32 F.3d 1179 (7th Cir. 1994), 93-2833, Brye v. Brakebush

Docket Nº:93-2833.
Citation:32 F.3d 1179
Party Name:Steven BRYE, Plaintiff-Appellant, v. William BRAKEBUSH, Nancy Brakebush, Carl Brakebush, and Brakebush Brothers, Inc., Defendants-Appellees.
Case Date:August 22, 1994
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit
 
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32 F.3d 1179 (7th Cir. 1994)

Steven BRYE, Plaintiff-Appellant,

v.

William BRAKEBUSH, Nancy Brakebush, Carl Brakebush, and

Brakebush Brothers, Inc., Defendants-Appellees.

No. 93-2833.

United States Court of Appeals, Seventh Circuit

August 22, 1994

        Argued Jan. 18, 1994.

Page 1180

        Jacqueline Macaulay, Jacobson & Macaulay, Madison, WI (argued), for plaintiff-appellant.

        Dennis M. White, Brennan, Steil, Basting & MacDougall, Madison, WI (argued), for defendants-appellees.

        Before FLAUM and ROVNER, Circuit Judges, and WILLIAMS, District Judge. [*]

        ANN CLAIRE WILLIAMS, District Judge.

        Steven Brye appeals from a judgment of the United States District Court for the Western District, Shabaz, J., granting defendants' motion for summary judgment and dismissing Brye's Title VII employment discrimination claim. The district court held that Brye was precluded from litigating his Title VII claim in federal court under the common law doctrine of res judicata. Specifically, the court held that a Wisconsin Circuit Court's dismissal of Brye's petition for review of an adverse decision by the Wisconsin Labor and Industry Review Commission ("LIRC") barred any further litigation of his discrimination claim. The Circuit Court's dismissal order, which was entered at Brye's request, reads as follows:

The Court hereby dismisses th[e] Petition with prejudice to further proceedings in regards to the charge of discrimination made before the Equal Rights Division, Department of Industry, Labor and Human Relations but without prejudice to any right the petitioner may have to pursue his claims in federal or state court under Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e et seq.

        (May 11, 1993 Dismissal Order at 1). Finding that the state court order was not on the merits and therefore not entitled to any preclusive effect under Wisconsin law, we reverse.

       I. Background

        On December 29, 1987, Steven Brye was fired from his job as a financial controller at Brakebush Brothers, Inc., a family-owned poultry processing company in Westfield, Wisconsin. Brye had worked at the company for more than seven years at the time of his discharge. Several months after his termination, Brye filed a charge of discrimination with the Equal Rights Division of the Wisconsin Department of Labor, Industry and Human Relations ("ERD"). Brye alleged that the company's owners, Bill, Nancy, and Carl Brakebush, harassed him throughout his employment with the company and ultimately discharged him because of his religious beliefs.

        According to Brye's complaint, the Brakebushes are active members of the Lutheran Church and believe that the Bible is the literal truth and the word of God. Brye, on the other hand, believes in a "universal god" but is not a Christian and does not attend church. Brye complains that the Brakebushes harassed him because they believed that he was an atheist and failed to accept Jesus Christ in his life as they did. Brye alleged that religion was a substantial factor in the Brakebushes' decision to fire him, and that he would not have been terminated but for his failure to accept Jesus Christ.

        Following a short investigation, an ERD investigator issued an "Initial Determination" finding probable cause to believe that Brakebush Brothers, Inc. had discriminated against Brye in violation of Wisconsin law. An administrative hearing was held in May and August 1990, and on September 11, 1991, Administrative Law Judge Alice E. DeLaO

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found that the Brakebushes had harassed and later fired Brye because of his religious beliefs. Brakebush Brothers, Inc. filed a timely petition for administrative review by the LIRC. After consulting with ALJ DeLaO on the issue of witness credibility, the LIRC made an independent finding of credibility, issued findings of fact at odds with the ALJ's, and reversed the ALJ's conclusion of law.

        One month later, on January 11, 1993, Brye filed a timely petition for judicial review of the LIRC's decision under Wis.Stats. Secs. 227.52 and 227.53. In his brief on appeal, Brye asserts that he only filed the state court petition because he had not yet received a "right to sue" letter from the Equal Employment Opportunity Commission ("EEOC"). The right to sue letter was issued on March 17, 1993. On May 6, 1993, plaintiff filed the instant suit under Title VII of the Civil Rights Act of 1964, 42 U.S.C. Sec. 2000e et seq., in the Western District of Wisconsin. He moved to voluntarily dismiss his Petition for Judicial Review then pending in Marquette County Circuit Court that same day. No briefing schedule had been set, nor any proceedings held in state court, before Brye filed his motion to voluntarily dismiss.

        Although Brye requested dismissal of his Petition for Review without prejudice, he acknowledged in his motion that under the Wisconsin Fair Employment Law, his petition for review could not be refiled. Plaintiff explained that he was requesting a voluntary dismissal without prejudice so that he could retain his right to pursue his claims in federal and/or state court under Title VII. Brye submitted a proposed order of dismissal which read as follows:

Petitioner Steven Brye, having made a motion for dismissal without prejudice of the above-captioned Petition for Review of a Decision of the Labor and Industry Commission;

The Court hereby dismisses that Petition with prejudice to further proceedings in regards to the charge of discrimination made before the Equal Rights Division, Department of Industry, Labor and Human Relations but without prejudice to any right the petitioner may have to pursue his claims in federal or state court under Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e et seq.

        Brakebush Brothers, Inc. responded with its own proposed order of dismissal. This proposed order states:

Petitioner, Steven Brye, having made a Motion for Dismissal without prejudice of the Petition for Review of a decision of the Labor and Industry Review Commission and having acknowledged that he cannot reinstate the petition, and this Court having duly considered the issue;

NOW THEREFORE ORDERS:

That the Petition for Review be, and it hereby is, dismissed with prejudice.

        On May 11, 1993, the Marquette County Circuit Court entered Brye's proposed order of dismissal.

        Defendants in this action then moved for summary judgment on the ground that the state court's dismissal of Brye's Petition for Review barred him from relitigating his employment discrimination claim in federal court. Concluding that Wisconsin courts would consider Brye's voluntary dismissal a final decision on the merits, and therefore entitled to preclusive effect, the district court granted defendants' motion for summary judgment.

       II. Analysis

        The issue on appeal is a narrow one--whether the district court erred in holding that the state court's dismissal of Brye's Petition for Review bars a federal court from hearing his Title VII claims. Our analysis begins, as it must, with a review of the controlling Supreme Court cases of Kremer v. Chemical Construction Corp., 456 U.S. 461, 102 S.Ct. 1883, 72 L.Ed.2d 262 (1982), and University of Tennessee v. Elliott, 478 U.S. 788, 106 S.Ct. 3220, 92 L.Ed.2d 635 (1986), where the Court explored the complex interplay between Title VII, the "full faith and credit" requirements of 28 U.S.C. Sec. 1738, and the common law doctrine of res judicata.

        In Kremer, plaintiff brought a Title VII action in federal court after a New York state court had affirmed a New York State

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Division of Human Rights determination that there was no probable cause to believe his employment discrimination claim. In affirming the lower court's dismissal of Kremer's complaint on res judicata grounds, the Court held that Congress did not intend to carve out a special Title VII exception to the general rule under 28 U.S.C. Sec. 1738 1 requiring federal courts to give the same preclusive effect to a state court judgment that the judgment would be given by other courts in that state. Kremer, 456 U.S. at 476, 102 S.Ct. at 1894-95. In a footnote in the opinion, the Court stated in dictum that it is nevertheless...

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