IN THE SUPREME COURT OF CALIFORNIA
KEVIN MURRAY,
S162570
Plaintiff and Petitioner,
Ninth Cir.Ct.App.
v.
No. 06-15847
ALASKA AIRLINES, INC.,
U.S. Dist.Ct.
No. CV-05-03633-MJJ
Defendant and Respondent.
The doctrine of collateral estoppel, or issue preclusion,1 is firmly embedded
in both federal and California common law. It is grounded on the premise that
―once an issue has been resolved in a prior proceeding, there is no further fact-
finding function to be performed.‖ (Parklane Hosiery Co. v. Shore (1979) 439
U.S. 322, 336, fn. 23.) ―Collateral estoppel . . . has the dual purpose of protecting
litigants from the burden of relitigating an identical issue with the same party or
his privy and of promoting judicial economy, by preventing needless litigation.‖
(Id. at p. 326, fn. omitted.)
We granted the request of the United States Court of Appeals, Ninth
Circuit, to answer the following question of California law pertaining to collateral
estoppel: Should issue-preclusive effect be given to a federal agency‘s
investigative findings, when the subsequent administrative process provides the
1
Many courts have used these terms interchangeably, and we do so here.
1
complainant the option of a formal adjudicatory hearing to determine the contested
issues de novo, as well as subsequent judicial review of that determination, but the
complainant elects not to invoke his right to that additional process, and the
agency‘s findings and decision thereby become a final, nonappealable order by
operation of law?2 (See Murray v. Alaska Airlines, Inc. (9th Cir. 2008) 522 F.3d
920 (Murray v. Alaska).)
The Ninth Circuit has furnished the following statement of facts and
procedural history (substantially reproduced here with minor nonsubstantive and
stylistic modifications) to more fully explain the context in which the question
arises. (Murray v. Alaska, supra, 522 F.3d at pp. 921-922.)
Factual and Procedural Background
Kevin Murray (Murray), a quality assurance auditor at Alaska Airlines, Inc.
(Alaska), brought safety concerns to the attention of the Federal Aviation
Administration (FAA), which then conducted an investigation that revealed
―significant discrepancies relating to air carrier safety.‖ Subsequently, the
maintenance facility at which Murray worked was closed and his position was
outsourced. Murray was not rehired by Alaska.
In December 2004, Murray filed an administrative complaint with the
United States Secretary of Labor (Secretary) under the whistleblower protection
provision of the Wendell H. Ford Aviation Investment and Reform Act for the
21st Century (AIR 21), seeking reinstatement, back pay, and compensatory
2
We have reformulated the question to reflect that the federal agency‘s
investigative findings here at issue have become a final nonappealable order by
operation of law, which appropriately narrows the focus of the inquiry. (Cal.
Rules of Court, rule 8.548(a).)
2
damages. (See 49 U.S.C. § 42121(b)(1), (b)(3)(B).)3 Invocation of AIR 21‘s
administrative complaint procedure is voluntary and optional. (§ 42121(b)(1).)
Murray — through his lawyer, Rand Stephens — alleged he had been denied the
opportunity to apply or interview for open positions at other Alaska facilities,
―despite [his] stated and documented request to remain‖ with the company, ―in
retaliation for [his] notifying [FAA inspectors] of Federal Aviation Regulations
. . . violations and for serious airworthiness issues posing a threat to air safety.‖
He also alleged that his superiors at Alaska ―admonished and chastised [him] . . .
for disclosing information to the FAA.‖
Pursuant to section 42121(b)(2)(A), the Secretary conducted an
investigation, during which Alaska submitted a written response to Murray‘s
complaint, produced relevant documentation, and offered testimonial evidence.
Murray was never contacted by the Secretary‘s investigator. He was not given a
copy of the documents provided by Alaska or its witnesses‘ statements. Nor did
Murray have an opportunity to submit additional information to the Secretary, or
respond to Alaska‘s arguments, before the Secretary rendered her findings.
In June 2005, the Secretary notified Murray by letter of her investigative
findings. The Secretary found that Murray had participated in protected
whistleblowing activity and that his termination and Alaska‘s subsequent failure to
rehire him constituted adverse employment action. Notwithstanding that
determination, the Secretary further determined there was ―no credible basis to
believe [Alaska] violated the employee protection provisions of AIR 21,‖ because
the ―record fail[ed] to establish any connection between [Murray‘s] termination
and his involvement in protected activity.‖ The Secretary found that Murray had
3
Hereinafter, all statutory citations are to title 49 of the United States Code
unless otherwise noted.
3
applied electronically for positions at other Alaska facilities and then ―inexplicably
removed his resume . . . the same night he applied.‖ ―The evidence showed that it
was impossible for [Alaska] to remove [Murray‘s] resume from the employment
website of its own accord.‖ The Secretary therefore concluded that Murray ―failed
to establish a nexus between his protected activity and the perceived
discriminatory action taken against him.‖ The Secretary dismissed Murray‘s
administrative complaint because he failed to demonstrate there was ―reasonable
cause to believe‖ (§ 42121(b)(2)(A)) that his whistleblowing was a ―contributing
factor in [Alaska‘s] unfavorable personnel action.‖ (§ 42121(b)(2)(B)(iii); see
29 C.F.R. § 1979.105(a) (2010).)
The Secretary‘s letter closed by notifying Murray that he had ―important
rights of objection which must be exercised in a timely fashion.‖ ―AIR 21 permits
an aggrieved party, WITHIN 30 DAYS . . . to file objections with the Department
of Labor and to request a hearing on the record before an Administrative Law
Judge.‖ (Original capitalization.) The letter also warned that if ―no objections are
filed WITHIN 30 DAYS, this decision shall become final and not subject to
judicial review.‖ (Original capitalization.) Murray never filed objections or
requested an on-the-record hearing. Nor did he take any steps to formally
withdraw his administrative complaint. (Cf. 29 C.F.R. § 1979.111(a) [allowing
complainant to withdraw his complaint by filing a written withdrawal with the
Asst. U.S. Sect. of Labor, who ―then determine[s] whether the withdrawal will be
approved‖].) On July 8, 2005, by operation of law, the Secretary‘s preliminary
investigative findings were ―deemed a final order . . . not subject to judicial
review.‖ (§ 42121(b)(2)(A).)
On August 2, 2005, Murray, still represented by counsel, filed a complaint
against Alaska in California state court, claiming that he had been wrongfully
terminated and retaliated against for whistleblowing, in violation of the public
4
policy of California. (See Lab. Code, § 1102.5, subd. (b).) Invoking diversity
jurisdiction, Alaska removed the action to federal district court. The district court,
relying on the Secretary‘s findings in her final order, granted summary judgment
to Alaska based on collateral estoppel. Murray timely appealed.
Discussion
The Ninth Circuit has asked this court to determine whether certain factual
findings made in the Secretary‘s final nonappealable order in the AIR 21
administrative action that preceded this state court lawsuit (removed to federal
court on grounds of diversity jurisdiction) may now be afforded issue-preclusive
effect under California law. Given the particular factual and procedural
circumstances of this case, and the particular provisions of the AIR 21 statutory
scheme here at issue, we conclude that they should.
Collateral estoppel is a distinct aspect of res judicata. ― ‗The doctrine of res
judicata gives conclusive effect to a former judgment in subsequent litigation
between the same parties involving the same cause of action. A prior judgment
for the plaintiff results in a merger and supersedes the new action by a right of
action on the judgment. A prior judgment for the defendant on the same cause of
action is a complete bar to the new action. (4 Witkin, Cal. Procedure (2d ed.
1971) Judgment, §§ 147-148, pp. 3292-3293.) Collateral estoppel . . . involves a
second action between the same parties on a different cause of action. The first
action is not a complete merger or bar, but operates as an estoppel or conclusive
adjudication as to such issues in the second action which were actually litigated
and determined in the first action. (Id., § 197, at p. 3335.)‘ (Preciado v. County of
Ventura (1982) 143 Cal.App.3d 783, 786-787, fn. 2.)‖ (Rymer v. Hagler (1989)
211 Cal.App.3d 1171, 1178 (Rymer).)
This case involves the doctrine of collateral estoppel as applied to the final
decision of a federal administrative agency, as well as a corollary of that doctrine
5
sometimes described as ―judicial exhaustion.‖ It is settled that the doctrine of
collateral estoppel or issue preclusion is applicable to final decisions of
administrative agencies acting in a judicial or quasi-judicial capacity. (See Astoria
Federal S. & L. Assn. v. Solimino (1991) 501 U.S. 104, 107 [extending the
doctrine to the final adjudications of both state and federal agencies]; United
States v. Utah Constr. Co. (1966) 384 U.S. 394, 421-422 (Utah Constr. Co.);
People v. Sims (1982) 32 Cal.3d 468, 479 (Sims); French v. Rishell (1953) 40
Cal.2d 477, 480-481; Knickerbocker v. City of Stockton (1988) 199 Cal.App.3d
235, 242.) As we explained in McDonald v. Antelope Valley Community College
Dist. (2008) 45 Cal.4th 88, judicial exhaustion ―may arise when a party initiates
and takes to decision an administrative process—whether or not the party was
required, as a matter of administrative exhaustion, to even begin the administrative
process in the first place. Once a decision has been issued, provided that decision
is of a sufficiently judicial character to support collateral estoppel, respect for the
administrative decisionmaking process requires that the prospective plaintiff
continue that process to completion, including exhausting any available judicial
avenues for reversal of adverse findings. (Johnson v. City of Loma Linda (2000)
24 Cal.4th 61, 69-72.) Failure to do so will result in any quasi-judicial
administrative findings achieving binding, preclusive effect and may bar further
relief on the same claims. (Id. at p. 76.)‖ (McDonald, supra, at p. 113.)
This court has further explained that ―[i]ndicia of [administrative]
proceedings undertaken in a judicial capacity include a hearing before an impartial
decision maker; testimony given under oath or affirmation; a party‘s ability to
subpoena, call, examine, and cross-examine witnesses, to introduce documentary
evidence, and to make oral and written argument; the taking of a record of the
proceeding; and a written statement of reasons for the decision.‖ (Pacific Lumber
6
Co. v. State Water Resources Control Bd. (2006) 37 Cal.4th 921, 944 (Pacific
Lumber).)
Ultimately, ―the inquiry that must be made is whether the traditional
requirements and policy reasons for applying the collateral estoppel doctrine have
been satisfied by the particular circumstances of this case.‖ (Sims, supra,
32 Cal.3d 468, 483.) Here, Murray, who has been represented by counsel at every
stage of the prior administrative and present court proceedings, voluntarily
instituted an action against his former employer, Alaska, under the federal
whistleblower protection statute, AIR 21. At the conclusion of the Secretary‘s
preliminary investigation, and upon receipt of her adverse factual findings and
decision, Murray effectively abandoned his administrative action and brought suit
against Alaska in state court, raising claims that would ultimately turn on the same
key factual matter of causation resolved against him in the earlier proceedings.4
He failed to take the steps required to lawfully withdraw his adminstrative
complaint, failed to exercise his absolute statutory right to a formal de novo
hearing of record before an administrative law judge (ALJ), and, consequently,
failed to exercise his statutory right to appeal any adverse findings and decision of
the ALJ to the Ninth Circuit. All such omissions occurred in the face of clear
statutory notice to Murray that his forfeiture of such rights would result in the
Secretary‘s preliminary factual findings and decision becoming a final
nonappealable order by operation of law. (§ 42121(b)(2)(A).)
4
As the Ninth Circuit‘s order explains, Murray‘s state law claims include
causation as a required element. (Murray v. Alaska, supra, 522 F.3d at p. 922,
fn. 2.) Claims of whistleblower harrassment and retaliatory termination may fail
where the complainant ―cannot demonstrate the required nexus between his
reporting of alleged statutory violations and his allegedly adverse treatment by
[the employer].‖ (Turner v. Anheuser-Busch, Inc. (1994) 7 Cal.4th 1238, 1258.)
7
In short, this case involves a variation of the usual factual pattern that
implicates the doctrine of collateral estoppel and its corollary principle of judicial
exhaustion. The AIR 21 statutory scheme afforded Murray an absolute right to a
full de novo trial-like hearing before an ALJ, a hearing we find would fully
comport with the requirements set forth in Pacific Lumber for establishing that the
administrative proceedings were ―undertaken in a judicial capacity.‖ (Pacific
Lumber, supra, 37 Cal.4th at p. 944.)5 Here, however, Murray admittedly failed to
invoke, and thereby forfeited, his right to such a formal adversarial hearing of
record. None of this court‘s previous decisions directly addresses whether adverse
administrative findings may be given collateral estoppel effect in a subsequent
court suit if the complainant against whom estoppel is being sought forfeited his
right to such a hearing, resulting in the agency‘s findings becoming a final,
nonappealable order by operation of law.
The high court has explained that the focus of our inquiry should be on
whether the party against whom issue preclusion is being sought had ―an adequate
opportunity to litigate‖ the factual finding or issue in the prior administrative
proceeding. (Utah Constr. Co., supra, 384 U.S. at p. 422.) We followed Utah
Constr. Co. in Sims, supra, 32 Cal.3d 468, 479, commenting that ―[t]his standard
5
The Ninth Circuit‘s order observes, ―An AIR 21 complainant may contest
the Secretary‘s investigative findings by filing ‗objections to [those] findings‘ and
‗request[ing] a hearing on the record‘ within 30 days of receiving them. See
§ 42121(b)(2)(A); 29 C.F.R. § 1979.106(a). If the Secretary‘s findings are timely
challenged, AIR 21 provides for a de novo, on-the-record hearing before an
Administrative Law Judge. See 29 C.F.R. § 1979.107(a)-(b); id. at § 1979.109(a)
(written findings and conclusions); 29 C.F.R. § 18.13 (discovery procedures); id.
at § 18.24 (subpoena power); id. at § 18.34 (right to personal appearance and
representation by counsel); id. at § 18.38 (prohibition on ex parte
communications); id. at § 18.52 (decision based on record of hearings).‖ (Murray
v. Alaska, supra, 522 F.3d at p. 923, fn. 4.)
8
formulated by the Supreme Court is sound . . . .‖ Appellate courts of this state
have followed suit, likewise recognizing that ―[i]t is the opportunity to litigate that
is important in these cases, not whether the litigant availed himself or herself of
the opportunity. (Teitelbaum Furs, Inc. v. Dominion (1962) 58 Cal.2d 601,
607 . . . .)‖ (Rymer, supra, 211 Cal.App.3d at p. 1179, italics added [no showing
complainant was denied opportunity to present relevant evidence in administrative
proceeding]; see also Castillo v. City of Los Angeles (2001) 92 Cal.App.4th 477,
482 [same].)
Focusing the inquiry on the opportunity to litigate issues in the prior
administrative proceeding is particularly appropriate where the party who initiates
an administrative complaint apparently abandons his action upon receiving an
adverse ruling, thereby forfeiting his statutory rights to a formal de novo hearing
of record before an ALJ, and then seeks to relitigate the same issues decided in the
agency‘s final order against the same party in a subsequently filed court action.
We confronted facts somewhat analogous to those now before us in Sims,
supra, 32 Cal.3d 468. There, the issue was whether a party to an administrative
action who simply refused to meaningfully participate in the proceedings was
estopped from relitigating, in a subsequent court action against the same party,
identical factual issues decided in the earlier administrative action. The county
department of social services (County) in Sims informed the respondent, a welfare
recipient, that she had received monies and food stamp benefits to which she was
not entitled, allegedly procured by fraud. The County demanded that the
respondent make restitution payments, and she agreed. The County additionally
served notice on her, proposing to reduce her future cash grants to further
compensate for the alleged overpayments. The respondent then exercised her
statutory right to a ―fair hearing‖ before a hearing officer of the California
Department of Social Services (DSS) to challenge the propriety of the County‘s
9
action. Meanwhile, the district attorney, on behalf of the state, filed criminal
charges against the respondent alleging violations of the Welfare and Institutions
Code based on the same allegations of welfare fraud raised in the administrative
action. (Sims, supra, 32 Cal.3d at p. 473.)
While the criminal charges were pending, the respondent‘s hearing was
held before a DSS hearing officer. ―The County declined to present any evidence
against respondent at the hearing. It contended that the DSS lacked jurisdiction to
hear the case since criminal charges were still pending in the superior court.
Respondent submitted the County‘s investigation report to the hearing officer and
presented evidence to disprove the allegation of fraud. [Her husband] testified that
during the time in question he lived at addresses other than that of respondent.‖
(Sims, supra, 32 Cal.3d at p. 474.) The hearing officer concluded the agency had
jurisdiction to hear the case, and that the County, through its inaction, had failed to
meet its burden of proving welfare fraud. The director of the DSS adopted the
hearing officer‘s result. The County neither requested a rehearing nor sought
judicial review of the agency‘s decision. (Ibid.)
Thereafter, in the criminal proceeding, the superior court applied the
doctrine of collateral estoppel to dismiss the criminal charges against the
respondent. We affirmed on appeal, concluding that the agency‘s determination of
an issue (welfare fraud) common to both the administrative and criminal
proceedings could properly be accorded collateral estoppel effect in the later
criminal prosecution because the traditional requirements and policy reasons for
applying collateral estoppel had been satisfied. The administrative hearing was a
quasi-judicial adversarial proceeding, since the administrative agency resolved
disputed issues of fact properly before it, and since the hearing process provided
both parties with an adequate opportunity to fully litigate the issues underlying
their claims. Although the hearing was not conducted according to the rules of
10
evidence applicable to judicial proceedings, we found this distinction did not
preclude a finding that the administrative agency was acting in a quasi-judicial
capacity. The welfare fraud issue litigated in the administrative proceeding was
identical to that involved in the criminal prosecution. (Sims, supra, 32 Cal.3d at
pp. 484-489.) We further found that the public policy considerations underlying
the doctrine were satisfied, in that according the administrative agency‘s final
decision collateral estoppel effect promoted judicial economy, avoided the
possibility of inconsistent judgments, and protected the accused from harassment
through repetitive litigation. (Ibid.)
Sims explained that ―[a]n issue is actually litigated ‗[w]hen [it] is properly
raised, by the pleadings or otherwise, and is submitted for determination, and is
determined . . . . A determination may be based on a failure of . . . proof . . . .‘
(Rest.2d, Judgments (1982) § 27, com. d, p. 255, italics added.) [¶] Here, the
welfare fraud issue was ‗properly raised‘ by respondent‘s request for a fair hearing
pursuant to Welfare and Institutions Code section 19050. After the fair hearing,
the controversy was ‗submitted‘ to the DSS for a ‗determination‘ on the merits.
The hearing officer found that the County had failed to prove that respondent had
fraudulently obtained welfare benefits. [¶] Thus, it is clear that respondent‘s guilt
or innocence of welfare fraud was actually litigated at the DSS fair hearing. The
County‘s failure to present evidence at the hearing did not preclude the fraud issue
from being ‗submitted‘ to and ‗determined‘ by the DSS.‖ (Sims, supra, 32 Cal.3d
at p. 484.)
Sims explained as well that ―the fair hearing process provided both the
County and respondent with an adequate opportunity to fully litigate their claims
before the DSS. That the County failed to present evidence or otherwise
participate at the hearing does not prove the contrary. The failure of a litigant to
introduce relevant available evidence on an issue does not necessarily defeat a plea
11
of collateral estoppel. (Teitelbaum Furs, Inc. v. Dominion Ins. Co., Ltd., supra,
58 Cal.2d at p. 607.) Even a judgment of default in a civil proceeding is ‗res
judicata as to all issues aptly pleaded in the complaint and defendant is estopped
from denying in a subsequent action any allegations contained in the former
complaint.‘ (Fitzgerald v. Herzer (1947) 78 Cal.App.2d 127, 132.) [¶] What is
significant here is that the County had notice of the hearing as well as the
opportunity and incentive to present its case to the hearing officer.‖ (Sims, supra,
32 Cal.3d at p. 481.) ―The People cannot now take advantage of the fact that the
County avoided its litigation responsibilities and chose not to present evidence at
the prior proceeding.‖ (Id. at pp. 481-482, italics added.)
California intermediate appellate courts have likewise invoked the
principles we explained in Sims in various factual settings. For example, in
Rymer, supra, 211 Cal.App.3d at page 1179, an employee (Rymer) filed an
administrative complaint with the Workers‘ Compensation Appeals Board
(WCAB) against his employer, seeking compensation for injuries resulting from a
work-related accident. He later filed a civil complaint for damages against the
employer in the superior court, predicated on the same injuries received in the
same accident, alleging the employer had failed to provide workers‘ compensation
benefits to him when injured. The two proceedings progressed concurrently. (Id.
at p. 1175.)
Thereafter, Rymer brought a motion in the WCAB proceeding to exclude
Fremont Indemnity Company (Fremont) as a party to the proceeding, on the basis
that Fremont was not the workers‘ compensation carrier for the employer at the
time of his injuries. The WCAB judge denied the motion, ruling that Fremont
either provided workers‘ compensation coverage to the employer on the date of
the injury, or was estopped from denying coverage based on its admission of such
coverage. The parties were each notified they had a statutory right to petition for
12
reconsideration of the decision. Further testimony on the merits of the workers‘
compensation claim was heard that same day, but the hearing was not concluded.
A second day of testimony was set for a later date, but was never held. Thereafter,
upon being served with a written copy of the minutes of the hearing at which the
WCAB judge issued his coverage order as well as the order itself, Rymer
successfully petitioned for a voluntary dismissal of his workers‘ compensation
claim without seeking reconsideration of the administrative law judge‘s coverage
ruling. (Rymer, supra, 211 Cal.App.3d at pp. 1175-1176.)
The employer in Rymer subsequently filed a motion for judgment on the
pleadings in the superior court action under the exclusivity rule of workers‘
compensation law, on the ground that the WCAB judge‘s ruling on the issue of
workers‘ compensation coverage was binding on Rymer and dispositive of his
claim. The trial court granted the motion, and judgment on the pleadings was
entered in the employer‘s favor. The Court of Appeal affirmed, explaining that
―the parties were given an opportunity to present evidence and to litigate the
coverage issue. The decision in the WCAB proceeding resolved a disputed issue
by applying a rule of law . . . to a specific set of facts. (See People v. Sims, supra,
32 Cal.3d at p. 480.) [Rymer] was afforded a full hearing to present evidence
under oath or affirmation. Each party was represented by counsel. Each party was
provided an opportunity to present oral argument. While no evidence was
introduced on the issue of coverage and the WCAB judge heard only argument of
counsel, there is no showing that [Rymer] was denied the opportunity to introduce
evidence on the issue. He simply chose not to do so. It is the opportunity to
litigate that is important in these cases, not whether the litigant availed himself or
herself of the opportunity.)‖ (Rymer, supra, 211 Cal.App.3d at p. 1179.)
Similarly, in Takahashi v. Board of Education (1988) 202 Cal.App.3d 1464
(Takahashi), a public school teacher claiming she was wrongfully terminated for
13
incompetency was found collaterally estopped from pursuing her civil and
constitutional claims in court because she had failed to raise those claims as
defenses to the charges of incompetency at the administrative hearing conducted
before the Commission on Professional Competence, instead asserting that the
commission had no jurisdiction to proceed. (Id. at pp. 1467-1468, 1470.) The
Takahashi court observed, ―There can be no justification for plaintiff‘s position
that she should be permitted to fail to assert at the administrative hearing
constitutional and civil rights violations as reasons that made her termination
wrongful, fail to prevail on the writ without attempting to urge or to bring before
the court those reasons, and then be allowed to recover damages in this
consolidated [court] action that resulted from termination of her employment
alleged to be wrongful based on those same reasons.‖ (Id. at p. 1485.)
In Sims, Rymer, and Takahashi, the parties against whom issue preclusion
was sought were afforded hearings in their prior administrative proceedings, but
failed to take full advantage of the opportunity to fully establish their claims at
those hearings. In Rymer, the complainant was afforded the opportunity to present
evidence on the relevant issue at his hearing and simply chose not to do so.
(Rymer, supra, 211 Cal.App.3d at p. 1179.) In Takahashi, the plaintiff chose to
contest the jurisdiction of the agency to proceed with the hearing rather than argue
her specific claims. (Takahashi, supra, 202 Cal.App.3d at p. 1470.) In Sims, the
County ―avoided its litigation responsibilities‖ altogether by ―fail[ing] to present
evidence or otherwise participate‖ in the prior administrative hearing process.
(Sims, supra, 32 Cal.3d at pp. 481, 482.) We see no significant distinction
between the situation here, where Murray forfeited his absolute right to a formal
adversarial hearing of record before an ALJ, a hearing that would have plainly
satisfied the requirement that the administrative proceeding be ―undertaken in a
judicial capacity‖ (Pacific Lumber, supra, 37 Cal.4th at p. 944) in order for
14
collateral estoppel to apply, and the case of a party who appears at such a hearing
but then chooses to present no evidence or otherwise refuses to participate in the
proceedings. (Sims, at pp. 481-482.)
Our research reveals that federal and state courts in other jurisdictions have
reached similar conclusions on similar facts. One particularly noteworthy decision
is the federal district court decision in Fadaie v. Alaska Airlines, Inc. (W.D.Wn.
2003) 293 F.Supp.2d 1210 (Fadaie). In that case, plaintiff Fadaie, a former
employee of Alaska like Murray, filed an AIR 21 administrative action raising
wrongful discharge claims based on allegations that the airline had retaliated
against him for whistleblowing activity. (Id. at p. 1217.) ―For whatever reason,
Mr. Fadaie opted not to request a hearing before an Administrative Law Judge.‖
(Id. at p. 1219.) In a subsequent court action, Alaska moved to dismiss the
plaintiff‘s suit on various grounds, including res judicata or estoppel. (Id. at
pp. 1217-1220.) The plaintiff opposed the motion, ―argu[ing] that res judicata is
inappropriate as to any of the claims asserted in [the court] litigation because the
procedures used by the [Secretary‘s] Regional Administrator did not afford
Mr. Fadaie a full and fair opportunity to present his claims.‖ (Id. at p. 1219.)
The Fadaie court first observed that ―[p]ursuant to the Restatement
(Second) of Judgments § 83: [¶] ‗An adjudicative determination by an
administrative tribunal is conclusive under the rules of res judicata only insofar as
the proceeding resulting in the determination entailed the essential elements of
adjudication, including . . . the right on behalf of a party to present evidence and
legal argument in support of the party‘s contentions and fair opportunity to rebut
evidence and argument by opposing parties . . . .‘ ‖ (Fadaie, supra, 293 F.Supp.2d
at p. 1219, fn. omitted.)
The court went on to explain, ―Plaintiff argues that the [Secretary‘s]
decision was based on an investigation, rather than an adjudicative proceeding,
15
and that he was never given an opportunity to contradict evidence presented by the
employer. To the contrary, the procedures governing Mr. Fadaie‘s whistleblower
complaint afford ample opportunity to fully present his claims, including avenues
of appeal that provided direct and apparently unique access to the federal appellate
courts. As stated in the [Secretary‘s] decision letter issued on March 7, 2003, the
statute under which plaintiff filed his administrative complaint provides for an
agency determination, followed by a formal hearing on the merits before an
Administrative Law Judge (‗ALJ‘). 49 U.S.C. § 42121(b)(2)(A). The proceedings
before the ALJ are adversarial in nature and involve taking evidence, hearing
testimony, and considering the arguments of the parties. The Secretary of Labor
then makes his or her final decision based on the ALJ‘s recommendation and can
choose from a full range of remedies when providing relief to the complainant.
Any party aggrieved by the Secretary‘s decision can take a direct appeal to the
Ninth Circuit. 49 U.S.C. § 42121(b)(4)(A). [¶] For whatever reason, Mr. Fadaie
opted not to request a hearing before an Administrative Law Judge. After
receiving the [Secretary‘s] decision letter, he decided not to follow through on the
procedures set forth in the letter, thereby waiving his right to an adversarial
hearing. Contrary to [plaintiff‘s] argument, [AIR 21] provides complainants with
an opportunity to fully and fairly litigate their claims: plaintiff cannot now argue
that the procedures utilized by the agency were insufficient when it was
Mr. Fadaie‘s choice to forgo the admittedly sufficient procedures to which he was
entitled.‖ (Fadaie, supra, 293 F.Supp.2d at pp. 1219-1220, fn. omitted.)6
6
The dissent asserts that ―Fadaie‘s conclusions have been rejected by a more
recent district court case considering the same question we face—whether a
title 49 United States Code section 42121 investigation alone, without a hearing, is
a worthy basis for collateral estoppel—and concluding, as I would, that it is not.
(See Hanna v. WCI Communities, Inc. (S.D.Fla. 2004) 348 F.Supp.2d 1322, 1330-
footnote continued on next page
16
(footnote continued from previous page)
1331 [Hanna].)‖ (Dis. opn. of Werdegar, J., post, at p. 7, fn. 3.) The dissent
misreads the Hanna decision. Hanna did not involve a whistleblower protection
claim under the AIR 21, as did Fadaie, and as does this case. Rather, Hanna
involved a claim for whistleblower retaliation under the Sarbanes-Oxley Act of
2002 (116 Stat. 745; see 18 U.S.C § 1514A), which ― ‗provides that no company
subject to the Securities Exchange Act of 1934 may retaliate against an employee
who lawfully cooperates with an investigation concerning violations of the Act or
fraud on the shareholders.‘ ‖ (Hanna, supra, 348 F.Supp.2d at p. 1325.) The
Hanna court explained that the Sarbanes-Oxley Act ―specifically mandates‖ that
where a claimant alleges discharge or other discrimination under the Act, and
― ‗the Secretary has not issued a final decision within 180 days of the filing of the
[administrative] complaint and there is no showing that such delay is due to the
bad faith of the claimant,‘ ‖ the claimant may bring an action ― ‗for de novo
review in the appropriate district court of the United States, which shall have
jurisdiction over such an action without regard to the amount in controversy.‘ ‖
(Hanna, at pp. 1325-1326, quoting 18 U.S.C. § 1514A(b)(1)(B), italics omitted.)
The court then observed, ―it is undisputed that [the Secretary] issued [the]
preliminary findings 199 days after Mr. Hanna filed his administrative complaint.‖
(Hanna, at p. 1326.)
In short, rejection of principles of collateral estoppel and judicial
exhaustion was not the basis for the Hanna court‘s denial of the defendants‘
motion to dismiss the claimant‘s subsequent federal court action. Rather, the court
expressly held, as a matter of law, that the plain language of the Sarbanes-Oxley
Act (18 U.S.C. § 1514A(b)(1)(B)) authorized the claimant to bring his securities
retaliation action in federal district court because of a procedural irregularity in the
prior administrative proceeding; the Secretary had failed to issue the agency‘s
final decision within 180 days of the filing of the administrative complaint, as
required under that particular whistleblower statute. (Hanna, supra, 348
F.Supp.2d at p. 1328.) Indeed, the court carefully explained that ―defendants‘
reliance on [Fadaie] is inapposite to the circumstances of this case. Fadaie
addresses the failure to exhaust administrative remedies in the context of filing a
claim under [the AIR 21]. While it is true that the Sarbanes-Oxley Act uses the
same administrative procedures as [the AIR 21], . . . it is fundamentally different
in that [the AIR 21] allows plaintiffs to ‗file [their] whistleblower claims directly
in a court of law.‘ Fadaie, 293 F.Supp.2d at 1220. Thus, under [the AIR 21], a
whistleblower plaintiff has the option of seeking either an administrative or a
judicial remedy from the moment his claim arises. Consequently, the Fadaie court
held that ‗once plaintiff initiated the administrative process. . . . the statute
obligated him to complete the administrative process, such that the only avenues
footnote continued on next page
17
There is yet another aspect of the AIR 21 statutory scheme that buttresses
our conclusion that factual findings made in the Secretary‘s final order can be
given preclusive effect in a subsequent court action between the same parties. The
―opportunity for judicial review of adverse rulings‖ is an important procedural
protection against a potentially erroneous determination and is a factor to consider
in determining whether collateral estoppel applies. (Vandenberg v. Superior Court
(1999) 21 Cal.4th 815, 829; see also Rest.2d Judgments, § 28(1), p. 273 [issue
preclusion will not apply if the party to be precluded could not, as a matter of law,
obtain review].) As noted, the AIR 21 statutory scheme gave Murray the right to a
formal de novo hearing of record before an ALJ, and further gave him the right to
appeal the Secretary‘s order to the appropriate United States Court of Appeals in
accordance with the Administrative Procedure Act. (§ 42121(b)(4)(A)-(B).)7 The
statute further expressly reflects Congress‘s intent that ―[a]n order of the Secretary
of Labor with respect to which review could have been obtained under
(footnote continued from previous page)
of relief available to him were a hearing before the ALJ and a direct appeal to the
[relevant] Circuit.‘ ‖ (Hanna, supra, 348 F.Supp.2d at p. 1330.) The Hanna
court‘s brief comments, following this holding, on the application of the doctrine
of issue preclusion to prior administrative findings under the Eleventh Circuit‘s
case law were plainly dicta, and should not be read as undermining the rationale of
Fadaie, an AIR 21 decision which the Hanna court itself carefully distinguished
from the matter directly before it.
7
―After the ALJ issues a ruling, a party has 10 days to file a petition for
review with the Department of Labor‘s Administrative Review Board. See 29
C.F.R. § 1979.110(a). At its discretion, the Administrative Review Board may
accept a case for review and issue a superseding final order; otherwise, the ALJ‘s
ruling becomes the final order of the Secretary of Labor. See § 42121(b)(3)(A).
Judicial review of such final orders may exclusively be had in the appropriate
United States Court of Appeals in accordance with the Administrative Procedure
Act. See § 42121(b)(4)(A)-(B); 5 U.S.C. ch. 7.‖ (Murray v. Alaska, supra,
522 F.3d at p. 923, fn. 4.)
18
subparagraph (A) shall not be subject to judicial review in any criminal or other
civil proceeding.‖ (§ 42121(b)(4)(B).)
This court‘s decision in Johnson v. City of Loma Linda (2000) 24 Cal.4th
61 (Johnson) explains that unless a party to ―a quasi-judicial administrative
agency proceeding‖ exhausts available judicial remedies to challenge the adverse
findings made in that proceeding, those findings may be binding in later civil
actions. (Id. at p. 65.)
In Johnson, an assistant city manager was dismissed and challenged his
dismissal on discrimination grounds through the city‘s administrative grievance
procedure. The administrative adjudication resulted in findings that the dismissal
was for economic reasons and not the product of unlawful discrimination. The
employee then filed a discrimination complaint under the state Department of Fair
Employment and Housing Act (Gov. Code, § 12900 et seq.; FEHA), received a
right-to-sue letter, and filed suit under the FEHA challenging the actions of the
personnel board and the city council. The trial court granted summary judgment,
finding the FEHA discrimination claim failed because the employee was bound by
the city‘s administrative findings. (Johnson, supra, 24 Cal.4th at pp. 65-67.) The
Court of Appeal held that the employee‘s failure to timely challenge the
administrative finding by the city that his dismissal was for economic reasons
barred his FEHA cause of action alleging that his termination was for
discriminatory reasons. (Johnson, at p. 67.)
We affirmed the judgment in Johnson with respect to the FEHA cause of
action, explaining that the city‘s ―administrative process provides internal
remedies‖ and that the employee had ―fail[ed] to obtain the requisite judicial
review of [the] adverse administrative finding.‖ (Johnson, supra, 24 Cal.4th at
p. 72.) We concluded on the particular procedural facts of the case that ―when, as
here, a public employee pursues administrative civil service remedies, receives an
19
adverse finding, and fails to have the finding set aside through judicial review
procedures, the adverse finding is binding on discrimination claims under the
FEHA.‖ (Id. at p. 76.) Although Johnson involved the claims of a public
employee, we find that a distinction of little difference here. The Ninth Circuit‘s
cases are also in accord. (See, e.g., Eilrich v. Remas (9th Cir. 1988) 839 F.2d 630,
632, quoting Plaine v. McCabe (9th Cir. 1986) 797 F.2d 713, 719, fn. 12 [― ‗If an
adequate opportunity for review is available, a losing party cannot obstruct the
preclusive use of the state administrative decision simply by forgoing [the] right to
appeal.‖].)
We conclude that under the particular facts and procedural posture of this
case, Murray may be precluded from relitigating the factual issue of causation
against Alaska in his state court wrongful termination action, removed to federal
court on grounds of diversity jurisdiction. Although without doubt, Murray‘s
claims would have been more fully litigated in the prior AIR 21 administrative
proceeding had he invoked his right to a formal hearing before an ALJ, he never
did so. Under California law, however, the dispositive issue of causation was
nonetheless ― ‗actually litigated‘ ‖ (Sims, supra, 32 Cal.3d at p. 484) in the
administrative proceeding once the matter was ― ‗ ―properly raised‖ ‘ ‖ by
Murray‘s AIR 21 complaint, along with his written statements and other
supporting documentation, and then ― ‗ ―determined‖ ‘ ‖ by the Secretary in her
written findings and order. (Sims, supra, 32 Cal.3d at p. 484.) Moreover,
Murray‘s ―fail[ure] to obtain the requisite judicial review of [the] adverse
administrative finding‖ available to him under the ―internal remedies‖ provided by
the AIR21 whistleblower statute further supports our conclusion that the
20
Secretary‘s adverse finding on causation, embodied in a final order, may be
afforded preclusive effect. (Johnson, supra, 24 Cal.4th at p. 72.)8
We recognize that Murray‘s initiation of the AIR 21‘s administrative
complaint procedure was voluntary and optional (§ 42121(b)(1)), and not a
8
Our recent decision in State Bd. of Chiropractic Examiners v. Superior
Court (2009) 45 Cal.4th 963, does not dictate a different conclusion here. In that
matter, we considered whether the State Personnel Board‘s adverse finding on a
whistleblower-retaliation claim should be given preclusive effect in the
employee‘s subsequent court action based on California‘s whistleblower-
protection statute (see Gov. Code, § 8547.8), notwithstanding that the employee
had failed to exhaust available administrative and judicial remedies. Citing
Johnson, supra, 24 Cal.4th at page 76, we acknowledged the general rule that
―writ review of an adverse administrative decision is a necessary step before
pursuing other remedies that might be available,‖ and that ―if a litigant fails to take
this step, and if the administrative proceeding possessed the requisite judicial
character (see Pacific Lumber, supra, 37 Cal.4th at p. 944), the administrative
decision is binding in a later civil action brought in superior court.‖ (State Bd. of
Chiropractic Examiners v. Superior Court, supra, at pp. 975-976.) But we went
on to explain that Johnson was distinguishable from the matter there before us,
because ―[h]ere . . . we have specific statutory language suggesting that adverse
findings by the State Personnel Board are not binding in a [subsequent
Government Code] section 8547.8[, subdivision (c)] damages action . . . .‖ (State
Bd. of Chiropractic Examiners v. Superior Court, at p. 976.) We explained further
that ―the Legislature expressly authorized a damages action in superior court for
whistleblower retaliation [citation], and in doing so it expressly acknowledged the
existence of the parallel administrative remedy. It did not require that the board‘s
findings be set aside by way of a mandate action; rather, it gave as the only
precondition to the damages action authorized in [Government Code] section
8547.8[, subdivision (c)], that a complaint be filed with the board and that the
board ‗issue[], or fail[] to issue, findings.‘ (Ibid.) The bareness of this statutory
language suggests that the Legislature did not intend the State Personnel Board‘s
findings to have a preclusive effect against the complaining employee.‖ (State Bd.
of Chiropractic Examiners v. Superior Court, at p. 976.)
Here, in contrast to State Bd. of Chiropractic Examiners v. Superior Court,
there is no language in the AIR 21 statute suggesting Congress intended that
conclusive findings made by the Secretary in a final nonappealable order should
not have preclusive effect in a subsequent state court action.
21
prerequisite to filing this state court retaliation–wrongful termination action. But
Murray, represented by counsel at all times, surely appreciated that when he
instituted the administrative proceeding against his former employer, Alaska, it
would have to retain counsel and defend the action. He was on statutory notice
that, if unsatisfied with the Secretary‘s findings, he could request a formal hearing
de novo before an ALJ at which he would be afforded the full panoply of trial
rights and protections; that he could then seek discretionary review of any adverse
decision with the Department of Labor‘s administrative review board; and
ultimately, that he could appeal any adverse decision to the Ninth Circuit. Both
Murray and his attorney were on further notice that, under applicable agency
regulations, if he wanted to withdraw his complaint he could do so only by filing a
formal written withdrawal with the Assistant United States Secretary of Labor,
who would then have to approve the withdrawal. (29 C.F.R. § 1979.111(a)
(2010).) Yet Murray never requested a formal hearing, never exercised his rights
of appeal, and never attempted to formally withdraw his complaint, even though
the statute placed him on notice that, if he took no action, the Secretary‘s findings
and decision would become a final nonappealable order by operation of law.
(§ 42121(b)(2)(A).)
Once Murray failed to exercise his rights to a formal hearing and judicial
review, the Secretary‘s investigative findings became ―a final order . . . not subject
to judicial review.‖ (§ 42121(b)(2)(A).) Where Congress evinces a clear intent to
preclude judicial review of final administrative decisions, a failure to properly
appeal a final order must be given preclusive effect. (See Tice v. Bristol-Myers
Squibb Co. (W.D.Pa. 2007) 515 F.Supp.2d 580, 584 [plaintiff collaterally
estopped from relitigating factual issues resolved by ALJ where his failure to
appeal ALJ‘s decision dismissing administrative whistleblower complaint under
22
Sarbanes-Oxley Act (18 U.S.C § 1514A) resulted in final order].) California law
is in accord.
Last, ―[e]ven assuming all the threshold requirements are satisfied . . . [w]e
have repeatedly looked to the public policies underlying the doctrine before
concluding that collateral estoppel should be applied in a particular setting.‖
(Lucido v. Superior Court (1990) 51 Cal.3d 335, 342-343.) We find that the
public policies underlying the doctrine of collateral estoppel will best be served by
applying the doctrine to the particular factual setting of this case. Those policies
include conserving judicial resources and promoting judicial economy by
minimizing repetitive litigation, preventing inconsistent judgments which
undermine the integrity of the judicial system, and avoiding the harrassment of
parties through repeated litigation. (Allen v. McCurry (1980) 449 U.S. 90, 94;
Montana v. United States (1979) 440 U.S. 147, 153-154; Sims, supra, 32 Cal.3d at
pp. 488-489; Syufy Enterprises v. City of Oakland (2002) 104 Cal.App.4th 869,
878.)
Considerations of comity and federalism further support application of the
doctrine of collateral estoppel in this case. The AIR 21 whistleblower statute
offers complainants strong incentives to invoke the administrative remedies as an
alternative to a court action. If the Secretary finds a statutory violation, she must
provide relief that includes immediate reinstatement with back pay and other
compensatory damages. (§ 42121(b)(3)(B).) By choosing to proceed under the
AIR 21‘s federal administrative whistleblower protection scheme, Murray availed
himself of these distinct advantages. To allow him to relitigate the factual issue of
causation decided against him in the Secretary‘s final nonappealable order in this
subsequent court action between the same parties would reduce the AIR 21
statutory scheme to a mere ―rehearsal[] for litigation‖ (Johnson, supra, 24 Cal.4th
at p. 72) should the complainant not prevail.
23
Conclusion
Given the factual and procedural circumstances of this case as reported in
the Ninth Circuit‘s published order, we conclude the Secretary‘s factual findings
on the issue of causation, embodied in a final nonappealable order, should, under
California law, be afforded preclusive effect in this subsequent court action
between the same parties.
BAXTER, J.
WE CONCUR:
CHIN, J.
MORENO, J.
CORRIGAN, J.
24
DISSENTING OPINION BY WERDEGAR, J.
Kevin Murray alleges he was wrongfully discharged by Alaska Airlines,
Inc. (Alaska). In the course of the investigation of his administrative complaint,
he received no hearing. He was not contacted to provide evidence. He was not
permitted to confront the witnesses against him, to review the evidence submitted
by Alaska, or to make oral or written arguments before findings were made. No
testimony was submitted under oath and no record was prepared. (See Murray v.
Alaska Airlines, Inc. (9th Cir. 2008) 522 F.3d 920, 921.) The majority holds that
after such an investigation, Murray may be collaterally estopped based on the
resulting administrative findings, and forever barred from seeking redress, because
he failed to appeal those findings and have them set aside. I respectfully dissent.
I
Murray, a quality assurance auditor for Alaska, brought safety concerns
about Alaska‘s operations to the attention of the Federal Aviation Administration.
An investigation revealed ― ‗significant discrepancies related to air carrier
safety.‘ ‖ (Murray v. Alaska Airlines, Inc., supra, 522 F.3d at p. 921.)
Subsequently, Murray‘s position was outsourced, and he was unable to find
another job with Alaska. Although not required to do so, Murray voluntarily filed
1
a federal administrative complaint with the United States Department of Labor,1
contending that Alaska‘s adverse actions were in retaliation for his protected
whistleblower activity. (See 49 U.S.C. § 42121(b).)
In the ensuing investigation, ―Alaska submitted a written response to
Murray‘s complaint, produced relevant documentation and offered witness
testimony.‖ (Murray v. Alaska Airlines, Inc., supra, 522 F.3d at p. 921.) The
investigation‘s treatment of Murray was in marked contrast: ―Murray was never
contacted by the Secretary [of Labor]‘s investigator. He was not given a copy of
the documents provided by Alaska or its witness statements. Nor did he have an
opportunity to submit additional information to the Secretary, or respond to
Alaska‘s arguments, before the Secretary rendered her findings.‖ (Ibid.)
Unsurprisingly, given these procedures, the Secretary of Labor, acting through her
agent, a regional administrator for the Occupational Health and Safety
Administration, issued findings in favor of Alaska: while Murray had engaged in
protected activity and suffered an adverse employment action, the Secretary
concluded there was no connection between the two.
Rather than appeal the adverse decision and seek an administrative hearing,
Murray filed suit, alleging wrongful termination and retaliation for whistleblowing
in violation of public policy. (See Lab. Code, § 1102.5, subd. (b); Tameny v.
Atlantic Richfield Co. (1980) 27 Cal.3d 167.) The question here is whether the
administrative findings, rendered without the benefit of a hearing or even
consultation with Murray, are entitled to issue preclusive effect so as to bar
Murray‘s suit.
1
There was no statutory exhaustion requirement that obligated him to pursue
an administrative remedy. (See Murray v. Alaska Airlines, Inc., supra, 522 F.3d at
p. 921; 49 U.S.C. § 42121(b)(1).)
2
That administrative findings may give rise to issue preclusion is of course
long settled. (See United States v. Utah Constr. Co. (1966) 384 U.S. 394, 419-
422; People v. Sims (1982) 32 Cal.3d 468, 479.) However, before an
administrative finding may operate as a bar to judicial relief, a court must assure
itself that the proceeding giving rise to it had a sufficiently ―judicial character.‖
(McDonald v. Antelope Valley Community College Dist. (2008) 45 Cal.4th 88,
113; Pacific Lumber Co. v. State Water Resources Control Bd. (2006) 37 Cal.4th
921, 944 (Pacific Lumber Co.); Sims, at pp. 479-480.) ―Indicia of [administrative]
proceedings undertaken in a judicial capacity include a hearing before an impartial
decision maker; testimony given under oath or affirmation; a party‘s ability to
subpoena, call, examine, and cross-examine witnesses, to introduce documentary
evidence, and to make oral and written argument; the taking of a record of the
proceeding; and a written statement of reasons for the decision.‖ (Pacific Lumber
Co., at p. 944.)
Comparing the features that demonstrate an administrative proceeding‘s
judicial character with the prefinding procedures afforded here leads ineluctably to
the conclusion the administrative findings in this case are not entitled to preclusive
effect. Testimony was not taken ―under oath or affirmation‖ (Pacific Lumber Co.,
supra, 37 Cal.4th at p. 944); Murray had no ―ability to subpoena, call, examine,
and cross-examine witnesses‖ (ibid.); he had no opportunity ―to introduce
documentary evidence‖ (ibid.); he had no opportunity ―to make oral and written
argument‖ (ibid.); and there was no ―taking of a record of the proceeding‖ (ibid.),
for indeed there was no hearing at all. There were, it is true, written findings, but
that alone is manifestly insufficient to support collateral estoppel. (See, e.g.,
McDonald v. Antelope Valley Community College Dist., supra, 45 Cal.4th at
pp. 113-114.) Indeed, I do not read the majority opinion as disputing that the
proceedings Murray actually received do not come close to satisfying the judicial
3
character requirement. For purposes of whether estoppel applies, that should be
the end of the matter.
II
The majority reaches a contrary conclusion by attending not to the
proceedings that actually preceded the administrative findings, but to those that
could have occurred, but did not, after the findings were made. We have never
done so before; indeed, we have previously dismissed as unsupported by authority
a similar argument to the one now embraced by the majority. In Pacific Lumber
Co., we expressly declared: ―For an administrative decision to have collateral
estoppel effect, it and its prior proceedings must possess a judicial character.‖
(Pacific Lumber Co., supra, 37 Cal.4th at p. 944, italics added.) We there
considered the proceedings leading up to the California Department of Forestry
and Fire Protection‘s approval of a timber harvesting plan for land subsequently
acquired by Scotia Pacific Company LLC and Pacific Lumber Company, a plan
that did not call for water quality monitoring, and concluded those prior
proceedings were of an insufficiently judicial character to bar a regional water
board from thereafter mandating such monitoring. (Id. at pp. 944-945.)
The lumber companies had argued that in assessing the judicial character of
the department of forestry‘s decision, we should take into account the appeal
procedures available to the water board. (Pacific Lumber Co., supra, 37 Cal.4th at
p. 945, fn. 13; see Pub. Resources Code, § 4582.9.) We declined to accept the
argument, noting a complete absence of authority for the proposition that
postfinding appeal proceedings that could have been, but were not, pursued could
rescue prefinding proceedings otherwise lacking in judicial character. (Pacific
Lumber Co., at p. 945, fn. 13.)
Pacific Lumber Co. is no anomaly; to the contrary, existing precedent
entirely justified its pronouncement that the assessment of an administrative
4
decision‘s judicial character depends upon the ―prior proceedings‖ leading up to
the decision. (Pacific Lumber Co., supra, 37 Cal.4th at p. 944.) The United States
Supreme Court approved administrative collateral estoppel in United States v.
Utah Constr. Co., supra, 384 U.S. 394. Both that case and every case the high
court relied on for recognition of administrative estoppel involved prefinding
proceedings that justified the imposition of estoppel. (See id. at p. 422 [findings
entered after a party ―had a full and fair opportunity to argue their version of the
facts‖ at an evidentiary hearing]; Sunshine Coal Co. v. Adkins (1940) 310 U.S.
381, 390-391 [findings followed a public hearing, taking of evidence, and oral
argument]; Fairmont Aluminum Co. v. Commissioner of Int. Rev. (4th Cir. 1955)
222 F.2d 622, 625 [taxpayer had an opportunity to submit evidence before
findings were issued]; Seatrain Lines v. Pennsylvania R. Co. (3d Cir. 1953) 207
F.2d 255, 258-259 [findings followed hearings and argument from both sides];
Goldstein v. Doft (S.D.N.Y. 1964) 236 F.Supp. 730, 732 [findings followed
hearings and written argument], affd. per curiam (2d Cir. 1965) 353 F.2d 484.)
We embraced the Utah Construction rule in People v. Sims, supra, 32
Cal.3d 468. In Sims and every published state case since, including every case the
majority relies on, courts have applied issue preclusion only after determining the
prefinding proceedings were of a sufficiently judicial character to warrant it. (See,
e.g., Johnson v. City of Loma Linda (2000) 24 Cal.4th 61, 71 & fn. 3 [estoppel
based on findings made after an evidentiary hearing with live testimony]; Sims, at
pp. 479-480 [estoppel based on findings made after a full evidentiary hearing with
the opportunity to subpoena, call, and cross-examine witnesses]; Page v. Los
Angeles County Probation Dept. (2004) 123 Cal.App.4th 1135, 1142 [issue
preclusion based on a comprehensive decision issued after a three-day adversarial
evidentiary hearing]; Castillo v. City of Los Angeles (2001) 92 Cal.App.4th 477,
482 [estopped party ―had ample opportunity to raise issues and present evidence‖
5
at a full evidentiary hearing]; Rymer v. Hagler (1989) 211 Cal.App.3d 1171, 1179
[estopped party was ―afforded a full hearing to present evidence under oath or
affirmation‖]; Takahashi v. Board of Education (1988) 202 Cal.App.3d 1464,
1470 & fn. 5 [barred party was afforded full hearing with a right of discovery].)2
Similarly, those decisions that have declined to find a basis for preclusion
have likewise considered the character of the prefinding procedures. (See, e.g.,
McDonald v. Antelope Valley Community College Dist., supra, 45 Cal.4th at
pp. 113-114 [no basis for requiring judicial exhaustion where the administrative
decision was not based on a hearing and the plaintiff had no opportunity to call
witnesses or present evidence]; Pacific Lumber Co., supra, 37 Cal.4th at pp. 944-
945 [rejecting estoppel and finding no basis for considering an unpursued
postdecision appeal]; Ahmadi-Kashani v. Regents of University of California
(2008) 159 Cal.App.4th 449, 458 [no basis for estoppel where the plaintiff ―was
afforded no hearing at all, let alone a ‗quasi-judicial‘ one, prior to abandoning her
grievance process‖]; id. at pp. 458-460.) In short, we have always insisted on
certain minimum prefinding procedures.
The reason for demanding that prefinding proceedings have a judicial
character is clear. One of the core values of our judicial system is accuracy in
decisionmaking. (E.g., Tehan v. Shott (1966) 382 U.S. 406, 416 [the ―basic
purpose of a trial is the determination of truth‖].) Many if not most of our rules
2
The majority emphasizes language in these cases that explains that issue
preclusion depends in part on whether there was an ―opportunity to litigate‖ an
issue, rather than on whether the estopped party actually litigated the issue. (Maj.
opn., ante, at pp. 8-15.) But what the majority ignores is the context: in each and
every one of the cases relied upon, the opportunity to litigate was afforded before
the decision being given preclusive effect was reached. Thus, as noted above,
each case involved a full hearing and a party‘s decision, at that full hearing, not to
step forward with better evidence.
6
for court proceedings have as a central purpose the promotion of accuracy.
Consequently, cases dating to the inception of the administrative collateral
estoppel doctrine have always considered the judicial character of the proceedings
that actually transpired before findings were rendered. Where the litigant was
given an opportunity to present his or her best case before the administrative
findings were issued, we can have faith in the findings reached thereafter. Here, in
contrast, we have no reason to have faith in the accuracy or fairness of the
findings, nor, consequently, do we have any justification for placing our
imprimatur on them and according the findings preclusive effect.
We have in the past identified the availability of postfinding review as an
additional necessary factor in determining whether to permit issue preclusion (see
Vandenberg v. Superior Court (1999) 21 Cal.4th 815, 829; maj. opn., ante, at
p. 18); never, until today, has the availability of a postfinding appeal been treated
as a sufficient condition for imposition of estoppel. In short, no California case
has allowed what the majority countenances here—issue preclusion for findings
rendered without any prior opportunity for a hearing, the submission of evidence,
the confrontation of witnesses, or the presentation of argument.3
3
The majority relies on a federal district court case, Fadaie v. Alaska
Airlines, Inc. (W.D.Wn. 2003) 293 F.Supp.2d 1210, for the opposite view. As
Fadaie was decided under Washington law (see id. at p. 1219, fn. 3), it has limited
relevance here. Moreover, Fadaie‘s conclusions have been rejected by a more
recent district court case considering the same question we face—whether a
title 49 United States Code section 42121 investigation alone, without a hearing, is
a worthy basis for collateral estoppel—and concluding, as I would, that it is not.
(See Hanna v. WCI Communities, Inc. (S.D.Fla. 2004) 348 F.Supp.2d 1322, 1330-
1331.) The majority attempts at exhaustive length to paint Hanna‘s discussion of
collateral estoppel as dicta. (Maj. opn., ante, at pp. 16-18, fn. 6.) While I disagree
with this characterization, it matters little; the views of a lone federal trial judge in
Fadaie on an estoppel question under Washington law, which have been disagreed
footnote continued on next page
7
III
Explicit or implicit in the majority opinion are three rationales for why we
should disregard past precedent and place our faith in administrative findings
rendered in such a nonjudicial fashion: Murray acquiesced in the findings; he was
obligated to exhaust the title 49 United States Code section 42121 procedure once
he invoked it; and federalism and comity considerations warrant according such
findings effect. None has merit.
Running through the majority opinion is the implication that Murray knew,
or should have known, that failing to seek a full hearing before an administrative
law judge would result in his forfeiture of any remedies—in essence, that he was
on notice he must appeal or face a bar, and that by failing to appeal he acquiesced
in the investigative findings. (See maj. opn., ante, at pp. 7, 20-22.) The regional
administrator‘s findings letter certainly put Murray on notice that he would
relinquish federal remedies unless he took further action.4 But the administrative
proceedings were voluntary; exhaustion of them was, for state purposes, not
mandatory. Murray rationally could have elected to forgo his federal remedies
(footnote continued from previous page)
with elsewhere in holding or dicta, simply cannot sustain the majority‘s conclusion
against the mass of contrary authority under California law.
4
It is in this sense that failure to act would render the preliminary findings
final. Finality is a necessary, but not a sufficient, condition for imposition of issue
preclusion. (See Vandenberg v. Superior Court, supra, 21 Cal.4th at p. 835;
Sanderson v. Niemann (1941) 17 Cal.2d 563, 573-575; Rest.2d Judgments, § 13.)
The majority‘s attempt to make more of the findings‘ finality, suggesting that so
long as a decision is final it ―must be given preclusive effect‖ (maj. opn., ante, at
p. 22), is without any semblance of support. Decisions may have preclusive effect
if they are final and the proceedings leading up to them were sufficiently judicial
in character. (Pacific Lumber Co., supra, 37 Cal.4th at p. 944.) The case the
majority relies upon, Tice v. Bristol-Myers Squibb Co. (W.D.Pa. 2007) 515
F.Supp.2d 580, says no more than that.
8
after receiving the initial regional administrator letter, deciding to focus his
energies on seeking state relief instead. Nothing in his actions can be interpreted
as acquiescence, i.e., as a concession that he lacked any evidence supporting
contrary findings, such as might elevate our faith in the accuracy of the
preliminary findings.5 Nor would anything in the letter, or in any of our prior
decisions, have alerted Murray or his counsel that failing to act would subject him
to a bar and a sacrifice of his independent, parallel state remedies. Fairness is a
necessary precondition to the application of estoppel (see Vandenberg v. Superior
Court, supra, 21 Cal.4th at p. 835; Lucido v. Superior Court (1990) 51 Cal.3d 335,
343); in the absence of foreseeability, application of a bar here is profoundly
inequitable.6
5
The majority chides Murray for failing formally to seek approval to
withdraw his complaint, as if that failure adds weight to the investigative findings.
(Maj. opn., ante, at pp. 7, 22; 29 C.F.R. § 1979.111(a).) However, the approval
requirement was inserted to benefit complainants, as a way of protecting against
coercion. (See 68 Fed.Reg. 14100, 14106 (Mar. 21, 2003) [the regulations permit
―a complainant to freely withdraw his or her complaint without prejudice. . . . The
purpose of the Assistant Secretary‘s approval is to help ensure that the
complainant‘s withdrawal is, indeed, made freely without threat of coercion or
unlawful promise.‖]) To turn such a protection into the basis for a quasi-
exhaustion requirement is unwarranted and unsound.
6
Numerous courts and commentators have recognized the significance of
foreseeability in deciding whether the application of preclusion in a given case is
appropriate. (See, e.g., Parklane Hosiery Co. v. Shore (1979) 439 U.S. 322, 330;
The Evergreens v. Nunan (2d Cir. 1944) 141 F.2d 927, 929 (opn. of Hand, J.); see
also Levine, Preclusion Confusion: A Call for Per Se Rules Preventing the
Application of Collateral Estoppel to Findings Made in Nontraditional Litigation,
1999 Ann. Surv. Am. L. 435 [discussing ways in which the unforeseeable
application of preclusion undermines the policies justifying it]; Note, For One
Litigant's Sole Relief: Unforeseeable Preclusion and the Second Restatement
(1992) 77 Cornell L.Rev. 905, 923 [―A court that invokes preclusion in an
unforeseeable manner cannot legitimately dismiss the precluded party‘s
complaints by repeating the old slogan that ‗[t]he predicament in which [he] finds
himself is of his own making.‘ ‖].)
footnote continued on next page
9
In a related vein, the majority suggests Murray can be fairly barred from
proceeding because he failed to exhaust available remedies. (E.g., maj. opn., ante,
at pp. 7-8, 19-22.) But this rationale depends on a substantial expansion of the
previously marked bounds of judicial exhaustion. Judicial exhaustion is simply a
logical corollary of collateral estoppel principles: if an administrative decision is
rendered, then, ―provided that decision is of a sufficiently judicial character to
support collateral estoppel‖ (McDonald v. Antelope Valley Community College
Dist., supra, 45 Cal.4th at p. 113), the losing party must exhaust available avenues
for reversing the decision or be bound by the underlying findings. The proviso—
that judicial character is a necessary precondition to trigger any obligation to
exhaust—has until today been crucial. (See Ahmadi-Kashani v. Regents of
University of California, supra, 159 Cal.App.4th at pp. 460-461 [in the absence of
a ― ‗quasi-judicial‘ ‖ hearing, the plaintiff was free to abandon an internal
grievance process and pursue her claim in court without exhausting any internal
remedies].)
Now, through legerdemain, this precondition has been erased. The
procedures Murray actually was afforded lacked even minimal judicial character;
(footnote continued from previous page)
The need for foreseeability is especially keen in the administrative context,
where uncertainty over the application of estoppel will be greater and may
significantly impact how parties elect to proceed. The fairness of imposing
preclusion in such a context should hinge in part on whether the parties could have
foreseen the significance of an issue for later proceedings. (See Bowen v. U.S.
(7th Cir. 1978) 570 F.2d 1311, 1322; see also Note, Collateral Estoppel Effects of
Administrative Agency Determinations: Where Should Federal Courts Draw the
Line? (1988) 73 Cornell L.Rev. 817, 826.) Here of course, given the paucity of
prior authority, Murray had no basis to foresee the preliminary administrative
findings would have any bearing on his state rights; the imposition of estoppel is
thus especially unjust.
10
under extant precedent, he should have been under no obligation to exhaust further
administrative remedies. Instead, the majority reasons (with a certain circularity)
that if a party has the right to appeal (but fails to do so), the findings will achieve a
judicial character, and if the findings achieve a judicial character, the party is
required to pursue an appeal. The right of appeal in title 49 United State Code
section 42121 proceedings is thus employed to serve a remarkable double duty,
both to mandate its own exercise by transforming into having judicial character
findings wholly lacking in such, and then, by its mere availability, to bar the
pursuit of all other avenues of relief.7
As a policy matter, the likely consequence of the majority‘s novel rule is
that parties in the future will be more cautious in initiating available voluntary
proceedings, with the inevitable result that fewer grievances will be resolved
informally. Instead, lawsuits will be filed at the outset, thus increasing the burdens
7
The majority relies for support on Johnson v. City of Loma Linda, supra, 24
Cal.4th 61, but Johnson did not purport to require exhaustion of judicial avenues
for overturning administrative findings except insofar as those findings were the
product of quasi-judicial proceedings. (See McDonald v. Antelope Valley
Community College Dist., supra, 45 Cal.4th at p. 114 [citing and distinguishing
Johnson because it involved a full opportunity to litigate at an evidentiary
hearing]; Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1090
[explaining that Johnson held administrative findings binding only when a party
had ―received an adverse quasi-judicial finding‖ and thereafter failed to set it
aside].)
The majority today does precisely what I cautioned against in Johnson:
imposes a collateral estoppel bar for neglecting to seek review of an adverse
administrative decision without regard to whether the specific decision satisfied all
the requirements for issue preclusion so as to trigger an exhaustion requirement.
(See Johnson v. City of Loma Linda, supra, 24 Cal.4th at p. 81 (conc. opn. of
Werdegar, J.); see also State Bd. of Chiropractic Examiners v. Superior Court
(2009) 45 Cal.4th 963, 975.)
11
on the court system. (See Ahmadi-Kashani v. Regents of University of California,
supra, 159 Cal.App.4th at p. 459.)
As its final justification, the majority invokes ―[c]onsiderations of comity
and federalism‖ (maj. opn., ante, at p. 23), but neither has any bearing here.
Insofar as federalism is concerned, Congress could have, but did not, preempt
parallel state remedies when it adopted a federal whistleblower administrative
remedy. (See Gary v. Air Group, Inc. (3d Cir. 2005) 397 F.3d 183, 190; Branche
v. Airtran Airways, Inc. (11th Cir. 2003) 342 F.3d 1248, 1261-1264.) Nothing
offends federalism principles in permitting an unpreempted parallel state
proceeding to go forward.
Nor is comity a concern. Notably, the majority accords the results of the
administrative investigation a weight it is not clear the Department of Labor or the
federal courts would grant them. In Hanna v. WCI Communities, Inc., supra, 348
F.Supp.2d 1322, the court considered whether preliminary findings issued in
response to a title 49 United States Code section 42121 complaint should be
accorded collateral estoppel effect. 8 The court pointed out that, in a proceeding
brought under section 42121, ―the [Department of Labor]‘s own regulations state
that res judicata or collateral estoppel treatment is only appropriate when ‗a
complainant brings a new action in Federal court following extensive litigation
before the Department that has resulted in a decision by an administrative law
8
Hanna arose under a whistleblowers‘ protection provision of the Sarbanes-
Oxley Act (see 18 U.S.C. § 1514A) that borrows the procedures of 49 U.S.C.
section 42121 for its effectuation. (Id., § 15141A(b)(2)(A).) As the majority
necessarily recognizes in relying on Tice v. Bristol-Meyers Squibb Co., supra, 515
F.Supp.2d 580, another Sarbanes-Oxley case, cases arising under other statutory
schemes that use section 42121‘s procedures may be fully relevant, at least insofar
as they address the effect of section 42121 proceedings rather than any substantive
aspects of the underlying claims.
12
judge or the Secretary.‘ 68 [Fed.Reg.] § 31860, 31863 (2003).‖ (Hanna, at
p. 1331.) There, as here, no decision had been issued by either an administrative
law judge or the review board responsible for issuing final decisions in the
Secretary of Labor‘s name; accordingly, findings based only on an investigation
and not a ― ‗trial-court like hearing‘ ‖ were an insufficient basis for collateral
estoppel. (Ibid.) I see no warrant for according the Department of Labor‘s
informal investigation a status equal to that of a fully litigated trial or
administrative hearing when neither the Department nor the federal courts would
uniformly do so.
IV
Application of collateral estoppel depends not only on whether the strict
requirements for estoppel have been satisfied, but also on whether the core public
policies underlying it—―preservation of the integrity of the judicial system,
promotion of judicial economy, and protection of litigants from harassment by
vexatious litigation‖—support its invocation. (Lucido v. Superior Court, supra, 51
Cal.3d at p. 343; see also Vandenberg v. Superior Court, supra, 21 Cal.4th at
p. 829; People v. Sims, supra, 32 Cal.3d at p. 483.) As well, we have cautioned
that preclusion in the administrative context must be applied more flexibly than
where the prior decision was judicial. (George Arakelian Farms, Inc. v.
Agricultural Labor Relations Bd. (1989) 49 Cal.3d 1279, 1290-1291.)9
9
This flexibility is an outlet to ensure that preclusion is not imposed in
unpredictable and unforeseeable circumstances. (See, e.g., Heiser, California’s
Confusing Collateral Estoppel (Issue Preclusion) Doctrine (1998) 35 San Diego
L.Rev. 509, 531-532; Note, The Collateral Estoppel Effect of Administrative
Agency Actions in Federal Civil Litigation (1977) 46 Geo. Wash. L.Rev. 65, 83-84
[―When according estoppel effect to agency findings would foster harsh,
unforeseeable effects, the court should invoke the judicially recognized principle
of applying collateral estoppel flexibly to avoid injustice.‖].)
13
Here, no loss of judicial integrity would ensue were estoppel denied,
because the prior findings were issued in a nonjudicial forum; thus no risk of
inconsistent judicial outcomes is present. (See Vandenberg v. Superior Court,
supra, 21 Cal.4th at p. 833.)10 Second, judicial economy is not an issue because
the original proceeding involved no expenditure of judicial resources. (See
Vandenberg, at p. 833.) Third, if the possibility of a whistleblower pursuing both
federal and state remedies were deemed vexatious, Congress could have seen fit to
preempt state remedies. It did not.
In the end, the majority turns its back on precedent, imposing collateral
estoppel as a form of sanction for failing to exhaust that which, as an initial matter,
was never required to be exhausted. Collateral estoppel should not be about
punishment, but about the reliability of the administrative findings we substitute
for a full and fair judicial hearing, appropriate if and only if we have faith in the
processes that produced those findings. As such faith is unwarranted here, I
respectfully dissent.
WERDEGAR, J.
WE CONCUR:
GEORGE, C.J.
KENNARD, J.
10
Moreover, the United States Supreme Court has made clear that
―[r]edetermination of issues is warranted if there is reason to doubt the quality,
extensiveness, or fairness of procedures followed in prior litigation.‖ (Montana v.
United States (1979) 440 U.S. 147, 164, fn. 11.) The one-sided investigation in
this case certainly offers reason for such doubt.
14
See next page for addresses and telephone numbers for counsel who argued in Supreme Court. Name of Opinion Murray v. Alaska Airlines, Inc.
__________________________________________________________________________________
Unpublished Opinion
Original Appeal XXX (on certification pursuant to rule 8.548, Cal. Rules of Court)
Original Proceeding
Review Granted
Rehearing Granted
__________________________________________________________________________________
Opinion No.
S162570Date Filed: August 23, 2010
__________________________________________________________________________________
Court:
County:
Judge:
__________________________________________________________________________________
Attorneys for Appellant:
Law Offices of James P. Stoneman II and James P. Stoneman II for Plaintiff and Petitioner.__________________________________________________________________________________
Attorneys for Respondent:
Howard Rice Nemerovski Canady Falk & Rabkin, David J. Reis and Jason M. Habermeyer for Defendantand Appellant.
Counsel who argued in Supreme Court (not intended for publication with opinion):
James P. Stoneman IILaw Offices of James P. Stoneman II
100 West Foothill Boulevard
Claremont, CA 91711
(909) 621-4987
David J. Reis
Howard Rice Nemerovski Canady Falk & Rabkin
Three Embarcadero Center, 7th Floor
San Francisco, CA 94111-4024
(415) 434-1600
Request under California Rules of Court, rule 8.548, that this court decide a question of California law presented in a matter pending in the United States Court of Appeals for the Ninth Circuit. The question presented is: "Should issue-preclusive effect be given to a federal agency's investigative findings, when the subsequent administrative process provides the complainant the option of a formal adjudicatory hearing to determine the contested issues de novo, as well as subsequent judicial review of that determination, but the complainant elects not to invoke his right to that additional process?"
| Date: | Citation: | Docket Number: | Category: | Status: |
| Mon, 08/23/2010 | 50 Cal. 4th 860, 237 P.3d 565, 114 Cal. Rptr. 3d 241 | S162570 | Question of Law - Civil | submitted/opinion due |
| 1 | Murray, Kevin (Plaintiff and Appellant) Represented by James P. Stoneman Attorney at Law 100 W. Foothill Boulevard Claremont, CA |
| 2 | Alaska Airlines, Inc. (Defendant and Respondent) Represented by David James Reis Howard, Rice, Nemerovski et al. 3 Embarcadero Center, 7th Floor San Francisco, CA |
| Opinion Authors | |
| Opinion | Justice Marvin R. Baxter |
| Dissent | Justice Kathryn M. Werdegar |
| Disposition | |
| Aug 23 2010 | Opinion filed |
| Dockets | |
| Apr 11 2008 | Request to answer question of state law filed By the United States Court of Appeals for the Ninth Circuit. |
| Apr 14 2008 | Received: Appellant's (Kevin Murray) Opening Brief Appelle's (Alaska Airlines, Inc) Brief |
| Jun 18 2008 | Request for certification granted The request, made pursuant to California Rules of Court, rule 8.548, that this court decide a question of California law presented in a matter pending in the United States Court of Appeals for the Ninth Circuit, is granted. For the purposes of briefing and oral argument, defendant Alaska Airlines, Inc. is deemed petitioner in this court. (Cal. Rules of Court, rule 8.520(a)(6).) George, C.J., was absent and did not participate. Werdegar and Corrigan, JJ., were absent and did not participate. Votes: Chin, A.C.J., Kennard, Baxter, and Moreno, JJ. |
| Jul 1 2008 | Request for extension of time filed Counsel for defendant and appellant requests extension of time to August 18, 2008, to file the opening brief on the merits. |
| Jul 15 2008 | Extension of time granted On application of defendant and appellant and good cause appearing, it is ordered that the time to serve and file the opening brief on the merits is extended to and including August 18, 2008. |
| Aug 18 2008 | Opening brief on the merits filed counsel for Alaska Airlines Inc., |
| Sep 19 2008 | Answer brief on the merits filed counsel for Kevin Murray (8.25(b)) |
| Oct 9 2008 | Reply brief filed (case fully briefed) Alaska Airlines, Inc., appellant by David J. Reis, Counsel |
| Oct 7 2009 | Note: Requested additional record from the U.S. Ninth Circuit Court of Appeals. |
| Oct 7 2009 | Received additional record I vol. of Transcripts, 1 Vol. of Excerpts of Record, and 1 volume of Electronic Record. |
| Apr 7 2010 | Supplemental brief filed Defendant and Respondent: Alaska Airlines, Inc.Attorney: David James Reis |
| Apr 14 2010 | Supplemental briefing ordered The parties are directed to address at oral argument, in addition to any other relevant matters, the following question: What is the relevance, if any, of the decision filed in McDonald v. Antelope Valley Community College Dist. (2008) 45 Cal.4th 88, to the question posed by the Ninth Circuit in this case? Supplemental briefs addressing this issue may be served and filed by both parties in the San Francisco office of this court no later than 10 days from the date of this order, and supplemental reply briefs may be served and filed in the San Francisco office of this court no later than seven days thereafter. George, C.J., was absent and did not participate. |
| Apr 26 2010 | Supplemental brief filed Defendant and Respondent: Alaska Airlines, Inc.Attorney: David James Reis |
| Apr 28 2010 | Supplemental brief filed Plaintiff and Appellant: Murray, KevinAttorney: James P. Stoneman |
| May 3 2010 | Filed: counsel for respondent (Alaska Airlines, Inc.) Reply to Supplemental Brief. |
| May 3 2010 | Order filed The above entitled matter is retitled as follows: KEVIN MURRAY, Plaintiff and Appellant, v. ALASKA AIRLINES, INC., Defendant and Respondent. |
| May 5 2010 | Supplemental brief filed Plaintiff and Appellant: Murray, KevinAttorney: James P. Stoneman Reply. |
| May 5 2010 | Case ordered on calendar to be argued Tuesday, May 25, 2010, at 9:00 a.m., in San Francisco |
| May 13 2010 | Stipulation filed Stipulation by counsel James P. Stoneman, II, that appellant Murray has no objection to Justice Kennard's participation in the deliberations and decision in this matter notwithstanding her absence from oral argument. |
| May 17 2010 | Stipulation filed Stipulation by counsel David J. Reis, that appellant has no objection to Justice Kennard's participation in the deliberations and decision in this matter notwithstanding her absence from oral argument. |
| May 25 2010 | Stipulation filed Stipulation by counsel James P. Stoneman II, that appellant has no objection to Justice Corrigan's participation in the deliberations and decision in this matter notwithstanding her absence from oral argument. |
| May 25 2010 | Stipulation filed Stipulation by counsel David J. Reis, that respondent has no objection to Justice Corrigan's participation in the deliberations and decision in this matter notwithstanding her absence from oral argument. |
| May 25 2010 | Cause argued and submitted |
| Aug 20 2010 | Notice of forthcoming opinion posted To be filed Monday, August 23, 2010 @ 10 a.m. |
| Briefs | |
| Aug 18 2008 | Opening brief on the merits filed |
| Sep 19 2008 | Answer brief on the merits filed |
| Oct 9 2008 | Reply brief filed (case fully briefed) |
| Brief Downloads | |
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| Jan 11, 2011 Annotated by dravi | FACTS: In December 2004, Murray filed a voluntary and optional administrative complaint with the Secretary of Labor (Secretary), pursuant to the whistleblower protection provision in the Ford Aviation Investment and Reform Act for the 21st Century (AIR 21), seeking reinstatement, backpay and damages. Murray alleged that, in retaliation for his report to the FAA, he had been denied employment at Alaska Airlines. The Secretary conducted an investigation, pursuant to section 42121(b)(2)(A) of AIR 21. During this process, Murray was not contacted by the investigator, did not see the documents Alaska produced, and did not have an opportunity to provide additional information to the Secretary of Labor. In June 2005, the investigation concluded that there was no causal link between Murray’s whistleblowing and his employment termination. The Secretary of Labor then dismissed Murray’s administrative complaint, and put Murray on notice that, if he wanted a formal hearing on the record before an Administrative Law Judge, he must request one within 30 days. Murray never requested this formal hearing, nor did he make any other objections to the administrative findings on the issue of causation. Instead, in August 2005, Murray filed suit against Alaska in California state court. The case was removed to federal district court on diversity grounds, and the district court granted summary judgment to Alaska, based on collateral estoppel on the causation issue. Murray appealed the case to the Ninth Circuit, which requested the California Supreme Court to address whether the factual findings made by the administrative investigation should have preclusive effect in the state court lawsuit subsequently removed to federal court. PROCEDURAL HISTORY: ISSUE: HOLDING: ANALYSIS (Baxter, J.): Quasi-Judicial Administrative Process Reliance on Precedent Support from Another Jurisdiction Congressional Intent Public Policy Concerns DISSENT (Werdegar, J.): Although the majority focused on the administrative proceedings that could have occurred after the findings were made, the dissent argues, relying on Pacific Lumber Co. v. Industrial Accident Commission, that the judicial character of the administrative process rests on proceedings prior to the administrative decision. The dissent pointed out that in each of the cases the majority cited in support of its position, the litigant actually received a full hearing before the administrative decision, rather than merely being given the opportunity to litigate after the administrative decision was rendered. The dissent pointed out that one reason to hesitate in granting preclusive effect to administrative findings is that we have less faith that non-judicial administrative processes will produce accurate results than we have in the accuracy of a judicial process. While post-finding review has sometimes been an additional necessary factor in determining whether to grant issue preclusion, the dissent argued that the majority’s decision is the first time that availability of postfinding appeal has been treated as a sufficient condition for granting issue preclusion. The dissent also criticized the majority’s reliance on Fadaie, arguing that the views of a single federal trial judge ruling under Washington law should not prevail under California law. The dissent went on to attack (1) the fairness of estopping Murray from relitigating the issue of causation, (2) his alleged obligation to exhaust administrative proceedings, and (3) the allegation that federalism and comity require issue preclusion. The dissent argued that, since Murray did not foresee or acquiesce to foregoing his court remedies by failing to pursue his administrative remedies, estoppel is inequitable. It also argued that the administrative proceedings were designed to protect whistleblowers, and to turn the availability of those remedies into an exhaustion requirement is counterproductive. The dissent pointed out that the majority's reliance on Johnson is misleading, since Johnson only required exhaustion of administrative remedies when the administrative proceedings were judicial in nature, but Murray’s proceedings were non-judicial. Finally, the dissent argued that federalism and comity concerns do not require preclusion, since Congress could have chosen to preempt state remedies when it adopted the federal whistleblower administrative remedy. In conclusion, the dissent pointed out that (1) no loss of judicial integrity would result if estoppel were denied, because the administrative proceedings were not judicial in nature, (2) judicial economy is not a concern because there was no use of judicial resources in the administrative proceeding, and (3) parallel pursuit of administrative and federal remedies is not vexatious since Congress chose not to preempt state remedies in the federal whistleblower statute. TAGS: KEY RELATED/CITED CASES AND STATUTES: Pacific Lumber Co. v. Industrial Accident Comm’n., 22 Cal.2d 410 (1943). People v. Sims, 651 P.2d 321 (Cal. 1982). Rymer v. Hagler, 211 Cal.App.3d 1171 (Ct. App. 1989). Takahashi v. Board of Education, 202 Cal.App.3d 1464 (Ct. App. 1988). Fadaie v. Alaska Airlines, 293 F. Supp. 2d 1210 (W.D. Wash. 2003). Hanna v. WCI Communities, Inc., 348 F. Supp. 2d 1332 (S.D. Fla. 2004). Johnson v. City of Loma Linda, 5 P.3d 874 (Cal. 2000). State Board of Chiropractic Examiners v. Superior Court, 45 Cal.4th 963 (2009). Annotation by: Deepika Ravi |
