Vines v. Northeast Louisiana University

• Decision Date: 05 March 2003
• Docket Number: No. 36,747-CA.,36,747-CA.
• Citation: 839 So.2d 979
• Parties: Dr. Dwight VINES and Dr. Van McGraw, Plaintiffs-Appellants, v. NORTHEAST LOUISIANA UNIVERSITY and the Board of Trustees, University of Louisiana System, Defendants-Appellees.
• Court: Court of Appeal of Louisiana — District of US

839 So.2d 979

Dr. Dwight VINES and Dr. Van McGraw, Plaintiffs-Appellants, v. NORTHEAST LOUISIANA UNIVERSITY and the Board of Trustees, University of Louisiana System, Defendants-Appellees.

No. 36,747-CA.

Court of Appeal of Louisiana, Second Circuit.

March 5, 2003.

Rehearing Denied April 3, 2003.

Johnny E. Dollar, Monroe, Dwan S. Hilferty, New Orleans, for Appellants.

Jones, Walker, Waechter, Poitevent, Carrere & Denegre, by H. Mark Adams, Pauline F. Hardine, Virginia W. Gundlach, Jennifer L. Anderson, Baton Rouge, McLeod Verlander, by Robert M. McLeod, Donald C. Douglas, Jr., Monroe, for Appellee University of Louisiana at Monroe.

Winston G. Decuir, New Orleans, Linda Law Clark, Baton Rouge, for Appellee Board of Supervisors of the University of Louisiana System.

Before BROWN, WILLIAMS and GASKINS, JJ.

GASKINS, J.

The plaintiffs, Dr. Dwight Vines and Dr. Van McGraw, appeal a trial court judgment sustaining an exception of res judicata and collateral estoppel as to their claims of age discrimination. The exception was based upon the dismissal of a suit in federal court filed by the Equal Employment Opportunity Commission (EEOC). The defendants, Northeast Louisiana University and the Board of Trustees of the University of Louisiana System, have answered, seeking sanctions for a frivolous appeal. For the following reasons, we reverse the trial court judgment and deny the claim for frivolous appeal.

FACTS

The plaintiffs were professors at Northeast Louisiana University, now known as the University of Louisiana at Monroe (ULM). Vines retired in 1989 and McGraw retired in 1991. They voluntarily chose to retire with benefits equal to 100% of their average compensation during their last three years of work. They simultaneously were rehired on a year-to-year basis. The plaintiffs worked for five years under this plan, receiving retirement benefits in addition to salaries for work performed.

In January 1996, the University of Louisiana System adopted a policy prohibiting the re-employment of retirees on a regular full-time basis. In April 1996, the plaintiffs were notified that they would not be rehired for the 1996-1997 year.

In May 1997, the plaintiffs filed suit in federal court claiming that the defendants violated the federal Age Discrimination in Employment Act (ADEA) contained in 29 U.S.C. § 621 et seq., as well as Louisiana law prohibiting age discrimination.¹ On the same date, they filed suit in state court asserting the same causes of action.

ULM removed the state court suit to federal court, claiming federal question jurisdiction. The cases were consolidated. The plaintiffs claimed that the defendants violated the federal and state laws against age discrimination by prohibiting the reemployment of retirees, paying the plaintiffs less than younger professors, and increasing their workloads.

The EEOC then instituted a separate action in federal court naming the plaintiffs as aggrieved parties. The EEOC alleged that ULM had a policy of paying rehired retirees lower wages and giving them increased workloads, in violation of the ADEA. The EEOC action was also consolidated in federal court with the federal and state cases brought by the plaintiffs. According to the plaintiffs, the EEOC eventually expanded the scope of victims to include all retirees employed at lower wages or rejected or terminated from employment.

In August 1999, the federal court granted an exception of prescription as to the plaintiffs' state court claims.²

On January 11, 2000, the United States Supreme Court in Kimel v. Florida Board of Regents, 528 U.S. 62, 120 S.Ct. 631, 145 L.Ed.2d 522 (2000), found that individuals may not sue the states under the ADEA.

The defendants filed a motion for summary judgment, seeking dismissal of the EEOC's and the plaintiffs' remaining ADEA claims. Based upon Kimel, the federal court concluded that it lacked jurisdiction over the plaintiffs' ADEA claims. However, the EEOC was not barred from asserting those claims on behalf of the plaintiffs.

The federal court also found in June 2000 that it lacked subject matter jurisdiction over the plaintiffs' individual state law claims and vacated its prior order dismissing the state law claims on grounds of prescription. The plaintiffs' state law claims were remanded to the state court. The EEOC's age discrimination claim on behalf of the plaintiffs proceeded in federal court. According to the plaintiffs, during discovery, the EEOC expanded the scope of the alleged victims to include others affected by the decision not to hire retirees.

Shortly before trial of the EEOC claim, the federal judge granted summary judgment, dismissing the lawsuit. The court found that the defendants' policy did not violate the ADEA and that ULM had neither paid lower wages nor discharged the plaintiffs in violation of the ADEA. The court found that the defendants had legitimate nondiscriminatory reasons for their decisions regarding the plaintiffs and there was no evidence to support a finding that the decisions were motivated by age. The EEOC sought to appeal the judgment, but then dismissed its appeal. At that point, the only matter still outstanding was the plaintiffs' discrimination claim based upon state law, which had been remanded to the state court.

The defendants filed an exception of res judicata/ collateral estoppel in the present case, arguing that it asserted the same claims and issues previously litigated and decided adversely to the plaintiffs in federal court. The trial court granted the exception, dismissing the plaintiffs' state court claims with prejudice.

The trial court, in a carefully considered judgment, found that the federal principles of res judicata applied to bar the plaintiffs' claims. The court noted there was no dispute that the federal court summary judgment on the EEOC claim was rendered by a court of competent jurisdiction and that the decision was final on the merits. The trial court noted that although the same parties were not involved, the EEOC was in privity with the plaintiffs. The court also stated that "strictly speaking" the cause of action was not the same. However, the court found that the same nucleus of operative facts applied, therefore res judicata barred the present action. The plaintiffs appealed the trial court judgment and the defendants answered the appeal.

RES JUDICATA AND COLLATERAL ESTOPPEL

The plaintiffs contend that the tests for res judicata and collateral estoppel were not met. While they concede that there was a judgment by a court of competent jurisdiction in the ADEA claim brought by the EEOC, and it was a final judgment on the merits, they argue that the cases do not involve the same parties or the same cause of action. These arguments have merit.

A final judgment in federal court can become the basis for a res judicata plea in state court. A federal court summary judgment based upon the burden of proof, and not lack of jurisdiction, is a final judgment for purposes of a subsequent state court plea of res judicata. Fust v. Fontenelle, 558 So.2d 715 (La.App. 4th Cir. 1990).

The federal law of res judicata bars all claims that were or could have been advanced in support of the causes of action on the occasion of its former adjudication, not merely those that were adjudicated. Palmer v. Lanco Construction, 95-0987 (La.App. 4th Cir.11/30/95), 665 So.2d 1217. Claim preclusion will therefore apply to bar a subsequent action on res judicata principles where parties or their privies have previously litigated the same claim to a valid final judgment. Reeder v. Succession of Palmer, 623 So.2d 1268 (La. 1993), cert. denied, 510 U.S. 1165, 114 S.Ct. 1191, 127 L.Ed.2d 541 (1994).

As specified in Reeder v. Succession of Palmer, supra, for res judicata to bar pendent state law claims in a subsequent state law proceeding, certain conditions must be met. First, the federal court must have jurisdiction over the federal law claims. Second, it must exercise that jurisdiction and render a judgment on the merits. Third, there must have been pendent state law claims that were not litigated due to a failure of the plaintiff to assert the claims. Under federal law, res judicata does not apply unless the party claimed to be barred had a "full and fair opportunity" to litigate the claim in the first action. Benton, Benton and Benton v. Louisiana Public Facilities Authority, 95-1367 (La.App. 1st Cir.4/4/96), 672 So.2d 720, writ denied, 96-1445 (La.9/13/96), 679 So.2d 110.

When a state court is required to determine the preclusive effects of a judgment rendered by a federal court exercising federal question jurisdiction, it is the federal law of res judicata that must be applied. Reeder v. Succession of Palmer, supra; Benton, Benton and Benton v. Louisiana Public Facilities Authority, supra.

For a federal court judgment to bar a subsequent suit under federal res judicata principles, it must meet four tests: (1) both cases must involve the same parties; (2) the prior judgment must have been rendered by a court of competent jurisdiction; (3) the prior judgment must have been a final judgment on the merits; and (4) the cause of action at issue must have been the same in both cases. Arthur v. Zapata Haynie Corporation, 95-956 (La.App. 3d Cir.1/22/97), 690 So.2d 86, writ denied, 97-1031 (La.5/30/97), 694 So.2d 252, cert. denied, 522 U.S. 860, 118 S.Ct. 162, 139 L.Ed.2d 106 (1997).

Even if res judicata does not apply, the doctrine of collateral estoppel, or issue preclusion, may. Collateral estoppel prohibits litigation between the same parties in any future lawsuit when an issue of ultimate fact has been determined by a valid and final judgment. When an issue or factor of law is actually litigated and determined to be a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim. RecoverEdge v....