                 FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT


ALEXANDRIA GREGG, Individually            No. 14-16785
and on Behalf of All Others
Similarly Situated,                           D.C. No.
                  Plaintiff-Appellant,    1:14-cv-00056-
                                             JMS-KSC
                  v.

STATE OF HAWAII, DEPARTMENT OF              OPINION
PUBLIC SAFETY; TED SAKAI, in his
official capacity as Director of the
Department of Public Safety, State
of Hawaii; NEAL WAGATSUMA, in
his official capacity as Warden of
the Kauai Community Correctional
Center, Department of Public Safety,
State of Hawaii, and in his individual
capacity,
                Defendants-Appellees.


      Appeal from the United States District Court
               for the District of Hawaii
      J. Michael Seabright, Chief Judge, Presiding

          Argued and Submitted June 15, 2017
                  Honolulu, Hawaii

                  Filed August 29, 2017
2               GREGG V. STATE OF HAWAII DPS

        Before: Raymond C. Fisher, Richard A. Paez
         and Jacqueline H. Nguyen, Circuit Judges.

                     Opinion by Judge Fisher


                            SUMMARY*


                             Civil Rights

    The panel vacated the district court’s dismissal of a 42
U.S.C. § 1983 action brought by a former Hawaii inmate who
alleged that she was psychologically traumatized as a result
of being compelled to undergo sexual shame therapy at a
Hawaii correctional facility, and remanded.

    The district court held that because plaintiff
experienced feelings of embarrassment and humiliation
contemporaneously with her therapy sessions, her claims
accrued on the last date that the sessions occurred in
November 2011. The district court dismissed plaintiff’s
Eighth Amendment claims filed on January 31, 2014 under
the applicable two-year statute of limitations and denied her
request for leave to amend her complaint.

    Applying Simmons v. United States, 805 F.2d 1363 (9th
Cir. 1986), the panel held that the district court erred in
denying plaintiff leave to amend to try to make a plausible
showing that it was not until January 2012 that she first
became aware of her injuries from her purported treatment

    *
      This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
             GREGG V. STATE OF HAWAII DPS                   3

in the therapy program. The panel held that it may be
reasonable for an incarcerated individual who is told she must
resurface past sexual traumas to overcome them to rely on
these assurances, and to view associated feelings of emotional
distress as normal, constructive responses incidental to the
healing process. The panel held that like the plaintiff in
Simmons, plaintiff in this case may be able to allege facts
making it plausible she neither knew nor reasonably should
have known she was injured by the therapy program until
sometime after she stopped participating in the sessions.


                         COUNSEL

Margery S. Bronster (argued), Andrew L. Pepper, Robert
Hatch, and Anthony Quan, Bronster Hoshibata, Honolulu,
Hawaii; Dan Hempey, Hempey & Meyers, Lihue, Kauai,
Hawaii; for Plaintiff-Appellant.

Marie Manulele Gavigan (argued) and Caron M. Inagaki,
Deputy Attorneys General; Douglas S. Chin, Attorney
General; Department of the Attorney General, Honolulu,
Hawaii; for Defendants-Appellees.


                         OPINION

FISHER, Circuit Judge:

    Alexandria Gregg learned she had psychological
disorders years after she underwent sexual shame therapy
sessions at a Hawaii correctional facility. Because Gregg
experienced feelings of embarrassment and humiliation
contemporaneously with her therapy sessions, the district
4             GREGG V. STATE OF HAWAII DPS

court held her claims accrued on the last date that the sessions
occurred.     The district court dismissed her Eighth
Amendment claims asserting cruel and unusual punishment
and deliberate indifference under the applicable two-year
statute of limitations and denied her request for leave to
amend her complaint. We address when her claims accrued.
Under federal law, a claim accrues when a plaintiff knows or
has reason to know of the injury that is the basis of the action
and the cause of that injury. See Bonneau v. Centennial Sch.
Dist. No. 28J, 666 F.3d 577, 581 (9th Cir. 2012); TwoRivers
v. Lewis, 174 F.3d 987, 991 (9th Cir. 1999). Here, Gregg
may be able to allege she was unaware of her injuries until
sometime after she stopped participating in the therapy
sessions. See Simmons v. United States, 805 F.2d 1363 (9th
Cir. 1986). That is, she may have reasonably viewed the
embarrassment and humiliation she felt as the ordinary, and
hence not harmful, response to therapy. We hold the district
court erred in denying as futile Gregg’s request for leave to
amend to include new assertions to this effect, and we vacate
and remand.

                       I. Background

                   A. Factual Allegations

    Gregg was periodically incarcerated at the Kauai
Community Correctional Center (KCCC) in Hawaii between
March and November 2011. Her first amended complaint
alleges the following facts about her experience there.

    Gregg participated in Life Time Stand (LTS), a program
run by Warden Neal Wagatsuma. The program purported to
provide “therapy, counseling, and mental health treatment”
for women inmates. Those who joined the program and
             GREGG V. STATE OF HAWAII DPS                    5

complied with its requirements were housed in less restrictive
jail environments. The LTS sessions involved “public sexual
shamings.” Inmates were forced to stand at a lectern and
speak about their sexual histories before large groups of men
and women inmates and staff. For example, Warden
Wagatsuma asked Gregg “whether she had sex while on
drugs,” “how many partners [she] previously had sex
relations with,” and “whether she had been raped.” He then
“ordered her to elaborate on previous incidents of rape” in
which she was the victim. Inmates were required to hold up
“sexual photographs” of themselves while Wagatsuma called
them “whores.” These sessions were videotaped and shown
to the broader inmate population.

    On one occasion, Wagatsuma showed a scene from the
film Irreversible (StudioCanal 2002) depicting the anal rape
of a young woman at knife point. Film critic Roger Ebert
described the scene as “so violent and cruel that most people
will find it unwatchable.”

    These experiences “humiliated, embarrassed, and
violated” Gregg, causing her to request a transfer to a
different correctional facility. After her request was granted,
Gregg remained incarcerated at a separate facility from
November 2011 until her release from custody in May 2012.
By the time she filed her complaint, Gregg had become
“psychologically, emotionally, and physically traumatized”
by her participation in the program.

                  B. Procedural History

   Gregg filed her original class action complaint under
42 U.S.C. § 1983 on January 31, 2014. Her first amended
complaint alleges, as relevant here, claims for cruel and
6              GREGG V. STATE OF HAWAII DPS

unusual punishment and deliberate indifference to substantial
risk of serious harm under the Eighth Amendment.1

    The defendants moved under Rule 12(b)(6) to dismiss and
under Rule 12(c) for judgment on the pleadings, arguing
Gregg’s claims were untimely. Gregg subsequently sought
leave to amend her first amended complaint to include new
factual allegations, submitting a pair of declarations in
support. In the first, Gregg said she “remained unaware of
[her] injuries until well after [her] release [from custody] in
May of 2012.” After her release, she began to consult
therapists to help process her experience. Toward the end of
2012, she met a former KCCC therapist who encouraged her
to seek professional psychological help. Gregg followed this
advice and, in early 2014, began to see Fran Tyson-Marchino,
a therapist who diagnosed Gregg with “traumatic experience
and adjustment disorders” caused by her participation in the
LTS program. In the second declaration, Tyson-Marchino
stated her professional opinion that Gregg’s psychological
conditions were “directly attribut[able] . . . to the trauma and
sexual egregious acts Ms. Gregg experienced while she was
incarcerated.”

    The district court granted the defendants’ motions to
dismiss and for judgment on the pleadings. Because the first
amended complaint alleged Gregg experienced feelings of
embarrassment and humiliation contemporaneously with her
participation in the LTS program, the court concluded her
claims – brought two years and two months after the sessions
ended – were untimely under the applicable two-year statute


    1
     Her complaint also included federal claims premised on retaliation
and discrimination, and claims under state law. She does not challenge
dismissal of these claims on appeal.
             GREGG V. STATE OF HAWAII DPS                   7

of limitations. The court ruled Gregg’s claims accrued “when
she was aware that she suffered injury from Defendants, and
the fact that it was not until later that [Gregg] was formally
diagnosed and/or that she learned the full extent of injury
does not make the accrual date a moving target.” The court
also denied as futile Gregg’s request for leave to amend. This
appeal followed.

                  II. Standard of Review

     We review de novo the district court’s dismissal of an
action on statute of limitations grounds, see Mann v. Am.
Airlines, 324 F.3d 1088, 1090 (9th Cir. 2003), accepting all
factual allegations in the complaint as true and drawing “all
reasonable inferences in favor of the nonmoving party,”
TwoRivers, 174 F.3d at 991. The allegations must “plausibly
suggest an entitlement to relief.” Ashcroft v. Iqbal, 556 U.S.
662, 681 (2009). Because a Rule 12(c) motion is
“functionally identical” to a Rule 12(b)(6) motion, “‘the same
standard of review’ applies to motions brought under either
rule.” Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d
1047, 1054 n.4 (9th Cir. 2011) (quoting Dworkin v. Hustler
Magazine Inc., 867 F.2d 1188, 1192 (9th Cir. 1989)). A
judgment on the pleadings is properly granted when, “taking
all the allegations in the pleadings as true, the moving party
is entitled to judgment as a matter of law.” Nelson v. City of
Irvine, 143 F.3d 1196, 1200 (9th Cir. 1998).

    “When the district court denies leave to amend because of
futility of amendment, we will uphold such denial if ‘it is
clear, upon de novo review, that the complaint would not be
saved by any amendment.’” Carvalho v. Equifax Info. Servs.,
LLC, 629 F.3d 876, 893 (9th Cir. 2010) (quoting Leadsinger,
8             GREGG V. STATE OF HAWAII DPS

Inc. v. BMG Music Publ’g, 512 F.3d 522, 532 (9th Cir.
2008)).

                       III. Discussion

    The parties agree a two-year statute of limitations applies
to Gregg’s § 1983 claims. The issue is when her claims
accrued. Because Gregg filed her complaint in January 2014,
her claims are untimely if they accrued before January 2012.
The district court ruled the claims accrued when Gregg
stopped participating in the LTS sessions in November 2011.
For the reasons that follow, we disagree that this is
necessarily the case. If Gregg neither knew nor should have
known of her injuries until after January 2012, her claims are
timely.

    The accrual date of a § 1983 claim is a matter of federal
law, “governed by federal rules conforming in general to
common-law tort principles.” Wallace v. Kato, 549 U.S. 384,
388 (2007). The general common law principle is that a
cause of action accrues when the plaintiff knows or has
reason to know of the injury that is the basis of the action and
the cause of that injury. See Bonneau, 666 F.3d at 581;
TwoRivers, 174 F.3d at 991; see also TRW Inc. v. Andrews,
534 U.S. 19, 27 (2001) (observing that “lower federal courts
generally apply a discovery accrual rule when a statute is
silent on the issue” (internal quotation marks omitted));
Bibeau v. Pac. Nw. Research Found. Inc., 188 F.3d 1105,
1108 (9th Cir. 1999) (as amended) (“[T]he discovery rule has
been observed as a matter of federal law.”). A plaintiff “must
be diligent in discovering the critical facts.” Bibeau,
188 F.3d at 1108. A cause of action accrues even if “the full
extent of the injury is not then known.” Wallace, 549 U.S. at
             GREGG V. STATE OF HAWAII DPS                    9

391 (quoting 1 C. Corman, Limitation of Actions § 7.4.1, pp.
526–27 (1991)).

    The issue here, then, is when Gregg knew, or in the
exercise of reasonable diligence should have known, of the
injuries forming the basis for her action and their cause. The
government argues that, because Gregg’s claims are for
injuries she sustained from her incarceration at KCCC, which
ended in November 2011, her claims could not have accrued
any later than that date. Gregg, on the other hand, argues she
was unaware of her injuries and their cause until she
consulted a professional therapist in 2014. Although she
experienced feelings of embarrassment and humiliation
contemporaneously with her participation in the LTS
program, Gregg maintains she was unable to recognize these
feelings as injuries until well after her release from custody.
She argues she was “prevented from connecting Defendants’
misconduct with her latent psychological illnesses” because
she was “under the guise of therapy” and “under the spell of
her abusive counselor.”          Although she “may have
unknowingly dealt with psychological symptoms while she
was in custody at KCCC,” she says “she did not have the
capacity to recognize . . . that these symptoms were not
merely a normal immediate reaction to intense therapy.” She
says she “remained unaware of [her] injuries until well after
[her] release [from custody] in May of 2012.”

   Gregg’s argument is supported by our decision in
Simmons v. United States, 805 F.2d 1363 (9th Cir. 1986).
There, the plaintiff (Simmons) had a history of physical,
sexual and emotional abuse and sought treatment from a
government counselor (Kammers). See id. at 1364. Simmons
maintained a counseling relationship with Kammers from
10              GREGG V. STATE OF HAWAII DPS

1973 until 1981. See id. Beginning in 1978, Kammers
initiated a sexual relationship with Simmons as well. See id.

    In 1980, Simmons began to experience a variety of
psychological problems, ranging from anxiety to depression,
which worsened until she was hospitalized for psychiatric
treatment in 1982. See id.

    In 1983, Simmons learned through psychiatric counseling
that Kammers’ misconduct was the cause of her
psychological problems and that her problems were due
essentially to Kammers’ inappropriate response to the normal
“transference phenomenon” in therapy. See id.2 Simmons
was eventually diagnosed with post-traumatic stress disorder
caused by Kammers’ unethical conduct, see id. at 1367, and
she filed a claim later that year for medical malpractice under
the Federal Tort Claims Act, see id. at 1364.

     After a bench trial, the district court found Simmons first
discovered her injuries and their cause in 1983 when she
learned, through psychiatric consultation, that Kammers’
misconduct was the cause of her psychological conditions.
See id. at 1366. Before that date, Simmons was unaware she
had suffered any injuries. Instead, she “blamed herself for
her problems,” id. at 1368, believing she was a “worthless
person,” id. at 1367 (internal quotation marks omitted). Even
if Simmons were to have recognized her injuries before 1983,


     2
      Transference denotes a patient’s emotional reaction to a therapist
and generally describes the projection of feelings onto the therapist, who
has come to represent someone from the patient’s past. See Simmons,
805 F.2d at 1364. When a therapist mishandles transference and becomes
sexually involved with a patient, medical authorities are nearly unanimous
in considering such conduct malpractice. See id. at 1365.
              GREGG V. STATE OF HAWAII DPS                     11

the district court found she would have been unaware of the
cause of her conditions. See id. at 1367 (explaining that
Simmons had “no idea,” until her psychiatrist first told her,
that her emotional injury was “caused by” Kammers’
conduct).

    We affirmed, holding the district court’s findings as to the
nature and cause of Simmons’ injury were fully supported by
the record. See id. We agreed both that Simmons did not
actually know of her injuries and their cause and that a
reasonable person should not have. We discussed a number
of reasons why, in the therapy context, it may be reasonable
for a patient to first discover her injuries long after the events
that caused them. The high degree of dependence and trust
of a patient on her therapist, for example, often impedes the
ability to view treatment “as in any way related to her
psychological damages.” Id. at 1368. This special
relationship, in other words, sometimes prevents the patient
from questioning the wrongful activity or recognizing it as
the source of her injuries. This is especially the case, we
explained, when a patient is given “assurances that h[er]
therapy [i]s proper.” Id. Moreover, “the client is usually
suffering from all or some of the psychological problems that
brought him or her into therapy to begin with. As a result, the
client is especially vulnerable to the added stress created by
the feelings of shame, guilt and anxiety produced . . . .” Id.
at 1367 (internal quotation marks omitted). Psychiatric injury
and its cause, we noted, are “subtler and more complicated”
than other injuries. Id. at 1367–68 (internal quotation marks
omitted).

    Greggs asks for leave to amend her complaint to bring her
claims within Simmons, and we agree she is entitled to that
opportunity. See Carvalho, 629 F.3d at 892 (“[L]eave to
12              GREGG V. STATE OF HAWAII DPS

amend shall be freely given when justice so requires.” (citing
Fed. R. Civ. P. 15(a))). Like Simmons, Gregg may be able to
allege facts making it plausible she neither knew nor
reasonably should have known she was injured by the LTS
program before January 2012. Individuals undergoing
therapy often expect to feel emotional discomfort as they deal
with the more difficult aspects of their lives. Pain is often a
byproduct of the healing process, and we should not
encourage, much less require a patient who begins therapeutic
treatment to bring suit at the first sign of emotional
discomfort. Under this theory, Gregg was unable to
recognize she was injured at all, so this would not be simply
a case where she was unable to recognize the extent of her
injury. See Wallace, 549 U.S. at 391.

    Like Simmons, Gregg was in treatment, and a government
official told her she was being provided “therapy, counseling,
and mental health treatment.” It may be that Gregg knew or
should have known before January 2012 that her feelings of
emotional discomfort were actually injurious, and that they
were caused by the LTS program. Her request to transfer out
of KCCC provides at least some support for this conclusion.3
But these are questions of fact. See Simmons, 805 F.2d at


     3
      Still, the allegation is not fatal to her complaint. At this stage, we
must draw all reasonable inferences in Gregg’s favor. See TwoRivers, 174
F.3d at 991. That Gregg was unable to tolerate her feelings of humiliation
does not compel the conclusion she knew she was injured by her mental
health “treatment.” A person may be unable to tolerate pain she otherwise
thinks is part of the healing process. The same is true of Gregg’s
allegation that she “became severely depressed when she was transferred
back to the KCCC modules from the less restrictive LTS housing.”
Indeed, this might well suggest Gregg connected her feelings of
depression with her return to a more restrictive housing placement, not
with the LTS program.
             GREGG V. STATE OF HAWAII DPS                   13

1368 (“We stress that what she knew and when she knew it
are questions of fact.”); see also id. (“[W]here the injury and
cause thereof are subtler and more complicated . . . it seems
particularly inappropriate to determine as a matter of law
what the plaintiff should have known.” (internal quotation
marks omitted)). We hold only that it may be reasonable for
an incarcerated individual who is told she must resurface past
sexual traumas to overcome them to rely on these assurances,
and to view associated feelings of emotional distress as
normal, constructive responses incidental to the healing
process. The district court erred in denying Gregg leave to
amend to try to make a plausible showing that it was not until
January 2012 that she first became aware of her injuries from
her purported treatment in the LTS program.

   Costs of appeal are awarded to Appellant Gregg.

   VACATED AND REMANDED.
