### In the 

# United States Court of Appeals
For the Seventh Circuit

____________________ No. 17

- 1895

I N R E : E DWARD L. C ALVERT , Debtor

- Appellee

.

A PPEAL OF : N ATIONAL L ABOR R ELATIONS B OARD

____________________
Appeal from the United States District Court for the
Southern District of Indiana

, Indianapolis Division

. No. 1: 1 6

- cv

- 00161

- SEB

- MJD

— Sarah Evans Barker

, Judge

.

____________________

A RGUED J ANUARY 8

, 2018

— D ECIDED J ANUARY 22, 2019

____________________

Before E ASTERBROOK and S YKES , Circuit Judges , and
B UCKLO , District Judge

. *

S YKES , Circuit Judge . Edward Calvert was the sole owner and president of E.L.C. Electric, Inc., an electrical contracting

company. After a labor organization u nsuccessfully campaigned to unionize his company’s workforce

, Calvert laid
off most of E.L.C. Electric’s rank

- and

- file electricians, which effectively prevented future unionization attempt s

. The

* Of the Northern District of Illinois, sitting by designation.2 No. 17

- 1895

National Labor Relations Board (“NLRB”) determined that
the c ompany violated the National Labor Relations Act (“NLRA”) , which prohibits discrimination against workers for exercising their statutory rights

. See 29 U.S.C. § 158(a)(3).
The Board ordered E.L.C. Electric to compensate the electricians with backpay.

Calvert tried to avoid the order by shifting his company’s operations to two new corporate entities. He didn’t succeed.
The NLRB discovered Calvert’s plan and held him personally responsible for the backpay award

. Facing more than $400,000 in liability, Ca lvert filed for Chapter 7 bankruptcy

. The Board challeng ed Calvert’s attempt to discharge the backpay liability , arguing that the debt was no t dischargeable because it arose from a willful and malicious injury

. See 11 U.S.C. § 523(a)(6). Calvert conceded the willfulness
element but denied that he acted malicious ly . The Board
countered by asserting that Calvert was collateral ly estoppe d from litigating the malice issue, but it made little
effort to establish the elements of the doctrine . Indeed, th e Board did not identify any specific findings in the NLRB ruling that should be given preclu sive effect

. The bankruptcy judge declined to apply collateral estoppel and instead
held a bench trial on the issue of malice. Based on the trial evidence, the jud ge found that Calvert had not acted maliciously and th us ruled that the debt was not exempt from discharge

. On appeal to the district court, the Board again raised collateral estoppel but fail ed to analyze the elements of the
doctrine or provide ci tations to the relevant parts of the agency record. T he district judge noted the se deficiencies
and affirmed

.No. 17

- 1895 3

We likewise affirm. The Board does not challenge the evidence at trial or the bankruptcy judge’s factual findings

. I nstead it stakes its entire case on co llateral estoppel

. But it

p ersists in providing only a general ized discussion of p reclusion doctrine that is untethered to specific findings in the
NLRB proceeding

. That’s not enough to establish that
Calvert is precluded from contesting the malice issue u nder § 523(a)(6).
I. Background

In July 2002 the International Brotherhood of Electrical Workers, Local 481, campaigned to become the certified bargaining representative for E.L.C. Electric’s rank

- and

- file electricians. Calvert launched his own campaign to oppose the Union’s efforts. When the Union lost, it filed an objection
with the NLRB , demanding a new vote on the grou nd that E.L.C. Electric had unlawfully meddled in the election

. While this objection was pending, E.L.C. Electric promoted two of its bargaining

- unit electricians and fired the remaining sixteen , leaving the Union without a rank

- and

- file
workforce at the company to unionize. T he Union filed a second charge with the NLRB alleg ing that E.L.C. Electric unlawfully fired the electricians for exercising their right to
unionize

. After a trial in April 2004, an administrative law judge
ruled that E.L.C. Electric violate d sections 8(a)(1) and (3) of
the N LRA , 29 U.S.C. § 158(a) (1), (3)

. T he NLRB affirmed the ALJ’s ruling a year later

. E.L.C. Elec., Inc. , 344 N.L.R.B. 1200 (2005). It determined that E.L.C. Electric violat ed § 158(a)(3)
of the NLRA by firing the electricians to prevent them from4 No. 17

- 1895

organizing . The NLRB ordered the company to compensate the electricians with backpay.

E .L.C. E lectric never paid the award

. It ceased operations
in March 2006. The ALJ initiated supplemental proceedings
and concluded that Calvert shuttered the firm to avoid paying the electricians

. The judge pierced the corporate veil
and held Calvert personally liable for $437,427 in backpay
and interest. The NLRB adopted the judge’s findings and conclusions, E.L.C. Elec., I nc. , 359 N.L.R.B. 255 ( 2012), and we summarily enforc ed the order in July 2013.

Calvert filed a Chapter 7 bankruptcy petition five months
later

. See 11 U.S.C. § 727

. In response t he Board challenged
Calvert’s a ttempt to discharge the backpay debt

. It raised multiple arguments but only one remains relevant . The
Board claimed that the debt was exempt from discharge
because it arose from a “willful and malicious injury by the debtor to another entity.” § 523(a)(6). Calvert did not dispute

t h at he acted wi llful ly

, but he denied that he acted maliciously. The Board sought summary judgment , arguing that the agency ’s finding of liability under § 158(a)(3) of the NLRA precluded Calvert from litigating whether the debt

was exempt from discharge under § 523(a)(6) of the Bankruptcy Code. The bankruptcy judge denied the motion

, reasoning that § 158(a) (3) and § 523(a)(6) apply different legal standards and that the NLRB proceedings lacked a

“ sufficient level of ‘specific findings’” to be given preclu sive effect on th e question whether the debt was exempt from discharge

— more particularly, whether Calvert had acted
with malice

. The matter proceeded to a bench trial , and Calvert testified that he laid off his employees to save money by hiringNo. 17

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independent contractors . T h e Board offered no evidence to refute this explanation. T he judge credited Calver t ’s testimony and found that the Board failed to prove that he acted maliciously . Based on these findings, the judge rejected the
Board’s c ontention that the backpay debt was exempt from discharge

. The Board appealed to the district court

, once again raising issue preclusion . The district judge affirmed. She rejected
the preclusion argument, noting that the Board had failed to analyze the elements of collateral estoppel or prov ide citations to the relevant parts of the agency record that might support preclusion. On the merits the judge held tha t the bankruptcy judge’s factual findings were not clearly erroneous

. II. Discussion
We review the bankruptcy court ’s findings of fact f or clear error and conclusions of law de novo

. In re Kempff

, 847 F.3d 444, 448 (7th Cir. 2017)

. The Bank ruptcy Code does

not permit the discharge of debts incurred because of “willful and malicious injury by the debtor to another entity or to the property of another entity.” § 523(a)(6). By its terms, this exception to the general discharge rule requires “(1) aninjury caused by the debtor (2) willfully and (3) maliciously.” F irst Weber Grp., Inc. v. Horsfall , 738 F.3d 767, 774 (7th Cir. 2013)

. The Board has the burden of establishing each of these elements by a preponderance of the evidence. Id.

There’s no dispute about injury, causation, or willfulness.
The sole question conc erns malice. It ’ s the Board ’s burden to prove that Calvert “acted ‘in conscious disregard of [his] duties or without just cause or excuse.’” Id. (quoting In re6 No. 17

- 1895

Thirtyacre , 36 F.3d 697, 700 (7th Cir. 19 94) ) (alteration in original )

. The Board contends that the NLRB adjudication collaterally estopped Calvert from contesting the malice
issue in the § 523(a)(6) litigation

. Calvert responds that the Board cannot now rely on collateral estoppel b ecause it did not fully develop the argument in the bankruptcy and district court s

. It’s t rue that t he
Board’s preclusion argument was overly generalized and incomplete

, as the district ju dge expressly noted. But the agency said enough to overcome a forfeiture, which is not “an overly technical appellate hurdle.” Fox v. Hayes , 600 F.3d 819, 832 (7th Cir. 2010). While not forfeited, the argument is neither adequately nor correctly developed in this court

— even after the district judge put the Board on clear notice of the defects in its briefing

— and that defeats the Board’s argument on appeal

. Issue preclusion prevents a party from relitigating issues that were resolved in a prior legal action. Adams v. City of Indianapolis , 742 F.3d 720, 736 (7th Cir. 2014)

. The party invoking preclusion must show that
(1) the issue sought to be precluded [was] the same as that involved in the prior litigation, (2) the issue [was] actually litigated, (3) the determination of the issue [was] essential to the final judgment, and (4) the party against whom estoppel is invoked [was] fully r epre sented in the prior action.

Matrix IV, Inc. v. Am. Nat’l Bank & Trust Co. of Chi. , 649 F.3d 539, 547 (7th Cir. 2011) (quoting H

- D Mich., Inc. v. Top Qual ity Serv., Inc. , 496 F.3d 755, 760 (7th Cir. 2007)).No. 17

- 1895 7

To determine whether the NLRB proceeding “involved”
the same issue as the bankruptcy proceeding

, the first step is

to “ determine with precision what matters actually were
decided” in the labor proceeding . 18 C HARLES A LAN W RIGHT

ET AL ., F EDERAL P RACTICE AND P ROCEDURE § 4417, at 459

– 60 ( 3d ed. 2016). This de termination must be grounded in the actual findings and analysis in the ALJ’s ruling

. See , e.g. , In re
Davis , 638 F.3d 549, 554 (7th Cir. 2011) (defining the issue

“ [ i ] n the context of the entire [prior] court opinion”); H

- D Mich., Inc. , 496 F.3d at 760

– 61 ( defining the issue with reference to specific statements in the prior opinion ).

It’s the Board ’ s job to identify the actual findings in the NLRB proceeding that it claims are entitled to preclusive
effect , and it must then map those findin gs onto the standard for malice under § 523(a)(6). Compare First Weber Grp.

, 738 F.3d at 775 (finding preclusion on the issue of malice because the prior action’s analysis “substantially mirrored” the standard under § 523(a)(6)), with Gerard v. Gerard

, 780 F.3d 806, 810

– 11 (7th Cir . 2015) (holding that a slander

of

- title verdict did not preclude litigation over whether the underlying injury was “willful” under § 523(a)(6) becausethe jury instructions for the verdict required only negligence).

The Board ha s not satisfied its burden. It has not identified the specific issues that were actually decided in the labor proceeding, much less mapped the ALJ’s findings onto the elements of § 523(a)(6). Instead , the Board’s argument for collateral estoppel is stated at a high level of generality. It

argues that § 158(a)(3) and § 52 3(a)(6) ask the same general question: “Why did Calvert discharge his employees, or, what was his intent in doing so?” Like the lower courts, w e8 No. 17

- 1895

cannot assess the applicability of issue prec lusion without a more precise analysi s of what was actually decided in the labor proceeding as a legal and factual matter

. See Econ. Folding Box Corp. v. Anchor Frozen Foods Corp. , 515 F.3d 718, 721 (7th Cir. 2008) (“It is not the court’s responsibility to research the law and construct the parties’ arguments for them.”).

The Board maintains that preclusion applies as a categorical matter because § 158(a)(3) prohibits discrimination
based on antiunion animus. As the Board sees it

, a factual finding that Cal vert acted with malice necessarily nests within the agency’s imposition of § 158(a)(3) liability. But for preclusion to apply , the Board must establish that the issue of discriminatory intent under § 158(a)(3) of the NLRA is the
same as the issue of malice under § 523(a)(6) of the Bankruptcy Code and also that the issue of Calvert’s intent was actually decided in the agency proceeding. It has not done so. To repeat , t he Board has not ground ed its argument in specific findings entered in the NLRB proceeding

, much less appl ied those findings to the malice standard under § 523(a)(6). Moreover, as the bankruptcy judge noted, the agency’s determination lacks specificity on the issue ofCalvert’s intent. The ALJ found only that the NLRB established a prima facie c ase under § 158(a)(3) that E.L.C. Electric
failed to rebut.

I n short, the Board has not met its burden to establish
that the prior agency adjudication involved and actually
decided the issue of whether Calvert acted with malice

, which is fatal to its preclusion argument. And because the
Board does not challenge the bankruptcy judge ’s factual finding that Calvert did not act with malice , its claim that theNo. 17

- 1895 9

backpay debt is exempt from discharge under § 523(a)(6) necessarily fails. Accordingly, t he judgment below is

A FFIRMED

.10 No. 17

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B UCKLO , District Judge , dissenting. I respectfully dissent. The question before the bankruptcy court was whether Calvert acted maliciously, i.e. “without just cause or excuse,” when he laid off nearly all of his rank

- and

- file workforce in
violation of the National Labor Relations Act. First Weber Grp., Inc. v. Horsfall , 738 F.3d 767, 774 (7th Cir. 2013). In adjudicating the underlying 29 U.S.C. § 158(a)(3) discrimination claim in the NLRB’s favor, the ALJ conducted an analysis that “substantially mirrored” the malice inquiry under
11 U.S.C. § 523(a)(6), id. at 775, and determined that Calvert’s conduct was unsupported by any lawful purpose. That
fi nding should have been given preclusive effect in the bankruptcy court.
My colleagues rule against the NLRB on the ground that its preclusion analysis is overly general. In their view, the Board “has not grounded its [preclusion] argument in specific findi ngs” or established that “the issue of Calvert’s
intent was actually decided in the agency proceeding.” But theNLRB points to several findings that the ALJ made regarding Calvert’s intent. First, the Board cites the ALJ’s determination that Calvert laid o ff his employees “ because of theirunion activities, to wit, to avoid having further NLRB proceedings and the risk that the Union might ultimately be
certified as the collective

- bargaining representative[] of [his] employees.” (Emphasis added.) The phrase “because of” tells us that the ALJ actually decided the issue of Calvert’s intent. Moreover, the ALJ’s determination that Calvert was motivated by a discriminatory purpose was essential to the ALJ’s ultimate holding. See SCA Tissue N. Am. LLC v.
N.L.R.B.

, 371 F.3d 983, 988 (7th Cir. 2004) (proof of discrimination requires evidence that “employer acted because ofNo. 17

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anti

- union animus”); Bloedorn v. Francisco Foods, Inc.

, 276 F.3d 270, 290 (7th Cir. 2001) (employer’s unlawful discriminatory motive is the “critic al question” in a § 158(a)(3) proceeding); Van Vlerah Mech., Inc. v. N.L.R.B. , 130 F.3d 1258, 1263 (7th Cir. 1997) (“In evaluating [§ 158(a)(3) allegations], the Board must determine the employer's motivation in taking a particular action.”).

Second, the Board identifies the ALJ’s determination that Calvert did not establish a “legitimate business reason” for his conduct. Notwithstanding the ALJ’s finding that Calvertacted with discriminatory intent, Calvert could have avoided liability under § 158(a)(3) by showing that he had a legitimate business reason for his actions. See N.L.R.B. v. Dorothy Shamrock Coal Co. , 833 F.2d 1263, 1266 (7th Cir. 1987) (“The employer

... may avoid liability by showing that hisactions would have been the same ‘regardless of his forbidden motive.’”). Calvert attempted to make such a showing, offering three different explanations for the layoffs, but the ALJ rejected all of them. Indeed, the ALJ found Calvert’s“shifting” justifications to be “wholly unreliable” and concluded that they “utterly failed to rebut” the Board’s evidence of “antiunion animus.” The upshot of the ALJ’s
burden

- shifting analysis was a conclusive finding on the
issue of Calvert’s intent: specifically, that Calvert laid off hisworkforce based on “antiunion animus” rather than “legitimate business considerations.”
The majority’s contrary view nods to Calvert’s argument that because § 158(a)(3) does not require the NLRB t o prove affirmatively that Calvert lacked a legitimate business reason for his conduct, the ALJ did not conclusively decide
the issue of Calvert’s intent. See supra at 8 (“ T he ALJ found12 No. 17

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only that the NLRB established a prima facie case under § 158(a)(3) th at E.L.C. Electric failed to rebut.”). That interpretation fails to appreciate that in the labor proceedings, the NLRB at all times carried the burden of establishing that Calvert discharged his employees “based in whole or in part
on antiunion animus.” N. L.R.B. v. Transp. Mgmt. Corp.

, 462 U.S. 393, 401 (1983), abrogated in non

- relevant part by Dir., Office of Workers’ Comp. Programs, Dept. of Labor v. Greenwich
Collieries , 512 U.S. 267, 276

– 78 (1994)). Moreover, it overlooks the text of the ALJ’s decision, which, in a paragraph thatopens, “[s]pecifically as to why [Calvert] made the decision

... ” the ALJ concluded that Calvert’s decision to lay off his workers “was motivated by

... antiunion animus.”
To establish issue preclusion, the NLRB needed to show
that the ALJ’s analysis of Calvert’s intent “substantially mirrored” the standard for malice under § 523(a)(6). Horsfall

, 738 F.3d at 775. In fact, the Board had a tougher row to hoe to prevail in the labor proceedings than it did before the bankruptcy court, s ince it had not only to prove Calvert’simpermissible motive, but also to withstand Calvert’s affirmative defense of a legitimate business reason. Regardless of who bore the burden on which issue, the universe of evidence presented to the ALJ had to persua de him that a prohibited reason

— not a legitimate one

— motivated
Calvert’s actions. And as the text of his decision makes clear, persuade him it did.
The majority faults the Board for failing to perform a more exacting exercise to “map[] the ALJ’s findings onto the elements of § 523(a)(6).” In my view, no heavy lifting was required to illustrate how the ALJ’s twin findings that Calvert acted with a prohibited motive and without a legiti-No. 17

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mate business reason satisfy the malice inquiry under § 523(a)(6). Malice is established by proof that a debtor acted “without just cause or excuse.” Horsfall , 738 F.3d at 774. The Board proved to the ALJ, notwithstanding Calvert’s contrary testimony, that Calvert acted with antiunion animus

— a prohibited motive. It is not clear to me what additional analytical dots the Board needed to connect to show that Calvert’s actions lacked just cause or excuse.
Bankruptcy courts in this circuit and elsewhere have held that an agency or state court finding that the debtor acted
with discr iminatory intent and without just cause satisfies the malice standard under § 523(a)(6). In re Fogerty , 204 B.R. 956, 962 (Bankr. N.D. Ill. 1996) (NLRB’s conclusion that the debtor wrongfully terminated two employees in violation of § 158(a)(3) decided the issue of malice because it was based on the determination that the debtor lacked just cause todischarge the employees and terminated them solely because of their protected activities); In re Goldberg , 487 B.R. 112, 129 (Bankr. E.D.N.Y. 2013) (applying co llateral estoppel to state court’s factual findings of intentional discrimination, reasoning that declining to do so would “sanction the viewthat there exists some ‘just cause or excuse’ for discrimination

... where the state court has already found otherwi se”).
When the ALJ held that Calvert discriminated against his employees in violation of § 158(a)(3) and held him liable for that violation, he resolved the question of whether Calvert had just cause for his actions. Instead of giving the ALJ’s findings ab out Calvert’s intent the preclusive effect they were due, the bankruptcy court offered Calvert another bite at the apple, affording him an opportunity to relitigate his purported justifications for violating federal law. But the14 No. 17

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ALJ’s analysis left no room for finding Calvert’s conduct justified. Accordingly, I would hold that the bankruptcy court was precluded from reopening an inquiry into
Calvert’s intent.