Mikhak v. University of Phoenix Inc.

Background

Bahar Mikhak previously sued University of Phoenix, alleging that it had discriminated against her because of her religion, subjected her to a hostile work environment, and retaliated against her in violation of Title VII and California’s Fair Employment and Housing Act. The court compelled arbitration, and later dismissed that earlier case for failure to prosecute after Mikhak did not initiate arbitration as ordered. The Ninth Circuit affirmed, and requests for further review were denied.

Mikhak later filed this case against University of Phoenix, individual University of Phoenix employees, Littler Mendelson P.C., and individual attorneys who had represented University of Phoenix. The court previously dismissed her original complaint for violating Federal Rule of Civil Procedure 8 because it asserted 62 causes of action against 13 defendants and was confusing and excessively lengthy. The court allowed her to amend, but directed her to keep the amended complaint short and clear.

Mikhak’s First Amended Complaint was 96 pages, with a 48-page addendum and 32 pages of charts and tables. It asserted 62 claims. The complaint primarily alleged that the attorney defendants and University of Phoenix defendants committed fraud and violated related laws by making false statements during the earlier litigation, improperly creating or enforcing the arbitration agreement, and providing a false employment reference.

Ruling on the Motion to Dismiss

The defendants moved under Rule 12(b)(6), which allows dismissal when a complaint does not allege enough facts to state a legally valid claim. The court granted the motion and dismissed the First Amended Complaint with prejudice.

Claims against the attorney defendants. The court held that claims based on the attorneys’ statements and filings during the earlier litigation were barred by California’s litigation privilege. That privilege protects communications made by authorized participants in judicial or similar proceedings when the communications are connected to the proceeding and made to achieve its purposes. The court ruled that the privilege applied even if the communications were allegedly malicious or false, and that Mikhak had alleged intrinsic rather than extrinsic fraud. The court also rejected the argument that filing a motion or letter was a non-communicative act.

The court separately held that the fraud claims against the attorney defendants were untimely. Mikhak alleged that she discovered the supposed fraud on November 24, 2017, but filed this action on September 7, 2021. The court rejected her arguments for equitable tolling, which can extend a filing deadline when a plaintiff could not reasonably have discovered a possible claim, and equitable estoppel, which can apply when a defendant’s conduct prevents timely filing. The court also held that the fraud allegations failed to state a claim because they did not allege that the attorneys intended to deceive Mikhak or that Mikhak relied on the alleged misrepresentations to her detriment.

Claims against the University of Phoenix defendants. The court held that claims based on the defendants’ conduct during the earlier litigation were covered by the litigation privilege. It also held that those litigation-related fraud claims were untimely and did not adequately allege intent to deceive or Mikhak’s justifiable reliance.

The court held that the claims based on conduct before the earlier litigation were untimely. Mikhak accepted the arbitration agreement in March 2014 and filed this case approximately seven and a half years later. The court found that she knew the relevant facts during or before the earlier litigation, regardless of when she learned that those facts might support a legal claim.

The court also held that claim preclusion, sometimes called res judicata, barred the pre-litigation claims against the University of Phoenix defendants. Claim preclusion prevents a party from bringing claims that were raised or could have been raised in an earlier case when there was a final judgment and the parties, or legally related parties, are the same. The court found that the earlier case ended in a final judgment under Rule 41(b), that University of Phoenix was a party to that case and certain employees were legally related to it for this purpose, and that the claims arose from the same facts involving Mikhak’s effort to obtain faculty status and the arbitration agreement.

The court also dismissed Mikhak’s claim under California Labor Code § 1050, which alleged that University of Phoenix gave a false reference to a potential employer. The court found that the complaint merely speculated that a negative reference might explain why Mikhak did not receive a response about teaching a class. It held that those allegations did not make the claim plausible and that discovery could not be used to search for support based only on conclusions and speculation.

Civil-rights and Fifth Amendment claims. The First Amended Complaint asserted claims under 42 U.S.C. § 1983 and the Fifth Amendment. A § 1983 claim generally requires a constitutional or federal-law violation by someone acting under state authority. The court held that the defendants were private individuals or entities and that the complaint did not allege facts showing that they acted under state authority. The court rejected Mikhak’s assertion that the defendants had conspired with a judge because the complaint alleged that they misled the court, not that they conspired with or bribed the judge.

The court also held that the Fifth Amendment’s due-process protection applies to federal government action, and that Mikhak had not alleged that the defendants were federal actors. It therefore dismissed the § 1983 and Fifth Amendment claims.

Disposition

The court dismissed the First Amended Complaint in its entirety with prejudice because it concluded that amendment would be futile. The court denied all pending motions as moot and stated that the district court no longer had jurisdiction over the case. The court also denied Mikhak’s objection to the defendants’ reply brief as untimely, finding that the parties had received flexible deadlines and that Mikhak was not prejudiced by the delay.