Shields v. BellSouth Advertising , 228 F.3d 1284 ( 2000 )

[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
SEPTEMBER 29, 2000
No. 99-8307 THOMAS K. KAHN
________________________ CLERK
D. C. Docket No. 97-03581-1-CV-ODE
PAUL SHIELDS,
Plaintiff-Appellant,
versus
BELLSOUTH ADVERTISING AND PUBLISHING COMPANY, INC.,
Defendant-Appellee.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
_________________________
(September 29, 2000)
Before CARNES, BARKETT and MARCUS, Circuit Judges.
MARCUS, Circuit Judge:
Plaintiff Paul Shields appeals from a judgment entered against him dismissing his
wrongful termination suit against Defendant BellSouth Advertising and Publishing Corp.
(“BAPCO”) under the doctrine of collateral estoppel. Prior to bringing suit in federal court,
Shields sought unemployment benefits through the Georgia state courts. During those state
proceedings, a Georgia Superior Court found that there was no record evidence that Shields was
fired because of his protected status as an HIV-positive male. Based on this state court finding,
the federal district court dismissed the lawsuit, which alleges wrongful termination on the basis
of disability in violation of Title I of the American with Disabilities Act, 42 U.S.C. § 12101, et
seq. The district court concluded that the gravamen of Shields’s suit -- his allegation that he
was terminated because of his HIV-positive status -- already was litigated in his state
unemployment benefits proceedings, and that those proceedings offered him a full and fair
opportunity for hearing in compliance with federal due process standards. While we agree with
the district court that Georgia’s unemployment benefits proceedings, on the face of this record,
comport with the procedural rigors of federal due process, we are unclear as a matter of Georgia
law whether a state court finding, in the context of an unemployment benefits appeal, that there
is no record evidence that an employee was fired because of his protected status would estop a
subsequent state court suit for wrongful termination on the basis of protected status. Because
this unanswered question of Georgia law is determinative of this appeal, we respectfully certify
the following question to the Supreme Court of Georgia:
Under the circumstances of this case, would a Superior Court’s
finding in an unemployment compensation appeal that there is no
evidence the decisionmaker who terminated the employee knew of
his protected status and no evidence that his protected status
motivated his discharge, collaterally estop the employee as a
matter of Georgia law from establishing in a subsequent wrongful
termination lawsuit in state court that he was terminated because of
his protected status?
I.
On December 14, 1981, BAPCO hired Shields as a Directory Advance Sales
Representative. Included in his job responsibilities was the task of soliciting local advertisers for
“The Real Yellow Pages.” As part of these duties, Shields routinely visited local businesses to
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discuss advertising programs and rates. On one such occasion, January 17, 1995, Shields
became involved in a nasty incident with a customer, Anh Puckett, who owned a local jewelry
store. The dispute centered around the fact that Ms. Puckett currently received a free
advertisement from BAPCO because of a previous mistake the company had made in her
advertisement. Having failed to read her case file, Shields was unaware of this history and
proceeded to argue with Ms. Puckett in front of his supervisor, Barbara Karesh, that he could not
give her a free advertisement. The argument became heated and Puckett asked Shields to leave
the store.1 Shields then left as Karesh stayed behind to apologize for Shields’s behavior. In the
midst of her apology, Shields returned to the store and loudly told Karesh, in front of Puckett,
“Come on. You are not going to get anywhere with her.” Karesh then reported the incident to
BAPCO management three days later.
In response, Karesh’s supervisor, David Pankey, conducted an investigation in which he
concluded that Shields’s behavior was “extremely serious, totally inexcusable, and without
justification.” Shields then was fired on February 10, 1995.2 BAPCO also demoted Karesh
from her manager position for her failure to report the incident immediately. She subsequently
resigned.
After his termination, Shields filed a union grievance under the collective bargaining
agreement challenging the validity of his firing. On July 2, 1996, an arbitration hearing was held
1
According to the record, Shields threw the rate sheets on the floor in anger and
exclaimed, “I might as well throw this out the window.” He then apologized but the argument
continued until Puckett asked him to leave. At that point, Shields stormed out of the store,
stating that he was “not in kindergarten.”
2
While Shields’s 13-year employment record was quite good, there was a similar incident
with a customer in 1992 for which Shields was reprimanded.
3
between BAPCO and the union. The arbitrator concluded that while Shields had committed
“gross misconduct,” Shields’s termination was not a reasonable response in light of his long-
term, above-average work performance. Shields then received full reinstatement, backpay, and
retroactive seniority with BAPCO. He returned to work but voluntarily resigned on August 15,
1996.
In addition to his union grievance, Shields also sought state unemployment compensation
benefits from the Georgia Department of Labor (“Department”). Under Georgia law, a
terminated employee is entitled to unemployment benefits unless the employer proves by a
preponderance of the evidence that the employee was discharged for “failure to follow rules,
orders, instructions, or failure to perform the duties for which hired.” See O.C.G.A. § 34-8-
194(2)(A). On March 1, 1995, a Georgia claims examiner ruled that Shields was entitled to
unemployment benefits dating back to February 12, 1995. BAPCO appealed this ruling on
March 15, 1995, and an administrative hearing officer held an adversarial hearing on the matter
on April 13, 1995. At the hearing, both Shields and Pankey testified and both witnesses were
subject to cross-examination. Both sides also were afforded an opportunity to introduce
evidence. On April 14, 1995, the hearing officer released a written decision affirming the award
of unemployment benefits to Shields.
In his decision, the hearing officer made a number of factual findings with respect to
Shields’s termination. He found that the incident involved a “very difficult customer,” that
Shields had an “above-average” employment history, that Shields “had not habitually had any
problems with customers that amounted to much,” and that Shields’s conduct “did not show
willful misconduct on his part, but [only] an inability to handle a particular customer who was
4
causing problems.” Notably, the officer expressly observed that Shields attributed his
termination to the fact that he had contracted the AIDS virus and had been receiving medical
treatment since the middle of 1994. This finding was the hearing officer’s only mention of
Shields’s HIV status. However, the hearing transcript makes clear that during Pankey’s cross-
examination, Pankey had been asked by Shields’s lawyer when he had learned of Shields’s HIV-
positive status. Pankey denied any knowledge of Shields’s medical condition.3
On April 21, 1995, BAPCO appealed the hearing officer’s decision to the Department’s
Board of Review. The Board affirmed the award to Shields without opinion on July 21, 1995.
BAPCO then appealed the Board’s ruling to the Superior Court of Dekalb County,
Georgia. After reviewing the hearing transcript and order, the state court reversed the
unemployment benefits award to Shields, concluding that the award was “unsupported by any
evidence submitted at the hearing below.” The state court found that it was undisputed that
Shields was “familiar with his employer’s rules, regulations, and policies regarding treatment of
customers contained in the company’s handbook,” and that Shields had been disciplined for a
similar incident with a customer three years earlier. The state court determined that Shields’s
conduct demonstrated “willful, intentional disrespect to this client, in contravention of company
rules.” Addressing Shields’s opinion that he was discharged because he had contracted the
AIDS virus, the court observed that “while the record does disclose that Shields is HIV positive,
and that Shields had taken a medical leave of absence because of his illness, there is no evidence
that Mr. Pankey, the sales manager who discharged Mr. Shields, knew that he was HIV positive
3
Several months prior to his termination, Shields had taken a three-month disability leave
for HIV-related illness.
5
or that this fact motivated the company’s discharge. In fact, Ms. Karesh was also severely
disciplined, and there is no evidence that she was HIV-positive.” This passage is the only
mention in the Superior Court opinion of Shields’s claim of wrongful termination on the basis of
protected status.4 On April 4, 1996, the Georgia Court of Appeals denied Shields’s application
for discretionary appeal from the Superior Court’s judgment.
On November 28, 1997, Shields filed the instant federal lawsuit alleging that his
termination violated Title I of the American with Disabilities Act of 1990, 42 U.S.C. § 12101, et
seq. In his complaint, Shields alleged that BAPCO terminated him because of his HIV-positive
status. On June 16, 1998, BAPCO responded by filing a motion to dismiss. BAPCO asserted
that Shields’s ADA suit was barred under the doctrine of collateral estoppel because Shields
already had litigated in his state unemployment benefits proceedings the question of whether he
was fired because of his HIV-positive status. On February 23, 1999, the district court granted
BAPCO’s motion to dismiss, finding that the state court determination regarding BAPCO’s
discharge of Shields precluded Shields’s federal ADA suit.
II.
We review the district court’s ruling on a motion to dismiss de novo. See United States
v. Nyhuis, 8 F.3d 731, 734 (11th Cir. 1993). Under our caselaw, we give preclusive effect to the
judgment of a state court provided that two conditions are met: first, that the courts of the state
from which the judgment emerged would do so themselves; and second, that the litigants had a
4
The Superior Court incorrectly observed that the hearing officer had “found that ‘one of
the main reasons’ Mr. Shields was discharged was because he had contracted the AIDS virus.”
In fact, the hearing officer made no express finding about the connection between Shields’s
discharge and his HIV status.
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“full and fair opportunity” to litigate their claims and the prior state proceedings otherwise
satisfied “the applicable requirements of due process.” Gorin v. Osborne, 756 F.2d 834, 836
(11th Cir. 1985); see also Migra v. Warren City School Dist. Bd. of Educ., 465 U.S. 75, 104 S.
Ct. 892, 79 L. Ed. 2d 56 (1984); Allen v. McCurry, 449 U.S. 90, 101 S. Ct. 411, 66 L. Ed. 2d
308 (1980).
A.
In this case, Shields has presented no persuasive argument that the procedures used in his
administrative proceeding violated federal due process requirements. Georgia’s unemployment
benefits compensation scheme expressly requires that, if the initial determination regarding
benefits is challenged, the parties receive a hearing before “one or more impartial hearing
officers.” O.C.G.A. § 34-8-220(a).5 The parties must, by law, receive “reasonable opportunity
for fair hearing” prior to the hearing officer making a decision. The parties may then seek an
additional layer of administrative review before the Board of Review, at which stage the parties
may seek leave to submit additional evidence. O.C.G.A. § 34-8-221(a). Next, the parties may
seek judicial review of the Board of Review’s decision in the appropriate Superior Court.
O.C.G.A. § 34-8-223. The judicial proceeding is summary in nature, but the court may, if
warranted, remand the matter to the hearing officer for further factfinding on an issue. See TNS
Mills v. Russell, 213 Ga. App. 107, 109, 443 S.E.2d 658, 660 (1994). The parties may then seek
a second layer of judicial review from the Georgia Court of Appeals. O.C.G.A. § 34-8-223(b).
5
Under the statutory scheme, a claims examiner makes an initial determination regarding
the employee’s eligibility for benefits, after which the losing party may appeal that decision by
seeking a full hearing. See O.C.G.A. §§ 34-8-190, 192.
7
In accordance with these extensive procedures, Shields received an administrative
hearing on his unemployment benefits request which was adversarial in nature and afforded him
a sufficient opportunity to pursue his positions. Shields raised the issue of his HIV-positive
status during the state proceedings, arguing that BAPCO fired him because of his HIV status
rather than because of his incident with Ms. Puckett. Thus, Shields cannot say that he was
denied the chance to present the issue he now raises again in this case. Both parties were
allowed to call witnesses to testify, to cross-examine witnesses, and to submit evidence into the
record. Notably, Shields has not argued that he was affirmatively prevented from calling or
cross-examining witnesses or introducing relevant evidence at the hearing. Shields received at
least two multi-page written decisions regarding his benefits claim, at the hearing officer stage
and again in the Superior Court. On this record, we can find no basis to conclude that the state
proceedings denied Shields a “full and fair opportunity” to pursue his wrongful termination
claims or otherwise failed to comport with “the applicable requirements of [federal] due
process.” Goren, 756 F.2d at 836.6
B.
That said, we believe the first part of our inquiry -- whether Georgia courts would
collaterally estop a wrongful termination claim based on protected status in light of the state
court’s findings as to BAPCO’s termination of Shields -- is more difficult. Under Georgia law,
6
Shields cites Delgado v. Lockheed-Georgia Co., 815 F.2d 641 (11th Cir. 1987) for the
proposition that participating in an administrative unemployment benefits proceeding does not
provide an employee with an adequate opportunity to litigate federal discrimination claims.
Delgado, however, involved decisions by a state agency that had not been judicially reviewed.
Id. at 647 (“we decline to grant preclusive effect to the unreviewed agency determinations”).
Here, however, the agency decisionmaking was subject to judicial review. Thus, Delgado does
not dictate the conclusion that the procedures afforded here were so inadequate as to violate
federal due process.
8
collateral estoppel should be applied when two conditions are met: first, when an action has
actually been adjudicated between the same parties; and second, when an issue from that
previous action was actually litigated or necessarily was decided for the previous judgment to
have been rendered.7 In this case, though, it is unclear whether under Georgia law the state
court’s finding that there was no record evidence supporting a conclusion that BAPCO’s
termination of Shields was HIV-related constitutes a prior adjudication, for collateral estoppel
purposes, of the merits of Shields’s ADA claim for wrongful termination on the basis of
protected status. And we have found no Georgia case directly on point. Although it is true that
Shields raised the HIV issue at his administrative hearing, that issue was offered only as a
possible alternate explanation for BAPCO’s termination motives and was not the focal point of
his benefits claim. Simply put, this case turns on a difficult interpretive question concerning
7
As the Georgia Supreme Court has explained:
Collateral estoppel precludes the re-adjudication of an issue that
has previously been litigated and adjudicated on the merits in
another action between the same parties or their privies. Like res
judicata, collateral estoppel requires the identity of the parties or
their privies in both actions. However, unlike res judicata,
collateral estoppel does not require identity of the claim -- so long
as the issue was determined in the previous action and there is
identity of the parties, that issue may not be re-litigated, even as
part of a different claim. Furthermore, collateral estoppel only
precludes those issues that actually were litigated and decided in
the previous action, or that necessarily had to be decided in order
for the previous judgment to have been rendered. . . . Before
collateral estoppel will bar consideration of an issue, that issue
must actually have been decided.
Waldroup v. Greene County Hosp. Auth., 265 Ga. 864, 866, 463 S.E.2d 5, 7-8
(1995); see also Block v. Woodbury, 211 Ga. App. 184, 185, 438 S.E.2d 413-14
(1993) (finding that “‘collateral estoppel . . . only precludes re-adjudication of an
issue already adjudicated between the parties or their privies in a prior action’”).
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Georgia collateral estoppel law.
Under our caselaw, “[w]hen such doubt exists as to the application of state law, a federal
court should certify the question to the state supreme court to avoid making unnecessary state
law guesses and to offer the state court the opportunity to interpret or change existing law.”
Pogue v. Oglethorpe Power Corp., 82 F.3d 1012, 1017 (11th Cir. 1996); see also Mosher v.
Speedstar Div. of AMCA Int’l, Inc., 52 F.3d 913, 916-17 (11th Cir. 1995); Sultenfuss v. Snow,
35 F.3d 1494, 1504 (11th Cir. 1994) (en banc) (Carnes, J., dissenting) (stating that “[o]nly
through certification can federal courts get definitive answers to unsettled state law questions.
Only a state supreme court can provide what we can be assured are ‘correct’ answers to state law
questions, because a state’s highest court is the one true and final arbiter of state law.”). We
therefore certify this question to the Supreme Court of Georgia:
Under the circumstances of this case, would a Superior Court’s
finding in an unemployment compensation appeal that there is no
evidence the decisionmaker who terminated the employee knew of
his protected status and no evidence that his protected status
motivated his discharge, collaterally estop the employee as a
matter of Georgia law from establishing in a subsequent wrongful
termination lawsuit in state court that he was terminated because of
his protected status?
We stress that our formulation of this question is not meant to limit the scope of inquiry by the
Supreme Court of Georgia. As we have explained previously, “the particular phrasing used in
the certified question is not to restrict the Supreme Court’s consideration of the problems
involved and the issues as the Supreme Court perceives them to be in its analysis . . . . This
latitude extends to the Supreme Court’s restatement of the issue or issues and the manner in
which the answers are to be given. . . .” Martinez v. Rodriquez, 394 F.2d 156, 159 n. 6 (5th Cir.
1968). To assist the Georgia Supreme Court in its determination, the entire record in this case,
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together with copies of the briefs of the parties, is transmitted herewith.
In sum, with respect to Shields’s appeal of the district court’s judgment, we find no
violation of federal due process, but CERTIFY the state law question of whether in these
circumstances Shields’s wrongful termination claim based on protected status would be
collaterally estopped under Georgia law, and therefore WITHHOLD final decision about the
district court’s grant of BAPCO’s motion to dismiss until we receive the answer to that question.
QUESTION CERTIFIED.
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