Opinion ID: 344782
Heading Depth: 2
Heading Rank: 1

Heading: D.2d at 312, 307 N.Y.S.2d at 693. The appellate court went on to state:

Text: It must be borne in mind that the Division, through its Director, received information concerning the complaint by holding the conference and by investigation, but there has been no hearing, and complainant has had no opportunity to present his case in a formal manner. For the Division to dismiss his complaint under such circumstances it must appear virtually that as a matter of law the complaint lacks merit. The record, such as it is, will not permit such a conclusion. A question of fact is presented requiring a hearing, and the Appeal Board was correct in determining that the action of the Division through its Regional Director was arbitrary and capricious (see Matter of Koster v. Holz, 3 N.Y.2d 639, 171 N.Y.S.2d 65, 148 N.E.2d 287; 1 N.Y.Jur., Administrative Law, §§ 181-191). Id. at 313, 307 N.Y.S.2d at 694-95. 9 The appellant also argues that the decision of the State Division received a rubber stamp affirmance from the Appeal Board and the Appellate Division. She contends that the Appeal Board, for example, cannot reverse a State Division order unless it is arbitrary and capricious, and that the scope of review in the Appellate Division is scarcely any broader. See Mize v. State Division of Human Rights, 33 N.Y.2d 53, 57, 349 N.Y.S.2d 364, 367-68, 304 N.E.2d 231 (1973) This argument misses the mark in several respects. In the first place, the scope of review in the Appellate Division under § 298 of the Human Rights Law is at least as broad as that afforded by a special proceeding pursuant to article 78 of the New York Civil Practice Law and Rule, which combines elements of common law mandamus and certiorari. Holland v. Edwards, 282 App.Div. 353, 358, 122 N.Y.S.2d 721, 725 (1st Dep't.1953), aff'd, 307 N.Y. 38, 119 N.E.2d 581 (1954). Courts in this circuit have not hesitated to give res judicata effect to article 78 proceedings in the state courts. See Taylor v. New York City Transit Authority, 433 F.2d 665, 668, 670-71 (2d Cir. 1970); Roode v. Michaelian, 373 F.Supp. 53 (S.D.N.Y.1974); Kabelka v. City of New York, 353 F.Supp. 7 (S.D.N.Y.1973). Indeed, the appeal from the Appeal Board determination was brought pursuant to both § 298 of the Human Rights Law and article 78 of the Civil Practice Law and Rules. Second, as pointed out, the issue before the State Division was whether the complaint lacked merit as a matter of law. The Appellate Division, in reviewing dismissals for lack of probable cause, has consistently applied this standard to the State Division's determinations. E.g., State Division of Human Rights v. Bond, Schoeneck & King, 52 A.D.2d 1045, 384 N.Y.S.2d 568 (4th Dep't.1976); Pember v. New York State Division of Human Rights, supra. Where the State Division fails to adhere to this standard, the Appellate Division has not hesitated to reverse and remand for a hearing or further investigation. E. g., Mayo v. Hopeman Lumber, supra; State Division of Human Rights v. Mecca Kendall Corp., 53 A.D.2d 201, 385 N.Y.S.2d 665 (4th Dep't.1976); State Division of Human Rights v. Board of Education, Olean Public Schools, supra. See also Burns v. Sabena Belgian World Airlines, 42 A.D.2d 347, 347 N.Y.S.2d 958 (1st Dep't.1973). There is, therefore, little reason to believe that the review afforded appellant was inadequate to correct errors made by the State Division in dismissing the complaint. 10 The Human Rights Law does not indicate whether a determination of no probable cause will bar further proceedings involving the same facts in the state courts; nor does it characterize such an order of dismissal as final. On the other hand, § 297(9) provides that where a complaint is dismissed on grounds of administrative convenience, see note 6 supra, such person shall maintain all rights to bring suit as if no complaint had been filed. N.Y. Exec. Law § 297(9) (McKinney 1976 Supp.). Arguably, by failing to include dismissals for lack of probable cause within this proviso, the legislature intended such dismissals to be a bar to state court suits. The point remains, however, that the Appellate Division's determination unquestionably is a final one and that the finality of a no probable cause determination is unclear 11 Section 1738 of Title 28, United States Code, provides: The Acts of the legislature of any State, Territory, or Possession of the United States, or copies thereof, shall be authenticated by affixing the seal of such State, Territory or Possession thereto. The records and judicial proceedings of any court of any such State, Territory or Possession, or copies thereof, shall be proved or admitted in other courts within the United States and its Territories and Possessions by the attestation of the clerk and seal of the court annexed, if a seal exists, together with a certificate of a judge of the court that the said attestation is in proper form. Such Acts, records and judicial proceedings or copies thereof, so authenticated, shall have the same full faith and credit in every court within the United States and its Territories and Possessions as they have by law or usage in the courts of such State, Territory or Possession from which they are taken. June 25, 1948, c. 646, 62 Stat. 947. 12 The so-called deferral provision of Title VII is contained in § 706 of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-5(c), providing in pertinent part: In the case of an alleged unlawful employment practice occurring in a State, or political subdivision of a State, which has a State or local law prohibiting the unlawful employment practice alleged and establishing or authorizing a State or local authority to grant or seek relief from such practice or to institute criminal proceedings with respect thereto upon receiving notice thereof, no charge may be filed under subsection (b) of this section by the person aggrieved before the expiration of sixty days after proceedings have been commenced under the State or local law, unless such proceedings have been earlier terminated, provided that such sixty-day period shall be extended to one hundred and twenty days during the first year after the effective date of such State or local law. According to the Congressional debate accompanying the passage of the 1964 Civil Rights Act, this section was intended to give States . . . a reasonable opportunity to act under State law before the commencement of any Federal proceedings by individuals who alleged discrimination. 2 Schwartz, Statutory History of the United States : Civil Rights 1334 (1970) (quoting statement of Senator Hubert Humphrey), quoted in Voutsis v. Union Carbide Corp., 452 F.2d 889, 892 (2d Cir. 1971). The emphasis of deferral is not that a claimant must exhaust all possible state remedies before bringing a Title VII action, rather, it gives the state a chance to employ its own conciliatory and adjudicatory machine to resolve a claim of discrimination. Thus, if the state fails to act within sixty days, the complainant may file a charge with the Equal Employment Opportunity Commission. If the state agency dismisses the complaint, 42 U.S.C. § 2000e-5(e) requires the complainant to file his charge within 300 days after the alleged discriminatory act or within thirty days after receiving notice that the State or local agency has terminated the proceedings under the State or local law, whichever is earlier . . . . Nothing in these provisions of the statute required the appellant to seek review of the state agency ruling. Indeed, the complaint was filed with the State Division on December 3, 1973, and the agency did not dismiss the complaint until February 11, 1974, more than two months later. As soon as the sixty day period had expired, appellant was free to file a charge with the EEOC and to pursue a § 1981 claim. 13 We do not express an opinion as to whether res judicata applies when a claimant prevails in the State Division and the respondent appeals to the Appeal Board, loses, and then appeals to the Appellate Division, where he wins a judgment reversing the State Division and dismissing the complaint. It is worth pointing out, however, that in this hypothetical the claimant did not pursue his claim to a judicial determination, rather, this was respondent's choice. Moreover, if res judicata applies in these circumstances, then deferral to state agencies pursuant to Title VII creates the risk that, by appealing any agency determination favorable to claimant, the respondent can force the claimant into the state courts and foreclose a federal action under § 1981 In addition, our holding does not extend to the question of whether, had appellant brought a timely Title VII claim instead of one under § 1981, res judicata should apply. The cases holding that deferral to state agencies under § 2000e-5(c) does not foreclose a Title VII action in federal court, e. g., Voutsis v. Union Carbide Corp., supra; Batiste v. Furnco Construction Corp., supra; Cooper v. Phillip Morris, Inc., 464 F.2d 9 (6th Cir. 1972); International Brotherhood of Electrical Workers, Local 5 v. EEOC, 398 F.2d 248, 250 n.3 (3d Cir. 1968), cert. denied, 393 U.S. 1021, 89 S.Ct. 628, 21 L.Ed.2d 565 (1969), did not involve resort to state judicial remedies following the agency determination. 14 Of course, the cases in this circuit espousing exhaustion of state administrative remedies prior to bringing a § 1983 claim involved discrimination or constitutional violations by officials of public agencies and the agency provided its own internal procedures for redressing such wrongs. E. g., Eisen v. Eastman, supra; Plano v. Baker, 504 F.2d 595 (2d Cir. 1974). Here, by contrast, private discrimination is alleged and the available administrative remedies involve a separate agency process that parallels an independent action in the state courts. The Supreme Court, moreover, has not stated a view as to whether a § 1981 claim of employment discrimination is ever subject to a requirement that administrative remedies be exhausted. Johnson v. Railway Express, 421 U.S. at 456 n.3, 95 S.Ct. at 1718 n.3 1 For the text of § 1738, see footnote 11 in the majority opinion, supra 2 See H. Friendly, Federal Jurisdiction: A General View 100-02 (1973); Theis, Res Judicata in Civil Rights Act Cases: An Introduction to the Problem, 70 Nw.L.Rev. 859 (1975); McCormack, Federalism and Section 1983: Limitations on Judicial Enforcement of Constitutional Claims, Part II, 60 Va.L.Rev. 250 (1974). See also Lombard v. Board of Education, 502 F.2d 631, 636 (2d Cir. 1974), cert. denied, 420 U.S. 976, 95 S.Ct. 1400, 43 L.Ed.2d 656 (1975) 3 Section 7803 of Article 78 of the New York Civil Practice Law and Rules, N.Y.C.P.L.R. § 7801 et seq. (McKinney 1972) reads: The only questions that may be raised in a proceeding under this article are: 1 whether the body or officer failed to perform a duty enjoined upon it by law; or 2 whether the body or officer proceeded, is proceeding or is about to proceed without or in excess of jurisdiction; or 3 whether a determination was made in violation of lawful procedure, was affected by an error of law or was arbitrary and capricious or an abuse of discretion, including abuse of discretion as to the measure or mode of penalty or discipline imposed; or 4 whether a determination made as a result of a hearing held, and at which evidence was taken, pursuant to direction by law is, on the entire record, supported by substantial evidence 4 Section 298 of the Human Rights Law, N.Y. Exec. Law § 298 (McKinney 1972) reads in part: Any complainant, respondent or other person aggrieved by any order of the board may obtain judicial review thereof, and the division may obtain an order of court for its enforcement and for the enforcement of any order of the commissioner which has not been appealed to the board, in a proceeding as provided in this section. . . . No objection that has not been urged in prior proceedings shall be considered by the court, unless the failure or neglect to urge such objection shall be excused because of extraordinary circumstances. Any party may move the court to remit the case to the division in the interests of justice for the purpose of adducing additional specified and material evidence and seeking findings thereon, provided he shows reasonable grounds for the failure to adduce such evidence in prior proceedings. The findings of facts on which such order is based shall be conclusive if supported by sufficient evidence on the record considered as a whole. . . . 5 Although it is true that under section 298, a party may move to cure an inadequate record, a successful motion must show reasonable grounds for the failure to adduce . . . (the additional evidence) in prior proceedings. Even then, the state court will not conduct its own inquiry into the merits, but will remit the case to the State Division 6 The majority opinion points out, supra, at p. 272, note 9, that this court has previously given res judicata effect to an Article 78 proceeding. For the most part, those cases are distinguishable, since they do not raise the special policy considerations applicable in an employment racial discrimination case. See, e. g., Taylor v. New York City Transit Authority, 433 F.2d 655 (2d Cir. 1970) (res judicata applied to a procedural due process claim raised in an Article 78 proceeding). And even when these special policy considerations are absent, this court has not always applied traditional res judicata rules to Civil Rights Act cases and Article 78. See Lombard, supra (prior Article 78 proceeding in which claim of procedural due process could have been, but was not, raised does not preclude § 1983 action based on that claim) 7 For that reason, the analogy drawn by the majority opinion between the administrative proceedings here and summary judgment in a judicial proceeding is inapposite