## F I L E D United States Court of Appeals Tenth Circuit 

### MAY 6 1999 

### PATRICK FISHER Clerk 

### PUBLISH UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

ANA GONZALES, Plaintiff-Appellant,

v. PABLO HERNANDEZ, M.D., THOMAS STURM, Ph.D., ROBERT PULLINGS and JOHN/JANE DOES, I-V, individually and in their official capacities, Defendants-Appellees. No. 97-2380

Appeal from the United States District Court for the District of New Mexico (D.C. No. CIV-95-657-M)

James A. Burke, Santa Fe, New Mexico, for Plaintiff -Appellant. Walter G. Lombardi, RMD Legal Bureau, State of New Mexico, for DefendantsAppellees.

Before SEYMOUR , Chief Judge, ANDERSON and BRISCOE , Circuit Judges.

SEYMOUR , Chief Judge.1 In the original complaint, Ms. Gonzales included John Does 1-10 as

defendants. After proposing and then withdrawing a n amended complaint in February 1995, Ms. Gonzales ultimately proposed and filed another amended complaint that dropped defendants Does 1-10, Aplt. App. 79-82, leaving LVMC as sole defendant. -2- Ana Gonzales brought this civil rights action claim ing that defendants discriminated and retaliated against her in connect ion with her employment by the Las Vegas Medical Center (LVMC). The district cou rt granted summary judgment against Ms. Gonzales under the Eleventh Am endment and the doctrines of res judicata and collateral estoppel. We affirm in part and reverse in part.

I Ms. Gonzales brought an unsuccessful discriminationclaim against LVMC before the New Mexico Human Rights Commission. Pur suant to the New Mexico Human Rights Act, N.M. S TAT
. ANN
. §§ 28-1-10 et seq. , she appealed de novo in state court, filing suit in October 1994 against LV MC but not against any individual employees. 1 She alleged that LVMC, through its employees, discriminated against her on the basis of national origin in violation of the state act. She further alleged that LVMC retaliated agai nst her for filing her Human Rights Commission claim. In June 1995, Ms. Gonzales filed the present action in federal court under 42 U.S.C. §§ 1981 and 1983. Describing the same ac ts and occurrences as alleged2 Ms. Gonzales does not dispute on appeal that the Eleventh Amendment

bars her claim against defendants in their official capacities. See Ford v. New Mexico Dept. of Pub. Safety , 891 P.2d 546, 551 (N.M. Ct. App. 1994). -3- in the state court suit, she asserted that defendan t LVMC employees, in their individual and official capacities, discriminated a nd retaliated against her, violating her federal equal protection, substantive due process, and First Amendment rights. The federal district court staye d this action pending the outcome of the state court suit. A jury in state c ourt subsequently returned a verdict finding that LVMC did not discriminate but did retaliate against Ms. Gonzales. The jury awarded her $170,000 in compens atory damages, as well as attorney’s fees and costs. The defendant LVMC employees in the instant action then moved for summary judgment. The district court granted it, h olding the federal claims barred under the Eleventh Amendment and by res judicata an d collateral estoppel. Ms. Gonzales appeals that summary judgment on the issue s of preclusion. 2

II We review a summary judgment decision de novo, appl ying the same legal standards used by the district court under Fed.R.Ci v.P. 56(c). See Pino v. Higgs , 75 F.3d 1461,1463 (10th Cir. 1996). We review the record in the light most favorable to the non-moving party. See McIlravy v. Kerr McGee Corp. , 119 F.3d3 We note that although Willnerheld that res judicata principles did not

apply in that case, see 848 F.2d at 1034 n.2, it also held that collateral estoppel precluded the plaintiff’s claims, id. at 1034. -4- 876, 879 (10th Cir. 1997). A federal court is required to give a state court j udgment the same preclusive effect it would be given under the laws of the state in which it was rendered. See 28 U.S.C. § 1738; Migra v. Board of Educ. , 465 U.S. 75 (1984). In the instant case, the governing law is that of New Mexico. We will address in turn the preclusive effect of Ms. Gonzales’ state discri mination and retaliation claims on her subsequent federal claims.

A. Discrimination Ms. Gonzales contends the district court erred in h olding that her unsuccessful discrimination claim against LVMC in s tate court is binding on her with respect to the individual defendants in her fe deral claim. She relies on Willner v. Budig , 848 F.2d 1032 (10th Cir. 1988), for the propositi on that there is no preclusion in identical but separate actions whe n the defendant in one action is a vicariously liable entity, as here, and the defen dant in the other action is a primary obligor, so long as there is no privity between the defendants. 3 Willner was not applying New Mexico law, however, as we are required to do here. See id. In the instant case, New Mexico law adopting the Restatment (Second) of-5-

Judgments § 51 (1980) controls questions of preclus ion involving vicarious liablility. See Ford v. New Mexico Dept. of Pub. Safety , 891 P.2d 546, 550 (N.M. Ct. App. 1994). Section 51 of the Restatement reads in relevant part: If two persons have a relationship such that one of them is vicariously responsible for the conduct of the other, and an ac tion is brought by the injured person against one of them, the judgment in the action has the following preclusive effects against the injured pe rson in a subsequent action against the other. (1) A judgment against the injured person that bars him from reasserting h is claim against the defendant in the first action extinguishes any claim he has against the other person responsible for the conduc t unless: (a) The claim asserted in the second action is base d upon grounds that could not have been asserted against the defendant in the first action; or (b) The judgment in the first action was based on adefense that was personal to the defendant in the first action.
RESTATEMENT (S ECOND ) OF J UDGMENTS , § 51 (1980) (emphasis added). The Restatement thus recognizes that when an injure d party initiates separate actions against a vicariously liable party and the primary obligor, and the injured party is unsuccessful in one claim, she is thereafter precluded from litigating a second claim based on the same conduct . The comments to the Restatement note that, “[i]n an important sense, . . . there is only a single claim. The same loss is involved, usually the same measure of damages, and the same or nearly identical issues of fact and law.” Id. at § 51 cmt. b. As such, “if [the-6-

injured party] is allowed to sue the second obligorafter having lost an action against the first,” rules of preclusion should “app roximate those that govern when the same claim is successively asserted against a s ingle defendant.” Id. The New Mexico Court of Appeals applied section 51( 1) in Ford, 891 P.2d at 550. The court enumerated four elements that ne ed to be fulfilled to trigger preclusion under the section: (1) liability under o ne of the claims is based on vicarious responsibility for the defendants in the other claim; (2) the first judgment would preclude a subsequent claim by plaintiff agai nst the first defendants for the conduct alleged in the second claim; (3) the claims in the second action are claims that could have been asserted against the first def endants in the first action; and (4) the first judgment was not based on a defense p ersonal to the first defendants. Id. In the employment suit in Ford, the plaintiff sued individually-named defendants for retaliation and denial of due proces s in federal court. After losing in federal court, the plaintiff sued the employer f or vicarious liability on the same conduct in state court under state law. The court found all four elements satisfied and barred the subsequent state suit. Following the analysis in Ford, we apply the four requirements to determine if Ms. Gonzales’ second discrimination claim is pre cluded under section 51(1). The first requirement is indisputably satisfied. T he state claim against LVMC was based on vicarious responsibility for the actions o f LVMC’s employees,-7-

defendants in this action. The second element requires that we analyze the cla ims in the two suits as though there were a single defendant. The question is whether New Mexico law would bar Ms. Gonzales’ second suit were LVMC the d efendant in both actions. We look to New Mexico preclusion law, which says a final judgment against a plaintiff extinguishes all rights to remedies again st the defendant with respect to all or any part of the transaction, or series of co nnected transactions, out of which the action arose. See Ford, 891 P.2d at 554. Here, the underlying transactions and alleged wrongful conduct in Ms. Gonzales’ two claim s are identical. The jury in the state action found LVMC did not discriminate ag ainst Ms. Gonzales. Were LVMC the defendant in the instant action, therefore , New Mexico would bar this subsequent action as relitigating a claim previousl y resolved against Ms. Gonzales. The third element requires that the claims in the s econd action be claims that could have been asserted against the first defendan t in the first action. Ms. Gonzales’ 42 U.S.C. §§ 1981 and 1983 claims asserti ng discrimination and retaliation could have been brought against LVMC in state court. See Martinez v. California, 444 U.S. 277, 283 n.7 (1980); Daddow v. Carlsbad Mun. Sch. Dist., 898 P.2d 1235 (N.M. 1995) (section 1983 action); Carter v. City of Las Cruces,
N.M. , 915 P.2d 336, 338 (N.M. Ct. App. 1996) (“It is se ttled that state and federal courts share concurrent jurisdiction over § 1983 cl aims for the denial of federal-8-

constitutional rights.”) The fourth element requires that the judgment in th e first action not be based on a defense that was personal to the defenda nt in the first action. Nothing in the record indicates that LVMC’s defense was per sonal to itself in the first action. All four elements are thus satisfied. Accordingly, pursuant to section 51(1) as applied i n New Mexico, the district court correctly held that Ms. Gonazale s is precluded from litigating claims against the defendant LVMC employees in this action on conduct identical to that alleged in her unsuccessful discrimination suit against LVMC.

B. Retaliation Ms. Gonzales argues the district court erred in fin ding that her successful retaliation claim against LVMC in state court barre d her claim against the responsible employees in federal court. The distri ct court apparently reached this conclusion based on its holding that the individual employees were in privity with LVMC and that all claims against the individual def endants should have been brought by Ms. Gonzales in the state court suit. See Aplt. App. at 102-04. On appeal, defendants assert they are in privity wi th LVMC, their employer, but they fail to cite a single New Mexico case so h olding and we have found none. The general weight of authority appears to be that while government employees-9-

are in privity with their employer in their officia l capacities, they are not in privity in their individual capacities. See, e.g., Gray v. Lacke , 885 F.2d 399, 404-06 (7th Cir. 1989); Willner , 848 F.2d at 1034 n. 2; Headley v. Bacon , 828 F.2d 1272, 1279 (8th Cir. 1987); Roy v. City of Augusta, 712 F.2d 1517, 1522 (1st Cir. 1983); Bills v. Hommer Consol. Sch. Dist. , 959 F. Supp. 507, 514-15 (N.D. Ill. 1997); C HARLES ALAN WRIGHT ET AL ., 18 F EDERAL P RACTICE & P ROCEDURE § 4458 at 506 & n.8, 508-09 & n.12 (1981 & Supp. 1999 ) (citing cases); J. M OORE , 18 M OORE ’ S F EDERAL P RACTICE § 131.40(3)(e)(ii)(A) (3d ed. 1999). In a similarly postured case, the court relied on this p rinciple in holding that res judicata did not apply to plaintiffs who sued a sch ool principal in his individual capacity after having successfully sued the school district. Bills , 959 F. Supp. at
514-15. In any event, the New Mexico Supreme Court has made it plain that it finds guidance in the RESTATEMENT (S ECOND ) OF J UDGMENTS when deciding preclusion issues, see, e.g., Kepler v. Slade , 896 P.2d 482, 486 (N.M. 1995); Three Rivers Land Co. v. Maddoux , 652 P.2d 240, 245 (N.M. 1982), and the Restatemen t does not refer to “privity” in resolving preclusion ques tions. Having applied Section 51(1) of the Restatement in Ford, we see no reason why the New Mexico courts would not apply section 51(2) as well. Indeed, the Ford court recognized “Section 51 as accurately describing New Mexico law .” 891 P.2d at 550. We4 Defendants assert that Ms. Gonzales’ reliance on § 49 of the Restatement

is flawed because that section assumes the persons allegedly jointly responsible for the loss are not in privity. Aplee. Br. at 11. As we have indicated above, the Restatement does not refer to privity and, in any e vent, we have found no New Mexico case holding that individual employees are i n privity with their vicariously liable employers. Moreover, defendants cite no New Mexico case (continued...) -10- therefore turn to section 51(2). Section 51(2) provides: (2) A judgment in favor of the injured person is conclusive upon him as to the amount of his damages, unless . . . (b) Different rules govern the measure of damages i n the two actions.
RESTATEMENT (S ECOND ) OF J UDGMENTS , § 51(2) (1980) (emphasis added). Courts applying section 51(2) have held that a judgment in favor of the injured party in a vicarious liability relationship does not preclude a second action against nonparties except as to the amount of damages. See Kimmel v. Iowa Realty Co. , 339 N.W.2d 374, 378 (Iowa 1983); see also Headley v. Bacon , 828 F.2d at 1278; Day v. Davidson , 951 P.2d 378, 383 (Wyo. 1997). The Restatement clearly contemplates a complainant proceeding in split actions against a vicariously responsible obligor and the primary obligor. See
RESTATEMENT (S ECOND ) OF J UDGMENTS § 49 (“A judgment against one person liable for a loss does not terminate a claim that t he injured party may have against another person who may be liable therefore.”); 4 see also id. § 50 (foreclosing4 (...continued)

supporting the proposition that a plaintiff is impr operly splitting a cause of action when she sues jointly and severally liable defendan ts in separate actions. An illustration set out under Restatement § 49 is on p oint:

A is injured as a result of the wrongful act of S, who is M’s employee. In A’s action against M, both the issues of liability and the extent of A’s injuries are litigated. Judgmentis for A for $10,000. A is not precluded from bringing an actio n against S but may recover no more than $10,000 for the injuries i nvolved.
RESTATEMENT (S ECOND ) OF J UDGMENTS § 49 illus. 1; see also id. § 24 cmt. e (“The rule against splitting . . . takes as its mod el a claim and action by a single plaintiff against a single defendant”); Anaya v. City of Albuquerque , 924 P.2d 735, 740 (N.M. App. 1996) (quoting § 24, cmt. e). -11- double recovery); cf. Sanchez v. Clayton , 877 P.2d at 572 (noting that Section 50 sets forth a “sound principle” as applied to awards of compensatory damages). Section 51(2)(b) allows additional damages in the s ubsequent action as long as the first action is successful and the measure of damag es in the second action is different. In fact, the Restatement constructs a h ypothetical directly on point: P is injured as a result of the deliberate act of S , who is M’s employee. P brings an action against M, the applic able law limiting his recovery to compensatory damages. P obtains ju dgment for $10,000. In a subsequent action against S, P may o btain judgment for no more than $10,000 in compensatory damages bu t is not precluded from recovering punitive damages. Id. at § 51 illus. 7. In Ms. Gonzales’ retaliation claim in state court, she won $170,000 in compensatory damages against LVMC, the vicariously responsible party.-12-

Applying the principles of the Restatement, we hold that Ms. Gonzales is not barred from suing the employee defendants for retal iation, but she is precluded under section 51(2) from seeking more than $170,000 in compensatory damages. Punitive damages are a different matter, however. The New Mexico Human Rights Act limited Ms. Gonzales’ recovery against L VMC to actual damages which are “‘synonymous with compensatory damages, and excludes punitive damages.’” Behrmann v. Phototron Corp. , 795 F.2d 1015, 1020 (N.M. 1990) (quoting 22 A M
. J UR
. 2 D D AMAGES § 3 (1988)). Because “[d]ifferent rules govern[ed] the measure of damages” in the first act ion, see RESTATEMENT (S ECOND ) J UDGMENTS § 51(2)(b), Ms. Gonzales is not barred from seeking punitive damages in her retaliation claim against t he employee defendants in this action. See Sanchez , 877 P.2d at 572 (punitive damages punish the tort feasor for wrongdoing rather than compensate the victim for a loss and must be separately determined against each defendant). In sum, although New Mexico law clearly precludes M s. Gonzales’ discrimination claim against the employee defendant s in this action, there is no policy reason nor law in New Mexico to bar her reta liation claim against the defendants for their individual liability since she prevailed on this claim in the first action against LVMC and also since different rules govern the measure of damages in this subsequent federal action. Consequ ently, we AFFIRM the5 We do not consider other issues raised by defenda nts that were not

addressed by the district court. Those issues may be reasserted on remand. -13- district court’s grant of summary judgment in favorof defendants on Ms. Gonzales’ federal claim of discrimination. We REVERSE the summary judgment on Ms. Gonzales’ federal claim of retaliation and REMAND for further proceedings. 5