The opinion of the court was delivered by: LASKER
Oswald Wilson, who alleges that he was dismissed from his employment at the New York Medical College ("the College") on account of racial discrimination, moves to reargue the decision of December 17, 1982 which dismissed the claims based on the United States Constitution, 42 U.S.C. § 1983, and the New York Human Rights Law, N.Y. Exec. Law § 296 (McKinney 1962). The constitutional and § 1983 claims were dismissed for lack of state action and the Human Rights Law claims were dismissed on grounds of res judicata. Wilson argues that the wrong legal standards were applied in both instances.
Defendants answer that the proper legal standards were applied, but that, in any event, it is unnecessary to reach the question of state action because, as a result of prior litigation, the plaintiff is collaterally estopped from pressing the constitutional claims.
I. The Constitutional and Section 1983 Claims
In the decision of December 17, 1982, we ruled that, under Blum v. Yaretsky, 50 U.S.L.W. 4859 (U.S. 1982), an allegation of state action is not adequate in the absence of a contention that the state coerced or significantly encouraged the challenged action. Id. at 4862. Wilson argues that the coercion or significant encouragement standard is improper, and that in the case at hand he need allege only that the state participated in the decision to dismiss him. He contends that his allegation that the New York City Health and Hospitals Corporation ("HHC") discussed and approved the decision to dismiss him provides a sufficient basis for a finding of state action.
Defendants argue that the question of the appropriate standard for finding state action is academic because Wilson is precluded on grounds of collateral estoppel from attempting to prove that HHC participated in the College's decision to dismiss Wilson. The defendants' contention is based on the following undisputed facts.
Wilson brought an earlier action pursuant to N.Y. Civ.Prac. Law § 7801 et seq. (McKinney 1981) ("the Article 78 proceeding") before the Supreme Court of New York County, Special Term, alleging that he was dismissed from the College because of racial discrimination. HHC was named as a defendant, and moved to dismiss on the grounds that (a) it did not participate in the College's decision to dismiss Wilson; and (b) it had no power to grant Wilson the relief he sought. In support of its contention that it did not participate in the decision to dismiss Wilson, HHC submitted an affidavit by its Director of Personnel for Lincoln Hospital, (the hospital from which Wilson was dismissed) stating that HHC did not participate in Wilson's termination "in any manner" and that Wilson's employment was terminated "solely by the unilateral action" of the College. (Affidavit of Orlando Rivera in Support of Motion to Dismiss Article 78 proceeding, paras. 4, 7). In response, Wilson stated only that his salary was paid by funds provided by HHC and that "the ultimate authority responsible for the employment of [plaintiff] was the Health and Hospitals Corp." (Affidavit of Oswald Wilson in support of Article 78 Petition, paras. 2, 3).
HHC's motion to dismiss was granted on the grounds that:
"inasmuch as no evidence has been offered that HHC was involved in any way in petitioner's dismissal, the fact that HHC funded the College's operation of Lincoln does not provide a basis for imposing liability on HHC for the employment practices of the College."
Wilson v. New York Medical College, No. 14016/1980, slip op. at 2 (New York County, Special Term, Sept. 4, 1980). The question presented is whether this finding by the Article 78 court precludes this Court from considering whether HHC participated in Wilson's dismissal.
The rule of collateral estoppel in this Circuit was articulated in Tucker v. Arthur Andersen & Co., 646 F.2d 721, 728 (2d Cir. 1981) quoting Restatement (Second) of Judgments § 68 (Tent. Draft #4, 1977)
"'When an issue of fact or law is actually litigated and determined by 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.'"
Wilson contends that the Article 78 court's ruling does not fall within the rule because: (1) the issue of HHC's participation in Wilson's dismissal was not "actually litigated" in that he did not dispute the point; (2) the issue was not "essential to the judgment" because the court could have ruled on other grounds; and (3) he did not have a full and fair ...