Unger v. Consolidated Foods Corp.

• Decision Date: 26 November 1982
• Docket Number: Nos. 80-2792,80-2844,s. 80-2792
• Citation: 693 F.2d 703
• Parties: 30 Fair Empl.Prac.Cas. 441, 30 Empl. Prac. Dec. P 33,161 Trudy UNGER, Plaintiff-Appellee, Counter-Appellant, v. CONSOLIDATED FOODS CORPORATION, Defendant-Appellant, Counter-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 703

693 F.2d 703

30 Fair Empl.Prac.Cas. 441,

30 Empl. Prac. Dec. P 33,161

Trudy UNGER, Plaintiff-Appellee, Counter-Appellant, v. CONSOLIDATED FOODS CORPORATION, Defendant-Appellant, Counter-Appellee.

Nos. 80-2792, 80-2844.

United States Court of Appeals Seventh Circuit.

Nov. 26, 1982.

David J. Parsons, Seyfarth, Shaw, Fairweather & Geraldson, Chicago, Ill., for defendant-appellant, counter-appellee.

John August Cook, Chicago, Ill., for plaintiff-appellee, counter-appellant.

Before CUMMINGS, Chief Judge, ^* MARKEY, Chief Judge, ^** and CUDAHY, Circuit Judge.

CUMMINGS, Chief Judge.

On June 1, 1982, the Supreme Court, --- U.S. ----, 102 S.Ct. 2288, 73 L.Ed.2d 1297, issued an order in this case granting the petition for a writ of certiorari, vacating the judgment of this Court in the above-titled cause (657 F.2d 909, 7th Cir.) and remanding the case for further consideration in light of Kremer v. Chemical Construction Corp., 456 U.S. ----, 102 S.Ct. 1883, 72 L.Ed.2d 262 (1982). We have given careful consideration to the Kremer opinion and the statements filed by the parties pursuant to Circuit Rule 19. Defendant emphasizes the similarity of the Kremer and Unger cases and urges us to dismiss the cases as res judicata. Plaintiff argues that Kremer is distinguishable, or alternatively, that Kremer should not be applied retrospectively. For the reasons articulated below, we have come to the conclusion that this case is controlled by Kremer and that Kremer must be applied retrospectively. Accordingly, we remand the case to the district court with instructions to dismiss the complaint.

I.

The facts of the case are fully set forth in our prior opinion; a brief summary will suffice here. In October 1972, Trudy Unger filed a complaint before the Illinois Fair Employment Practices Commission (FEPC) alleging that her first discharge from the employ of Sirena Division of Consolidated Foods Corporation was discriminatory and her second retaliatory. After a hearing, the Hearing Examiner found against plaintiff on the first discharge and in her favor on the second. The full Commission, however, in 1975 concluded that Trudy Unger was not a victim of sex discrimination on either count. She then sought administrative review in the Circuit Court of Cook County, which reversed the FEPC. Sometime in 1976, defendant appealed the state decision to the Illinois Appellate Court, and in February 1977, plaintiff filed a Title VII suit in Federal District Court. In 1978, the Illinois Appellate Court reversed the Circuit Court and reinstated the decision of the Commission. ¹ Leave to appeal to the Illinois Supreme Court was denied; the Illinois state case thus concluded in defendant's favor.

In 1980 in the District Court defendant argued before Judge Roszkowski that plaintiff Unger's suit was barred by res judicata, ² but the motion to dismiss was denied on Title VII policy grounds and the federal case proceeded to trial. A bench trial before Judge J. Sam Perry resulted in a verdict and judgment in Trudy Unger's favor. Defendant appealed and we affirmed on both the res judicata issue and on the merits of the case.

Prior to our decision in this case, the Supreme Court granted certiorari in Kremer v. Chemical Construction Corp., 623 F.2d 786 (2d Cir.1980), a Title VII collateral estoppel case. ³ Soon after this Court's decision, defendant filed a petition for certiorari and moved the Supreme Court to consolidate Unger with Kremer. That motion was denied. On May 17, 1982, the Supreme Court held in Kremer that Title VII does not effect a partial repeal by implication of 28 U.S.C. Sec. 1738. ⁴ A federal court confronted with a Title VII discrimination complaint must give preclusive effect to a prior state court judgment on the same matter--assuming that the plaintiff previously had a "full and fair opportunity" to litigate.

II.

The ultimate question in this case is whether the prior state court judgment in Unger must be accorded preclusive effect under the collateral estoppel analysis of Kremer. As a threshold matter this Court must consider whether the cases are sufficiently similar that the Kremer analysis may appropriately be applied to Unger. In Kremer, plaintiff filed a complaint before the New York State Division of Human Rights, where, after informal proceedings, his complaint was dismissed for lack of probable cause. That decision was sustained throughout the New York State courts. ⁵ Only after the end of all state court proceedings did Kremer file a Title VII suit in district court. Kremer is thus a straightforward collateral estoppel case. It is virtually the paradigmatic case in that the only question before the Supreme Court was the preclusive effect of a state court proceeding that concededly was final before the federal suit was filed. Unger is complicated procedurally by the fact that plaintiff conducted parallel suits in state and federal court; the collateral estoppel effect of the state court proceeding thus varied from time to time. Moreover, while Kremer lost consistently throughout state and federal proceedings and no federal trial was held, Unger won at the Illinois Circuit Court level, defendant's collateral estoppel argument was rejected in federal district court, and a federal trial was held on the Title VII complaint.

Despite these differences in the sequencing of the state and federal suits in the two cases, it is our conclusion that Kremer is indeed relevant precedent. When the procedural underbrush of Unger is cleared away, it is apparent that a final state judgment preceded the federal trial. As between two actions pending at the same time, the first of two judgments has preclusive effect on the second. 18 Wright, Miller & Cooper, Federal Practice and Procedure Sec. 4404; Restatement (Second) of Judgments, Sec. 14 (res judicata), Sec. 27, Comment 1 (collateral estoppel) (1981). Following this rule and the teaching of Kremer, the district court properly might have granted defendant's timely motion to dismiss the suit on a collateral estoppel ground at the time of the Illinois Appellate Court's reversal.

This Court, on remand, is again in the position of reviewing the propriety of the district court's refusal to dismiss the suit on a collateral estoppel ground. The fact that the case went to trial is itself of no consequence. The denial of the collateral estoppel motion to dismiss is not a collateral order appealable under 28 U.S.C. Sec. 1291; appeal of the district judge's decision had to await the end of the trial.

III.

We now turn to the question of whether under Kremer the Illinois state court decision should bar plaintiff. Three points may be disposed of briefly at the outset. First, according to general preclusion principles, a prior action bars a subsequent action only if the same parties and the same cause of action are involved in both suits. We note that the Illinois prohibition against discrimination in employment, Ill.Rev.Stat. ch. 48, Sec. 853, is at least as broad as that of Title VII, and that plaintiff Unger alleged the same discriminatory conduct in state and federal court; thus the same claims of discrimination as well as the same parties are involved in the state and federal suits. Second, the Illinois proceedings satisfy the due process requirements set forth in Kremer, 102 S.Ct. at 1896-99. At an FEPC hearing the parties may be represented by counsel, testimony is under oath and cross-examination is permitted, the rules of evidence used in Illinois courts apply, and compulsory process is available. See Rules and Regulations of the Illinois Fair Employment Practices Commission (issued pursuant to Ill.Rev.Stat. ch. 48, Sec. 856.05 (1975)). The reviewing court is also empowered to remand the case to the agency for the taking of further evidence. Ill.Rev.Stat. ch. 110, Sec. 275(1)(g). Third, a final judgment of the Illinois Appellate Court on administrative review would be accorded preclusive effect by the Illinois courts. See Lee v. City of Peoria, 685 F.2d 196 (7th Cir.1982). Section 1738 requires the federal court to accord the state court decision a like effect. If plaintiff Unger is to avoid the reach of Kremer, it must be on some other grounds.

Plaintiff Unger argues that Unger and Kremer are distinguishable in terms of the standards of administrative review applied by the Illinois and New York courts. Her contention is that a prior judgment can have preclusive effect only if it was a decision on the very question presented to the second court. The point is essentially that made by Justice Blackmun in his Kremer dissent, 102 S.Ct. at 1903, in which he argued that the New York Appellate Division "made no finding one way or the other concerning the merits of petitioner's claim" (emphasis in original) because the court was reviewing the agency's decision process rather than directly addressing the question of whether Rubin Kremer had been discriminated against. Thus "since the discrimination claim, not the validity of the state agency's decision, is the issue before the federal court," the state court decision should not be a bar according to his dissent. Id. Unger maintains that the New York standard of review was so stringent as to amount to a decision on the merits (and thus a decision on the issue raised in the Title VII complaint), while the Illinois courts' review, being deferential, was a review of the administrative proceeding and thus did not constitute a finding one way or the other as to whether she was a victim of discrimination. ⁶

We do not, however, discern any practical difference in the standards of review applied by the Illinois and New York courts. According to the Illinois Appellate Court in Unger, 18 Ill.Dec. at 117-18, 377 N.E.2d at 270-71, "upon review of the dismissal of a charge by the [FEPC], the scope of review is to ascertain from an adequate record whether the commission's order of dismissal is arbitrary, capricious, or an abuse of discretion."...