Opposition Brief — Candelario v. Frank

fa)

No. 90-863

Jn the Supreme Court of the Anite sores

See a rams emmsils

lis so ae:

OCTOBER TERM, 1990

SABAT QUINONES CANDELARIO, PETITIONER

Vv.

ANTHONY M. FRANK,

POSTMASTER GENERAL OF THE UNITED STATES

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

BRIEF FOR THE RESPONDENT IN OPPOSITION

KENNETH W. STARR

Solicitor General

STUART M. GERSON

Assistant Attorney General

MARLEIGH D. DOVER

WENDY M. KEATS

Attorneys

Department of Justice

Washington, D.C. 20530

(202) 514-2217

{7

QUESTION PRESENTED

Whether principles of administrative res judicata preclude

the Postmaster General from raising a postal employee’s

failure to mitigate damages in an action to enforce a deci-

sion of the Equal Employment Opportunity Commission.

(1)

TABLE OF CONTENTS

Page

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ea in a hk kee eeu eh soak ese 5

re ee red oy aah sae eee eke ke 12

TABLE OF AUTHORITIES

Cases:

Albermarle Paper Co. .. Moody, 422 U.S. 405

a ER GS oP 8

Federated Dep't Stores \. Moitie, 452 U.S. 394

en eG uw be Cae 0b 60x 10, 11

Frazier v. United States Postal Service, 26 M.S.P.B.

ae eg as coe oy Vade oe eulce 6 us 2 8

Gellingtos: v. Department of Justice, 87 Fed. Eq. Op-

portunity Rep. (Labor Rel. Press) € 1,040 (Apr.

Ne i anaes os ee 7

Hanrahan v. Hampion, 446 U.S. 754 (1980) .... 1}

Haskins vy. Department of Army, 808 F.2d 1192 (6th

ee te vies sk ae eae eae cae 9-10

Horn v. Duke Homes Div. of Windsor Mobile

Homes, Inc., 755 F.2d 599 (7th Cir. 1985) ... 8

Houseton v. Nimmo, 670 F.2d 1375 (9th Cir.

ee re wane Le ae ee eae & s 10

International Harvester Co. v. Occupational Health

and Safety Review Comm’n, 628 F.2d 982 (7th Cir.

ee ee soe ye bats a Lis kb ¢ 1]

Kremer v. Chemical Constr. Co., 456 U.S. 461

TN TS ee ee cee base ki 6

Marks v. Pratico, Inc., 633 F.2d 1122 (Sth Cir.

Is a ys sc ow Fs «ab e's Cox. Y

lV

Cases — Continued: Page

Moitie v. Federated Dep’t Stores, Inc., 611 F.2d 1267

SC SE no nr caee cals peck ea es eas 10

Moore v. Devine, 780 F.2d 1559 (11th Cir.

DE Ue cual uses eee eee as tec eh rene nn 7-8, 9

Pecker v. Heckler, 801 F.2d 709 (4th Cir.

DE each Pea asa ncaa neti sk ne ne eco ee 10

Rasimas v. Michigan Dep’t of Mental Health, 714

fg oF fe ae See eee y)

Snow v. United States Postal Service, 88 Fed. Eq.

Opportunity Rep. (Labor Rel. Press) © 1,030

Se: Se EN ee Laren ey, 4 7

Sullivan v. Hudson, 109 S. Ct. 2248 (1989) .... 11

Taylor v. Philips Indus., Inc., 593 F.2d 783 (7th Cir.

i BER ey oe a ere rye SR Pan Pera S

Texas State Teachers Ass'n v. Garland Indep. School

District, 489 U.S. 782 (1989) ............... 1]

United States v. Utah Constr. & Mining Co., 384

See I ns ay Go hove we ke oe eae ees 6,9

University of Tennessee v. Elliott, 478 U.S. 788

SNS Sth c coe OE ka Bs 8 se Re ae 6

Statutes and regulations:

Rehabilitation Act of 1973, Pub. L. No. 93-112, 87

eal, Jon Gee ee. Fe) OE ONE.) .. 2.2 eee.

a SEED oo kp weo-n ase cooassces

Pe oe! es 3,

ee

MO Or Mees ooo se 3,

y. Fon &.

Pt. 102:

TD SR ee ek sk ooo ee oe a 8

~ © & WN

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re

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Regulations — Continued:

Pres ENT a:s7ate ora ack ote slate cal w aie'a ee er

Fas ee re ak a eae Oa oe earn

Sections 1613.221-1613.234 ...........

NN NIN oo owe Sek ceew ences

oe |

Sections 1613.237-1613.239 ...........

ek eo , EE err ee

section 1613.271(aM4) .... 2... cccee

Section 1613.281 (1986) .............. 3,

(

NNN ONNYAnNYANNN

Miscellaneous:

Restatement (Second) of Judgments (1982) ..... 6

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7 _ en reliiigs>

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Jn the Supreme Court of the Gnited States

OcTOBER TERM, 1990

No. 90-863

SABAT QUINONES CANDEI ARIO, PETITIONER

v.

ANTHONY M. FRANK,

POSTMASTER GENERAIL OF THE UNITED STATES

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

BRIEF FOR THE RESPONDENT IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. Al-A19)

is reported at 906 F.2d 798. The opinion of the district court

(Pet. App. A22-A46) is reported at 715 F. Supp. 414.

JURISDICTION

The judgment of the court of appeals was entered on June

26, 1990. A petition for rehearing was denied on September

4+, 1990. Pet. App. A87-A88. The petition for a writ of cer-

tiorarl was filed on November 26, 1990. The jurisdiction

ot this Court is invoked under 28 U.S.C. 1254(1).

(1)

STATEMENT

1. Petitioner, a veteran who is partially disabled by a

back condition, was hired by the United States Postal Serv -

ice as a probationary part-time postal clerk in August 1979.

On September 0, 1979, the Postal Service discharged peti-

tioner on the basis of a medical determination that his back

condition was incompatible with heavy lifting and other

physical requirements of the job. Petitioner filed a com-

plaint with the Postal Service asserting that the Service had

unlawfully discriminated against him on account of his

disabHity, in violation of the Rehabilitation Act of 1973,

Pub. L. No. 93-112, 87 Stat. 390 (codified at 29 U.S.C. 701

el seq.). See 29 C.F.R. Pt. 1613.' The Postal Service issued

a final agency decision finding that petitioner’s termination

was not discriminatory. Pet. App. AS5-A6, A23-A25,

A64-A69.

Petitioner appealed to the Equal Employment Opportuni

ty Commission (EEOC), which rendered a decision in his

favor in April 1985. Pet. App. A63-A82. The sole issue con-

sidered by the EEOC was “whether the record supports a

finding of no discrimination.” Jd. at A73. The EEOC deter-

mined that petitioner’s discharge was improperly based on

his physical condition and ordered the Postal Service to

“reinstate [petitioner] at the paygrade he would normally

have reached if not terminated, and award him backpay for

the period from his termination to his reinstatement.” /d.

at A78. The EEOC neither considered nor determined the

amount of back pay due petitioner, and the parties presented

no argument or evidence on this question. See id. at A37.

' The procedures of 29 C.F.R. Pt. 1613 apply to employment

discrimination complaints by tederal employees. The procedures of 29

C.F.R. Pt. 1601 apply to discrimination complaints by state and private

employees.

2. The Postal Service reinstated petitioner in June 1985.

In accordance with the requirement that “[i]nterim earnings

or amounts earnable with reasonable diligence by the per-

son * * * discriminated against shall operate to reduce the

back pay otherwise allowable,” 42 U.S.C. 2000e-5(g),? the

Postal Service asked petitioner to submit proof of his earn-

ings and efforts to obtain other employment during the back

pay period. Petitioner submitted documents indicating that,

apart from 100 hours of part-time work, he had no interim

earnings. Petitioner’s submissions showed that he had not

sought unemployment compensation during the back pay

period, and that he was a full-time university student for

three years. See C.A. App. 16-18. In March 1986, the Postal

Service determined that petitioner had not made reasonable

efforts to obtain other employment and denied him back

pay. Pet. App. A27-A28.

Petitioner submitted additional documents in August

1986, including undated applications for employment, a let-

ter stating that he had been a student in a vocational

rehabilitation program, and a handwritten log setting forth

the names and business cards of employers that he claimed

to have contacted. C.A. App. 20. Upon investigation, the

Postal Service determined that the additional materials were

Suspect, and again denied petitioner’s claim for back pay.

Pet. App. A31l.

3. Petitioner then brought an enforcement action in

district court. See 42 U.S.C. 2000e-5(g), 2000e-16(c); 29

C.F.R. 1613.281 (1986). He moved for summary judgment,

arguing that the Postal Service had not raised his alleged

failure to mitigate damages before the EEOC and therefore

was precluded by the doctrine of administrative res judicata

from raising the issue in the district court. The district court

? Section 2000e-5(g) is incorporated by reference in the Rehabilita-

tion Act. See 29 U.S.C. 794a(a)(1).

4

granted summary judgment for petitioner. Pet. App.

A22-A46. The court found that “the EEOC serves in a

judicial capacity” and renders a “final judgment [on the

merits] with which the Postal Service is obligated to

comply.” /d. at A38-A39. Although the district court agreed

with the Postal Service that “before the EEOC, there was

no inquiry into the reasonable-diligence issue, and there was

no calculation of the back pay,” id. at A37, the court con-

cluded that the Postal Service was “precluded from raising

the reasonable-diligence issue if it could have raised it in

the administrative proceeding,” id. at A39. The court held

that “[t]he exact construction of the back-pay award [was]

a proper subject of the EEOC proceedings,” id. A40-A41,

and found “no legislative policy that would favor separate,

collateral review of the reasonable-diligence issue,” /d. at

A42-A43.

4. The court of appeals reversed. Pet. App. Al-A19.

The court of appeals agreed with the district court that

“IsJince the EEOC acted in a judicial capacity, any factual

determination that it made may be subject to the doctrine

of res judicata.” Id. at A1l2. But the court observed that

administrative res judicata would not apply to the EEOC

proceedings “in the face of contrary public policy,” such

as “when it would result in a ‘manifest injustice.’” /d. at

A13 (citing cases). The court concluded that to preclude the

Postal Service from raising the mitigation issue in a subse-

quent enforcement action “would be a ‘manifest injustice’ ”

and “would violate the statutory mandate in compliance pro-

ceedings brought before the district court [under Section

2000e-5(g)] that ‘[i]Jnterim earnings or amounts earnable with

reasonable diligence by the person or persons discriminated

against shall operate to reduce the back pay otherwise

allowable.’” Jd. at A13-A14.

The court of appeals observed that “[t]he proceeding

before the EEOC was concerned with a liability determina-

tion, and was not necessarily the appropriate forum for a

aA

precise determination of [petitioner’s] damages.” Pet. App.

Al4. The court also noted that the applicable regulations

“[njowhere * * * direct the EEOC to determine in that pro-

ceeding the specific amount of back pay due the com-

plainant,” ‘bid. nor do they specify “which body [the EEOC

or the employing agency] must determine back pay in the

first instance,” id. at AlS. Moreover, “in practice, it ap-

pears that in typical proceedings the EEOC does not com-

pute back pay in the first instance.” /d. at A15-A16. The

court concluded that to require the EEOC, contrary to its

current practice, to compute the specific amount of back

pay due in all future administrative appeals “would not

foster administrative efficiency,” because the initial calcula-

tion of back pay involves “matters that can best be con-

sidered and determined by the agency which had employed

the complainant.” /d. at A17-A18. Accordingly, the court

of appeals vacated the judgment and remanded the case for

further proceedings.

ARGUMENT

The decision of the court of appeals is correct and does

not conflict with any decision of this Court or any other

court Of appeals. In addition, the court of appeals has

remanded this case to the district court for further pro-

cecdings. Because petitioner may recover the back pay he

secks on remand, interlocutory review of the court of ap-

peals’ decision is not warranted.

1. Petitioner contends (Pet. 20-29, 44-60) thai the Postal!

Service should have raised his alleged failure to mitigate

damages in the EEOC proceedings on the meriis of his

discrimination complaint. In petitioner’s view, principles of

adiministiative res judicata preclude the Postal Service from

raising the mitigation issue in a subsequent enforcement ac-

tion. Petitioner further contends (Pet. 29-43) that the court

h

of appeals erred in declining to apply administrative res

judicata here on the basis of public policy and to avoid

manifest injustice. These contentions are unpersuasive.

a. Administrative res judicata applies “[w]hen an ad-

ministrative agency is acting in a judicial capacity and

resolves disputed issues of fact properly before it which the

parties have had an adequate opportunity to litigate.” United

States \. Utah Constr. & Mining Co., 384 U.S. 394, 422

(1966). See also University of Tennessee v. Elliott, 478 U.S.

788, 797-798 (1986) (issue preclusion applies to factfinding

of administrative bodies acting in a judicia! capacity);

Aremer. Chemical Constr. Co., 456 U.S. 461, 484-485 n.26

(1982). Although the EEOC acted in a judicial capacity in

this case, it did not resolve any disputed issues of fact con-

cerning the amount of back pay due. And because the

amount of back pay due generally is determined by the

employing agency in the first instance, after the EEOC has

issued its decision on the merits, the proceedings before the

EEOC did not afford the Postal Service an adequate op-

portunity to litigate the mitigation issue.

The sole issue before the EEOC was “whether the record

supports a finding of no discrimination.” Pet. App. A73.

The district court expressly found that “[w]hen the present

case was before the EEOC, there was no inquiry into the

reasonable-diligence issue, and there was no calculation of

the back pay owed to [petitioner].”? Jd. at A37. This was

consistent with the EEOC’s usual practice. As the court of

* Consequently, the district court’s suggestion that principles of col-

lateral estoppel (issue preclusion) prevent the Postal Service from rais-

wig the mufigation issue in a subsequent proceeding (Pet. App. A35-A38)

is plamly incorrect. See Restatement (Second) of Judgments § 27 (1982)

fissue preclusion applies to issues “actually litigated and determined”

In a prior proceeding).

appeals recognized (id. at A1S-A17), the EEOC generally

does not compute the amount of back pay due a successful

claimant. In Snow v. United States Postal Service, 88 Fed.

Eq. Opportunity Rep. (Labor Rel. Press) € 1,030 (Sept. 30,

1987), for example, the EEOC issued an order directing the

Postal Service to reinstate an employee and award back pay,

and later issued a separate order affirming the Postal Seiv-

ice’s denial of back pay for failure to mitigate damages. '

The EEOC’s procedures focus on resolving claims of

discrimination on the merits. See 29 C.F.R.

1613.213-1613.218 and 1613.221-1613.234. The regulations

provide that, upon a final finding of discrimination, the

Commission may order appropriate corrective action, 29

(.F.R. 1613.234 and 1613.271, which ordinarily should in-

clude “[pJayment * * * on a make whole basis tor any loss

of earnings the person may have suffered as a result of the

discrimination.” Section 1613.271(a)(4). The employing

agency is required to report to the EEOC within a prescribed

time that “the corrective action has been taken.” Section

1613.234(a). If the employee is dissatisfied with the level

of compliance, he is entitled to file a civil suit for enforce-

ment in district court. 42 U.S.C. 2000e-16(c); 29 C.F.R.

1613.281 (1986). See Moore v. Devine, 780 F.2d 1559, 1563

4 Petitioner attempts to distinguish Snow by noung thai the remedial

order in that case directed the Postal Service to award back pay reduced

by amounts earned, and the EEOC processed the agency s subsequent

back pay determination as an administrative appeal rather than as a

compliance report. Pet. 1-53. But the EFOC in Snow clearly treated

the back pas calculation as a separate stage of the process that follow

ed determination of the employee's claim of discrimination on the

merits. In Gellington v. Department of Justice, 87 Fed. ty. Oppor-

‘unity Rep (labor Rel. Press) © 1.040 (Apr. 15, 1987). the EEOC con

sidered the mitigation tssuc on the initial appeal because the employs

me agency had already tound discrimination aid the cinploysee’s ap

peal was trom the agenes’s partial denial of back pay for failure to

mitigate

(11th Cir. 1986). As the court of appeals recognized (Pet.

App. A17-A18), the practice of deferring calculation of back

pay until after a determination on the merits of a discrimina-

tion claim promotes administrative efficiency by allowing

the EEOC to focus its resources on the claimaf elt while

the employer, in the first instance, performs the largely

ministerial task of assembling the information needed to

implement the usual remedy of reinstatement and back pay.°

Because the EEOC generally does not calculate the

amount of back pay due in the first instance, the parties

in this case did not have an adequate opportunity to litigate

back pay issues before the EEOC. Indeed, petitioner’s argu-

ment, if takgn seriously, would preclude him from recover-

ing any back pay because he failed to present evidence con-

cerning thefamount of back pay due. See Taylor v. Philips

Indus., Inc. , 593 F.2d 783, 787 (7th Cir. 1979) (“Under [Title

VII’s make whole] formula, before the court may award

damages, plaintiff must first establish that she has, in fact,

sustained an economic loss from defendant's discrimination.

~* * Not until the plaintiff establishes what she contends

are her damages does the burden of going forward to rebut

the damage claim or to show plaintiff's failure to mitigate

damages, fall on detendant.”). Accord Horn v. Duke Homies

Div. of Windsor Mobile Homes, Inc., 755 F.2d 599, 606

(7th Cir. 1985) (back pay ordinarily is granted Title VII

plaintiffs, but “plaintiff has the burden of proving the

* Other tederal remedial schemes also provide tor the calculation of

_back pay in a separate stage of the proceedings, following a determina-

tion of hability. The National Labor Relations Board’s regulations pro

mulgated under the National Labor Relations Act (on which Title VII's

back pay remedy was expressly modeled. see A/bermarle Paper Co. v.

Voodyv, 422 U.S. 408, 419 (1978)). provide for calculation of make-

whole damages at a later stage of the proceedings. See 29 C.F.R.

102. 52-102.59. The Meri Systems Protection Board also typically

pesoives Puck pay issues ai a separates stage. See fruzier v. United States

Postal Service 26 M.S_.P.B. 584. 885-586 (1985).

Y

damages caused her”); Rasinas v. Michigan Dep’t of Men-

tal Health, 714 F.2d 614, 623 (6th Cir. 1983); Marks v.

Pratico, Inc. , 633 F.2d 1122, 1125 (Sth Cir. 1981). In short,

the doctrine of administrative res judicata does not apply

tO questions concerning the amount of back pay due,

because the EEOC’s decision did not “resolve[] disputed

issues of fact” on that issue, and the parties did not “have

* * * an adequate opportunity to litigate” those issues in

the prior administrative proceeding, Utah Constr. & Min-

ing Co., 384 U.S. at 422.°

There is no merit to petitioner’s contention (Pet. 20-29)

that the procedure followed in this case permits a federal

employer.to overrule a back pay remedy ordered by the

EEOC. The employer is bound by the EEOC’s finding of

discrimination. See 42 U.S.C. 2000e-16; Moore v. Devine,

780 F.2d at 1562. The employer’s role is limited to making

the initial calculation of the amount of back pay due. If

the employee disputes the calculation, he has a right to seek

resoiution of that dispute by filing an enforcement action

in district court (or, under current regulations, by petition-

ing the EEOC for enforcement of its order, see note 6,

supra). Thus, contrary to petitioner’s assertions (Pet. 20-21,

28-29), the decision in this case does not conflict with deci-

sions holding that the EEOC’s final decision in federal sec-

tor employment discrimination cases is binding on the

employing agency. See Haskins v. Department of Army,

* In 1987, after the events at issue in this case, the EEOC issued sup-

plemental regulations that make it even clearer that compliance tssues,

including mitigation, generally are treated as separate from the merits

of a discrimination complaint. The regulations establish a formal pro-

cedure by which a claimant may petition the EEOC tor enforcement

of a reme tial order, and the EEOC may conduct further fact-finding.

See 29 C.F.R. 1613.237-1613.239. Because it ts now clear that federal

emplo, ves may return to the EFOC for resolution of compliance issues,

petitioner's contentions are of no continuing significance.

10

SO8 F.2d 1192, 1200 (6th Cir. 1987) (EEOC determination

“must be reviewed [by a court in an enforcement action]

in the contest that i was made; facts which were not re-

solved by the KEOC in making such a determination can-

not be read into such a finding upon a claimant’s demand”).

See also Hlouseton v. Nimmo, 670 F.2d 1375 (9th Cir. 1982);

Pecker \. Heckler, 8301 F.2d 709 (4th Cir. 1986).

b. Because principles of administrative res judicata do

not preclude the Postal Service from raising petitioner's

alleged failure to mitigate damages in an enforcement ac-

tion, there is no need for this Court to consider petitioner’s

additional contention (Pet. 29-44) that the court of appeals

should not have recognized an exception to administrative

res judicata based on public policy and the avoidance of

manifest injustice. But even if administrative res judicata

ordinarily would apply here, the court of appeals’ decision

would not warrant further review.

In Federated Dep't Stores v. Moitie, 482 U.S. 394, 401

(1981), this Court rejected “public policy” and “simple

justice” as reasons tor excepting from the effects of res

judicata parties who, for tactical reasons, elected not to ap-

peal a lower court judgment. The lower court in Moitie had

recornized that “strict application of the doctrine of res

judicaia would preclude * * * review of the instant deci-

sion,” id. at 397 (quoting Mone .. Federated Dep't Stores,

Ine., OV F.2d 1267, 1269 (9th Cir. 1980)), yet nevertheless

declined to apply the doctrine. This Court held that the con-

cededly applicable doctrine of res judicata should have been

applied, because the ends of justice are “achieved when a

complex body of law developed over a period of years is

evenhandedly applied,” and because exceptions to pertinent

law should not be invoked based on “any individual judge's

ad hoc determination of the equities in a particular case,”

452 U.S. at 401.

Voie otters no support tor petitioner’s position. The

sourt here did not expressiv hold that res judicata was

applicable and then decline to apply the doctrine because

of an “ad hoc determination of the equities,” 452 U.S. at

401. Rather, the court determined that in light of the nature

of EEOC proceedings res judicata did not apply to such

proceedings. See also International Harvester Co. \v.

Occupational Health and Safety Review Comin ’n, 628 F.2d

982, 984-986 (7th Cir. 1980) (administrative res judicata does

not apply to issues not reached in the previous administrative

proceeding).

The court of appeals concluded that to preclude the Postal

Service from asserting petitioner’s failure to mitigate

damages in his enforcement action would torce the EEOC

\o adopt less efficient administrative procedures, Pet. App.

A17- Al8, and would violate the statutory requirement that

back pay must be reduced by the amount which the claim-

ant earned, or with reasonable diligence could have earned,

in the back pay period. Pet. App. A13-A14. In the absence

of a conflict in the circuits, the court of appeals’ decision

presents no issue calling for review by this Court.

2. The court of appeals correctly rejected petitioner’s

claim (Pet. 64-65) that he is a “prevailing party” in his en-

forcement action for purposes of an award of attorney's

tees. A plaintift is not a prevailing party unless he has

achieved some of the benetit sought in bringing the action.

Texas State Teachers Ass'n vy. Garland Indep. School

District, 489 U.S. 782, 790-792 (1989); Sullivan v. Hudson,

109 S. Ct. 2248, 2255 (1989). See also Hanrahan \.

Hampton, 446 U.S. 754, 759 (1980). Because petitioner has

yet to achieve any of the benefit sought in his enforcement

action, his claim for attorney’s fees is premature.

12

CONCLUSION

The petition for a writ of certiorari should be denied.

Respecttully submitted.

KENNI IHW. STARR

Solicitor General

SILART M. GERSON

Assistant Attorney General

M<skRLtIGH D. DOVER

WENDY M. KEAIS

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