OSHIVER v. LEVIN, FISHBEIN, SEDRAN & BERMAN

OPINION OF THE COURT

LEWIS, Circuit Judge.

Appellant Sherry J. Oshiver brought suit against the Philadelphia law firm of Levin, Fishbein, Sedran & Berman, where she had been employed as an attorney, claiming violations of both Title VII and the Pennsylvania Human Relations Act ("PHRA"). This is an appeal from the district court's dismissal of Oshiver's complaint, upon the law firm's motion, on the ground that Oshiver's claims were time-barred. We will affirm the district court's dismissal of Oshiver's discriminatory failure to hire claim, and reverse the district court's dismissal of Oshiver's discriminatory discharge claim.

I.

Oshiver, who had applied for a position as an associate attorney at Levin, Fishbein, Sedran, & Berman (the "firm") in May, 1989, was instead hired as an hourly attorney, having been informed that there were no salaried positions available at that time. When she was hired, however, she was also advised by the firm that she would be considered for an associate position if and when an opening occurred.

On April 10, 1990, Oshiver was dismissed with the explanation that the firm did not have sufficient work to sustain her position as an hourly employee at that time, but that the firm would contact her if either additional hourly work or an associate position became available.

In January, 1991, having been unable to secure employment since her dismissal, Oshiver applied for unemployment compensation benefits. At a benefits hearing on May 21, 1991, Oshiver learned that shortly after her dismissal, a male attorney had been hired by the firm to take over her duties as an hourly employee. Nearly six months after acquiring this information, on November 8, 1991, Oshiver filed administrative complaints with the Pennsylvania Human Relations Commission ("PHRC") and the Equal Employment Opportunity Commission ("EEOC") alleging that her dismissal was the product of gender discrimination.

In January, 1992, Oshiver learned that the firm had hired a male attorney as an associate in May of 1991, without notifying her that an associate position had opened. The firm's failure to hire her as an associate, according to Oshiver, constituted an additional instance of gender discrimination. Thus, Oshiver amended her administrative complaints in early April, 1992, to include a claim of discriminatory failure to hire.

On September 28, 1992, the EEOC issued Oshiver a right-to-sue letter, and on December 21, 1992, she filed a complaint in the United States District Court for the Eastern District of Pennsylvania alleging discrimination under Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e, et seq. ("Title VII") and the Pennsylvania Human Relations Act.

The district court granted the firm's motion to dismiss Oshiver's complaint, holding that her federal claims were time-barred because the statutory limitations period had begun to run on April 10, 1990, the day the firm dismissed Oshiver; on that day, the court concluded, Oshiver knew or had reason to know that an alleged discriminatory act had occurred. The district court refused to apply the doctrine of equitable tolling to excuse Oshiver's failure to file her EEOC charge timely, finding nothing in Oshiver's complaint to suggest that the law firm had misled her respecting her cause of action, 818 F.Supp. 104.

In reviewing the district court's dismissal of Oshiver's claims of discrimination, we are called upon to balance the relevant statutorily mandated deadlines against certain tolling doctrines that might apply to extend them.

II.

We have jurisdiction over this appeal under 28 U.S.C. § 1291. Since this is an appeal from a district court's dismissal pursuant to Rule 12(b)(6), we exercise plenary review. Ditri v. Coldwell Banker Residential Affiliates, Inc., 954 F.2d 869, 871 (3d Cir.1992).1 We accept all facts pleaded as true and draw all reasonable inferences in favor of the plaintiff, D.R. v. Middle Bucks Area Vocational Technical School, 972 F.2d 1364, 1367 (3d Cir.1992), focussing on the pleadings2 to determine whether the plaintiff has stated a claim upon which relief may be granted.

III.

As noted above, the timeliness of Oshiver's administrative complaints is the key issue before us. Oshiver claims that her charges under Title VII were timely brought because the statutory limitations period did not begin to run until May 21, 1991, when she first discovered that the firm had hired a male attorney to assume her former duties as an hourly employee. Therefore, Oshiver argues, her filing on November 8, 1991, was timely. The firm disagrees, as did the district court. In the firm's view, the statute of limitations began to run on the date of Oshiver's termination, April 10, 1990, thus rendering Oshiver's administrative complaints untimely.

Title VII, like the PHRA, allows a plaintiff to bring suit within 180 days after the alleged act of discrimination; however, if the plaintiff initially filed a complaint with a state or local agency with authority to adjudicate the claim, he or she is allotted 300 days from the date of the alleged discrimination within which to file a charge of employment discrimination with the EEOC. 42 U.S.C. § 2000e-5(e).3 Therefore, since Oshiver filed a complaint with the PHRC, she had 300 days after the alleged act of discrimination in which to bring a charge with the EEOC. See Davis v. Calgon Corp., 627 F.2d 674, 675 (3d Cir.1980) (per curiam) (300-day limitations period applied even though plaintiff's filing with state agency was untimely).4

There are two doctrines which might apply in this case to extend the time period Oshiver had in which to file her charges of discrimination: the discovery rule and the equitable tolling doctrine. As the Seventh Circuit observed in Cada v. Baxter Healthcare Corp., 920 F.2d 446 (7th Cir.1990), these theories, and their application, invite confusion. We will first discuss each of these doctrines and then apply them in turn to determine whether Oshiver timely filed her discrimination claims.

A. The Discovery Rule

We begin with the discovery rule.5 As a general rule, the statute of limitations begins to run when the plaintiff's cause of action accrues. Cada, 920 F.2d at 450. As the court in Cada noted, the accrual date is not the date on which the wrong that injures the plaintiff occurs, but the date on which the plaintiff discovers that he or she has been injured. Id. There will, of course, be times when the aggrieved person learns of the alleged unlawful employment practice, for example, at the very moment the unlawful employment practice occurs; in such cases the statutory period begins to run upon the occurrence of the alleged unlawful employment practice. However, there will also be occasions when an aggrieved person does not discover the occurrence of the alleged unlawful employment practice until some time after it occurred. The discovery rule functions in this latter scenario to postpone the beginning of the statutory limitations period from the date when the alleged unlawful employment practice occurred, to the date when the plaintiff actually discovered he or she had been injured. Cada, 920 F.2d at 450. In either scenario, once the plaintiff's cause of action has accrued, that is, once the plaintiff has discovered the injury, the statutory limitations period begins to run and the plaintiff is afforded the full limitations period, starting from the point of claim accrual, in which to file his or her claim of discrimination. Id. at 452 ("[I]t is entirely clear that the discovery rule if applicable gives the plaintiff the entire statute of limitations period in which to sue, counting from the date of discovery....").

A claim accrues in a federal cause of action as soon as a potential claimant either is aware, or should be aware, of the existence of and source of an injury. See Keystone Insurance Co. v. Houghton, 863 F.2d 1125, 1127 (3d Cir.1988) (stating this general proposition in the context of determining the accrual date of a RICO cause of action). A different rule, we have noted, would require an insufficient degree of diligence on the part of the potential claimant. Keystone Insurance, 863 F.2d at 1127. With specific regard to Title VII claims, and in a similar vein, the United States District Court for the District of Delaware observed that the limitations period for Title VII claims begins to run, under federal law, "`when the plaintiff knows or reasonably should know that the discriminatory act has occurred.'" Ohemeng v. Delaware State College, 643 F.Supp. 1575, 1580 (D.Del.1986) (Roth, J.) (quoting McWilliams v. Escambia County School Board, 658 F.2d 326, 330 (5th Cir. 1981)). Thus, the "polestar" of the discovery rule is not the plaintiff's actual knowledge of injury, but rather whether the knowledge was known, or through the exercise of reasonable diligence, knowable to the plaintiff. See Bohus v. Beloff, 950 F.2d 919, 925 (3d Cir.1991) (construing Pennsylvania law and applying the discovery rule in connection with a medical malpractice cause of action) (citations omitted). In short, the discovery rule functions to delay the initial running of the statutory limitations period, but only until the plaintiff has discovered or, by exercising reasonable diligence, should have discovered (1) that he or she has been injured, and (2) that this injury has been caused by another party's conduct. Bohus, 950 F.2d at 924.

The question arises whether a plaintiff's discovery of the actual, as opposed to the legal, injury is sufficient to trigger the running of the statutory period. In other words, does the statutory period begin to run upon a plaintiff's learning that he or she has been discharged from employment, for example, or does it begin to run only after a plaintiff comes to realize that the discharge constituted a legal wrong? We have in the past stated that a claim accrues in a federal cause of action upon awareness of actual injury, not upon awareness that this injury constitutes a legal wrong. See Keystone Insurance, 863 F.2d at 1127. See also Bohus, 950 F.2d at 924-25 (In order for a claim to accrue, "[t]he plaintiff need not know the exact medical cause of the injury; that the injury is due to another's negligent conduct; or that he [or she] has a cause of action.") (citations omitted). Likewise, by indicating that the discovery rule postpones the beginning of the limitations period from the date a plaintiff was wronged until the date a plaintiff discovers that he or she was injured, the Court of Appeals for the Seventh Circuit in Cada has, at least by implication, suggested that awareness of actual injury, as opposed to legal injury, is sufficient to trigger the running of the statutory period. Cada, 920 F.2d at 450. See also Merrill v. Southern Methodist University, 806 F.2d 600, 604-05 (5th Cir.1986) (stating that the limitations period in Title VII cases starts to run on the date when the plaintiff knows or reasonably should know that the discriminatory act has occurred, not on the date the victim first perceived that a discriminatory motive caused the act).

B. Equitable Tolling

1.

We preface our analysis of the equitable tolling doctrine with the observation that the time limitations set forth in Title VII are not jurisdictional. See Hart v. J.T. Baker Chemical Co., 598 F.2d 829, 831 (3d Cir. 1979). These time limitations are analogous to a statute of limitations and are, therefore, subject to equitable modifications, such as tolling. Id. Such treatment of Title VII's time limitation provisions is in keeping with our goal of interpreting humanitarian legislation in a humane and commonsensical manner so as to prevent unnecessarily harsh results in particular cases. Id.

Id. at 832.

Equitable tolling functions to stop the statute of limitations from running where the claim's accrual date has already passed. Cada, 920 F.2d at 450. We have instructed that there are three principal, though not exclusive, situations in which equitable tolling may be appropriate: (1) where the defendant has actively misled the plaintiff respecting the plaintiff's cause of action; (2) where the plaintiff in some extraordinary way has been prevented from asserting his or her rights; or (3) where the plaintiff has timely asserted his or her rights mistakenly in the wrong forum. School District of City of Allentown v. Marshall, 657 F.2d 16, 19-20 (3d Cir.1981) (quoting Smith v. American President Lines, Ltd., 571 F.2d 102, 109 (2d Cir.1978)); see also Miller v. Beneficial Management Corp., 977 F.2d 834, 845 (3d Cir.1992) (citation omitted).6

In Meyer v. Riegel Products Corporation, 720 F.2d 303 (3d Cir.1983), a case involving the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. §§ 621 et seq., we observed that although the time limitations prescribed by Congress must be "treated seriously," cases may arise "`where the employer's own acts or omissions have lulled the plaintiff into foregoing prompt attempts to vindicate his [or her] rights.'" Meyer, 720 F.2d at 307 (quoting Bonham v. Dresser Industries, Inc., 569 F.2d 187, 193 (3d Cir. 1977)). In such cases, equitable tolling may be appropriate. Id. See also Smith v. American President Lines, Ltd., 571 F.2d 102, 109 n. 12 (2d Cir.1978) ("The primary consideration underlying statutes of limitations is that of fairness to the defendant ... The most common and justifiable of the exceptions to the running of statutes of limitations[, therefore,] is based upon affirmative acts of the defendant which have impeded suit."). We have held, in the context of employment discrimination cases, that the equitable tolling doctrine may excuse the plaintiff's non-compliance with the statutory limitations provision at issue when it appears that (1) the defendant actively misled the plaintiff respecting the reason for the plaintiff's discharge, and (2) this deception caused the plaintiff's non-compliance with the limitations provision. See Meyer, 720 F.2d at 308-09.

The Meyer and Hart cases are helpful in our present endeavor to sketch the contours of the equitable tolling doctrine insofar as it applies to cases involving alleged employer deception.

In Hart, a defendant employer discharged the plaintiff, a female biochemist. At the time of her discharge, the plaintiff (Hart) was given four reasons for her dismissal, all unrelated to her gender. Hart, 598 F.2d at 830 n. 2. Hart filed an untimely charge of gender discrimination with the EEOC. She later brought suit under Title VII. The district court granted the employer's motion for summary judgment, finding that (1) Hart had untimely filed her EEOC charge and (2) the facts of the case did not call for equitable tolling. Id. at 831.

We affirmed the district court's refusal to apply the equitable tolling doctrine, finding that all of the facts upon which Hart's charge of discrimination was predicated were known to her on the date of her discharge. Id. at 833.

Id. at 834. We also expressed concern over the extended period between Hart's discharge and her first contact with the EEOC, a period of 421 days. In the absence of evidence that the defendant employer had contributed to Hart's delay in filing, it could be "extremely unfair," we reasoned, to require the employer to defend against Hart's lawsuit. Id.

The Plaintiff in Meyer was 61 years old when he was discharged. Suspecting age discrimination, Meyer contacted his former employer shortly after his termination and sought the reason for his dismissal. The employer informed Meyer that he had been dismissed due to a "reorganization." Meyer, 720 F.2d at 305. After filing a charge of age discrimination with the United States Department of Labor, Meyer brought suit against the employer. Meyer, 720 F.2d at 306. The district court granted the employer's motion for summary judgment, finding that Meyer had failed to file a timely charge with the Department of Labor. In arriving at this conclusion, the court explicitly rejected Meyer's plea to invoke the doctrine of equitable tolling, noting that his own statements revealed that he suspected from the day of his discharge that he had been dismissed because of his age. Id. at 306.

We reversed the district court's summary dismissal of Meyer's ADEA claim. We found that he had alleged acts on the part of the employer that, taken as alleged, could persuade a court to activate the doctrine of equitable tolling. We then emphasized the differences between Meyer and Hart:

Id. at 308 (citation omitted) (emphasis supplied).

2.

We next address the important question concerning the amount of time a plaintiff is afforded in which to file an otherwise untimely charge or complaint when equitable tolling is activated by the defendant employer's deception regarding the plaintiff's cause of action. We have not, prior to this case, provided an answer.

We begin by restating the fundamental rule of equity that a party should not be permitted to profit from its own wrongdoing. This basic principle underlies the equitable tolling doctrine itself. See Miklavic v. USAir Inc., 21 F.3d 551, 557 (3d Cir.1994). To allow a defendant to benefit from the statute of limitations defense after intentionally misleading the plaintiff with regard to the cause of action, thereby causing the plaintiff's tardiness, would be "manifestly unjust." Cf. Miklavic, 21 F.3d at 557. See also LaVallee Northside Civic Ass'n v. Coastal Zone Management, 866 F.2d 616, 625 (3d Cir.1989) (stating that equitable tolling is based on the equitable principle that, having unfairly lulled the plaintiff into inaction, the defendant may not profit by such wrongful conduct through invocation of the statute of limitations defense).

Against the back-drop of this principle, we are lead to conclude that where a defendant actively misleads the plaintiff regarding the reason for the plaintiff's dismissal, the statute of limitations will not begin to run, that is, will be tolled, until the facts which would support the plaintiff's cause of action are apparent, or should be apparent to a person with a reasonably prudent regard for his or her rights. This is the rule set forth by the Court of Appeals for the Fifth Circuit in Reeb v. Economic Opportunity Atlanta, Inc., 516 F.2d 924 (5th Cir.1975). It has been recognized and applied by a number of our sister circuits, see Vaught v. R.R. Donnelley & Sons Co., 745 F.2d 407, 410-12 (7th Cir.1984) (applying Reeb and referring to it the "seminal case" in the area of equitable tolling); Wilkerson v. Siegfried Ins. Agency, Inc., 683 F.2d 344, 345-46 (10th Cir.1982) (applying Reeb); Miranda v. B & B Cash Grocery Store, Inc., 975 F.2d 1518, 1531-32 (11th Cir.1992) (same), and we adopt it here.

In Reeb, the plaintiff, a woman, was employed by Economic Opportunity of Atlanta (the "EOA"). The EOA terminated Reeb's employment, citing a "limitation of funds" as the reason. Reeb, 516 F.2d at 926. Nearly seven months later, Reeb learned that soon after dismissing her, the EOA had given her former position to an allegedly less qualified male employee. Upon learning of her replacement, Reeb filed charges of gender discrimination with the EEOC. The district court dismissed the case on the ground that Reeb had failed to file her administrative complaint within ninety days of the alleged discriminatory discharge. Id. The court of appeals vacated the district court's judgment dismissing the case. Id. at 931. Finding that the 90-day period did not begin to run until Reeb had learned of the EOA's replacement hire, the court of appeals stated:

Id. at 930.

Thus, where the plaintiff has been actively misled regarding the reason for his or her discharge, the equitable tolling doctrine provides the plaintiff with the full statutory limitations period, starting from the date the facts supporting the plaintiff's cause of action either become apparent to the plaintiff or should have become apparent to a person in the plaintiff's position with a reasonably prudent regard for his or her rights. The appropriateness of this rule, as a matter of equity, can be illustrated by reference to Cada.

The court in Cada distinguished "equitable estoppel" and "equitable tolling."7 According to Cada, equitable estoppel arises where the defendant has attempted to mislead the plaintiff and thus prevent the plaintiff from suing on time. Id. at 452. Thus, according to Cada, equitable estoppel requires a showing of inequitable conduct on the part of the defendant. In contrast, for equitable tolling, all the plaintiff need show is that he or she could not, by the exercise of reasonable diligence, have discovered essential information bearing on his or her claim. Id. With this contrast in mind, the court went on to discuss the remedy each doctrine affords:

Id. at 452-53.

We agree that where the plaintiff's failure to file timely cannot be attributed to any inequitable conduct on the part of the defendant, an automatic extension of the statute of limitations by the length of the tolling period does not make sense as a matter of equity. However, such an automatic extension makes eminent equitable sense where the defendant has, by deceptive conduct, caused the plaintiffs untimeliness.

C.

By way of summary, the discovery rule and the equitable tolling doctrine are similar in one respect and different in another. The doctrines are similar in that each requires a level of diligence on the part of the plaintiff; that is, each requires the plaintiff to take reasonable measures to uncover the existence of injury. See Keystone Insurance, 863 F.2d at 1127 (making this point with regard to the discovery rule); Reeb, 516 F.2d at 930 (making this point with regard to equitable tolling). The plaintiff who fails to exercise this reasonable diligence may lose the benefit of either doctrine. The two doctrines differ, however, with respect to the type of knowledge or cognizance that triggers their respective applications. The discovery rule keys on a plaintiff's cognizance, or imputed cognizance, of actual injury. See Merrill, 806 F.2d at 604-05. Equitable tolling, on the other hand, keys on a plaintiff's cognizance, or imputed cognizance, of the facts supporting the plaintiff's cause of action.8 Underlying this difference between the discovery rule and equitable tolling is the more fundamental difference in purpose between the two rules. The purpose of the discovery rule is to determine the accrual date of a claim, for ultimate purposes of determining, as a legal matter, when the statute of limitations begins to run. Equitable tolling, at least as the doctrine might apply in Oshiver's case, presumes claim accrual. Equitable tolling steps in to toll, or stop, the running of the statute of limitations in light of established equitable considerations.

IV.

We now apply the discovery rule and the doctrine of equitable tolling to Oshiver's claims.

A.

With regard to Oshiver's claim of discriminatory discharge, we have no difficulty in concluding that for purposes of the discovery rule, Oshiver "discovered" the injury on April 10, 1990, the very date defendant law firm informed her of her discharge. Simply put, at the moment the law firm conveyed her dismissal to her, Oshiver became aware (1) that she had been injured, i.e., discharged, and (2) that this injury had been caused by another party's conduct. That Oshiver may have been deceived regarding the underlying motive behind her discharge is irrelevant for purposes of the discovery rule. See Keystone Insurance, 863 F.2d at 1127.

Having discovered the injury associated with her alleged wrongful discharge on April 10, 1990, it is clear that the discovery rule offers Oshiver no relief in relation to the timeliness of the filing of her discriminatory discharge claim. This filing occurred on November 8, 1991. Oshiver's wrongful discharge action accrued on April 10, 1990. Oshiver waited some 440 days before filing her administrative complaint, or too long by some 140 days.9

We next address whether Oshiver's discriminatory failure to hire claim is saved by the operation of the discovery rule. In so doing, it bears repeating that the discovery rule requires the plaintiff to exercise reasonable diligence in the ascertainment of injury. We cannot say that Oshiver exercised the reasonable diligence required by the discovery rule in connection with her discovery of the firm's hiring of the male associate. This hiring occurred sometime in May of 1991. Had Oshiver exercised reasonable diligence —had she, for example, telephoned the law firm periodically to monitor the status of her own outstanding associate application, or checked with the firm in May of 1991 after learning that it had hired an hourly attorney shortly after discharging her—she would almost certainly have discovered the associate hiring much earlier. Thus, the discovery rule affords Oshiver no relief in connection with the timing of the filing of her failure to hire claim.

B.

We now apply the doctrine of equitable tolling to Oshiver's discriminatory discharge claim.10

Oshiver's complaint alleges that at the time of her dismissal, the firm offered the explanation that it had no work for her to perform. Oshiver also alleges in her complaint that she learned in May of 1991 that she had been replaced by a male, and that "apparently there was work to do at the firm." (Joint Appendix at 20a). The district court concluded that the allegations in Oshiver's complaint were insufficient to invoke the doctrine of equitable tolling. However, this issue was raised in the context of a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6). The district court was to accept all allegations of fact as true and draw all reasonable inferences in Oshiver's favor. Middle Bucks Area Vocational Technical School, 972 F.2d at 1367. Therefore, all that was required of Oshiver at this stage was that she plead the applicability of the doctrine. A fair reading of Oshiver's complaint is that she claims that the firm told her there was no work when "apparently there was ...," a fact which she learned for the first time much later. Thus, Oshiver's allegations essentially charge that (1) the firm actively misled her regarding the reason for her discharge, and (2) the critical fact that would have alerted a reasonable person to the alleged unlawful discrimination only became known to Oshiver on May 21, 1991. We find that these allegations, taken as true and giving Oshiver the benefit of all reasonable inferences, are sufficient to activate the doctrine of equitable tolling. See Reeb, 516 F.2d at 930.

We offer no view as to whether Oshiver will derive ultimate benefit from the equitable tolling doctrine in relation to her wrongful discharge claim. The factual questions remain (1) whether the firm effectively misled Oshiver with respect to her discriminatory discharge cause of action; (2) if so, whether a person such as Oshiver, with a reasonably prudent regard for her rights, would have been misled by the firm's communication; and (3) if so, whether a person in Oshiver's position with a reasonably prudent regard for her rights would have learned of the firm's deception sooner. These factual inquiries must be undertaken before a proper resolution of the equitable tolling issue can reached.

We wish to make clear, however, that the purpose of and the remedy afforded by the equitable tolling doctrine, at least insofar as it applies in cases involving defendant employer deception, are understood properly only in light of the equitable principle which underlies the doctrine, namely, that one should not be permitted to benefit from his or her own wrongdoing. See Reeb, 516 F.2d at 930 ("`Deeply rooted in our jurisprudence, this principle has been applied in many diverse classes of cases by both law and equity courts and has frequently been employed to bar inequitable reliance on statutes of limitations.'") (quoting Glus v. Brooklyn Eastern District Terminal, 1959, 359 U.S. 231, 232-33, 79 S.Ct. 760, 762, 3 L.Ed.2d 770 (1959)); Miklavic v. USAir, Inc., 21 F.3d at 557. Our conclusion that the equitable tolling doctrine tolls the initial running of the statutory period until the plaintiff knows, or should reasonably be expected to know, the concealed facts supporting the cause of action flows directly, and naturally, from this fundamental equitable principle. Unless the plaintiff is then given the full statutory period in which to file his or her charge of discrimination, starting from the moment he or she acquires or constructively acquires such knowledge, the defendant's inequitable conduct will have served to shorten the limitations period, and thus benefit the defendant. This is precisely the result the equitable tolling doctrine was created to avoid.

V.

For the reasons stated above, we will affirm the district court's dismissal of Oshiver's discriminatory failure to hire claim pursuant to Federal Rules of Civil Procedure 12(b)(1) and (6). We will reverse the district court's dismissal of Oshiver's discriminatory discharge claim and remand for proceedings consistent with this opinion.