Winters v. North Hudson Regional Fire & Rescue

Justice ALBIN,

dissenting.

Plaintiff Steven Winters brought a civil action against his employer, defendant North Hudson Regional Fire and Rescue and certain named supervisory officials (collectively “Regional” or “defendants”), under the New Jersey Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-1 to -14. Winters claims that he was terminated from his position as a firefighter by Regional in retaliation for his whistle-blowing activities. He contends that his employer’s true motive for firing him was his complaints about: inoperable radios that compromised fire department safety; a supervisor’s alleged sexual harassment; a supervisor’s interference with an investigation; and the needless death of a firefighter due to inadequate supervision and faulty equipment. He contends that the pretextual motive for his firing was his violation of his employer’s sick-leave policy.

Although Winters’s termination for violating his employer’s sick-leave policy was affirmed by the Civil Service Commission (Commission) and an appellate panel, the trial court and Appellate Division in the present case concluded that Winters was entitled to proceed with his CEPA claim. Both the trial and appellate courts in the CEPA case found that Winters’s retaliation claim was neither litigated nor adjudicated in the administrative law and subsequent appellate proceedings. For those reasons, they rejected Regional’s argument that Winters was collaterally estopped from prosecuting his retaliation claim. For those same reasons, I would affirm.

However, without any support in the record — and none cited in its opinion — the majority summarily proclaims that Winters litigated the retaliation claim in the administrative-law proceedings and that the claim was adjudicated on the merits, thus warranting the application of collateral estoppel to bar his CEPA claim. Collateral estoppel is an equitable doctrine and should be invoked only to promote equity. Its misapplication here produces just the opposite result. Because Winters was unfairly denied his day in court, I respectfully dissent.

I.

I agree that if a public employee raises retaliation as a defense in an administrative disciplinary proceeding, if he is given a full and fair opportunity to litigate the defense, and if the Office of Administrative Law and the Civil Service Commission adjudicated that defense on the merits adversely to the employee, he may be collaterally estopped from pursuing a CEPA claim. But that did not happen here.

Regional terminated Winters for violating its sick-leave policy. Winters appealed to the Commission, which then transferred the matter to the Office of Administrative Law as a contested case. Although Winters’s attorney did raise retaliation as a defense in her opening argument, Regional asserted during the hearing that “we should not try a [CJEPA case here. Frankly, we can do it, but it’s not going to be five days [of] hearing, number one, and number two, it’s not going to resolve the issue.” Winters may have raised the issue of retaliation, but one thing is clear — the Administrative Law Judge (ALJ) who heard the case did not adjudicate that issue. In the ALJ’s “statement of the issues” no mention is made of retaliation as a defense.¹ Moreover, the ALJ apparently did not believe that retaliation by Regional was even an issue in the case. The ALJ stated that “[n]one of the ten charges against Winters relates” to Winters’s claim of retaliation for speaking out about the death of a firefighter. It is worth noting that Winters’s retaliation claim was premised on much more than just his speaking out about the firefighter’s death. Significantly, no other reference to retaliation is made in the ALJ’s fifteen-page written opinion affirming Winters’s termination. Finally, the ALJ ruled in favor of Regional in a summary decision after Regional completed its case and without hearing Winters’s case.

The final decision of the Civil Service Commission, which issued a ten-page report adopting the ALJ’s termination ruling, nowhere mentions retaliation as a defense or adjudicates that issue. Although Winters argued on appeal that the administrative tribunals faded to rule on his defense of retaliation, the Appellate Division did not address that claim.

After Winters filed his CEPA action, defendants moved for summary judgment on two grounds — collateral estoppel and insufficiency of evidence to sustain his claims. In particular, defendants alleged that the retaliation claim had been litigated and adjudicated adversely to Winters in the administrative forums. The trial court rejected that argument. The court determined that neither the ALJ nor the Commission addressed or adjudicated the issue of retáliation. The court therefore declined to dismiss Winters’s CEPA lawsuit based on collateral estoppel. The court also found that Winters presented sufficient evidence to survive summary judgment.

The Appellate Division granted defendants’ motion for leave to appeal. It too rejected defendants’ collateral-estoppel arguments. It noted that the ALJ and the Commission did not “make findings or conclusions regarding defendants’ motivation or intent in instituting the disciplinary actions against [Winters].” The Appellate Division also observed that “[t]he decisions in the administrative appeals did not require a consideration of retaliatory conduct.” It emphasized that “[t]he lone statement in the ALJ’s decision concerning retaliation does not support a finding that ‘the issue was actually litigated in the prior proceeding,’ or that ‘there was a full and fair opportunity to litigate the issue.’ ” (Internal citations omitted). Thus, the Appellate Division held “that the issue of whether the disciplinary action [was] instituted for retaliatory reasons was never fully presented in the administrative proceedings before the ALJ granted defendants’ motion for summary decision.”

In light of the record, the reasons given by the trial court and Appellate Division for not applying the doctrine of collateral estoppel are unassailable.

II.

Collateral estoppel is an equitable doctrine that bars litigation of an issue previously decided in an earlier action. Olivieri v. Y.M.F. Carpet, Inc., 186 N.J. 511, 521-22, 897 A.2d 1003 (2006). The doctrine applies when

(1) the issue to be precluded is identical to the issue decided in the prior proceeding;

(2) the issue was actually litigated in the prior proceeding;

(3) the court in the prior proceeding issued a final judgment on the merits;

(4) the determination of the issue was essential to the prior judgment; and

(5) the party against whom the doctrine is asserted was a party to or in privity with a party to the earlier proceeding.

[Id. at 521, 897 A.2d 1003 (quoting In re Estate of Dawson, 136 N.J. 1, 20-21, 641 A.2d 1026 (1994)) (internal quotation marks omitted).]

All five factors must be satisfied for the invocation of collateral estoppel. See ibid. Here, based on the procedural history outlined above, several factors clearly do not apply.

First, contrary to the majority opinion, the issues in the administrative proceeding and the CEPA action were not “aligned.” See ante at 87-88, 50 A.3d at 661. The ALJ and Commission determined one singular issue — whether Regional had a legitimate basis for terminating Winters. They did not inquire whether Regional had an illegitimate one as well. However, if Regional had, in addition to legitimate motives, illegitimate motives for firing Winters, then Winters had a right to proceed with a CEPA action under a mixed-motive theory. See Fleming v. Corr. Healthcare Solutions, Inc., 164 N.J. 90,100, 751 A.2d 1035 (2000). The ALJ and Commission never considered whether Winters’s termination was the product of mixed motives. Importantly, this State’s prior jurisprudence did not impose on an employee an obligation to raise retaliation as a defense in the administrative disciplinary process. Judge Skillman wrote in Scouler v. City of Camden that a “civil service disciplinary action ... does not involve a ‘cause[ ] of action that require[s] a finding of retaliatory conduct that is actionable under CEPA.’ ” 332 N.J.Super. 69, 74, 752 A.2d 828 (App.Div.2000) (alterations in original). He reasoned that

the "cause of action” at a dvil service disciplinary hearing is not the employee’s claim that the employer has taken “retaliatory action,” but rather the employer’s claim that the employee was guilty of misconduct. Any claim that the disciplinary charge was brought in retaliation for conduct protected by CEPA is solely a matter of defense, which the employee has no burden to prove in order to be exonerated. [Id. at 74-75, 752 A.2d 828.]

The Commission did not decide whether Regional acted with ill motives in terminating Winters; it merely decided that “working in other positions while being out on paid sick leave from a public employer is egregious conduct” warranting termination. Thus, the issues before the administrative panels in the disciplinary hearing and the Superior Court in the CEPA action were not the same, as the majority argues.

Second, a retaliation defense was never fully litigated. Because of the summary disposition, Winters never had the opportunity to present his case. In his written opinion, the ALJ did not list retaliation as a contested issue, and retaliation does not appear anywhere in the Commission’s decision.

Third, despite the majority’s contention that retaliation was “litigated as part of the final judgment in the administrative action,” see ante at 88, 50 A.3d at 661, nowhere in the ALJ or Commission’s decision is there an adjudication of that issue. Like the trial court and Appellate Division, I have searched in vain for a “determination of the [retaliation] issue [that] was essential to the [Commission’s] prior judgment.” See Olivieri, supra, 186 N.J. at 521, 897 A.2d 1003. The majority is not able to cite a single line, or even a phrase, from the final decision of the Civil Service Commission that even remotely suggests an adjudication on the merits of the retaliation claim.

Collateral estoppel cannot be invoked unless all of its essential factors are present. Here, three are absent: retaliation was not a clearly identified issue in both the administrative proceedings and the CEPA action; the retaliation issue was not “actually litigated” in the administrative proceedings; and, last, the Commission did not render a determination on retaliation that was essential to the Commission’s judgment upholding the discipline imposed by Regional. The majority’s use of this equitable doctrine in this case has produced a manifestly inequitable result.

III.

The majority’s well-intentioned goal of attempting to avoid duplicative litigation and inconsistent results when matters are tried in different forums is laudatory. But that goal should not be achieved by paving over the equitable principles that undergird the collateral-estoppel doctrine. Because I believe that, in this case, collateral estoppel has been sacrificed on the altar of judicial economy, I respectfully dissent.

For reversal — Chief Justice RABNER and Justices LaVECCHIA, HOENS, PATTERSON, and Judge WEFING (temporarily assigned) — 5.

For affirmance — Justice ALBIN — 1.

1 The ALJ framed the issues as: “(1) whether appellant engaged in outside employment while on sick leave during his employment with Regional and, if so, whether such activity constituted misconduct cognizable under the Civil Service Law [and] (2) whether the Regional home confinement rule is constitutionally sustainable, and if so, whether the charges related thereto were timely.”