Opinion ID: 1456313
Heading Depth: 2
Heading Rank: 1

Heading: USERRA Created a New Cause of Action

Text: We must first determine whether a cause of action under USERRA aris[es] under an Act of Congress enacted after December 1, 1990. 28 U.S.C. § 1658(a). Although Congress passed USERRA in 1994, it was the latest in a series of federal laws seeking to protect the ability of our veterans to obtain employment upon returning to civilian life. According to Middleton, USERRA did not establish a new cause of action in 1994, but instead amended its predecessor statute, commonly referred to as the Veterans' Reemployment Rights Act of 1974 (VRRA). See Pub.L. No. 93-508, § 404(a), 88 Stat. 1578, 1594 (codified at 38 U.S.C. § 2021 et seq. ) (recodified at 38 U.S.C. § 4301 et seq. by the Veterans' Benefits Act of 1992, Pub.L. No. 102-568, § 506, 106 Stat. 4320, 4340), amended by USERRA. Because the VRRA predated § 1658, Middleton argues that the federal statute of limitations does not apply. In Jones, the Supreme Court held that a cause of action `aris[es] under an Act of Congress enacted' after December 1, 1990and therefore is governed by § 1658's 4-year statute of limitations-if the plaintiff's claim against the defendant was made possible by a post-1990 enactment. 541 U.S. at 382, 124 S.Ct. 1836 (alteration in original). This principle governs even if the new law amended a preexisting law; Congress often creates new causes of action by amending existing statutes, and § 1658(a) is not limited to entirely new sections of the United States Code. Id. at 381, 124 S.Ct. 1836. What matters is the substantive effect of an enactmentthe creation of new rights of action and corresponding liabilitiesnot the format in which it appears in the Code. Id. As the Court directed, we must determine whether the plaintiff has alleged a violation of the relevant statute as it stood prior to December 1, 1990, or whether her claims necessarily depend on a subsequent amendment. Id. at 384, 124 S.Ct. 1836. To answer that question, we return to the VRRA, which Congress passed in 1974. The VRRA provided veterans with certain rights and protections upon their return to the workforce, and it barred employment discrimination based on a reservist's military service. See Pub.L. No. 93-508, sec. 404, § 2021(a)(B), (b)(3), 88 Stat. 1578, 1595-96 (1974). The only remedy available under the VRRA was injunctive relief and recovery of lost wages and benefits. Id. sec. 404, § 2022. In 1994, Congress replaced the VRRA with USERRA to clarify, simplify, and, where necessary, strengthen the existing veterans' employment and reemployment rights provisions. H.R.Rep. No. 103-65(I), at 18 (1993) (emphasis added), as reprinted in 1994 U.S.C.C.A.N. 2449, 2451; see also S.Rep. No. 103-158, at 33 (1993) (noting that USERRA would restructure, clarify, and improve  the VRRA (emphasis added)). Among other improvements, if an employer engaged in willful discrimination, USERRA permitted a plaintiff to seek liquidated damages, a form of relief unavailable under the VRRA. See USERRA sec. 2, § 4324(c)(1)(A)(iii). With that new provision, Congress converted what had been an equitable claim into a legal one, which brought along the corresponding right to a jury trial. See Maher v. City of Chi., 463 F.Supp.2d 837, 844 (N.D.Ill.2006) (holding that liquidated damages under USERRA are punitive and therefore subject to trial by jury); cf. Calderon v. Witvoet, 999 F.2d 1101, 1109 (7th Cir.1993) (holding that actions seeking liquidated damages under a different statute are suits at common law for purposes of the Seventh Amendment's right to a jury trial); Troy v. City of Hampton, 756 F.2d 1000, 1003 (4th Cir.1985) (holding that claims under the VRRA are equitable and a plaintiff is not entitled to a jury trial). Consequently, USERRA established additional rights and liabilities that did not exist under the VRRA. Middleton refers us to an unpublished district court case, decided before Jones, holding that USERRA claims were not subject to § 1658. See Akhdary v. City of Chattanooga, No. 1:01-CV-106, 2002 WL 32060140 (E.D.Tenn. May 22, 2002). In Akhdary, the district court stated, Section 1658 applies `only when Congress establishes a new cause of action without reference to preexisting law.' The USERRA does not establish a new cause of action; instead, it amends the preexisting law of the VRRA. Id. at  (citations omitted) (quoting Zubi v. AT & T Corp., 219 F.3d 220, 225 (3d Cir.2000)). But that district court's reasoning is incompatible with the test the Supreme Court announced in Jones. As the Court made clear, the important concern is not whether an amendment refers to preexisting law, but the amendment's substantive effect on the rights and liabilities of the parties. 541 U.S. at 381, 124 S.Ct. 1836. After the Court decided Jones, several lower courts, including a district court in our circuit and one in the same district as Akhdary, have found that USERRA is subject to the four-year limitations period in § 1658. [1] See Wagner v. Novartis Pharm. Corp., 565 F.Supp.2d 940, 945 (E.D.Tenn. July 10, 2008) (collecting cases); Nino v. Haynes Int'l, Inc., No. 1:05-cv-0602, 2005 WL 4889258, at  (S.D.Ind. Aug.19,2005). USERRA provided veterans the chance to seek previously unavailable remedies, an amendment that materially altered the VRRA's enforcement provision. The rights to liquidated damages and a jury trial were not available to Middleton under the VRRA, and USERRA created new potential liability for the City. In his operative complaint, Middleton alleged that the City's violation of USERRA was willful, and he sought all just and proper relief. Such relief encompasses the new remedies that Congress provided for veterans in USERRA. Applying the Supreme Court's reasoning in Jones, Middleton's current claim was made possible by and necessarily depend[s] on USERRA, meaning it arose under a cause of action enacted after § 1658. See 541 U.S. at 382, 384, 124 S.Ct. 1836.