or issue preclusion, applies when a litigant in a prior proceeding asserts an issue of fact or law in a subsequent proceeding and (1) the issue 'has necessarily been decided in the prior action and is decisive of the present action,' and (2) there has been 'a full and fair opportunity to contest the decision now said to be controlling.'" Giakoumelos v. Coughlin, 88 F.3d 56, 59 (2d Cir. 1996) (quoting Schwartz v. Public Administrator, 24 N.Y.2d 65, 71, 298 N.Y.S.2d 955, 246 N.E.2d 725 (1969)).
Discrimination, however, was not an issue in either the unemployment proceedings or plaintiff's civil service application. In fact, the Second Circuit rejected an argument virtually identical to Obiajulu's for that very reason in Fondel v. Grumman Aerospace Corp., 884 F.2d 657 (2d Cir. 1989). In Fondel, the plaintiff sued his former employer based on alleged race discrimination, and the employer counterclaimed for relocation expenses based on a written agreement between the parties by which the plaintiff agreed that if he were "removed for cause" within the first year of his employment, he would reimburse the employer for any relocation expenses that the employer had provided to him. After a bench trial, the district court dismissed the plaintiff's claim and awarded the defendant damages on the counterclaim. Affirming the district court's judgment, the Second Circuit held that an ALJ's finding that the plaintiff was not guilty of misconduct that for unemployment insurance purposes did not collaterally estop the defendant from pursuing its counterclaim. Noting that "there was no identity in the pertinent issues" in the unemployment proceeding and the federal lawsuit, the court stated that "under New York law an employee's conduct may be such that it justifies a 'for cause' dismissal, yet not rise to the level of misconduct that disqualifies him from unemployment insurance." Id. at 659. That reasoning applies with equal force to the case at bar. See also Hernandez v. New York City Law Dep't Corp. Counsel, 1997 U.S. Dist. LEXIS 620, No. 94 Civ. 9042, 1997 WL 27047 *16 (S.D.N.Y. Jan. 23, 1997) ("even an unemployment insurance decision affirmed by a New York court in an Article 78 proceeding will not be given preclusive effect in this Circuit because of the difference in the issues involved") (citing Hill v. Coca Cola Bottling Co. of New York, 786 F.2d 550, 553 (2d Cir. 1986)); Guiden v. Southeastern Pub. Serv. Auth. of Virginia, 760 F. Supp. 1171, 1177 (E.D.Va. 1991) ("because the standard involved in proving misconduct as a legitimate nondiscriminatory reason for discharge in a Title VII action is not the same as the test applied in an unemployment compensation hearing to determine misconduct for purposes of denial of unemployment compensation benefits, the issues are not identical. Preclusion is therefore inappropriate"); Gore v. R.H. Macy & Co., 1989 U.S. Dist. LEXIS 6578, No. 86 CIV. 9684, 1989 WL 65561 (S.D.N.Y. June 13, 1989) (ALJ's finding that plaintiff was not guilty of misconduct for unemployment insurance purposes was not entitled to preclusive effect in employment discrimination action, because issues were not identical and defendant did not have full and fair opportunity to litigate, since defendant's incentive to litigate unemployment claim was "minuscule" compare to liability it faced in discrimination action); Wilson v. Supreme Color Card, Inc., 1988 U.S. Dist. LEXIS 5156, No. 87 CIV. 0037, 1988 WL 61914 *2 (S.D.N.Y. June 6, 1988) (refusing to give preclusive effect in employment discrimination action to ALJ's factual findings in unemployment insurance proceeding, since in that proceeding, "it was Wilson's conduct, rather than Supreme's, that was being judged").
This ruling is consistent with that of federal courts of appeals throughout the country, which have "unanimously concluded that unreviewed administrative agency findings can never be accorded preclusive effect in subsequent Title VII proceedings." Roth v. Koppers Indus., Inc., 993 F.2d 1058, 1062 (3d Cir. 1993). Since the Elliott decision, then, "it has been well established ... that an unreviewed state administrative determination--including those of a state human rights division or unemployment insurance board--does not preclude de novo federal court consideration of a Title VII claim ..." Hernandez, 1997 U.S. Dist. LEXIS 620, 1997 WL 27047 *16 (collecting cases).
Moreover, the findings at issue here clearly left open the possibility that plaintiff was terminated for reasons other than discrimination. Indeed, the Board found that plaintiff had exhibited "poor judgment" that "may have given the employer reason to fire" him. Likewise, Civil Service found only that it was satisfied by plaintiff's explanation, and made no explicit finding about why plaintiff was terminated.
In addition, the findings by Civil Service are even less deserving of preclusive effect than the ALJ's. Civil Service was not acting in a judicial capacity when it concluded that plaintiff's explanation for his termination was satisfactory, and it certainly could not be said that defendants "litigated" the matter.
Plaintiff's motion for collateral estoppel (Item 88) is denied.
AFTER REVIEWING THE PLEADINGS AND DOCUMENTS IN THIS CASE, I BELIEVE THAT THE PARTIES SHOULD TAKE SERIOUS EFFORTS TO RESOLVE AND SETTLE THE CASE. THEREFORE, THIS CASE IS REFERRED TO SENIOR UNITED STATES DISTRICT JUDGE MICHAEL A. TELESCA SOLELY FOR THE PURPOSE OF SETTLEMENT DISCUSSIONS, ACCORDING TO A SCHEDULE AND PROCEDURE ADOPTED BY JUDGE TELESCA.
IT IS SO ORDERED.
DAVID G. LARIMER
UNITED STATES DISTRICT COURT
Dated: Rochester, New York
August 28, 1997.
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