Welch v. Johnson

Page 714

907 F.2d 714

54 Fair Empl.Prac.Cas. 529,

55 Empl. Prac. Dec. P 40,419

Carolyn WELCH, Plaintiff-Appellant, v. Gordon JOHNSON, et al., Defendants-Appellees.

No. 88-2507.

United States Court of Appeals Seventh Circuit.

Argued Sept. 28, 1989.

Decided July 23, 1990.

Gerald A. Goldman, Arthur R. Ehrlich, Goldman & Marcus, Chicago, Ill., for plaintiff-appellant.

James A. Coghlan, Laurel Black Rector, Asst. Attys. Gen., Office of the Attorney Gen., Welfare Litigation Div., Chicago, Ill., for defendants-appellees.

Before POSNER and RIPPLE, Circuit Judges, and ESCHBACH, Senior Circuit Judge.

RIPPLE, Circuit Judge.

Carolyn Welch appeals the district court's grant of summary judgment on grounds of res judicata in favor of the defendants on her claims under 42 U.S.C. Sec. 1983 and 42 U.S.C. Secs. 2000e-2 and -3. For the following reasons, we affirm in part and reverse in part.

I BACKGROUND

A. Relevant Facts

Plaintiff-appellant Carolyn Welch is a former employee of the State of Illinois. From 1974 to May 1985 she was employed in the Department of Children and Family Services (DCFS). On January 29, 1985, Ms. Welch filed a one count complaint in federal court under 42 U.S.C. Sec. 1983 alleging that, since September 1983, the DCFS and several officials within DCFS had been harassing her in retaliation for a discrimination complaint she had filed with the Illinois Department of Human Rights in 1980. Ms. Welch alleged six specific instances of discrimination: (1) that, in September 1983, the defendants had denied her a promotion to the position of Child Welfare Administrator IV and had promoted a lesser qualified male to the position; (2) that she had received unfair and incorrect memoranda that criticized her job performance and her use of vacation and sick leave; (3) that the defendants had made repeated and inappropriate demands to review her statements of economic interest that are filed annually with the Illinois Secretary of State; (4) that the defendants had charged her before the Illinois Board of Ethics with a conflict of interest in the performance of her job; (5) that the defendants had disseminated false and misleading information about her to the media; and (6) that the defendants had threatened her with imminent dismissal.

On May 7, 1985, several months after she had filed her section 1983 complaint, Ms. Welch was discharged from her position at DCFS. On May 20, 1985, she appealed her dismissal to the Illinois Civil Service Commission (CSC). An initial hearing was conducted before a CSC hearing officer on September 27, 1985. The focus of this hearing was to determine whether DCFS could substantiate its dismissal charges against Ms. Welch. Nearly all the dismissal charges against Ms. Welch pertained to her alleged misuse of her position with DCFS to pursue her personal interest in Adoptions Unlimited, Inc., a private adoption agency in which she allegedly held an ownership interest. The specific charges against Ms. Welch were as follows: (1) violations of Illinois law by taking custody of a child in November 1983 while representing Adoptions Unlimited, Inc., an unlicensed adoption agency; (2) violations of Illinois law and the Interstate Compact on the Placement of Children by transporting this child in November 1983 from Illinois to Indiana and placing the child with a family in Indiana; (3) falsification of employee time records on two days during February 1984 to reflect her presence at work while actually conducting business on behalf of Adoptions Unlimited; (4) misuse of sick leave on various days between November 1983 and October 1984 to perform duties on behalf of Adoptions Unlimited; (5) theft and failure to maintain the confidentiality of DCFS client information, based on the discovery in October 1984 of copies of DCFS master file cards and a DCFS client's psychological profile in the offices of Adoptions Unlimited; (6) improper participation in a private adoption during February through December of 1983; (7) an unauthorized return to her office on March 29, 1985, in violation of express instructions from a supervisor not to return to the office without permission.

On February 28, 1986, the CSC hearing officer issued factual findings and a recommendation that the discharge of Ms. Welch was warranted because the charges against her had been proved in part. On March 29, 1986, the CSC issued its own decision, in which it adopted the findings and recommendations of the hearing officer.

On April 22, 1986, Ms. Welch filed in the Circuit Court of Cook County a complaint for administrative review of the CSC's decision. On October 29, 1987, the circuit court held a hearing on the complaint, after which it affirmed the CSC's findings as not contrary to the manifest weight of the evidence and the CSC's conclusion that Ms. Welch's discharge was warranted. ¹

B. Proceedings in the District Court

Back in September 1985, while the CSC hearing officer was conducting a hearing on the dismissal charges, Ms. Welch amended her complaint in the federal action to include two additional counts of discrimination under Title VII of the Civil Rights Act of 1964. 42 U.S.C. Secs. 2000e to 2000e-17. Count II alleged that, in September 1983, DCFS violated 42 U.S.C. Sec. 2000e-2 by denying Ms. Welch a promotion to Welfare Administrator IV based solely on her sex. Under Count III, Ms. Welch realleged the facts under Count I (the section 1983 claim) and contended that these same facts constituted a violation of 42 U.S.C. Sec. 2000e-3.

On November 21, 1986, during the pendency of Ms. Welch's administrative review proceeding in the Circuit Court of Cook County, the defendants filed a motion for partial summary judgment in federal district court on grounds that the CSC's decision barred the section 1983 claim. After the state circuit court affirmed the CSC's decision, the defendants amended their motion for summary judgment to include Ms. Welch's Title VII claims. The defendants argued that Ms. Welch had been afforded a full and fair opportunity in her CSC hearing to litigate any defenses to her discharge, "including the defense that the discharge was the product of discrimination." Memorandum Opinion and Order, No. 85 C 779 (July 6, 1988) at 3 [hereinafter Mem. Op.]. The defendants thus contended that the state circuit court's decision to affirm the CSC's findings and conclusions constituted res judicata as to Ms. Welch's federal claims of discrimination based on section 1983 and Title VII.

C. District Court Opinion

Relying primarily on this court's decision in Lee v. City of Peoria, 685 F.2d 196 (7th Cir.1982), the district court granted the defendants' amended motion for summary judgment. The district court began by noting that, under 28 U.S.C. Sec. 1738, federal courts are required to give state court judgments the same full faith and credit that is given in the state's own courts. Thus, because Ms. Welch's discharge had been reduced to a state court judgment, the district court concluded that it must give that judgment "the same force and effect that other state courts would." Mem. Op. at 4. Moreover, the court noted, its obligation to give effect to the state court judgment was not altered by the fact that Ms. Welch had filed a federal suit under section 1983 and Title VII. Id. (citing Kremer v. Chemical Constr. Corp., 456 U.S. 461, 102 S.Ct. 1883, 72 L.Ed.2d 262 (1982), and Migra v. Warren City School Dist. Bd. of Educ., 465 U.S. 75, 104 S.Ct. 892, 79 L.Ed.2d 56 (1984)).

The court then turned to an application of the elements of res judicata. Quoting this circuit's decision in Lee, 685 F.2d at 199, the court stated three prerequisites for the application of res judicata:

"(1) a final judgment on the merits in an earlier action; (2) an identity of the cause of action in both the earlier and the later suit; and (3) an identity of parties or their privies in the two suits."

Id. (quoting Lee ). The court then focused on the disputed second element of the test: " 'whether this suit presents the same cause of action for res judicata purposes as the prior state administrative proceeding.' " Id. at 5 (quoting Defendants' amended motion for summary judgment at 8). In determining whether there was a single cause of action for purposes of res judicata, the district court attempted to determine if the state administrative and federal actions arose out of a " 'single core of operative facts.' " Id. (quoting Lee, 685 F.2d at 200). The district court then concluded that an "[e]xamination of the facts underlying the federal suit and the administrative proceedings reveals that there is an identity of causes of action in this case." Id.

In rejecting Ms. Welch's contention that the facts underlying the federal action differed from those underlying the state discharge proceedings, the district court reasoned as follows:

The charges involved in plaintiff's dismissal included claims that plaintiff was operating a private adoption agency while employed at DCFS and was using her position at DCFS to obtain benefits for her private business. The hearing officer found these charges substantiated in part. In her federal civil rights action, plaintiff complains about how DCFS personnel treated her, including criticisms of her use of sick leave, requests to review statements of economic interest, a charge of conflict of interest before the Illinois Board of Ethics, and dissemination of information to the media. The court believes that DCFS's treatment of plaintiff relates directly to plaintiff's activities with the private adoption agency. If plaintiff had any defense that her treatment by DCFS culminating in her dismissal was attributable to sexual discrimination, plaintiff should have raised that defense at her dismissal hearing. Plaintiff cannot now relitigate a factual scenario already ruled on by the administrative agency and affirmed by a state court.

Id. at 7-8. The district court thus concluded that both the federal ...