Doug Taylor v. City of Lawrenceburg ( 2018 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 17-2803
DOUG TAYLOR,
Plaintiff-Appellant,
v.
CITY OF LAWRENCEBURG, DEARBORN COUNTY, STATE OF
INDIANA, an Indiana municipal corporation, et al.,
Defendants-Appellees.
____________________
Appeal from the United States District Court for the
Southern District of Indiana, New Albany Division.
No. 4:14-cv-00077-RLY-TAB — Richard L. Young, Judge.
____________________
ARGUED JANUARY 18, 2018 — DECIDED NOVEMBER 20, 2018
____________________
Before SYKES and HAMILTON, Circuit Judges, and LEE, Dis-
trict Judge.
LEE, District Judge. The appellant, Doug Taylor, claims that
the Board of Public Works and Safety of the City of Lawrence-
burg (“the Board”) terminated his employment with the City
 The Honorable John Z. Lee, District Judge for the United States Dis-
trict Court for the Northern District of Illinois, sitting by designation.
2 No. 17-2803
because of his disagreements with the Mayor and exposure of
purported wrongdoing by City officials. Seeking redress, Tay-
lor filed suit against the City, members of the Board, and sev-
eral City officials, bringing a claim of First Amendment retal-
iation pursuant to 42 U.S.C. § 1983. Taylor also asserted state
law claims of defamation, violation of free-speech rights un-
der the Indiana constitution, and violation of Indiana’s whis-
tleblower statute. The district court entered summary judg-
ment in the City’s favor as to Taylor’s claims. We affirm.
I. BACKGROUND
Doug Taylor is a former police officer of the City of Law-
renceburg, Indiana. He also held positions with the City’s
civil-city, parks, and electric departments. Taylor ran for a po-
sition on Lawrenceburg’s City Council and, in April 2011, im-
properly appeared in police uniform at an event for his cam-
paign. Taylor also inaccurately represented on his police time
sheet that he was on duty during the campaign event. The In-
diana State Police investigated this conduct, resulting in the
filing in October 2011 of criminal charges against Taylor for
Official Misconduct and Ghost Employment. Taylor won elec-
tion to the City Council in November 2011.
The Board placed Taylor on administrative leave with pay
shortly after the criminal charges were filed. It later moved
him to a front-desk position within the police department in
January 2012.
On March 13, 2013, Taylor signed a deferred prosecution
agreement admitting to the criminal charges and agreeing to
resign from the City Council. The next day, he distributed to
local, state, and federal law enforcement agencies an eleven-
No. 17-2803 3
page letter accusing the Board and various City officials, in-
cluding Mayor Dennis Carr, of corruption and criminal
wrongdoing.
A week later, the Board notified Taylor of its intent to ter-
minate his employment as a police officer (as well as with
“any other department of the City”) and informed him of his
right to a hearing pursuant to Indiana Code § 36-8-3-4(c). Tay-
lor requested a hearing.
Prior to the hearing, the Board adopted a rule that its de-
cision would be determined by a simple majority vote of the
Board members who were present during the presentation of
evidence and argument. Five members, including the Mayor,
were present to hear the evidence and arguments at Taylor’s
hearing. After considering the evidence, the Board voted 2 to
1 to terminate Taylor’s employment. The Mayor, who votes
only in the event of a tie, did not vote, and one other member
of the Board abstained. Taylor’s employment was terminated,
and he stopped receiving paychecks from the City.
The Board subsequently issued its findings of fact and law
pursuant to § 36-8-3-4(i). In its findings, the Board credited a
local prosecutor’s testimony that he would not accept case-
related information from a police officer, like Taylor, who had
admitted to a crime of dishonesty. The Board also rejected
Taylor’s contention that the Board members were biased
against him.
In addition, the Board rebuffed Taylor’s suggestion that
the termination proceedings were initiated in response to his
March 14, 2013, letter accusing Board members and others of
wrongdoing. The Board found “no causal connection” be-
4 No. 17-2803
tween the termination proceedings and the letter and ex-
plained that it had waited for the resolution of Taylor’s crimi-
nal charges before issuing the notice of termination.
Pursuant to § 36-8-3-4(e), Taylor had the right to appeal the
Board’s decision to “the circuit or superior court of the county
in which [the Board was] located,” within thirty days, § 36-8-
3-4(f), after which the Board’s decision would become “final
and conclusive,” § 36-8-3-4(g). Taylor timely appealed the
Board’s decision to the Dearborn County Superior Court on
October 25, 2013, but he voluntarily dismissed the appeal in
August 2014, before it was adjudicated.
II. ANALYSIS
The district court entered summary judgment in favor of
the defendants, concluding that Taylor’s First Amendment re-
taliation claim was barred by res judicata or collateral estoppel
and that the individual defendants were immune to Taylor’s
state law claims pursuant to § 36-13-3-5(b) because he had al-
leged that they had acted “under authority or color of state
law.” The district court also found that the state law claims
failed on the merits. We review a grant of summary judgment
de novo. Brunson v. Murray, 843 F.3d 698, 704 (7th Cir. 2016).
In University of Tennessee v. Elliott, 478 U.S. 788, 798–99
(1986), the Supreme Court held that federal courts must give
state administrative factfinding “the same preclusive effect to
which it would be entitled in the State’s courts,” provided that
the state agency acted in a judicial capacity and resolved is-
sues that the parties had an adequate opportunity to litigate.
We have no trouble concluding that the Board acted in a
judicial capacity here. In Goodwin v. Board of Trustees of the Uni-
versity of Illinois, 442 F.3d 611, 620 (7th Cir. 2006), we held that
No. 17-2803 5
a state board that made employment decisions had acted in a
judicial capacity because (1) its decision was subject to judicial
review pursuant to state law, (2) a hearing officer had pre-
sided over the hearing, which provided the opportunity for
counsel to examine and cross-examine witnesses under oath,
and (3) the board issued findings of fact. The same is true here.
For his part, Taylor points to evidence that, he contends,
shows certain Board members engaged in improper ex parte
communications with some witnesses, City employees, and
fellow Board members. But Taylor had the opportunity to
raise these issues when he appealed the Board’s determina-
tion to the Indiana Superior Court and chose not to do so.
Given Taylor’s ability to fully litigate these issues before the
Board, the Board’s findings of fact and law, and the availabil-
ity of judicial review, we are satisfied that the Board acted in
a judicial capacity.
Turning to the application of issue preclusion under Indi-
ana law, as we explained in Mains v. Citibank, N.A., 852 F.3d
669, 675–76 (7th Cir. 2017), cert. denied, 138 S. Ct. 227 (2017),
the Supreme Court of Indiana has stated that “[i]n general,
issue preclusion bars subsequent litigation of the same fact or
issue that was necessarily adjudicated in a former suit.” Miller
Brewing Co. v. Ind. Dep’t of State Revenue, 903 N.E.2d 64, 68
(Ind. 2009). Moreover, “Indiana courts follow federal prece-
dents in applying issue preclusion (also commonly referred
to as collateral estoppel).” Mains, 852 F.3d at 675–76 (citing
Miller, 903 N.E.2d at 68). Thus, “[i]n order for issue preclusion
to apply under Indiana law, the … decision must be final.” Id.
at 676. From there, we ask two questions: “(1) whether the
party in the prior action had a full and fair opportunity to lit-
igate the issue and (2) whether it is otherwise unfair to apply
6 No. 17-2803
collateral estoppel given the facts of the particular case.” Indi-
anapolis Downs, LLC v. Herr, 834 N.E.2d 699, 705 (Ind. Ct. App.
2005).
Taylor first argues that issue preclusion should not apply
because the Board’s decision was a nullity and, therefore, not
final. Prior to Taylor’s hearing, the Board had adopted a deci-
sional rule requiring a majority vote of the Board members
who were present to hear evidence and argument. Five Board
members participated in the hearing, but only three actually
voted, with two out of the three voting for termination. And
so, Taylor contends, the Board “never made a decision to ter-
minate his employment.”
Of course, Taylor cannot mean to argue that the Board is-
sued no decision at all. It made a determination and issued
findings of fact and law. As a result, Taylor’s employment was
terminated, and he stopped receiving checks from the City.
Instead, what Taylor is doing is challenging the validity of
that decision.
But the appropriate forum for Taylor to press this issue
was the Circuit or Superior Court in Dearborn County. § 36-
8-3-4(e). Knowing this, Taylor filed an appeal, but withdrew
it before it could be adjudicated. Under Indiana law, once an
appeal is withdrawn, it is as though it was never filed. See
State ex rel. Weaver v. Paxson, 11 N.E.2d 677, 678 (Ind. 1937)
(holding that police officer who withdrew appeal of a Board
of Public Works decision had “manifestly” failed to appeal).
And, because “the decision of the board is final and conclu-
sive upon all persons not appealing,” § 36-8-3-4(g), the
Board’s decision became final as to Taylor once he withdrew
his appeal.
No. 17-2803 7
The next question is whether Taylor had a full and fair op-
portunity to litigate before the Board the same issues that un-
derlie his claims in this suit. The crux of Taylor’s federal and
state free-speech retaliation claims, as well as his state law
whistleblower claim, is his contention that the Board termi-
nated him because of his March 2013 disagreements with
Mayor Carr.
Taylor litigated these issues before the Board, and the
Board found against him. In its findings, the Board stated that
there was no causal connection between its decision and Tay-
lor’s letter, but rather that the proceedings were “causally re-
lated to the resolution or disposition of judicial proceedings
… . Specifically, … [Taylor] was subject to criminal charges
prior to the execution of the deferred prosecution agreement,
such that disciplinary proceedings could not commence until
after the execution of the agreement. The Board finds that un-
til [Taylor] admitted the elements of his criminal activity in
the context of a judicial proceeding, any prior admission by
[him] was entitled to less weight.” Moreover, as to Taylor’s
clashes with Mayor Carr, the Board also rejected his argument
that the Board members were improperly biased or preju-
diced against him.
Taylor therefore had the opportunity to litigate before the
Board the same material issues underlying his claims in this
case. And, for the same reasons discussed above, we are con-
vinced that Taylor had a full and fair opportunity to be heard
on these issues.
Lastly, as to his defamation claim, Taylor argues again that
this claim should be revived because the Board’s determina-
tion was not approved by the required majority vote. His def-
amation claim arises out of the Board’s proposed findings,
8 No. 17-2803
which he contends improperly credited the testimony of a
prosecutor about Taylor’s inability to testify credibly in his
role as a police officer after having admitted to a crime of dis-
honesty. But, again, Taylor failed to appeal the Board’s deter-
mination and, therefore, is bound by its findings as to these
issues under Indiana law. To the extent Taylor’s defamation
claim rests on issues that could not have been litigated until
after the Board issued its decision, Taylor could argue that is-
sue preclusion should not apply; but he does not make that
argument and thus waives it. See Hojnacki v. Klein-Acosta,
285 F.3d 544, 549 (7th Cir. 2002). In any event, it is difficult to
see how the Board’s findings regarding the testimony by the
state prosecutor that he would not rely on Taylor in the future
could possibly constitute defamation.
The district court’s decision is affirmed.