Court Opinion

ID: 9469694
Source: CourtListenerOpinion
Date Created: 2023-08-05 02:46:56.023783+00
Date Added: 2024-06-11T17:41:31.158428
License: Public Domain

GIBBONS, Circuit Judge,
with whom
A. LEON HIGGINBOTHAM, Jr., Circuit Judge joins, dissenting:
This case is before us on an appeal from a final judgment against United States Steel Corporation (USS) in favor of Thelma Davis in her action alleging employment discrimination in violation of 42 U.S.C. § 1981. USS contends that the trial court’s findings of fact are clearly erroneous, and that in any event the section 1981 action is barred by res judicata. The majority reaches only the res judicata contention, holding that the section 1981 action is barred. Because, under Fed.R.Civ.P. 8(c), res judicata is an affirmative defense, it is important to look at the record to see how the issue was presented in the district court. Moreover a review of the procedural history of this unfortunate lawsuit will serve as a case study in the ability of determined defendants to use the judicial process to delay and eventually deny accountability for discrimination.
I.
The complaint was filed in August of 1975. USS did not answer, but moved for summary judgment on the ground that the action was time barred. The district court granted that motion.1 On appeal this court, over four years ago, reversed. At that time Judge Van Dusen, in an opinion in which Judge Adams joined, summarized Ms. Davis’ complaint as follows:
Plaintiff’s complaint accuses her employer of racially discriminatory conduct in basically two respects. First, U.S. Steel Supply’s supervisory personnel are alleged to have failed to correct, and to have tacitly approved, a pattern of racial abuse directed at Mrs. Davis by her fellow workers. Second, plaintiff alleges that her discharge was in response to her complaints of racial harassment and constituted an unlawful termination of her employment. Plaintiff’s complaint cites incidents of abuse and of personal property damage, but not of bodily injury. The *180gravamen of the complaint does not concern Mrs. Davis’ interest in personal security, but rather involves unlawful interference with her rights as an employee. Mrs. Davis implicitly asserts a right to good faith efforts by an employer to correct instances of co-worker racial harassment and a right not to be discharged for complaining of such incidents. Essentially, Mrs. Davis complains that U.S. Steel Supply demeaned her and fired her because of her race. In terms of legal relief, plaintiff’s complaint does not seek damages for either property or bodily injury. The complaint seeks back wages and fringe benefits lost as a result of her firing.2
This is an accurate summary. Ms. Davis complains not merely of the events which occurred on February 2, 1970, but of the atmosphere maintained by USS which culminated in those events.
In the first appeal, although the district court had not reached the issue, USS relied upon res judicata as an alternative ground for affirmance, and Judge Van Dusen’s opinion refers to the February 19,1975 decision of the Commonwealth Court. Addressing that ground, he wrote:
There is an open question under state and federal law whether the Commonwealth Court’s reversal of the Commission’s order would be accorded res judicata effect in a subsequent private suit brought under either the Human Relations Act or under federal civil rights laws. The res judicata force of state judicial review of local administrative adjudications depends on a variety of factors which have not been developed in the record in this case. See New Jersey Educ. Ass’n v. Burke, 579 F.2d 764 (3d Cir. 1978); Mitchell v. NBC, 553 F.2d 265 (2d Cir. 1977). The district court, in fact, did not reach the res judicata issue in dismissing plaintiff’s § 1981 complaint. We intimate no view as to the proper res judicata effect, if any, that should be accorded the Commonwealth Court’s reversal of a finding of discrimination in a subsequent action under the Pennsylvania Human Relations Act of 1981.3
Judge Van Dusen’s discussion of res judicata was not a casual reference. The issue was argued orally and was the subject of extensive supplemental briefing in the first appeal. Thus even before USS filed an answer, this court, after full argument and briefing, gave the litigants a clear indication that something more than an offhand reference to the Commonwealth Court decision was required before a court could pass on the affirmative defense of res judicata.
II.
On remand USS did not immediately file an answer. Instead it made a renewed motion for summary judgment. This motion apparently was made orally at a conference with the trial judge, for there is no docket entry for the motion, and no supporting affidavit in the record. Thus there is no way that this court can tell precisely what was presented to the district court in support of the renewed motion for summary judgment. Included in the appendix to the briefs in this court, however, is the affidavit of G.R. Southworth, dated September 5, 1975. (302a-304a). Since that is the date on which the first summary judgment was rendered, it appears that USS relied, in the renewed motion, on the same papers which were before this court in the first appeal.4 As here relevant, Mr. South-worth’s affidavit alleges:
*1812.) Examination of relevant files reveals that Thelma Davis did not file an appeal to the Pennsylvania Supreme Court from the decision by the Commonwealth Court of Pennsylvania on February 19, 1975.
(303a). Although the Southworth affidavit does not so allege, the trial court and this court were furnished, in 1975, with a copy of the Commonwealth Court opinion. Since the renewed motion for summary judgment apparently put before the trial court the identical record which was before this court on the first appeal, it is hardly surprising, in light of Judge Van Dusen’s opinion noting the inadequacy of that record, that the renewed motion was denied. The trial court, in its order denying that motion, did observe that it was denied “for the reason that res judicata does not foreclose the instant action where defendant has pursued state appellate remedies rather than plaintiff.” (305a). That ruling, however, did not pass upon the sufficiency, in other respects, of the Southworth affidavit in meeting USS’s Rule 8(c) burden. Moreover examination of that sparse affidavit reveals that it presented no question of the collateral estoppel effect to be given any adjudication by a Pennsylvania tribunal, administrative or judicial. The sole issue presented by the September 1975 motion was the res judicata effect of the Commonwealth Court decision on the section 1981 action. This court in the first appeal held that the 1975 moving papers were an inadequate record on which to make such a ruling.
III.
When its renewed motion to dismiss was denied, in March of 1979, USS finally filed an answer, which pleaded affirmatively:
33. Davis’ cause of action is barred by the doctrine of res judicata.
34. Davis’ cause of action is barred by the doctrine of collateral estoppel.
(310a). Thereafter, pursuant to an order entered on the authority of a local rule, the parties filed a pre-trial stipulation. That stipulation set forth a number of admissions. It also placed in evidence the Transcript of Proceedings before the Pittsburgh Human Relations Commission and Ms. Davis’ deposition. No other exhibits were made a part of the trial record. Of particular significance is the fact that none of the proceedings in the Pennsylvania state courts were placed in evidence. The stipulation lists as a legal issue the question “[wjhether the instant Complaint is barred by the doctrine of res judicata." (381a). It does not list collateral estoppel as an issue. It provides, moreover, that “[t]he foregoing admission of fact having been made, and the parties having specified the issues of fact and law remaining to be litigated, this stipulation shall supplement the pleadings and govern the course of trial unless modified to prevent injustice.” Id. The stipulation was never modified. Thus it is clear beyond question that the affirmative defense of collateral estoppel pleaded in the answer was abandoned by USS in the pretrial stipulation. That abandonment is confirmed by the fact that no records of the Pennsylvania courts, upon which a plea of collateral estoppel would have to rest, were included in the trial record. There is simply no basis in the record before us on this appeal for the consideration of a collateral estoppel issue. The majority’s suggestion that USS’s counsel may not have appreciated the distinction between res judicata and collateral estoppel (p. 173 n.9) is, in light of paragraphs 33 and 34 of the answer, preposterous.
As to res judicata, the pre-trial stipulation and exhibits do not include even the decision of the Commonwealth Court. The res judicata issue is listed as a legal issue, but since no trial record was made on it, USS obviously did not expect the district *182court to pass upon it in the trial on liability. The text of the stipulation makes plain that on that issue USS rested solely upon the affidavit and exhibits which it presented in support of its 1975 motion to dismiss the complaint. Indeed the trial court’s liability opinion merely cross references to its summary judgment ruling. (384a). Thus on the res judicata issue the case is before us with exactly the same record that was presented to the panel which decided the first appeal. USS then urged that it was entitled to summary judgment as a matter of law because of the Commonwealth Court decision, and this court held that it was not. Today the majority, including a judge who joined in our earlier panel opinion, holds on the same record that it is. In our view the original panel decision was right. The only place in this record in which it presented that issue was in its September 1975 motion for summary judgment, and USS has not established that it is entitled to summary judgment on res judicata grounds.
IV.
In considering whether USS was in 1975 entitled to summary judgment on res judicata grounds, this court cannot confine its consideration to the ground recited in the district court’s order. That ground, that Ms. Davis did not resort to the state courts but was brought there as a defendant, is in our view correct for reasons set forth hereafter. But entirely aside from that ground, the majority still must be satisfied that USS’s summary judgment record entitled it to a judgment as a matter of law. In reaching that conclusion the court must be satisfied: (1) that under Pennsylvania law the courts of that state would treat the judgment relied on as a bar to a subsequent suit on a federal law cause of action; and (2) that even if Pennsylvania courts would ordinarily do so, no overriding federal law prevents that result. The majority’s analysis does not satisfy us in either respect.
A.
We agree with the majority that when presented with a defense of res judicata based upon a final personal judgment in favor of the defendant, our starting point is the direction in 28 U.S.C. § 1738 that “[t]he records and judicial proceedings of any court of any . .. State . . . shall have the same full faith and credit in every court within the United States ... as they have by law or usage in the courts of such State. ...” The judgment which USS relies upon is that of the Commonwealth Court which “vacated” the orders of the Pittsburgh Commission on Human Relations dated March 6, 1972 and October 2, 1972. It is only that judgment on which USS could rely, for the decisions of the Commission, and of the Court of Common Pleas of Allegheny County which initially reviewed it, were in favor of Ms. Davis, not USS. Restatement (Second) of Judgments § 19 (1982).
The court must, before assessing the effect of that judgment, consider what it actually decided. USS was before the Commonwealth Court as an appellant from a decision of the Court of Common Pleas of Allegheny County. It was before the latter court as an appellant in an appeal brought pursuant to section 7 of the Pennsylvania Local Agency Law, Pa.Stat.Ann. tit. 53, § 11307 (Purdon 1972) (repealed 1978, current version at 2 Pa.Cons.Stat.Ann. § 752 (Purdon Pamph. 1981-82)). That statute reflects the unique status of local municipal agencies under Pennsylvania law. Although those agencies perform adjudications, their proceedings may be, and often are, quite informal. There is no provision for discovery of any kind. The Local Agency Law makes no provision for compulsory process for the attendance of witnesses. Local agencies are not bound by the rules of evidence. Pa.Stat.Ann. tit. 53, § 11305 (now at 2 Pa.Cons.Stat.Ann. § 554). They may, but are not required, to make a complete record of their proceedings. Pa.Stat. Ann. tit. 53, § 11304 (now at 2 Pa.Cons. Stat.Ann. § 553). If a complete record is not made, the Court of Common Pleas may hear the matter de novo. Pa.Stat.Ann. tit. 53, § 11308(a) (now at 2 Pa.Cons.Stat.Ann. § 754(a)). If a complete record is made, the Court of Common Pleas hears the appeal on *183the agency record, and
shall affirm the adjudication unless it shall find that the same is in violation of the constitutional rights of the appellant,, or is not in accordance with law, or that the provisions of [the Local Agency] act have been violated in the proceedings before the agency, or that any finding of fact made by the local agency and necessary to support its adjudication is not supported by substantial evidence.
Pa.Stat.Ann. tit. 53, § 11308(b) (now at 2 Pa.Cons.Stat.Ann. § 754(b)). The scope of review of the Commonwealth Court is equally narrow. Civil Service Commission of Philadelphia v. Saladino, 47 Pa.Cmwlth. 249, 408 A.2d 178 (1979). The scheme of the Local Agency Law reflects the fact that, unlike courts of record and some state agencies, the agencies of Pennsylvania municipalities are often administered by part time personnel and have limited resources. Clearly Pennsylvania law recognizes that local agencies must, considering their limited resources, be permitted to proceed informally, and that such informality is tolerable because those agencies have only limited and specialized jurisdictions. Moreover the limited scope of judicial review of their adjudications reflects the legislative judgment that such a scope of review is appropriate for tribunals having only such limited and specialized jurisdictions. Thus the precise Pennsylvania law issue we must address is what res judicata effect that state would give to a decision reviewing, under the Local Agency Law, an adjudication of a local municipal agency.
The majority opinion refers to no Pennsylvania case resolving that question, and our research has not uncovered any. Certainly the two Pennsylvania cases referred to, Duquesne Slag Products Co. v. Lench, 490 Pa. 102, 415 A.2d 53 (1980), and Gallery v. Municipal Authority of the Township of Blythe, 432 Pa. 307, 243 A.2d 385 (1968), are not dispositive, for both involved prior adjudications in courts of record, having unlimited subject matter jurisdiction, in which compulsory witness process and discovery were available, and in which the rules of evidence applied. Even when adjudications have taken place in such tribunals, the Pennsylvania rule with respect to claim preclusion — res judicata —as distinguished from issue preclusion — collateral estoppel— is carefully circumscribed. “For the defense of res judicata to prevail, it is necessary that between the previous action and the present action there be identity in the thing sued on, identity of the cause of action, identity of the persons and parties to the action, and identity of the quality or capacity of the parties suing or sued.” Duquesne Slag Products Co. v. Lench, 490 Pa. at 105, 415 A.2d at 55.
Pennsylvania’s carefully articulated rule respecting claim preclusion (we reiterate that a collateral estoppel claim is not presented in this record) is predicated upon the policy in favor of requiring a party to plead in a single lawsuit all legal bases for relief, and to request all forms of relief which might be available as a result of a transaction or series of connected transactions. The rationale for a claim preclusion rule as broad as the underlying transaction is best set forth in the Restatement (Second) of Judgments:
Equating claim with transaction, however, is justified only when the parties have ample procedural means for fully developing the entire transaction in the one action going to the merits to which the plaintiff is ordinarily confined. A modern procedural system does furnish such means. It permits the presentation in the action of all material relevant to the transaction without artificial confinement to any single substantive theory or kind of relief and without regard to historical forms of action or distinctions between law and equity. A modern system allows allegations to be made in general form and reads them indulgently; it allows allegations to be mutually inconsistent subject to the pleader’s duty to be truthful. It permits considerable freedom of amendment and is willing to tolerate changes of direction in the course of litigation. Parties can resort to compulsory process besides private investigations to ascertain the facts surrounding the transaction, thereby measurably avoiding *184surprise at the trial. The pretrial conference contributes to the same end of developing the whole case. The law of res judicata now reflects the expectation that parties who are given the capacity to present their “entire controversies” shall in fact do so.
Because the transactional view set forth in this Section assumes as the present standard a modern system of procedure with the general characteristics described in this Comment, there is a need to allow exceptions to the general rule where the judgment is rendered in a jurisdiction whose procedural system has not been modernized, especially one where unification of law and equity has not been achieved. These exceptions are set forth in § 26(c).
Restatement (Second) of Judgments. § 24 comment a (1982). The exception to claim preclusion to which the Comment refers states:
When any of the following circumstances exists, the general rule of § 24 does not apply to extinguish the claim, and part or all of the claim subsists as a possible basis for a second action by the plaintiff against the defendant:
(c) The plaintiff was unable to rely on a certain theory of the case or to seek a certain remedy or form of relief in the first action because of the limitation on the subject matter jurisdiction of the courts or restrictions on their authority to entertain multiple theories or demands for multiple remedies or forms of relief in a single action, and the plaintiff desires in the second action to rely on that theory or to seek that remedy or form of relief
Restatement (Second) of Judgments § 26(l)(c) (1982). The Comment to that subsection observes:
The general rule of § 24 is largely predicated on the assumption that the jurisdiction in which the first judgment was rendered was one which put no formal barriers in the way of a litigant’s presenting to a court in one action the entire claim including any theories of recovery or demands for relief that might have been available to him under applicable law. When such formal barriers in fact existed and were operative against a plaintiff in the first action, it is unfair to preclude him from a second action in which he can present those phases of the claim which he was disabled from presenting in the first.
The formal barriers referred to may stem from limitation on the competency of the system of courts in which the first action was instituted, or from the persistence in the system of courts of older modes of procedure — the forms of action or the separation of law from equity or vestigial procedural doctrines associated with either.
Restatement (Second) of Judgments, § 26 comment c (1982). We have no doubt, given the careful manner in which Pennsylvania has articulated its claim preclusion rule, that it would recognize the qualification in section 26(l)(c). Certainly no Pennsylvania case suggests otherwise.
Given that qualification, we are certain that the Pennsylvania Supreme Court would not treat the judgment in the Commonwealth Court as a res judicata bar to an action under 42 U.S.C. § 1981. First, it would not treat the Pittsburgh Human Relations Commission as if it were a court of record, because it is not. It would recognize that that local agency did not afford discovery, did not provide for compulsory process for witnesses, and was not bound by the rules of evidence. Thus it would have serious reservations about giving preclusive effect even to that agency’s factfinding. Second, the Pennsylvania Supreme Court would recognize that as a creature of a city ordinance the Commission lacked subject matter jurisdiction to adjudicate a claim arising under any law except the ordinance, or to afford any remedy other than that authorized by the ordinance. Thus it would recognize that Ms. Davis not only was under no duty to tender her section 1981 claim for adjudication by that agency, but *185that if she had done so, the agency could not lawfully have adjudicated it. It would recognize, as well, that the agency could not lawfully award attorneys fees, which were sought in this action and were awarded in the judgment appealed from. As to the proceedings on appeal in the Court of Common Pleas and the Commonwealth Court, the Supreme Court of Pennsylvania would recognize that the same limitations on the subject matter jurisdiction of the local agency would also prevent the adjudication of other causes of action in those courts on appeal. The Local Agency Law could not be plainer. In an appeal pursuant to that law the reviewing courts may consider only those causes of action which the local agency could and did adjudicate.
In an effort to obfuscate, the majority opinion treats the opinion of the Commonwealth Court not as what it is — a limited review of the decision of an agency with limited and specialized jurisdiction — but as if it were a primary adjudication. The opinion observes that “the court clearly concluded that the findings and record in the case were inadequate to support the conclusion that U.S. Steel had discriminated against Davis because of her race.” (At 173). Even if that statement were accurate, it would not be dispositive on claim preclusion, for at best it would be a holding that Ms. Davis had failed to make a record before the agency, which would support a claim under the ordinance. It would not justify treating the agency as if it had subject matter jurisdiction over causes of action arising under other laws. The legal tests for claim preclusion and for issue preclusion are not the same under Pennsylvania law (or under that of any other state), and it is improper to rely on a description of the court’s determination of a factual issue to apply claim preclusion to causes of action which never were and never could have been litigated. The policy behind the claim preclusion rule, as the Second Restatement makes clear, is to encourage litigation of all claims in a single proceeding. That policy is inoperative with respect to local agency adjudications in Pennsylvania because they lack subject matter jurisdiction to entertain all claims. There is not even a reason for a rule requiring a litigant to make the best factual case before a tribunal which lacks jurisdiction to adjudicate all causes of action arising out of a transaction or series of transactions.
Worse, however, than the effort to obfuscate the distinction between claim preclusion and issue preclusion is the majority’s patent misstatement of the holding of the Commonwealth Court. That court’s opinion focused not on the record before the agency, but only upon the agency’s findings. The opinion notes:
In view of the fact that the lower [Common Pleas] court did not take any additional testimony or receive any additional evidence, our scope of review in this case is to determine whether the Commission abused its discretion or committed an error of law. See Pittsburgh Press Employment Advertising Discrimination Appeal, 4 Pa.Cmwlth. 448, 287 A.2d 161 (1972).
We have carefully reviewed the record in this case, and we conclude that we must reverse because the Commission’s findings of fact are not sufficient to support its conclusion that Section 8(a) of the Ordinance was violated.
United States Steel Supply, Div. of U.S. Steel Corp. v. Pittsburgh, 16 Pa.Cmwlth. 425, 428, 332 A.2d 871, 873-74 (1975). The court focused its attention upon the provision in the ordinance making it an unlawful employment practice to discriminate with respect to discharge. Compare Judge Van Dusen’s description of Ms. Davis’ Complaint. After quoting the findings, the Commonwealth Court observed:
A careful reading of the Commission’s findings, quoted above, leads us to conclude that they are not related to the offense which the Commission concluded took place. The findings offer no information concerning how the Supply Division discriminated “in dismissing Mrs. Davis” and therefore do not support the Commission’s conclusion.
*186Id. at 430,332 A.2d at 874-75. Quite plainly the Commonwealth Court’s opinion proceeds upon one of two assumptions. It assumes either that the complaint before the Pittsburgh Human Relations Commission was confined to the February 2, 1970 discharge, or that section 8(a) of the ordinance, as a matter of law, reaches only discharges, not ongoing patterns of employment discrimination. Ms. Davis’ complaint in the district court, as Judge Van Dusen observed, is considerably broader. The complaint to the agency, although it is not a part of the record on appeal since it was not included as an exhibit in the preclusive pretrial stipulation, is nevertheless included in the appendix. (4a). It refers not only to Ms. Davis’ discharge, but also to racial harassment over three years and to the maintenance by USS of an atmosphere of racial intolerance. Thus assuming the agency complaint may properly be considered (which, on this record, we doubt), it suggests that the decision of the Commonwealth Court is predicated upon an interpretation of the ordinance as applicable only to discharges, riot to long-term patterns of employment discrimination. Whatever the basis of the Commonwealth Court’s decision, the majority’s assertion that it “clearly concluded that the findings and record in the case were inadequate to support the conclusion that U.S. Steel had discriminated against Davis because of her race” (emphasis supplied) is a bold misdescription. That opinion does not analyze the record. It analyzes the agency’s findings, and even without contesting most of them, concludes that they are insufficiently related to the February 2, 1970 discharge.
Our observations about the majority’s misdescription of the Commonwealth Court decision are not particularly relevant on the res judicata issue, because, tor the reasons set forth above, it is clear that neither Pennsylvania nor any other state would apply a rule of claim preclusion to a judgment vacating an order of a local municipal agency with limited subject matter jurisdiction and affording only limited procedural safeguards. If the issue of collateral estoppel were fairly presented by this record, what the Commonwealth Court decided might well be relevant. For the reasons set forth in Part III above, no collateral estoppel claim is before us, although the majority opinion quite unfairly suggests that it is. Issue preclusion — collateral estoppel— would require that we examine those findings of fact which were not set aside as clearly erroneous by the Commonwealth Court in order to determine whether any of them, applied against Ms. Davis, would bar relief on her federal court complaint, which Judge Van Dusen’s earlier opinion fairly summarizes. The agency findings of fact, numbered, are set forth in the margin.5 Of *187the ten findings, there is only one (No. 6) that the Commonwealth Court opinion actually describes as “not supported by the evidence,” and then only after that finding is first described as “not related to the charge that a discriminatory discharge took place.” All of the other findings of fact were accepted by the Commonwealth Court as supported by the evidence, but held to be irrelevant. 16 Pa.Cmwlth. at 430, 332 A.2d at 875. Certainly the one finding of fact which the Commonwealth Court obliquely suggested may not have been supported by the record is no basis for any collateral estoppel against Ms. Davis on a factual basis. The accepted findings all tend to support her section 1981 claim. On any fair reading, the Commonwealth Court decision cannot support factually based issue preclusion. As to any legally based issue preclusion, the Commonwealth Court never considered (1) whether or not the agency’s findings of fact would support a charge under section 1981, or (2) whether the agency record would support such a charge. Only issues of fact or law actually litigated and determined by a valid final judgment are deemed conclusively determined in subsequent actions. Restatement (Second) of Judgments § 27 (1982). Thus, although on this record all that is properly before us is a res judicata or claim preclusion contention, and not a collateral estoppel or issue preclusion contention, the majority suggestion that collateral estoppel also bars Davis’ section 1981 claim that she was subjected to an ongoing pattern of racial harassment culminating in her discharge is completely unsupportable as a matter of Pennsylvania law.
Moreover, even if the majority’s description of the Commonwealth Court’s opinion were fair, that court’s decision that the record before the local agency was insufficient to support a conclusion that Ms. Davis had been discriminated against would not, as a matter of law, support a collateral estoppel on the discrimination issue. The record here is different. It includes, besides the testimony taken before the local agency, an extensive deposition of Ms. Davis. At best the Commonwealth Court decision would estop her from claiming that, on precisely the same record which she presented to the agency and which was reviewed by that court, a court in a later proceeding could find discrimination.
B.
The majority’s reliance on Kremer v. Chemical Construction Corp., - U.S. -, 102 S.Ct. 1883, 72 L.Ed.2d 262 (1982), is misplaced for several reasons.
In the first place, Justice White did not and could not instruct in that case on the law of Pennsylvania. He dealt, rather, with a specific provision in the New York Human Rights Law, not with the common law of res judicata of any state. Kremer’s complaint was referred to the New York State Division of Human Rights, a statewide agency operating under a detailed statutory scheme radically different from the Pennsylvania Local Agency Law. N.Y. [Executive] Law §§ 290-301 (McKinney 1982). That agency has general rulemaking authority, authority to issue compulsory process, to confer immunity from criminal prosecution, to provide technical assistance to victims of discrimination, and even to obtain on request and utilize the services of all governmental departments and agencies. N.Y. [Executive] Law § 295. The substantive prohibitions which the agency enforces are in many respects broader than those in either section 1981 or Title VII of the Civil Rights Act of 1964. N.Y. [Executive] Law §§ 296, 296-a. Its procedures are regulated by statutory safeguards designed to assure a full and fair development of a record. N.Y. [Executive] Law § 297. The statute preserves the right of a person aggrieved by an unlawful discriminatory practice to resort to a court, rather than to the agency, *188“for damages and such other remedies as may be appropriate.” N.Y. [Executive] Law § 297(9). The provisions in the Human Rights Law for judicial review are far broader than those of the Pennsylvania Local Agency Law, for the New York Appellate Division “shall have the power to grant such temporary relief or restraining order as it deems just and proper, and to make and enter upon the pleadings, testimony, and proceedings set forth in such transcript an order enforcing, modifying, and enforcing as so modified, or setting aside in whole or in part such order.” Agency factfinding is reviewed by a “sufficient evidence” standard. N.Y. [Executive] Law § 298.
If an individual elects to institute such an action without resorting to the state agency “he may not subsequently resort to the procedure herein.” But if he does resort to the agency, “the final determination therein shall exclude any other action, civil or criminal, based on the same grievance of the individual concerned.” N.Y. [Executive] Law § 300. It was the last quoted statutory provision, and only that, on which the Kremer Court relied, observing:
There is no question that this judicial determination precludes Kremer from bringing “any action, civil or criminal, based upon the same grievance” in the New York courts. N.Y.Exec. Law § 300 (McKinney 1972).
-U.S. at-, 102 S.Ct. at 1890. There is no such Pennsylvania statute applicable to local agencies.6 The Supreme Court in Kremer was not dealing with common law principles of res judicata, but with a specific, detailed statutory scheme in which the New York legislature said expressly that a claimant did not have to resort to the agency, but if the claimant did so, that resort was a complete election of remedies. There is no such Pennsylvania legislation applicable to this case.7
It should be noted, moreover, that under the New York scheme the statutory election of remedies applies whether or not either party seeks judicial review, for under section 298 agency orders become final within thirty days, and section 300 refers to all final determinations. Yet in its discussion of 28 U.S.C. § 1738, the Supreme Court was quite careful to state that despite the finality language in the New York statute, Title VII did not require claimants to seek review of an unfavorable administrative action.8 This explicit reiteration of settled Title VII caselaw makes it abundantly clear that the court did not hold that a state could apply res judicata — claim preclusion — to an agency determination even though the New York Human Rights Law purports to do so. The Court’s holding is a narrow one. In Kremer the plaintiff elected to pursue the state agency remedy. Having lost before the state agency, the plaintiff could have sued in a federal court under Title VII (or under section 1981). He elected to proceed under section 298 of the New York Human Rights Law. That *189court decided factual issues against him, and in those circumstances he is collaterally estopped from relitigating those issues. “Nothing in the legislative history of the 1964 Act suggests that Congress considered it necessary or desirable to provide an absolute right to relitigate in federal court an issue resolved by a state court.” -U.S. at-, 102 S.Ct. at 1893 (emphasis supplied).
Juxtaposing the Kremer Court’s explicit recognition of a Title VII claimant’s right to bypass state judicial review with its observations about issue preclusion, it seems to us that the opinion cannot have any application to a case such as this, in which the claimant never was in a position to seek state court judicial review because she was not aggrieved by the agency action. The recognition that claimants need not resort to state judicial review demonstrates that the federal statutes do not contemplate a doctrine that would recognize transaction-wide claim preclusion as a result of an agency proceeding. If Kremer were to be construed to mean that whenever an agency afforded even the slightest relief, a respondent could drag the charging party into a state court and thereby achieve transaction-wide claim preclusion, the Kremer Court’s clear premise that there was no obligation to present all claims or all facts to the agency would be undermined. An interpretation of Title VII and section 1738 which recognizes issue preclusion in those instances in which a claimant resorts to state court judicial review is a reasonable accommodation between conflicting federal policies favoring vindication of civil rights and state policies favoring finality of judicial determinations. Carrying the Kremer holding to the next stage, as the majority proposes, is unreasonable, inconsistent with Justice White’s analysis, and dangerous. Not all localities are enthusiastic supporters of antidiscrimination legislation, and it will not take long for some local agencies to appreciate that all they have to do to deprive a claimant of a Title VII or section 1981 remedy in a federal court is to grant some scintilla of relief so that a respondent can drag the claimant into a state court. The effect of such practices would be that the only Title VII cases which ever reached the federal courts would be those in which the claim so lacked merit that the local agency did not afford even a scintilla of relief. At that point federal judges will, no doubt, complain to Congress that Title VII should be repealed so as to relieve their dockets of “junk” cases. It is inconceivable, given his express reendorsement of Chandler v. Roudebush, 425 U.S. 840, 96 S.Ct. 1949, 48 L.Ed.2d 416 (1976); Alexander v. Gardner-Denver Co., 415 U.S. 36, 94 S.Ct. 1011, 39 L.Ed.2d 147 (1974), and McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), that Justice White intended such a result.9 The majority obviously does. And as Judge Sloviter convincingly demonstrates, the majority position will inevitably result in by-passing the state conciliation effort, which Congress thought appropriate, for in every case in which a federal remedy other than under Title VII can be sought in a federal court no represented defendant should in the future make Ms. Davis’ mistake.
Furthermore the majority’s application of its misinterpretation of Kremer to a section 1981 action is entirely too glib. That statute and Title VII present quite distinct issues. As the Kremer opinions make clear, despite the language adopted by Congress in 1793, 28 U.S.C. § 1738 cannot be applied literally if such an application would interfere with the full and fair implementation of another federal statute or policy. That doctrine is well settled. See United States v. United States Fidelity & Guaranty Co., 309 U.S. 506, 60 S.Ct. 653, 84 L.Ed. 894 (1940) (Indian Nations under tutelage of United States are immune to suit; immunity is not waived by failure to assert it; judgment subject to collateral attack); Kalb v. Feuerstein, 308 U.S. 433, 60 S.Ct. 343, 84 L.Ed. 370 (1940) (state court judg*190merit of foreclosure and foreclosure sale void if rendered while a Frazier-Lemke Act petition is pending). It is embodied in the Restatement (Second) of Judgments §§ 26(c), (d) & 86, and would undoubtedly be recognized as a matter of Pennsylvania state law even if it were not, as it is, required by the Supremacy Clause.
The majority’s reference to Allen v. McCurry, 449 U.S. 90, 101 S.Ct. 411, 66 L.Ed.2d 308 (1980), in support of its application of Kremer to section 1981 cases does not advance the analysis. As the majority concedes, Allen v. McCurry involved 42 U.S.C. § 1983, which has a very different legislative history than section 1981. But a more significant distinction is that Allen v. McCurry involved only issue preclusion — • collateral estoppel — not claim preclusion. Even with respect to section 1983 there is no suggestion that a litigant must submit all his claims, state and federal, to a state court or state agency growing out of a transaction or series of transactions. Claimants obviously cannot do so in criminal cases. Indeed the Court’s approving reference to England v. Louisiana State Board of Medical Examiners, 375 U.S. 411, 84 S.Ct. 461, 11 L.Ed.2d 440 (1964), confirms that state law with respect to claim preclusion does not determine the question whether federal law causes of action must be submitted to state courts. 449 U.S. at 101 n.17, 101 S.Ct. at 418 n.17. It is reconfirmed by Patsy v. Board of Regents of the State of Florida, - U.S.---, 102 S.Ct. 2557, 73 L.Ed.2d 172 (1982), reiterating the rule that exhaustion of state administrative remedies is not a prerequisite for a section 1983 action. Thus Allen v. McCurry lends no support for an extension of the Kremer holding from Title YII cases to section 1981 cases. With respect to section 1981 two separate inquiries are necessary. The first is whether the initial tribunal had jurisdiction to adjudicate a section 1981 claim. If it did not, claim preclusion cannot apply. It is clear that the initial tribunal, the local agency, did not as a matter of Pennsylvania law have jurisdiction to adjudicate a section 1981 action or an application for attorneys fees under 42 U.S.C. § 1988. That alone is enough to prevent claim preclusion, for the jurisdiction of the Court of Common Pleas and the Commonwealth Court under the Local Agency Law is no broader than that of the underlying agency. There is also a question, thus far unresolved in this court and in the Supreme Court, whether as a matter of federal law any state court has jurisdiction to entertain a section 1981 action. If that is the case, obviously neither a claim preclusion rule nor an issue preclusion rule of state law could govern.10 The question is not a simple one. As the majority concedes, section 1981 originated in the Civil Rights Act of 1866. Section 3 of that act provides:
That the district courts of the United States, within their respective districts, shall have, exclusively of the courts of the several States, cognizance of all crimes and offenses committed against the provisions of this act, and also, concurrently with the Circuit Courts of the *191United States, of all causes, civil and criminal, affecting persons who are denied or cannot enforce in the courts or judicial tribunals of the State or locality where they may be any of the rights secured to them by the first section of this act ... .11
The legislative history of that provision is hardly clear,12 and the subsequent history of the statute perhaps less so.13 It is at least uncertain whether any state court has jurisdiction to entertain a section 1981 action, and before the majority may blithely assume that a Pennsylvania claim preclusion rule can bar such an action, it is obliged, at least, to explore the question.
The second inquiry is whether, assuming the Pennsylvania courts have jurisdiction to adjudicate section 1981 actions, Congress intended in the Civil Rights Act of 1866 to create an exception to the predecessor of 28 U.S.C. § 1738. The majority addresses that issue, but its discussion entirely misses the mark. The 1866 statute provides for a right of removal “in the manner prescribed by the ‘Act relating to habeas corpus and regulating judicial proceedings in certain cases’ approved March three, eighteen hundred and sixty-three, and all acts amendatory thereof.”14 The 1863 Act provides in relevant part that “it shall be lawful in any such action or prosecution which may be now pending, or hereafter commenced, before any state court whatever, for any cause aforesaid, after final judgment, for either party to remove and transfer, by appeal, such case . . . from such court to the next circuit court of the United States to be held in the district in which such appeal shall be taken, in manner aforesaid.” After removal, the “circuit court shall thereupon proceed to try and determine the facts and the law in such action, in the same manner as if the same had been there originally commenced, the judgment in such case notwithstanding.’’15 (Emphasis supplied). The 1S63 post-judgment new trial provision is as unambiguous an exception to the predecessor of 28 U.S.C. § 1738 as could be written. The 1866 Civil Rights Act incorporates that provision by reference. Thus it is absolutely certain that the 1866 Congress intended that the statute from which section 1981 is derived provide an exception to state law rules of res judicata. Contrary to the majority’s conclusion (at 175) Congress plainly meant to render ineffective state civil judgments having to do with race discrimination.
The post-judgment removal feature of the 1866 Act is what the Court refers to in Allen v. McCurry, 449 U.S. 90, 99 n.14, 101 S.Ct. 411, 417 n.14, 66 L.Ed.2d 308 (1980). The majority quotes the footnote, but concludes:
The Court thus construed the 1866 Act as affecting the weight properly given to state judgments only if those judgments arose out of state proceedings that were defective.
(At 176). That conclusion is obscurant nonsense. Plainly in distinguishing section 1983, which derived from a different and later statute, the Court was contrasting the intention of the 1863 and 1866 Congresses to render ineffective all state judgments having to do with racial and Unionist discrimination. It is true that in the post-reconstruction era, when the Court began the process of emasculating the Civil Rights Acts, it construed the separate pre-trial removal provisions of the 1866 Civil Rights Act as requiring a showing that state procedures were on their face unfair. Strauder v. West Virginia, 100 U.S. 303, 25 L.Ed. 664 (1880); Virginia v. Rives, 100 U.S. 313, 25 L.Ed. 667 (1880). Those cases, however, dealt with pre-judgment removal, which has no relevance whatever to res judicata. *192They had nothing to do with the post-judgment new trial feature of the 1866 and 1863 Acts, which were omitted in the Revised Statutes of 1874.16 And no fair minded reading can construe the 1863 post-judgment new trial provision as anything but an absolute right to relitigate.
Since it is indisputable that Congress intended a res judicata exception in the 1866 Act, the only open question is whether, when the post-judgment removal provision was dropped from the Revised Statutes of 1874, Congress evidenced a positive intention to make actions under that statute subject to state res judicata rule for the first time. Section 5596 of the Revised Statutes provides:
All acts of Congress passed prior to said first day of December one thousand eight hundred and seventy-three, any portion of which is embraced in any section of said revision, are hereby repealed, and the section applicable thereto shall be in force in lieu thereof; . . . and all acts of Congress passed prior to said last-named day no part of which are embraced in said revision, shall not be affected or changed by its enactment.
The manner in which many statutes — the civil rights acts particularly — were distributed by the codifiers among various titles makes it difficult to apply section 5596 in particular instances. See, e.g., Wilson v. Omaha Indian Tribe, 442 U.S. 653, 99 S.Ct. 2529, 61 L.Ed.2d 153 (1979); Runyon v. McCrary, 427 U.S. 160, 96 S.Ct. 2586, 49 L.Ed.2d 415 (1976). But given the general congressional intention to repeal only the prior statutes which were then codified, and leave other laws in effect, anyone trying to treat the Revised Statutes as a change in the congressional policy against giving state court judgments res judicata effect in section 1981 cases has the burden of persuasion. The majority opinion does not persuade us.
V.
Since we do not join in the majority’s res judicata -collateral estoppel reasoning or conclusion, it is appropriate to note that USS’s alternative position is equally devoid of merit. USS contends that the trial court’s findings of fact are clearly erroneous. The trial court performed the classic function of the factfinder: drawing inferences from conflicting evidence as to the ultimate facts in issue. Under the standards governing this court set forth in Fed. R.Civ.P. 52(a) we cannot substitute our inferences even if we were of a mind to do so. Pullman-Standard v. Swint,-U.S.-, 102 S.Ct. 1781, 72 L.Ed.2d 66 (1982). We are not in any event of a mind to do so, for the trial court’s conclusions are amply supported by the evidence and eminently reasonable.
VI.
The majority has disregarded the record in this case, ignored a prior decision of this court made on an identical record, misstated the contents of the Commonwealth Court decision, confused the distinction under Pennsylvania law between claim preclusion and issue preclusion, misinterpreted the Supreme Court’s decision in Kremer v. Chemical Construction Corp., - U.S. -, 102 S.Ct. 1883, 72 L.Ed.2d 262 and misread the Civil Rights Act of 1866 — all in an unsuccessful effort to justify the patently unjust result of depriving Ms. Davis of a judgment for money damages and attorneys fees to which the trial court properly found her entitled. We dissent.

. Davis v. United States Steel Supply, Div. of U.S. Steel Corp., 405 F.Supp. 394 (W.D.Pa. 1976).

. Davis v. United States Steel Supply, Div. of U.S. Steel Corp., 581 F.2d 335, 338 (3d Cir. 1978).

. 581 F.2d at 340 n.5,

. The certified record in this appeal does not contain the Southworth affidavit or any of the pleadings before either the Pittsburgh Human Relations Commission, the Court of Common Pleas of Allegheny County, or the Commonwealth Court. It contains only the September 5, 1975 motion, which reads in its entirety:

MOTION TO DISMISS, OR IN THE ALTERNATIVE, FOR SUMMARY JUDGMENT

Defendant United States Steel Corporation moves the Court, pursuant to Rule 12(b) of the Federal Rules of Civil Procedure, to dismiss the instant Complaint on the grounds of *181lack of jurisdiction over the subject matter and failure to state a claim upon which relief can be granted; or, in the alternative, moves the Court to enter summary judgment in its favor on the basis that the pleadings, fogether with the affidavit and exhibits attached to the brief accompanying this motion, show that there is no genuine issue as to any material fact and that Defendant United States Steel Corporation is entitled to judgment as a matter of law.

. 1. Mrs. Thelma B. Davis is a black female who was employed by the United States Steel Corporation on May 5, 1966.
2. Mrs. Davis had received her training at Connelly Vocational School, M.D.T.A. program, and was very highly recommended by her teachers for this employment.
3. Mrs. Davis took an examination, given by the Respondent, and appeared to possess all of the necessary skills for her future employment.
4. The United States Steel Supply Division of the United States Steel Corporation had never employed Negro personnel, either in clerical, secretarial, or any capacity other than laborers in the warehouse who performed menial jobs.
5. The first year of Complainant’s employment went without major incident, but beginning in 1966 Complainant experienced difficulties with other employees and was the victim of name calling (i.e., racial slurs) and suffered damage to personal property, the only employee to experience such.
6. Complainant had, on several occasions, reported the incidents to her immediate supervisor but in all cases little or no credence was given them, with the word of the other employee taken for value.
7. Complainant experienced difficulties in the Flexograph Room and was transferred to the File Room but the difficulties continued.
8. On February 2, 1970, when Complainant went to the then acting manager to complain concerning damage to her boots, she was summarily dismissed from the employment of the United States Steel Supply Division.
9. The Complainant was dismissed on the spot and no apparent effort was made to determine the validity of her complaint of the incident.
10. Various employee conflicts apparently occurred in the office where Complainant worked and the supervisor and management appeared unable or unwilling to ameliorate *187these employee problems. On investigation by Commission on Human Relations staff after the dismissal of the employee, it appeared that Complainant’s records were kept in a different fashion than the records of other employees, and letters involving other employees, critical of Complainant, were kept in the Complainant’s file.
(276a-278a).

. Compare Pa.Stat.Ann. tit. 43, § 962 (Purdon 1964).

. Since the Pittsburgh ordinance is not of record we do not know its terms, but USS has not suggested that it contains provisions similar to the New York Human Rights Law.

. The Court wrote:
No provision of Title VII requires claimants to pursue in state court an unfavorable state administrative action, nor does the Act specify the weight a federal court should afford a final judgment by a state court if such a remedy is sought. While we have interpreted the “civil action” authorized to follow consideration by federal and state administrative agencies to be a “trial de novo,” Chandler v. Roudebush, 425 U.S. 840, 844-845 [96 S.Ct. 1949, 1951 52, 48 L.Ed.2d 416] (1976); Alexander v. Gardner-Denver Co., supra, 415 U.S., at 38 [94 S.Ct., at 1015]; McDonnell Douglas Corp. v. Green, 411 U.S. [792] at 798-799 [93 S.Ct. 1817, at 1822-23, 36 L.Ed.2d 668] (1973), neither the statute nor our decisions indicate that the final judgment of a state court is subject to redetermination at such a trial.
- U.S. at--, 102 S.Ct. at 1891. Justice Blackmun, dissenting, also observed:
The Court, as it must, concedes that a state agency determination does not preclude a trial de novo in federal district court. . . . Congress made it clear beyond doubt that state agency findings would not prevent the Title VII complainant from filing suit in a federal court.
----U.S. at----, 102 S.Ct. at 1900.

. See also Patsy v. Board of Regents of the State of Florida, — U.S. -- , 102 S.Ct. 2557, 73 L.Ed.2d 172 (1982).

. See Restatement (Second) of Judgments § 86 (1982). The Restatement provides these illustrations:
A Co. brings an action against B Co. in a state court under a state antitrust law and loses on the merits. It then commences an action in a federal court upon the same facts, charging violations of the federal antitrust laws, of which the federal courts have exclusive jurisdiction. The second action is not barred.
Section 26 comment c, illustration 2.
W brings an action in state court against E, her employer, alleging that she was discharged from her employment on account of race, in violation of a state statute prohibiting discrimination in employment on account of race. Judgment is for E. W then brings an action in federal court, alleging that the discharge in question was in violation of a federal statute prohibiting discrimination in employment on account of race. The state court judgment does not preclude litigation of the federal claim if the federal statute contemplates that the federal claim may be asserted notwithstanding the adjudication in state court.
Section 86 comment d, illustration I. See also Note, The Collateral Estoppel Effect of Prior State Court Findings in Cases Within Exclusive Federal Jurisdiction, 91 Harv.L.Rev. 1281 (1978); Note, Exclusive Jurisdiction of the Federal Courts in Private Civil Actions, 70 Harv.L. Rev. 509 (1957).

. 14 Stat. 27 (1866).

. See, e.g., Cong. Globe, 39th Cong., 1st Sess., 475-80, 598-600, 1123-25, 1155, 1161, 1271, 1366-67, 1679-81, 1758 59, 1782-83 (1866).

. See especially 16 Stat. 144 (1870); 17 Stat. 13 (1871); 18 Stat. 335 (1875); 18 Stat. 470 (1875), Revised Statutes of the United States, §§ 563, 629, 1977-79 (2d ed. 1878).

. 14 Stat. 27 (1866).

. 12 Stat. 757 (1863).

. A possible explanation for the omission is the holding in The Justices v. Murray, 76 U.S. (9 Wall.) 274, 19 L.Ed. 658 (1870), that post-judgment removal and retrial of a case tried to a jury violates the seventh amendment. The review may have concluded that because the post-judgment appeal provision could no longer apply to cases tried to a jury, and most cases were so tried in the 1870’s, the provision was not one of general application. The Murray holding does not bear upon the question whether Congress intended an exception to the predecessor of 28 U.S.C. § 1738, which enacts a non-constitutional rule of decision.