JON C. BANTY, Complainant
DINGS CO. MAGNETIC GROUP, Respondent
An administrative law judge (ALJ) for the Equal Rights Division of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.
The commission has considered the petition and the positions of the parties, and it has reviewed the record which was before the ALJ. Based on its review, the commission agrees with the decision of the ALJ, and it adopts the findings and conclusion in that decision as its own.
The decision of the administrative law judge (copy attached) is affirmed. The complaints in this matter, ERD Case Nos. CR200803382 and CR200903205, are dismissed with prejudice. (1)
Dated and mailed
July 31, 2012
bantyjon . rsd : 110 : 5
BY THE COMMISSION:
/s/ Robert Glaser, Chairperson
/s/ Ann L. Crump, Commissioner
/s/ Laurie R. McCallum, Commissioner
Background -- The complaints in this matter alleged that the respondent discriminated against the complainant in terms and conditions of employment, and that it discharged him, because of his race and because of his having filed a complaint alleging discrimination.
Before the complaints went to hearing at the Equal Rights Division, the complainant started an action against the respondent in federal district court, making essentially the same allegations as were made in the ERD complaints. The ERD matters were put in abeyance while the federal court action proceeded.
The federal court action then concluded with a decision by the court, on a motion for summary judgment, in favor of the respondent, dismissing the complaint with prejudice. The court issued a 17-page decision, making extensive findings of fact, and discussing and disposing of the complainant's claims in detail.
The respondent then moved the ERD for dismissal of the complaints pending there, on the basis of claim preclusion.
The ALJ granted the respondent's motion to dismiss, albeit on a different rationale. The ALJ reasoned that, pursuant to Aldrich v. LIRC, 2008 WI App 63, 310 Wis. 2d 796, 751 N.W. 2d 666 (2008), claim preclusion could not be applied to block a claim under the WFEA based on a decision in federal court under Title VII. However, he concluded that issue preclusion could apply. He analyzed the factors that must be weighed to determine whether or not to apply issue preclusion, determined that those factors were satisfied, and on that basis held that the complaints should be dismissed.
The complainant petitioned for review, arguing that basing the outcome on the federal case is unfair because he did not have legal representation in the federal case. He also notes that his reasons for not appealing the federal case were that he had received a $979 bill of costs in the federal case, his unemployment was denied, and he had to file for bankruptcy. He repeats his argument that he was treated differently by the respondent with regard to receiving the opportunity for a last-chance agreement.
Discussion - The first step in the analysis of issue preclusion is to determine whether the issue or fact was actually litigated and determined in the prior proceeding by a valid judgment in a previous action and whether the determination was essential to the judgment. Aldrich v. LIRC and Best Buy, 2012 WI 53, ¶ 97, 341 Wis.2d 36, 814 N.W.2d 433 (#210AP1785, filed May 23, 2012).
Initially, it should be noted that the fact that the outcome in the federal court proceeding in this case came in a ruling on a motion for summary judgment, rather than after a trial, does not matter. The "actually litigated" requirement does not mean there must have been a trial. "An issue decided on summary judgment may satisfy the elements of issue preclusion." Aldrich, 2012 WI 53, ¶ 99-100.
Resolving the question of whether the issue or fact was actually litigated and determined requires comparing the specific factual issues addressed in the previous action and in the action which is sought to be precluded. Here, there is no question that they are the same. The allegations made in the complaints in the ERD matters involved here, were all specifically made in the federal court complaint, and they were specifically addressed in, and determined in, the federal court's decision. The federal court's decision clearly addressed and determined the critical issue of whether the adverse actions taken by the respondent were shown to have been motivated by bias because of the complainant's race or his having filed a previous complaint. Those determinations were obviously essential to the judgment, as they formed the basis of the complainant's cause of action. As to the allegations of both race discrimination and retaliation, the court found that even if the evidence and the reasonable inferences from that evidence were construed in the light most favorable to Banty, he had not presented evidence sufficient to allow a finding in his favor.
This leaves the second step in the analysis: determining whether applying issue preclusion comports with principles of fundamental fairness.
The central goal of the "fundamental fairness" analysis is to protect the rights of all parties to a full and fair adjudication of all issues involved in the action. The decision should be made with special attention to guarantees of due process which require that a person must have had a fair opportunity procedurally, substantively and evidentially to pursue the claim before a second litigation will be precluded. Aldrich, 2012 WI 53, ¶ 109.
Courts have generally looked to these five factors to decide whether the "fundamental fairness" test is met:
(1) Could the party against whom preclusion is sought have obtained review of the judgment as a matter of law;
(2) Is the question one of law that involves two distinct claims or intervening contextual shifts in the law;
(3) Do significant differences in the quality or extensiveness of proceedings between two courts warrant relitigation of the issue;
(4) Have the burdens of persuasion shifted such that the party seeking preclusion had a lower burden of persuasion in the first trial than in the second; and
(5) Are matters of public policy and individual circumstances involved that would render the application of collateral estoppel to be fundamentally unfair, including inadequate opportunity or incentive to obtain a full and fair adjudication in the initial action?
Aldrich, 2012 WI 53, ¶ 110. No single factor is dispositive, and the final decision must rest on a "sense of justice and equity." The five factors are not exhaustive or exclusive. The weight given to each factor is discretionary. 2012 WI 53, ¶ 111-112.
Applying these standards here leads to the conclusion that application of issue preclusion here would comport with fundamental fairness.
First, Banty could have obtained review of the judgment as a matter of law. As the ALJ noted, he had the right to appeal the decision to the U. S. Court of Appeals. While in his petition for review Banty seems to argue that he did not appeal because of financial problems, this factor is focused on the question of whether the party had a right to appeal as a matter of law. Banty did.
Second, there were not two distinct and different types of claim here, or "intervening contextual shifts in the law." As the ALJ noted, the provisions of the Wisconsin Fair Employment Act and Title VII involving race discrimination and retaliation are similar in nature such that this factor cannot be said to apply.
Third, there are not significant differences in the quality or extensiveness of proceedings between the two tribunals which would warrant relitigation.
Considering a contrasting situation illustrates this. If this were a situation in which issue preclusion was sought to be applied based on the outcome of the EEOC's initial investigation into a complaint filed with it under Title VII, this factor would certainly not be met. That is because EEOC investigations are ex parte, they do not allow for any form of confrontation and examination of adverse witnesses, and they are, standing alone, not sufficient to satisfy the requirements of due process. For the ERD to give preclusive effect to an EEOC investigation result, and on that basis to dismiss a complaint filed with it without providing an opportunity for hearing, would thus clearly be improper as a matter of law. But in this case, there was a resolution of the material factual and legal issues by a federal district court judge in the context of proceedings governed by the Federal Rules of Civil Procedure. As noted above, while the specific procedural context in federal court was a motion for summary judgment, it has been expressly recognized that such a disposition of a case can support claim preclusion. 2012 WI 53, ¶ 99-100. And, as the Wisconsin Supreme Court noted in Aldrich, the quality and extensiveness of the proceedings in federal court actions are at least equal to the quality and extensiveness of the proceedings that would unfold at the Wisconsin ERD. 2012 WI 53, ¶ 115.
Fourth, there is no shift in the applicable burdens of persuasion such that the party seeking preclusion (i.e., the respondent) had a lower burden of persuasion in the first proceeding (i.e., the federal district court) than in the second (i.e., before the ERD). The burdens are essentially the same in all contexts: the burden would be on Banty to persuade the trier of fact that he was discriminated against.
Fifth and finally, there do not appear to be any matters of public policy and individual circumstances involved that would make application of issue preclusion fundamentally unfair. Banty had adequate opportunity and incentive to obtain a full and fair adjudication in the initial action in federal court. The opportunity was certainly there, in the form of the procedures available to litigants in federal court. While Banty did not end up having a full hearing on the merits in federal court, it must again be borne in mind that the fact that the matter was disposed of on summary judgment does not
per se preclude application of issue preclusion. As the ALJ noted, federal district court summary judgment procedures generally allow for the possibility of discovery, the obtaining and submission of affidavits by witnesses, and other formal means to obtain and present evidence. Banty also surely had the incentive to pursue his Title VII claim; it should be noted that the potential remedies (in the form of damages) available there were greater than are available under the WFEA. There are no special matters of public policy implicated by this case. There also do not appear to be any "unique circumstances" here, as the Wisconsin Supreme Court repeatedly noted were present in
Aldrich, 2012 WI 53, ¶ ¶ 10, 139, 147, 151, on the basis of which this fifth factor could be invoked.
Conclusion - The conditions for the application of issue preclusion are all met in this case. The ALJ's decision accurately and thoroughly documents and explains this. For these reasons the commission affirms the ALJ's decision.
Jason A. Kunschke, Attorney for Respondent
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(1)( Back ) The ALJ's Order had a typographical error in one ERD case number. The correct numbers are as stated above, and should be deemed a corrective modification of the ALJ's Order.