Opinion ID: 2834302
Heading Depth: 3
Heading Rank: 2

Heading: Limitations Ruling

Text: Even if we interpreted TWC’s decision as merely a dismissal for failure to meet the 180-day filing limitations period, we reach the same conclusion. The filing limitations period acts as a statute of limitation for Payday Law claims. A court’s dismissal of a claim because of a failure to file within the statute of limitations is accorded preclusive effect. See Fite v. King , 718 S.W.2d 345, 347 (Tex. App.—Dallas 1986, writ ref’d n.r.e .); see also Besing v. Vanden Eykel , 878 S.W.2d 182, 185 (Tex. App.—Dallas 1994, writ denied) (stating that granting summary judgment on limitations operates as res judicata to a subsequent writ between the same parties on the same cause of action). The Fifth Circuit has enunciated unequivocally that res judicata “shall be given to a judgment dismissing a cause of action on limitations grounds.” Steve D. Thompson Trucking, Inc. v. Dorsey Trailers, Inc. , 870 F.2d 1044, 1046 (5th Cir. 1989) (citing Nilsen v. City of Moss Point , 674 F.2d 379, 382 (5th Cir. 1982), aff'd on rehearing , 701 F.2d 556 (5th Cir.1983) (en banc)). Many other federal courts of appeals have also recognized that a final judgment on statute of limitations grounds precludes further litigation of the same dispute. See, e.g. , Murphy v. Klein Tools, Inc. , 935 F.2d 1127, 1128–29 (10th Cir. 1991); Kale v. Combined Ins. Co. of Am. , 924 F.2d 1161, 1163, 1165 (1st Cir. 1991); Shoup v. Bell & Howell, Co. , 872 F.2d 1178, 1180 (4th Cir. 1989); Rose v. Town of Harwich , 778 F.2d 77, 80 (1st Cir. 1985) (applying Massachusetts law and acknowledging a “clear trend toward giving claim-preclusive effect to dismissals based on statutes of limitations”); PRC Harris, Inc. v. Boeing Co. , 700 F.2d 894, 896 (2d Cir. 1983). Failure to timely file an administrative wage claim, as mandated by the Legislature, bars the claim on limitations grounds. TWC’s dismissal of Igal’s claims under Section 61.052(a) is a denial of the claim to which res judicata attaches when, as here, the claim is pursued to final judgment. The dissent relies on Section 49 of the Restatement (First) of Judgments and the Restatement of Conflict of Laws for the proposition that a claimant whose action is precluded by limitations in one state court may still be able to pursue the same action in a different state with a longer limitations period. __ S.W.3d at __. [10] That analogy, the dissent argues, supports letting a Payday claimant who litigates his claim in the Texas Commission to a final decision later file the same claim in a Texas court of law. Id. This argument fails for several reasons. First, Igal does not cite Section 49 or make the argument the dissent makes. Second, this Court has not adopted Section 49 of the Restatement. Third, Section 49 does not support the proposition that a Payday claimant can pursue his claim twice in this case. Comment (a) to Section 49 addresses the potential to file a claim in two different states with different statutes of limitations: [I]f the plaintiff brings an action to enforce a claim in one State and the defendant sets up the defense that the action is barred by the Statute of Limitations in that State, the plaintiff is precluded from thereafter maintaining an action to enforce the claim in that State. He is not, however, precluded from maintaining an action to enforce the claim in another State if it is not barred by the Statute of Limitations in that State. Restatement (First) of Judgments § 49 cmt . a (1942) (emphasis added). Igal’s claim is being pursued in one state, not in two states with separate legislatures that have mandated different public policies on limitations. See Steve D. Thompson Trucking, Inc. v. Dorsey Trailers, Inc. , 880 F.2d 818, 819 (5th Cir. 1989) (denial of rehearing) (concluding that Section 49 applies to “duplicative actions in state courts in different states”). As this Court has explained, the Texas Legislature’s creation of the Payday administrative scheme and the attendant filing limitations period logically effectuates its efficiency goals, which are not inconsistent with the existence of an alternate common law contract claim. The Legislature set up a more rapid administrative route that a claimant may select, or a claimant may pursue the judicial route; both have benefits and detriments depending on the timing of the filing, the size of the claim, the cost of pursuing recovery, and other factors. In this case, we are not faced with contrary policies in separate jurisdictions which Section 49 presumes for its limitations argument. The Fifth Circuit Court of Appeals case on which the dissent relies for its Section 49 argument is distinguishable as it presents competing limitations policies in different states that are not at issue here. See Henson v. Columbus Bank & Trust Co. , 651 F.2d 320, 325 (5th Cir. 1981) (a plaintiff’s failure to defeat a statute of limitations defense in one state does not necessarily preclude the action in another jurisdiction). The Fifth Circuit later distinguished Section 49 and squarely held, in cases like this one, that a dismissal on limitations grounds operates to bar subsequent litigation of the same dispute in the same jurisdiction. See Ellis v. Amex Life Ins. Co., 211 F.3d 935, 937 (5th Cir. 2000) (dismissal of a suit on limitations grounds bars second suit under principles of res judicata ); Thompson Trucking , 880 F.2d at 819 (distinguishing Henson ); see also Mathis v. Laird , 457 F.2d 926, 927 (5th Cir. 1972) (holding that a ruling based on a statute of limitations was a decision on the merits for res judicata purposes). [11] Fourth, claimants are entitled to a fair and reasonable procedure to recover unpaid wages. We do not conclude, however, that because the Legislature created an administrative route to recovery as an alternative to a lawsuit, that claimants necessarily will have two bites at the apple. They are entitled to a fair bite, but not two bites. A common law breach of contract claim for damages has long existed. The 1989 amendments to the Labor Code that created an administrative route for employees to obtain unpaid wages advised employees that they “may,” not must, file a wage claim with TWC. Employees were then given a choice between an administrative process designed to adjudicate quickly relatively small claims or to have their day in court and the longer and more involved process of the judicial system. See Tricon Tool & Supply, Inc. , 226 S.W.3d at 511. The Legislature could have created two consecutive procedures (an administrative proceeding followed by a new judicial proceeding for the dissatisfied party) for adjudicating these claims, but there is no indication that it did. In Texas parlance, the claimant selects which horse to ride. Once the horse crosses the finish line, a claimant cannot switch horses and run the same race again, hoping for a different outcome. Fifth, the dissent’s position would also make TWC determinations based on limitations entirely duplicative, as any party aggrieved by a final administrative decision on limitations would get another chance in a lawsuit over the same claim in a court of law. See Tex. Lab. Code § 61.062. Morever , this position could pit one court’s ruling against another. An unsuccessful party who timely appealed the final TWC limitations ruling to a trial court of competent jurisdiction could also obtain review in Texas appellate courts thereafter. If the party ultimately lost the judicial appeal of TWC’s administrative decision, including through judicial appeals and petition to this Court, the dissent would allow the party to file a new common law claim in a court that could reach a different result. There is simply no indication that the Legislature intended Payday Law claims to receive judicial review in two separate court proceedings. We decline to impose such substantial inefficiency on the Legislature’s Payday scheme. Finally, we do not equate the optional filing of an administrative claim as equivalent to filing a common law claim in a separate jurisdiction’s court of law, such that Section 49’s two-state approach might apply. Unlike with common law claims, the Legislature can prescribe with relatively few limitations the parameters, damages, and procedures for pursuing an administrative right it creates. See Tex. Natural Res. Conservation Comm’n v. Lakeshore Util. Co. , 164 S.W.3d 368, 377 (Tex. 2005) (“We begin with the well-established principle that as an administrative agency, the Commission may exercise only those powers that the Legislature confers upon it in clear and express language, and cannot erect and exercise what really amounts to a new or additional power for the purpose of administrative expediency.”) ( citing Pub. Util. Comm’n v. City Pub. Serv . Bd. of San Antonio , 53 S.W.3d 310, 316 (Tex. 2001)). The Legislature created an alternate administrative remedy and included a right to appeal the final administrative determination to a court of law. Igal availed himself of the administrative avenue and declined to exercise his right to appeal. TWC was acting in a judicial capacity when it decided that Igal’s failure to timely file defeated his claims. When TWC’s decision became final, Igal was bound by that decision. Res judicata , therefore, barred Igal’s suit in district court.