The federal court yesterday dismissed a separate discrimination lawsuits filed by two women in 2006 against garment factory La Mode Inc. that filed a bankruptcy case.
Citing the commencement of the lawsuits violated the automatic bankruptcy stay, U.S. District Court for the NMI Chief Judge Ramona V. Manglona dismissed the lawsuits filed by Anecia Perez and Erlinda Paguta.
In separate decisions issued yesterday, Manglona said without competent counsel to advise them, Perez and Paguta waited for the court to tell them when they would have their day, when in fact their day had passed long ago.
“Because more than 90 days have passed since the EEOC (Equal Employment Opportunity Commission) issued the right-to-sue letter, any new attempted filing in this matter would be untimely,” said Manglona in dismissing the cases with prejudice.
Dismissal with prejudice means the case cannot be re-opened.
Perez and Paguta, both Filipinos, asked the court to order La Mode Inc. to pay them backpay, compensation, including medical expenses not paid by the employer, and liquidated damages.
The plaintiffs alleged that since at least October 2004, the defendant has engaged in unlawful practices at its Saipan facility.
These alleged practices include subjecting them to discrimination on the basis of their age, and national origin by depriving them of employment benefits given to employees, the complaints said.
According to court records, Perez and Paguta first filed their discrimination complaints with the EEOC in November 2004.
In October 2005, EEOC issued a determination of reasonable cause to believe that La Mode had discriminated against Perez and Paguta on the basis of age and national origin.
Conciliation efforts failed. EEOC elected not to bring suit against La Mode. In April 2006, EEOC issued a notice of right to sue, whereupon Perez and Paguta had 90 days within which to file suit against the factory.
The two timely filed the suits in court on June 27, 2006.
La Mode closed its Saipan operations and in July 2005 filed for Chapter 7 bankruptcy protection in California.
In August 2006, the U.S. Trustee filed in the U.S. District Court for the NMI a notice of automatic stay and served it on Perez and Paguta.
The automatic stay prevents creditors from taking certain actions against the debtor.
After receiving the notice, Perez and Paguta ceased to prosecute their claims. La Mode never answered their complaints.
The court did not issue a stay order.
In April 2010, the bankruptcy case closed. On April 7, 2011, the federal court issued an order to show cause why the stay should not be lifted.
A month later, the court lifted the stay. The case again languished without prosecution for almost a year.
At the April 9, 2012 status conference, the court directed La Mode to respond to the complaint.
La Mode then filed a motion to dismiss the lawsuits. The company asserted that because the complaint and service of process were in violation of the automatic stay in the bankruptcy case, they were void from the beginning.
Perez and Paguta explained that they were not aware of the bankruptcy until the stay notice issued in August 2006 and therefore they should not be faulted for any violation of the stay.
In granting La Mode's motion to dismiss, Manglona said because Perez and Paguta commenced their lawsuits against La Mode while the bankruptcy case was pending, the filing violated the stay and was void.
Manglona said the plaintiffs' argument that the lawsuits are a continuation of the EEOC case is without merit.
“The EEOC case was an administrative process, while the lawsuit in district court is judicial,” Manglona said.
The judge said it is regrettable that Perez and Paguta did not seek or obtain sound legal advice on how best to proceed once they had notice of the bankruptcy stay.