that there are 'compelling reasons' for declining supplemental jurisdiction in this case." As Ninth Circuit explained, in making that determination, a court must also consider the values of judicial economy, convenience, and fairness to litigants. These considerations favored retaining jurisdiction over Arroyo's particular Unruh Act claim "given the very late stage at which the district court declined supplemental jurisdiction." As the Court reasoned, the district court's summary-judgment ruling on the ADA claim had already resolved all of the issues necessary to resolving Arroyo's Unruh Act claim. And "[g]iven that the correct disposition of Arroyo's Unruh Act claim follows obviously and ineluctably from the findings that the district court has already made, it would be a sheer waste of time and resources to require that claim to be refiled in state court." At that stage, the only purposes of doing so would be to "dun" Arroyo the $1,000 special filing fee, which in these circumstances "would amount to little more than a gratuitous tax on the award to which Arroyo has already established he is entitled."
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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