Opinion ID: 2570739
Heading Depth: 4
Heading Rank: 2

Heading: The preclusive effect of the prior administrative and judicial proceedings.

Text: Judge Greene dismissed Sengupta's § 1983 claims challenging his termination on the basis of the preclusive effect of the Parrish findings and Judge Hodges's unappealed decision. Sengupta challenges numerous aspects of this decision.
Sengupta claims that summary judgment was improper because Judge Greene erroneously accorded collateral estoppel effect to the Parrish findings. Collateral estoppel, or issue preclusion, bars the relitigation of an issue where: (1) the party against whom the preclusion is employed was a party to or in privity with a party to the first action; (2) the issue precluded from relitigation is identical to the issue decided in the first action; (3) the issue was resolved in the first action by a final judgment on the merits; and (4) the determination of the issue was essential to the final judgment. [27] If these criteria are met, collateral estoppel would properly apply to the issues litigated before and decided by Parrish, Rice, and Judge Hodges. [28] Sengupta raised objections to the application of collateral estoppel to the Parrish findings before both Rice and Judge Hodges. Rice rejected these objections and accorded collateral estoppel effect to the Parrish findings. Judge Hodges affirmed Rice's application of collateral estoppel in Sengupta's appeal of his termination. Because Sengupta failed to timely appeal Judge Hodges's decision, Sengupta may not now object to the application of collateral estoppel to the Parrish findings in the termination context of the present case. [29] Furthermore, collateral estoppel precludes Sengupta's § 1983 claims premised upon a lack of due process before Hearing Officer Rice. Judge Hodges determined that Sengupta had been afforded due process in his pre-termination proceedings before Rice. Because the prerequisites for collateral estoppel are present, this unappealed finding precludes Sengupta from relitigating the due process issue with respect to the Rice proceedings. [30]
Sengupta also challenges the res judicata effect of Judge Hodges's decision. The doctrine of res judicata provides that a judgment in a prior action will bar a subsequent action if the prior judgment was (1) a final judgment on the merits, (2) from a court of competent jurisdiction, (3) in a dispute between the same parties (or their privies) about the same cause of action. [31] It is not disputed that Judge Hodges's decision was a final judgment on the merits, from a court of competent jurisdiction, in a dispute between the same parties. Hence, the critical question is whether the current and the earlier dispute are about the same cause of action. We have not previously decided what constitutes a cause of action when a defendant who could, but does not, interpose a counterclaim in one proceeding subsequently seeks to maintain a separate action on that claim. [32] Had the plaintiff failed to bring a claim in the original proceeding, any subsequent claim arising from the same transaction would clearly be barred by res judicata. [33] To apply the same rule to a defendant's foregone counterclaim, however, would require the defendant to assert his claim in the forum or proceeding chosen by the plaintiff... [rather than being] allowed to bring suit at a time and place of his own selection. [34] To protect the defendant's right to choose his or her own forum for suit, the Restatement (Second) of Judgments § 22(2) provides that a defendant will only be barred from bringing a foregone counterclaim as a claim in a subsequent proceeding if: (a) The counterclaim is required to be interposed by a compulsory counterclaim statute or rule of court, or (b) The relationship between the counterclaim and the plaintiff's claim is such that successful prosecution of the second action would nullify the initial judgment or would impair rights established in the initial action. [35] Under ordinary circumstances, Restatement § 22(2) adds little to the preclusive effect of Civil Rule 13(a)'s compulsory counterclaim provision. [36] It was not the Civil Rules that governed Sengupta's administrative hearing, however, but Board of Regents' Policy 04.08.08. That policy afforded [the defendant employee] an opportunity to present testimony and other evidence as to why the action should not be taken, but did not require the defendant to raise any counterclaims. Sengupta's appeal to superior court, similarly, was governed not by the Civil Rules, but by the Rules of Appellate Procedure. [37] Absent the grant of a trial de novo, the Appellate Rules do not adopt Civil Rule 13(a)'s compulsory counterclaim provision. [38] In the absence of a compulsory counterclaim statute or rule, Sengupta's attempt to assert his foregone counterclaim in a new action will only be barred if [t]he relationship between the counterclaim and the [original] plaintiff's claim is such that successful prosecution of the second action would nullify the initial judgment or would impair rights established in the initial action. [39] In Lee v. City of Peoria, [40] the Seventh Circuit applied Restatement § 22(2)(b)'s common law compulsory counterclaim provision to bar the claims of a plaintiff in a position much like Sengupta's. Lee, a police officer, was discharged by the Board of Fire and Police Commissioners for giving false testimony. [41] In defending himself before the Board, Lee argued only that his testimony had been true. [42] In his appeal of the Board's decision to state court, however, Lee claimed that his discharge was the result of racial discrimination. [43] After his appeal was denied, Lee filed a claim of racial discrimination in federal court. [44] The Seventh Circuit noted that Lee's allegation of racial discrimination, if established, would have been a complete defense in his termination hearing. [45] Relying on Restatement § 22(2)(b) as an alternative basis for its holding, the Seventh Circuit held that because Lee's claim of racial discrimination, if successful, would directly undermine both the right of the city to discharge him and the validity of the state court's decision, res judicata would bar Lee from subsequently raising that claim in federal court even if Lee had not presented a counterclaim alleging racial discrimination in the original action. [46] Because the factual basis of Sengupta's First Amendment claims is closely tied to the factual basis of his termination hearing, Sengupta probably would have been permitted to present his First Amendment claims as counterclaims in the pre-termination hearing, just as he was permitted to present his retaliation grievance in that proceeding. The University's decision to terminate Sengupta was based, in part, upon his intentionally untruthful conduct: (1) in the writing of a letter concerning the licensing of Professors of Mining Engineering; (2) in reporting Dr. Speck had `secretly removed' a purchase order from the purchasing files; and (3) in testifying concerning a `Las Vegas video.' In the current action, Sengupta now claims that the University violated his First Amendment rights by retaliating against him for making these statements, and that his termination was illegitimately motivated by the University's opposition to his protected speech on these issues. If Sengupta were able to establish that the First Amendment barred the University from relying upon the disputed statements in the pre-termination hearing, his successful prosecution of that claim would impair the University's right to have terminated him on the basis of those statements. Sengupta's claim is thus barred by Restatement § 22(2)(b), because the successful prosecution of [his claim] . . . would impair rights established in the initial action. Sengupta's First Amendment claims would also be barred even if he had only been permitted to bring them as defenses, rather than counterclaims, in the original action. When a defendant fails to interpose a defense to a plaintiff's original action, Restatement § 22(2)(b) bars the defendant from relying on the facts of that defense to bring a separate action against the original plaintiff if [t]he relationship between the [subsequent claim] and the plaintiff's claim is such that successful prosecution of the second action would nullify the initial judgment or would impair rights established in the initial action. [47] As the First Circuit has suggested, Restatement § 22(2)(b)'s application to both foregone counterclaims and foregone defenses prevents parties from avoiding the preclusive effect of a foregone counterclaim by denominating it a defense. [48] Even if the defendant in the original proceeding is not permitted to bring a counterclaim, res judicata will still bar the subsequent assertion of that claim if it could have been raised by way of defense in the original proceeding and could have provided the same relief if raised. [49] Assuming certain remedies were not immediately available to Sengupta in the administrative proceeding, success in proving a constitutional violation at the pre-termination hearing would have allowed him to seek those remedies in a subsequent § 1983 suit. [50] Therefore, if Sengupta had been barred from presenting his First Amendment claim as a counterclaim, his subsequent claim would still be barred because he could have presented it as a defense. [51] Sengupta's claim arises out of the same cause of action as his foregone counterclaim or defense. But, [i]t is a well-established principle that no decision may constitute res judicata if the party against whom it is asserted has not had a full and fair opportunity to litigate his claims. [52] We must therefore determine whether Sengupta had a full and fair opportunity to litigate his counterclaim, or defense, in the earlier proceeding. In Eilrich v. Remas, the Ninth Circuit held that the plaintiff clearly had a full and fair opportunity to litigate his First Amendment claim in an unreviewed administrative proceeding where Eilrich was afforded a 14-day proceeding resembling a trial, documented by an eleven-volume transcript.... [B]oth sides were entitled to call, examine and cross-examine witnesses under oath or affirmation. At the hearing, both parties were represented by counsel, twenty-one sworn witnesses testified, subpoenas were issued, and both parties presented oral argument and written memoranda. Both sides briefed the first amendment issue, the hearing officer considered these arguments and applied the appropriate legal standards to the facts surrounding Eilrich's statements and discharge. [53] We followed the Ninth Circuit's reasoning in Eilrich in Diedrich v. City of Ketchikan. [54] Moreover, we have held that appellate review provides a plaintiff with an even fuller and fairer opportunity to litigate his constitutional claims. [55] Because Hearing Officer Rice gave preclusive effect to the factual findings of the Parrish proceeding, whether res judicata bars Sengupta's claim arguably depends upon whether Sengupta was given a full and fair opportunity to litigate his claims at both administrative hearings. At the time the Parrish proceeding began, the University's grievance procedures were still governed by Alaska's Administrative Procedure Act (APA). [56] Sengupta was thus afforded the right to introduce exhibits, rebut the adverse evidence, and subpoena, call, examine, cross-examine, and impeach witnesses. [57] By Sengupta's own admission, the Parrish hearing lasted almost continuously over a two month period, consisting of about five thousand pages of transcript, several hundred exhibits, [and] about twenty five witnesses .... Sengupta also had the right to appeal the rejection of his grievance to superior court, although he did not exercise that right. The Rice proceeding was governed not by the APA, but rather by Board of Regents' Policy 04.08.08. That policy gave Sengupta the right to present testimony and other evidence as to why [he should not be terminated,] and to be represented by legal counsel or another advisor of his choice. At the pre-termination hearing, moreover, Hearing Officer Rice told Sengupta that he could present whatever you want to  evidence or argument  at this time. Despite the opportunity to do so, however, Sengupta declined to present any evidence or make any substantive arguments. Sengupta did, however, exercise his right to appeal his termination to the superior court. In both the Parrish and Rice proceedings, then, Sengupta was afforded an opportunity to be heard similar to the full and fair opportunity approved of in Eilrich. An additional opportunity to be heard was provided by Sengupta's right of appeal to the superior court, a right he exercised following his termination. Unlike the plaintiff in Eilrich, admittedly, Sengupta's First Amendment claims were never actually litigated, whether in the administrative hearings or on appeal. Application of res judicata depends only upon the plaintiff having had a full and fair opportunity  to litigate his claims, however, and not upon his actually having done so. Because Sengupta failed to take advantage of his full and fair opportunity to assert his First Amendment claims in the administrative hearings, he is barred by res judicata from asserting them now. We need not consider whether res judicata barred Sengupta's § 1983 equal protection claims. In reviewing a grant of summary judgment, this court may affirm the superior court on any basis appearing in the record. [58] To raise a genuine issue of fact for a § 1983 equal protection claim, a plaintiff must submit some evidence of discriminatory motive or intent. [59] A plaintiff bears a similar burden for a § 1981 discrimination claim. [60] As discussed infra, Sengupta had a full opportunity to submit evidence of discriminatory motive in conjunction with his § 1981 mixed motive discrimination claim but failed to produce any such evidence. Because Sengupta had ample opportunity but failed to submit evidence of discriminatory motive that would raise a genuine issue of fact regarding his § 1983 equal protection claim, we affirm the dismissal of this claim. In summary, we hold that the applicable statute of limitations bars Sengupta's § 1983 claims challenging the alleged salary disparity, the sick leave denial, and the procedural aspects of the Parrish hearing. Judge Hodges's unappealed decision precludes under collateral estoppel principles Sengupta's § 1983 due process claims with respect to the Rice proceedings, as well as his challenge to the application of preclusive effect to the Parrish findings. In addition, Judge Hodges's decision bars on res judicata grounds the remaining § 1983 claims premised upon free speech violations. Finally, in the absence of any genuine issue of fact, dismissal of the § 1983 equal protection claims was proper. Thus we affirm the dismissal of each § 1983 claim.