Appeal from the United States District Court for the Northern District of Illinois, Eastern Division, No. 85 C 8969 -- Harry D. Leinenweber, Judge.
Before CUDAHY, POSNER and EASTERBROOK, Circuit Judges.
CUDAHY, Circuit Judge. This case presents the question whether unreviewed findings of fact made during a state administrative proceeding should be given preclusive effect in a subsequent suit brought under the Age Discrimination in Employment Act (the "ADEA"), 29 U.S.C. § 621 et seq. (1982).*fn1 We hold that they should not be given such effect.
James Duggan, a tenured public school teacher, was employed by the east Chicago Heights School District (the "District" or the "Board"), from the 1969-70 academic year until his termination on July 26, 1983. The summer before Duggan was dismissed, the Board issued a Notice of Remediation which identified deficiencies in Duggan's teaching performance and which directed him to take particular steps to remedy these deficiencies.*fn2 A series of classroom observations of Duggan's teaching performance were conducted by school officials during the 1982-83 school year, and a number of conferences were held with Duggan. Duggan was dismissed the following summer because the Board claimed that his performance did not improve. At the time he was terminated, the Board provided Duggan with a list of charges.*fn3
On January 17, 1984, Duggan filed a charge of racial and age discrimination with the Equal Employment Opportunity Commission (the "EEOC"). Duggan, who is white, claimed that he had been harassed and subjected to employment conditions different than those of a younger black teachers. (The majority of teachers employed by the East Chicago Heights School District are black, and the school district in which Duggan taught had an all black student population.)
Duggan was entitled to a hearing on the charges under state law. Ill. Rev. Stat., ch. 122, para. 24-12 (1985). A nine-day administrative hearing was held during June and July of 1984 to determine if the school district had cause to dismiss Duggan and to consider Duggan's claims of racial and age discrimination. Duggan was represented by counsel at the hearing. Although he had the right to present evidence, Duggan alleges that he was unable to introduce any documentary evidence to establish his claims of discrimination because discovery was not available to him; instead, he related specific conversations with school officials in which his age and race were mentioned. Appellant's brief at 9. On September 20, 1985, the hearing officer sustained Duggan's dismissal, finding that the Board had established that "Duggan failed to maintain student discipline and behavior which is conducive to learning." In re Hearing between East Chicago Hts. School Dist. and Duggan, Award and Opinion at 46 (issued Sept. 20, 1985). The hearing officer concluded that he as unable to credit Duggan's charge of race discrimination; he also apparently considered and dismissed Duggan's claim of age discrimination, but his opinion is not clear on this point. Id. at 42.
Duggan, received his right-to-sue letter from the EEOC on July 25, 1985. On October 24, 1985, Duggan filed suit in federal court, claiming that the Board had discriminated against him on the basis of age in violation of the ADEA and on the basis of race in violation of Title VII, 42 U.S.C. § 2000e et seq., and section 1983, 42 U.S.C. § 1983. Duggan alleged that from 1982 until his dismissal he had been harassed, unfavorably evaluated and eventually dismissed because of his age and race. Amended Complaint, Count I para. 8, 9 (age); Count II para. 8 (race) (filed Oct. 24, 1985). Duggan also filed a complaint in state court, requesting judicial review of the administrative proceeding, Ill. Rev. Stat., ch. 110, para. 3-101 et seq. (1985), but he subsequently filed a motion to have that action voluntarily dismissed without prejudice. Duggan's motion was granted on August 15, 1986.
The Board filed a motion to dismiss the federal suit, and the district court granted that motion, holding that Duggan was barred by res judicata from maintaining his suit, even though the decision of the hearing officer had not been reviewed by a state court. Duggan v. Board of Educ. of East Chicago Hts. School Dist., 40 FEP Cases (BNA) 1208 (N.D. Ill. 1986). The court relied primarily on Buckhalter v. Pepsi-Cola General Bottlers, 768 F.2d 842 (7th Cir. 1985), cert. granted and judgment, vacated, 478 U.S. 1017, 106 S. Ct. 3328, 92 L. Ed. 2d 735 (1986), in which this court held that an unreviewed decision of the Illinois Human Rights Commission that ruled against a plaintiff's claim of race discrimination bars a subsequent Title VII and section 1983 suit so long as the agency was acting in a judicial capacity in ruling on the claim and the plaintiff had a full and fair opportunity to litigate the issue. Id. at 852. The district court in this case extended Buckhalter's holding to claims brought under the ADEA, and it found that Duggan had had a full and fair opportunity to litigate his claims of racial and age discrimination before the hearing officer. Although discovery was not available to Duggan in the administrative proceeding and the hearing was not conducted in strict conformity with the rules of evidence, Duggan made no showing as to how he was prejudiced by either factor. 40 FEP Cases at 1211-12. Duggan appeals.
Since the district court issued its opinion in this case, the Supreme Court decided University of Tennessee v. Elliott, 478 U.S. 788, 106 S. Ct. 3220, 92 L. Ed. 2d 635 (1986). The Court held in Elliott that unreviewed factual determinations by state agencies are not entitled to preclusive effect where the plaintiff has brought a discrimination claim under Title VII in federal court. Id. at 3225.*fn4 But the Court also held that unreviewed proceedings could preclude a subsequent claim based on section 1983 if the state agency was acting in a judicial capacity in resolving the disputed factual issues and the parties had an adequate opportunity to litigate. Id. at 3227. on appeal, the school district concedes that the district court's holding as to Duggan's Title VII claim must be reversed under Elliott. Appellee's Brief at 4.
With respect to Duggan's section 1983 claim, he failed to raise this matter until his reply brief. Rule 28(a) of the Federal Rules of Appellate Procedure provides that a statement of issues must appear in appellant's initial brief; under Rule 9(e) of the Rules of the United States Court of Appeals for the Seventh Circuit,*fn5 issues appearing for the first time in a reply brief will not be considered by this court. In re Bear, 789 F.2d 577, 579 (7th Cir. 1986). Counsel for appellant conceded at oral argument that Duggan had waived his section 1983 claim by failing to present it in his opening brief.*fn6 The issue that remains before us therefore is whether an unreviewed state administrative decision should be given preclusive effect in a subsequent suit brought under the ADEA.*fn7
the Supreme Court held in Elliott that Congress did not intend that a prior unreviewed administrative proceeding could preclude a plaintiff from being afforded a trial de novo on his Title VII claim. The Court based its conclusion on section 2000e-5(b) of Title VII and its prior decision in Chandler v. Roudebush, 425 U.S. 840, 48 L. Ed. 2d 416, 96 S. Ct. 1949 (1976). Section 2000e-5(b) provides that the EEOC, in investigating discrimination charges, must give "substantial weight to final findings and orders made by State or local authorities in proceedings commenced under State or local [employment discrimination] law." 42 U.S.C. § 2000e-5(b). It would be nonsensical to provide that the EEOC must give only "substantial" weight to state or local findings of fact if the federal court that subsequently hears the Title VII claim must give preclusive effect to these same state or local administrative factual determinations. The intervening EEOC investigation would be "pointless." Kremer v. Chemical Constr. Corp., 456 U.S. 461, 470 n.7, 72 L. Ed. 2d 262, 102 S. Ct. 1883 (1982). The Court also concluded that applying administrative res judicata in a Title VII suit would be contrary to its holding in Chandler. In that case, the Court held that federal employees enjoy the same right to trial de novo of their Title ViI claims ...