Opinion ID: 790580
Heading Depth: 2
Heading Rank: 1

Heading: Preclusive Effect of the Section 3020-a Hearing

Text: 14 Burkybile contends that the Section 3020-a hearing was the equivalent of an arbitration, and that arbitrations are not given preclusive effect. We note that the preclusive effect of arbitrations is a difficult and complex issue. Ultimately, we do not reach that issue because we disagree that the arbitration-like features of the Section 3020-a hearing negate the hearing's status as an administrative adjudication. 15 Under the Full Faith and Credit Act, 28 U.S.C. § 1738, federal courts must give state-court judgments the same preclusive effect as they would receive in courts of the same state. Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 81, 104 S.Ct. 892, 79 L.Ed.2d 56 (1984). However, neither arbitrations nor administrative adjudications are state-court judgments within the coverage of Section 1738. See University of Tenn. v. Elliott, 478 U.S. 788, 796, 106 S.Ct. 3220, 92 L.Ed.2d 635 (1986); McDonald v. City of W. Branch, 466 U.S. 284, 287-88, 104 S.Ct. 1799, 80 L.Ed.2d 302 (1984). Nonetheless, in federal actions based on 42 U.S.C. § 1983, state administrative fact-finding is given the same preclusive effect as it would receive in courts of the same state. Elliott, 478 U.S. at 799, 106 S.Ct. 3220. New York courts give quasi-judicial administrative fact-finding preclusive effect where there has been a full and fair opportunity to litigate. Ryan v. New York Tel. Co., 62 N.Y.2d 494, 478 N.Y.S.2d 823, 825-27, 467 N.E.2d 487 (1984); see also, Doe v. Pfrommer, 148 F.3d 73, 79-80 (2d Cir.1998); Zanghi v. Incorporated Vill. of Old Brookville, 752 F.2d 42, 46 (2d Cir.1985). 16 Burkybile contends that McDonald establishes that arbitrations are not given such preclusive effect. This contention, however, overlooks significant complexity. McDonald held that a labor arbitration would not preclude a subsequent Section 1983 action based on the same facts, in accordance with a line of cases beginning with Alexander v. Gardner-Denver Co., 415 U.S. 36, 94 S.Ct. 1011, 39 L.Ed.2d 147 (1974). 2 McDonald, 466 U.S. at 292, 104 S.Ct. 1799. However, the McDonald line of cases has been called into question by a more recent line of Supreme Court cases that permit arbitration agreements to foreclose access to federal courts. See, e.g., Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 35, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991). This holding implicitly give arbitrations preclusive effect, and is thus closely intertwined with but not identical to the preclusion issue. We have reconciled McDonald and Gilmer as to the question of access to federal courts, but not as to preclusion. See Fayer v. Town of Middlebury, 258 F.3d 117, 121-22 (2d Cir.2001); Rogers v. New York Univ., 220 F.3d 73, 75 (2d Cir.2000). In other instances, we have given arbitrations preclusive effect without reference to McDonald, Gilmer, Rogers, or any related precedents. Boguslavsky v. Kaplan, 159 F.3d 715, 720 (2d Cir.1998); Benjamin v. Traffic Executive Ass'n E. R.R., 869 F.2d 107, 114 (2d Cir.1989). 17 However, we need not decide here whether arbitrations have preclusive effect. Instead, we hold that because the Section 3020-a hearing was an administrative adjudication, we must give its findings preclusive effect. Burkybile points to several similarities between the Section 3020-a hearing and an arbitration: 1) the hearing officer is drawn from a list of labor arbitrators provided by the American Arbitration Association, N.Y. Educ. Law § 3020-a(3); 2) the hearing officer is paid a fee customary for an arbitrator, id. at (b)(i); 3) the hearing is reviewed under the arbitration-oriented provisions of Article 75, rather than the agency-oriented provisions of Article 78, of the New York Civil Practice Law and Rules, N.Y. Educ. Law § 3020-a(5); 4) the subject matter of the hearing covers labor disputes normally handled by arbitration and serves as a substitute for labor arbitration, N.Y. Educ. Law § 3020; and 5) the hearing officer used arbitral standards to judge the conflicting medical evidence. 18 On the other hand, several factors demonstrate the administrative nature of the hearing: 1) the hearing was created by statute rather than private agreement, N.Y. Educ. Law § 3020-a; 2) the hearing is a disciplinary procedure that adjudicates charges against an employee rather than rights set by a private agreement; 3) the hearing procedures were set in part by statute, id. at § 3020-a(3), and in part by the state Commissioner of Education, id. at § 3020-a(3)(c)(i); and 4) the hearing was administered and paid for by the state Department of Education, id. at § 3020-a(3)(b)(1). 19 We hold that these facts, taken together, establish that the Section 3020-a hearing is an administrative adjudication that must be given preclusive effect. The hearing is undoubtedly very similar in form and procedure to an arbitration. However, the important fact is not that New York has seen fit to adopt the proven procedures and methodologies of arbitration for the Section 3020-a hearing, but rather that these procedures are administered by a state agency. See Elliott, 478 U.S. at 799, 106 S.Ct. 3220 (giving preclusive effect to actions of a state agency acting in a judicial capacity (internal quotation marks omitted)). So long as the parties have an adequate opportunity to litigate, the precise nature of the procedures that an agency uses to reach a determination does not affect the basic policies of finality and comity recognized by Elliott. See 478 U.S. at 798-99, 106 S.Ct. 3220. In that case, the Supreme Court saw no reason to conclude that the Full Faith and Credit Act was intended to foreclose the adaptation of traditional principles of preclusion to such subsequent developments as the burgeoning use of administrative adjudication. Id. at 797, 106 S.Ct. 3220. Similarly, we see no reason to foreclose such adaptation simply because New York has chosen to conduct that adjudication using arbitral procedures. 20 Accordingly, we apply the Elliott test, which states that when a state agency acting in a judicial capacity resolves disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate, federal courts must give the agency's factfinding the same preclusive effect to which it would be entitled in the state's courts. Id. at 799, 106 S.Ct. 3220 (internal quotation, citation, and indication of alteration from original omitted). As noted above, New York courts will give administrative determinations preclusive effect if made in a quasi-judicial capacity and with a full and fair opportunity to litigate the issue. Ryan, 478 N.Y.S.2d at 825-27, 467 N.E.2d 487. These tests are met here. Section 3020-a clearly authorizes a hearing officer to adjudicate questions of fact, charges, and penalties. N.Y. Educ. Law § 3020-a(4). Burkybile's hearing properly adjudicated multiple charges of misconduct and determined that there was just cause for termination. Burkybile also had an adequate, full, and fair opportunity to litigate the question of cause for her termination. Section 3020-a lays out extensive litigation procedures for hearings, including motion practice, bills of particulars, mandatory disclosure, discovery, subpoena power, right to counsel, cross-examination, testimony under oath, and a full record. N.Y. Educ. Law § 3020-a(3)(c). This specific hearing occupied a total of fourteen days over a three-month period, and included the testimony of twenty witnesses, including five expert medical witnesses. The decision itself runs to over 150 pages and analyzes the evidence and arguments in extensive detail. 21 We have some concern over the hearing officer's use of an arbitral standard to judge the conflicting medical evidence that gave greater deference to the Board's experts than to Burkybile's. However, in this case, the hearing officer noted that such deference would be accorded only after Burkybile had failed to overcome the views of the Board's experts. In applying this standard, the hearing officer conducted a careful analysis of expert witness bias, credibility, credentials, and consistency. We conclude that because the hearing officer provided thorough and balanced reasoning in this case, the use of the inappropriate arbitral standard did not deny Burkybile an adequate, full, and fair opportunity to litigate. We therefore hold that the facts found at Burkybile's Section 3020-a hearing must be accorded preclusive effect. 22