Opinion ID: 799901
Heading Depth: 4
Heading Rank: 2

Heading: Herrera's Race-Discrimination Claim

Text: State administrative decisions are given preclusive effect with respect to issues later raised in a federal-court lawsuit `[w]hen an administrative agency is acting in a judicial capacity and resolves disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate.' Univ. of Tenn. v. Elliott, 478 U.S. 788, 797-98, 106 S.Ct. 3220, 92 L.Ed.2d 635 (1986) (quoting United States v. Utah Constr. & Mining Co., 384 U.S. 394, 421-22, 86 S.Ct. 1545, 16 L.Ed.2d 642 (1966)). In such circumstances, 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; see also Cockrel v. Shelby Cnty. Sch. Dist., 270 F.3d 1036, 1046 (6th Cir.2001) ([F]ederal courts must give the factual findings of a state agency that is acting in a judicial capacity preclusive effect if such findings would have preclusive effect in the State's courts.). Administrative preclusion is favored as a matter of general policy, but its suitability may vary according to ... the relative adequacy of agency procedures. Astoria Fed. Sav. & Loan Ass'n v. Solimino, 501 U.S. 104, 109-10, 111 S.Ct. 2166, 115 L.Ed.2d 96 (1991). Herrera argues both that the Fayette HRC was not acting in a judicial capacity and that he did not have an adequate opportunity to litigate his discrimination claim. At the outset, we note that [i]t is difficult to state a general formula to capture the essential elements of adjudicatory procedure that may entitle administrative decisions to preclusion effects in subsequent judicial proceedings. 18B WRIGHT & MILLER, FEDERAL PRACTICE AND PROCEDURE § 4475, at 483 (2d ed. 2002). Likewise, a full and fair opportunity to litigate does not require any single model of procedural fairness, let alone a particular form of procedure. Kremer v. Chem. Constr. Corp., 456 U.S. 461, 483, 102 S.Ct. 1883, 72 L.Ed.2d 262 (1982). After examining the particular circumstances of this case, we agree with Churchill McGee that the requirements of Elliott have been met. We have held that [a]n administrative board acts in a judicial capacity when it hears evidence, gives the parties an opportunity to brief and argue their versions of the facts, and the parties are given an opportunity to seek court review of any adverse findings. Nelson v. Jefferson County, 863 F.2d 18, 19 (6th Cir.1988). As described in more detail below, Herrera had the opportunity to present evidence and could seek judicial review of the administrative decision. Although the Fayette HRC does not appear to have requested formal briefing, Herrera had the opportunity to present his charges against Churchill McGee and to communicate with the HRC investigator throughout the process. We also take some guidance on this issue from Kremer, in which the Supreme Court considered a Title VII employment-discrimination suit brought after the plaintiff had sought relief with the New York State Division of Human Rights (NYHRD). 456 U.S. at 463-64, 102 S.Ct. 1883. Without conducting a hearing, the NYHRD issued a no-probable-cause finding, which was affirmed first in an administrative appeal and again by an intermediate appellate court. Id. at 464, 102 S.Ct. 1883. Kremer could have obtainedbut did not seekreview by the New York Court of Appeals. Id. Considering the NYHRD procedures for discrimination claims, the Supreme Court rejected Kremer's argument that the New York administrative and judicial proceedings in this case were so deficient that they are not entitled to preclusive effect in federal courts. Id. at 467, 102 S.Ct. 1883. In New York: Before th[e] determination of probable cause is made, the claimant is entitled to a full opportunity to present on the record, though informally, his charges against his employer or other respondent, including the right to submit all exhibits which he wishes to present and testimony of witnesses in addition to his own testimony. The complainant also is entitled to an opportunity to rebut evidence submitted by or obtained from the respondent. He may have an attorney assist him and may ask the division to issue subpoenas. Id. at 483, 102 S.Ct. 1883 (internal quotation marks and citations omitted). In the end, the Court had no hesitation in concluding that this panoply of procedures, complemented by administrative as well as judicial review provided the complainant with a full and fair opportunity to litigate his discrimination claims. Id. at 484, 102 S.Ct. 1883. [7] In Kentucky, a complainant presents his or her charges against the employer to the Fayette HRC in [a] short, plain and concise statement. R.27-11 at 5 (Fayette HRC Rules, § 2.010). Next, the Respondent shall file with the Commission a verified statement of position or evidence with respect to each and every allegation of the complaint. Id. at 6 ( Id. § 2.020). The HRC investigator is then required to make a prompt and thorough investigation of the allegations of the Complaint. Id. at 7 ( Id. § 2.030). A Fayette HRC investigator has the authority to require all parties to attend a Fact-Finding Conference, for the purposes of: 1. Identifying the issues in dispute; 2. Ascertaining the positions of the parties; 3. Resolving those issues that can be resolved; 4. Obtaining evidence; and 5. Determining the likelihood of a predetermination settlement. Id. Further, the investigator can request access to premises, records, and documents relevant to investigation of the Complaint, and, if that request is denied, can obtain a subpoena. Id. The investigator can also interview witnesses outside of a formal Fact-Finding Conference. If the HRC determines after an investigation that no probable cause exists to support the claim of discrimination, it will dismiss the complaint. Beyond the investigation and probable-cause determination, HRC procedures allow for an unsuccessful complainant to request reconsideration by the HRC's Executive Director and to seek review by the Kentucky courts. See id. at 12-13 (Fayette HRC Rules, §§ 2.050(I), 2.060); KY.REV.STAT. ANN. § 344.240. Upon reconsideration by the Executive Director, the complainant can introduce new evidence. R.27-11 at 12-13 (Fayette HRC Rules, § 2.050(I)). Based on the available procedures, the HRC rules appear to have provided Herrera with a similar ability to present his claims and any supporting evidence as Kremer had in New York. As in Kremer, Herrera had an opportunity to present on the record, though informally, his charges against his employer. 456 U.S. at 483, 102 S.Ct. 1883. Herrera could submit evidence in support of his claim and, because the Fayette HRC rules do not contain a deadline for the submission of evidence, seemingly could have responded to any evidence submitted by or obtained from Churchill McGee with additional evidence of his own. The Fayette HRC can obtain subpoenas, though it is not clear whether Herrera could have asked the investigator to do so. Herrera could seek assistance from an attorney. Administrative reconsideration and judicial review are available. Indeed, in Herrera's case, the Fayette HRC investigator informed him multiple times that he could submit evidence in support of his claims. The investigator also interviewed one of Herrera's former co-workers at Herrera's request. Insofar as Herrera complains about not being able to present additional evidence to the investigator (even though the investigator's July 21, 2008, letter stated that she would accept more evidence), Herrera could have argued this point on reconsideration or before a court on appellate review of the HRC's decision. Both the investigator and the Executive Director advised Herrera that he might wish to consult an attorney. Herrera makes much of the fact that the Fayette HRC did not hold a hearing before dismissing his complaint for lack of probable cause. Although many of the administrative-preclusion cases Herrera cites involved a formal hearing before the agency, we have never held that such a hearing is a precondition to administrative preclusion. Under the Fayette HRC rules, the agency will hold a hearing only after it has determined that probable cause supports the complainant's claim of discrimination. R.27-11 at 18 (Fayette HRC Rules, § 2.100). If administrative preclusion applied only to lawsuits filed by those individuals who had a hearing before the Fayette HRC, then some individuals who brought claims to the HRC would be precluded from filing a subsequent lawsuit in federal court, but others would not, depending upon the outcome of the administrative proceeding. Moreover, Herrera's position would lead to the dubious result that a complainant with a weaker case (i.e., whose claim was dismissed without a hearing for lack of probable cause) would be in a more favorable position with respect to preclusion than a complainant with a stronger case (i.e., whose claim was supported by probable cause and thus merited a hearing). In addition, the Fayette HRC's purpose is to resolve discrimination claims, the same purpose served by a § 1981 suit in federal court. We have declined to apply administrative preclusion when the agency proceedings served a more limited purpose than the subsequent lawsuit. In Hicks v. Floyd County Board of Education, for example, we held that a decision by a state unemployment insurance commission that the employer had unfairly forced the employee to leave did not bar a subsequent sex-discrimination lawsuit under § 1983. 99 Fed.Appx. 603, 604-05 (6th Cir.2004) (unpublished opinion). Affording preclusive effect to such determinations would undermine the purposes of unemployment-compensation hearings; the heightened stakes could turn[] an unemployment hearing into a forum for thorough exploration of [discrimination] issues and thus defeat the purpose of providing fast, cheap resolution of unemployment claims. Id. at 605 (citing Berrier v. Bizer, 57 S.W.3d 271, 281 (Ky.2001)). No such risk exists in the Fayette HRC context, because both parties already have an incentive to pursue the central issueemployment discriminationvigorously. Although it is somewhat of a close call, we are ultimately convinced that the Fayette HRC was acting in a judicial capacity and that the parties have had an adequate opportunity to litigate the issues contained in Herrera's § 1981 race-discrimination claim. Elliott, 478 U.S. at 797-98, 106 S.Ct. 3220 (quoting Utah Constr. & Mining Co., 384 U.S. at 421-22, 86 S.Ct. 1545). The fact that the HRC's Order of Dismissal for lack of probable cause received neither administrative reconsideration nor judicial review does not change this conclusion, because both options were available. Herrera's fail[ure] to avail himself of the full procedures provided by state law does not constitute a sign of their inadequacy. Kremer, 456 U.S. at 485, 102 S.Ct. 1883; see also Chapman v. Farris, No. 2002-CA000573-MR, 2004 WL 1367117, at  (Ky.Ct.App. June 18, 2004) (That [plaintiff] did not utilize the opportunities afforded him under KRS Chapter 13B in the administrative proceedings... cannot be used in his favor to relitigate the same issue in the circuit court.). Finally, the Fayette HRC's decision would receive preclusive effect in Kentucky courts. As detailed above, a final determination from the Fayette HRC would bar a subsequent KCRA lawsuit on election-of-remedies grounds. In addition, Kentucky courts would give preclusive effect to the agency's decision on traditional issue-preclusion grounds. Kentucky courts preclude litigation of an issue in a subsequent proceeding if that same issue was actually litigated, actually decided, and necessary to the judgment in a prior proceeding. Yeoman v. Ky. Health Policy Bd., 983 S.W.2d 459, 465 (Ky.1998). As in federal court, [d]ecisions of administrative agencies acting in a judicial capacity are entitled to the same res judicata effect as judgments of a court. Ky. Bar Ass'n v. Harris, 269 S.W.3d 414, 418 (Ky.2008) (citing Godbey v. Univ. Hosp. of the Albert B. Chandler Med. Ctr., Inc., 975 S.W.2d 104, 105 (Ky.Ct.App.1998)). Herrera's § 1981 race-discrimination claim is based on the same premise as his claim before the Fayette HRCthat he was treated differently than similarly situated employees of a different race and national origin. The issue of disparate treatment was actually litigated and actually decided by the HRC and was necessary to the HRC's determination that no probable cause existed to support Herrera's KCRA claim. The investigator found that other employees [at Churchill McGee] have experienced the same treatment regardless of their race or national origin. R.10-3 at 1 (July 21, 2008 Letter). Accordingly, Herrera is precluded from arguing in his § 1981 suit the same issue, i.e., that he was treated less favorably in the terms and conditions of employment than similarly situated employees outside of his protected class. [8] Because the administrative decision here would receive preclusive effect in Kentucky courts, the final requirement of Elliott is satisfied. The district court was therefore correct in holding that the doctrine of administrative preclusion bars Herrera's § 1981 race-discrimination claim in Count One, and we affirm its grant of summary judgment as to that claim.