Staats v. County of Sawyer

• Decision Date: 17 July 2000
• Docket Number: No. 99-1303,DEFENDANTS-APPELLEES,PLAINTIFF-APPELLANT,99-1303
• Citation: 220 F.3d 511
• Parties: (7th Cir. 2000) EDWARD G. STAATS,, v. COUNTY OF SAWYER AND COUNTY OF BAYFIELD,
• Court: U.S. Court of Appeals — Seventh Circuit

Page 511

220 F.3d 511 (7th Cir. 2000)

EDWARD G. STAATS, PLAINTIFF-APPELLANT, v. COUNTY OF SAWYER AND COUNTY OF BAYFIELD, DEFENDANTS-APPELLEES.

No. 99-1303

U.S. Court of Appeals, Seventh Circuit

Argued September 28, 1999

Decided July 17, 2000

Appeal from the United States District Court for the Western District of Wisconsin. No. 98-C-593-S--John C. Shabaz, Chief Judge.

Robert W. Pledl (argued), Courtney, Pledl & Molter, Milwaukee, WI, Monica M. Murphy, Wisconsin Coalition for Advocacy, Milwaukee, WI, for Plaintiff-Appellant.

Joel L. Aberg (argued), Weld, Riley, Prenn & Ricci, Eau Claire, WI, for Defendant-Appellee.

Before Bauer, Flaum, and Diane P. Wood, Circuit Judges.

Diane P. Wood, Circuit Judge.

In September 1994, Edward Staats learned that he suffers from bi-polar disorder. He received treatment for it, but when he attempted to return to his job as personnel director for Sawyer and Bayfield Counties, Wisconsin (the Counties), he was told that the job had been eliminated. Believing that this was a poor disguise for disability discrimination, he pursued his state administrative remedies. Ultimately, the Labor and Industry Review Commission (LIRC) rejected his claims, and the Circuit Court for LaCrosse County affirmed that decision. Meanwhile, Staats had also filed charges with the federal Equal Employment Opportunity Commission (EEOC), which in due course issued him a right-to-sue letter. This case followed in federal court. The district court dismissed Staats's claims under Titles I and II of the Americans with Disabilities Act (ADA) and the Rehabilitation Act of 1973 on the ground of claim preclusion. Because we find that Wisconsin would permit claim splitting under the circumstances presented here, we reverse and remand for further proceedings.

I.

There is little more to the underlying facts than we have already recounted. Staats began working as the full-time personnel director for the Counties in May 1993 under an arrangement whereby he split his time between them. Either county was entitled to terminate the agreement by filing written notice before September 1 of the year preceding termination. Everything proceeded smoothly until September 1994, when Staats began acting strangely. He was hospitalized the same month for his bi-polar disorder; in October, he was hospitalized again and remained in the hospital until mid-November. In late November 1994, he attempted to return to work. At that point, the Counties told him that he needed a release from his doctor. He complied, but the work release his doctor gave him restricted him to "working no more than 40 hours per week, taking no work home to complete after hours, attending regular therapy sessions with psychiatrists, in complian[ce] with his medication, monthly laboratory testing of medication blood level and abstinence from alcohol for the next 90 days." In mid-December 1994, one of Staats's treating physicians completed a medical form indicating that Staats was able to perform work as a personnel director as of November 20, 1994.

A return to work, however, was not in Staats's future. Instead, on December 19, the Counties' attorney informed Staats that he could continue to work until the end of the calendar year, at which time his job position itself would be eliminated. On March 3, 1995, Staats filed a claim of employment discrimination with the State of Wisconsin Equal Rights Division, alleging violations of the Wisconsin Fair Employment Act (WFEA), Wis. Stat. sec. 111.31 et seq. The Equal Rights Division found probable cause to believe that the Counties had discriminated against Staats and certified the matter to a hearing before an administrative law judge. After a full hearing on the merits, the ALJ issued a decision concluding that the Counties had violated the WFEA and had failed to determine what sort of accommodation Staats might need.

The Counties appealed the decision to the LIRC. Conducting the appeal on the record, the LIRC reversed the ALJ's decision. It found that although the Counties had eliminated Staats's position because of his disability, the Counties had not violated the WFEA. Staats sought review of the LIRC decision in state court under the Wisconsin state administrative review procedures. See Wis. Stat. sec. 111.395. The state court conducted a review limited to the administrative record, as it was required to do by statute. See Wis. Stat. sec. 227.57. It upheld the LIRC's decision. See id. Staats did not appeal.

Two weeks after Staats filed his complaint with the Equal Rights Division, he cross-filed with the EEOC. Sometime in May 1998, he received his right-to-sue letter from the EEOC and shortly thereafter filed the present action in federal district court. His complaint alleged that the Counties had discriminated against him because of his disability (bi-polar disorder) by failing to provide reasonable accommodations for him and eliminating his position, in violation of Titles I and II of the Americans with Disabilities Act, 42 U.S.C. sec. 1201, et seq., and the Rehabilitation Act of 1973, as amended, 29 U.S.C. sec. 794, et seq. The Counties filed a motion for summary judgment on the basis that the state court decision affirming the decision of the LIRC barred the federal court action under the doctrine of claim preclusion. See 28 U.S.C. sec. 1738; Northern States Power Co. v. Bugher, 525 N.W.2d 723, 728-29 (Wis. 1995). The district court agreed and entered judgment for the Counties; Staats now appeals.

II.

We review a district court's grant of summary judgment on the basis of claim preclusion de novo. Roboserve, Inc. v. Kato Kagaku Co., Ltd., 121 F.3d 1027, 1034 (7th Cir. 1997). As Staats was the nonmoving party, we draw any inferences from the facts in his favor. Broadcast Music, Inc. v. Claire's Boutiques, Inc., 949 F.2d 1482, 1486 (7th Cir. 1991).

Staats suggests three reasons why the state court judgment does not bar his claims under the federal anti-discrimination laws: (1) Wisconsin law would not give the state court judgment preclusive effect; (2) the state court had limited jurisdiction in conducting its review of the administrative decision and therefore Staats could not have brought his federal claims in the earlier proceeding; and (3) the standards and remedies provided by Wisconsin discrimination law are narrower than those of federal law, and so an exception to claim preclusion should apply.

As we recently observed in Froebel v. Meyer, 217 (7th Cir. 2000), the federal court was required to give the Wisconsin court's judgment the same full faith and credit that it would have received in a Wisconsin court. Id. at *4; 28 U.S.C. sec. 1738. The fact that this was a state court judgment affirming an administrative decision does not exempt it from the normal rules of preclusion. State administrative findings that have been subjected to state judicial review are entitled to both claim and issue preclusive effect in federal courts. Kremer v. Chemical Construction Corp., 456 U.S. 461, 481-82 n.22 (1982). The Supreme Court has also held that "it is sound policy to apply principles of issue preclusion to the factfinding of administrative bodies acting in a judicial capacity." University of Tennessee v. Elliott, 478 U.S. 788, 797 (1986). See also East Food & Liquor, Inc. v. United States, 50 F.3d 1405, 1411-12 (7th Cir. 1995) (applying administrative issue preclusion to state agency findings in a food stamp case). On the other hand, the Court has drawn the line at claim preclusion for unreviewed state agency findings, concluding in Elliott that "Congress did not intend unreviewed state administrative proceedings to have preclusive effect on Title VII claims." 478 U.S. at 796.

Although Staats's claims arise under the ADA and the Rehabilitation Act, not Title VII, we think the logic of Kremer and Elliott applies equally to other federal anti-discrimination statutes. Because the Wisconsin circuit court entered a judgment in Staats's case, we have a "reviewed" state administrative decision, which is entitled to whatever degree of claim preclusion Wisconsin would give it. In Froebel, we reviewed the principles that govern in Wisconsin:

The Wisconsin Supreme Court recently summarized its approach to deciding when a subsequent action is barred in Sopha v. Owens-Corning Fiberglas Corp., 601 N.W.2d 627 (Wis. 1999). There the court indicated that three factors had to be present in order to preclude the later action:

(1) identity between the parties or their privies in the prior and present suits; (2) prior litigation resulted in a final judgment on the merits by a court with jurisdiction; and (3) identity of the causes of action in the two suits.

Id. at 637.

Froebel, 2000 WL 862519 at *4. See also Northern States Power, 525 N.W.2d at 728; Patzer v. Board of Regents of the University of Wisconsin System, 763 F.2d 851, 855 (7th Cir. 1985).

The first requirement--identity of the parties--is plainly met here, as Staats and the Counties were the opposing parties in both cases. We assume for the sake of argument that the third requirement--identity of claim--is also satisfied, under the transactional approach that prevails in Wisconsin. See Northern States Power, 525 N.W.2d at 728-29; Parks v. City of Madison, 492 N.W.2d 365, 370 (Wis. Ct. App. 1992), citing Juneau Square Corp. v. First Wisconsin National Bank, 364 N.W.2d 164, 170 (Wis. Ct. App. 1985). Staats's WFEA, ADA, and Rehabilitation Act claims arose out of the same basic factual situation and the same basic conduct of the Counties: the elimination of his position of employment. Under the transactional approach, Wisconsin would probably find that these claims are the same. See Brye v. Brakebush, 32 F.3d 1179, 1184 (7th Cir. 1994); DePratt v. West Bend Mutual Ins. Co., 334 N.W.2d 883, 886 (Wis. 1994) ("[The] claim is coterminous with the transaction, regardless of the number of substantive theories or variant forms of relief flowing from these theories;...