Thursday, November 8, 2018
Court of Appeal:
Applying State Preclusion Rule to Federal Dismissal Is Error
By a MetNews Staff Writer
The First District Court of Appeal yesterday revived a case brought by a man who challenged his ineligibility to become a corrections officer based on his prior use of a false social security number, holding that the judge mistakenly applied state rather than federal claim preclusion rules.
The opinion was written by Acting Presiding Justice Jon B. Streeter of Div. Four.
The plaintiff in the case, Victor Guerrero, illegally moved to the country from his native Mexico when he was 11 years old. Before obtaining U.S. citizenship 21 years later, in 2011, Guerrero used a false social security number in order to work.
Upon becoming a citizen through his wife, he applied to become an officer with the California Department of Corrections and Rehabilitation (“CDCR”). He answered truthfully a question on the application whether he had ever used a fake social security number, and his application was rejected twice.
Guerrero brought a suit in the U.S. District Court for the Northern District of California against the CDCR and the State Personnel Board (“SPB”)—which had rejected his appeals from the department’s finding of his ineligibility—as well as suing other defendants.
His suit alleged violations of both state and federal law, including contravention of his due process rights and employment discrimination based on his Latino heritage. U.S. District Judge William J. Alsup dismissed the state law claims without prejudice.
“[A] federal court cannot grant plaintiff any relief based on his state-law claims because SPB and CDCR do not waive their Eleventh Amendment immunity in this action. There is no supplemental jurisdiction over plaintiff’s state-law claims….”
He went on to say:
“Because adjudication of plaintiff’s California state-law claims in federal court would contravene the Eleventh Amendment, plaintiff’s state-law claims against all defendants must be Dismissed. These may be re-filed in state court.”
Alsup ordered Guerrero’s reinstatement in the CDCR hiring process, and awarded him $140,000 in backpay and more than $1.4 million in costs and fees.
The judge agreed that Guerrero had been discriminated against individually, but held that the question regarding social security number falsification was not categorically discriminatory.
(He noted that while Latinos are over-represented in the CDCR compared to the broader California workforce, such a fact is no bar to determining whether a hiring practice has a discriminatory effect under federal law.)
The Ninth U.S. Circuit Court of Appeals affirmed Alsup’s judgment against the department in a 2017 memorandum opinion. It reversed the judgment as to the SPB, as the board had had a “purely adjudicatory role in this case,” and there was “no evidence that it discriminated against or interfered with the CDCR’s relationship with Guerrero.”
State Court Proceedings
Upon resolution of his federal litigation, the stay in the state-law proceedings before San Francisco Superior Court Judge Curtis E.A. Karnow, which he had initiated after Alsup’s dismissal, was lifted.
Karnow was convinced by the CDCR’s argument that the state rules governing claim preclusion applied to the case.
In his view, “the same primary rights were at issue in the federal case…and in this case,” which required dismissal under the claim preclusion doctrine.
Guerrero appealed, arguing that federal claim preclusion rules alone govern the preclusive effect of federal judgments. Such rules, he argued, would allow the survival of his state law claims, which would afford him a chance at damages beyond the back pay and fees to which he was limited under federal law.
Federal Law Controlling
“Guerrero argues that, in determining the preclusive effect of the judgment in the Federal Action, the trial court erroneously applied the California doctrine of primary rights. He correctly points out that in Semtek Int’l Inc. v. Lockheed Martin Corp. (2001)…the United States Supreme Court held that federal common law controls the preclusive effect of a federal judgment.”
“While recognizing that ‘Semtek does not tell us what the rule of decision is when the federal judgment was on a federal question,’ the trial court went on to apply California law because it perceived no federal interest in the application of federal law. On this point, the court erred.”
The jurist added:
“The only California case we have found that takes account of the changed landscape following Semtek…holds that ‘where a prior federal judgment was based on federal question jurisdiction, the preclusive effect of the prior judgment of a federal court is determined by federal law.’ ”
State Law Misapplied
Streeter went on to note:
“[T]he court appears to have proceeded on the understanding that federal law recognizes an exception to claim preclusion that ‘salvages’ Guerrero’s state claims for damages in these circumstances, while California law does not. This, in our view, sets up a false conflict.”
“There is no denying that the basis for the dismissal of Guerrero’s state law claims for damages in the Federal Action, the Eleventh Amendment—which is jurisdictionally disabling in an Article III court, absent a waiver—was a limitation on ‘the subject matter jurisdiction’ of the district court. Contrary to what the trial court appears to have believed, this exception has been recognized in both federal law and California law. Thus, claim preclusion does not apply here under either federal or California law.”
The case is Guerrero v. California Department of Corrections and Rehabilitation, 2018 S.O.S. 5324.
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