Buttaro v. City of New York, 2016 U.S. Dist. LEXIS 125965 (E.D.N.Y. Sept. 15, 2016):

1.Analysis

1.1. Collateral Estoppel

Defendants argue that the ALJ's "factual determinations with respect to plaintiff's misconduct are afforded preclusive effect," and that as a result, Buttaro's discrimination, selective-enforcement, and retaliation claims are effectively precluded. Def. Mem. of Law, DE 13, ("Def. Mem.") at 11. Not quite. The ALJ decided only that Buttaro engaged in misconduct; it did not address [*15]  whether the FDNY engaged in discrimination, selective enforcement, or retaliation. And while the ALJ's factfinding is preclusive, its legal determinations (for example, its rejection of Buttaro's First Amendment defense) are not. Therefore, although Buttaro may not dispute the finding that he engaged in the charged conduct, his claims may proceed.

"'[W]hen a state agency acting in a judicial capacity resolves issues of fact properly before it which the parties have had an adequate opportunity to litigate, federal courts must give the agency's factfinding the same preclusive effect to which it would be entitled in the State's courts.'" Locurto v. Giuliani, 447 F.3d 159, 170 (2d Cir. 2006) (quoting Univ. of Tennessee v. Elliott, 478 U.S. 788, 799 (1986)). Under New York law, collateral estoppel--or issue preclusion--applies "'when two basic conditions are met: (1) the issue sought to be precluded is identical to a material issue necessarily decided by the administrative agency in a prior proceeding; and (2) there was a full and fair opportunity to contest this issue in the administrative tribunal.'" Schoolcraft v. City of New York, 955 F. Supp. 2d 192, 194 (S.D.N.Y. 2013) (quoting Jeffreys v. Griffin, 1 N.Y.3d 34, 39 (2003)). "The burden of showing that the issues are identical and were necessarily decided in the prior action rests with the party seeking to apply issue preclusion," while "the burden of showing that the prior action [*16]  did not afford a full and fair opportunity to litigate the issues rests with the party opposing the application of issue preclusion." Proctor v. LeClaire, 715 F.3d 402, 414 (2d Cir. 2013); see also Ryan v. New York Telephone Co., 62 N.Y.2d 494, 501 (1984). "Even when the requirements of collateral estoppel are satisfied, application of the doctrine is discretionary--it is grounded on concepts of fairness and should not be rigidly or mechanically applied." Heller v. Bedford Cent. Sch. Dist., 144 F. Supp. 3d 596, 615 (S.D.N.Y. 2015) (quotation omitted).

The ALJ's finding that Buttaro engaged in the charged conduct--e.g., that he "failed to wear Department-issued clothing in the firehouse and repeatedly disobeyed orders to wear only authorized clothing in the firehouse," ALJ Op. at 31--is entitled to preclusive effect. See Matusick v. Erie Cty. Water Auth., 757 F.3d 31, 49 (2d Cir. 2014) ("The factual findings... that [the plaintiff] had indeed committed the charged conduct... precluded [the plaintiff] from arguing otherwise at trial.").⁴

4   Buttaro had a full and fair opportunity to litigate his position at the administrative hearing. He was represented by counsel and allowed to call and cross-examine witnesses, and to offer other evidence. Although he was not allowed to conduct depositions or serve interrogatories, he has not shown that the lack of pre-hearing discovery affected the availability of evidence or outcome of the proceedings. [*17]  See Chauffeur's Training Sch., Inc. v. Spellings, 478 F.3d 117, 132 (2d Cir. 2007); Wickham Contracting Co. v. Bd. of Educ. of City of New York, 715 F.2d 21, 27 (2d Cir. 1983).

However, Buttaro is not precluded from arguing that Defendants engaged in retaliation, selective enforcement, or discrimination. The ALJ explicitly declined to decide those issues. See ALJ Op. at 30 ("a selective enforcement or retaliation claim is not a proper defense in an administrative proceeding"). And by finding that Buttaro engaged in conduct warranting termination, the ALJ did not "necessarily decide" that Defendants lacked discriminatory or retaliatory motive. See Matusick, 757 F.3d at 48-49; Dillon v. Suffolk Cty. Dep't of Health Servs., 917 F. Supp. 2d 196, 216 (E.D.N.Y. 2013) ("[I]t is possible that the disciplinary charges--even though upheld in administrative proceedings--would not have been brought but for the Defendants' retaliatory motive."); Cortes v. City of New York, 700 F. Supp. 2d 474, 486 (S.D.N.Y. 2010) ("Although defense proffers indicate that Plaintiff raised his discrimination or selective prosecution assertions at the hearings, there is no indication that the discrimination allegations were relevant to the question of whether Plaintiff had committed the charged infractions. Thus,... Defendants have failed to demonstrate that the allegations in this action were actually litigated and necessarily decided in the administrative proceeding."); Morey v. Somers Cent. Sch. Dist., 2007 WL 867203, at *4 (S.D.N.Y. Mar. 21, 2007). Therefore, Buttaro's retaliation, selective enforcement, and discrimination claims are not precluded. [*18]

Similarly, the ALJ's finding that "potential workplace disruption outweighs [Buttaro's] First Amendment right to wear non Department-issued t-shirts in the firehouse" is a legal determination that is not entitled to preclusive effect. "[W]hether to give preclusive effect to the unreviewed legal determinations of state administrative decisions" is the subject of a circuit split on which the Second Circuit has not yet taken a position. Doe v. Pfrommer, 148 F.3d 73, 80 (2d Cir. 1998); see also Leventhal v. Knapek, 266 F.3d 64, 72 n.3 (2d Cir. 2001). Several district courts in this circuit, however, have "declined to extend preclusive effect to unreviewed agency determinations of law." Levich v. Liberty Cent. Sch. Dist., 361 F. Supp. 2d 151, 161 (S.D.N.Y. 2004) ("we will not apply issue preclusion to the hearing officer's determination that plaintiff's [] letter was not protected by the First Amendment and will now consider the merits of plaintiff's retaliation claims"); see also, e.g., Pappas v. Giuliani, 118 F. Supp. 2d 433, 442 (S.D.N.Y. 2000), aff'd, 290 F.3d 143 (2d Cir. 2002). These courts reason that the Supreme Court's "choice of language" in Elliott [Univ. of Tennessee v. Elliott, 478 U.S. 788, 799 (1986)]--the case which established that when a state agency "'resolves disputed issues of fact... federal courts must give the agency's factfinding the same preclusive effect to which it would be entitled in the State's courts'"--is "too specific and consistent to ignore." Levich, 361 F. Supp. 2d at 161 (quoting Elliot, 478 U.S. at 799); see Pappas, 118 F. Supp. 2d at 441-42 ("The Supreme Court's specific language in Elliott [*19]  lends further support to the conclusion that it did not wish to extend issue preclusion to unreviewed administrative determinations of law."). Moreover, interpreting Elliott to apply only to factfinding, not legal determinations, "comports with the fundamental purpose of § 1983 to interpose the federal courts between the States and the people, as guardians of their constitutional rights." Levich, 361 F. Supp. 2d at 161-62 (quotation omitted); see Pappas, 118 F. Supp. 2d at 442 ("if we were to hold today that the administrative determinations of law were preclusive, we would in essence be compelling [the plaintiff] to litigate his federal constitutional claims before the very agency he contends violated them"). Indeed, this approach conforms to that of New York courts. See Akgul v. Prime Time Transp., Inc., 293 A.D.2d 631, 633 (2d Dep't 2002) ("[A]n administrative agency's final conclusion, characterized as an ultimate fact or a mixed question of fact and law, is not entitled to preclusive effect."). Thus, while the Court will defer to the ALJ's finding of potential workplace disruption, it will decide de novo whether Buttaro's activities were protected by the First Amendment.