Plaintiff may relitigate similar issue on federal court despite unsuccessful Article 78 petition in state court

This case clarifies when you can bring a lawsuit after losing one of your issues in an Article 78 proceeding in the New York State courts. Specifically, the Court of Appeals determines when the Article 78 loss has res judicata effect in subsequent litigation, even in federal court. The Court finds the plaintiff may proceed with his case even through his Article 78 was not successful.

The case is Whitfield v. City of New York, issued on March 15. Judge Carney gives a thorough review of Article 78's in New York. For the uninitiated, Article 78 petitions are a quick way to resolve certain disputes against the government, as they have a short statute of limitations and usually do not require a trial or live testimony and can be resolved on the paperwork, such as documents, affidavits, and statutory or case law. Normally, people don't get damages in Article 78 petitions; they get an injunction or a definitive court ruling on some issue involving public administration.

At the same time, under res judicata principles, you cannot relitigate the same issues over and over in different courts. This case asks when you can litigate an issue in federal court that you lost in the Article 78 petition. What makes this case unique is that the Article 78 court in the state system did not decide whether plaintiff could recover any damages because the Article 78 court ruled against the plaintiff in that proceeding. Plaintiff brings a similar claim in federal court, but this time he seeks damages. Can he proceed in federal court?

Plaintiff is a former inmate in the New York system who claims he was denied a position working with youths for a state agency because of his criminal record and a book he wrote about the unfairness of his criminal conviction. The Article 78 court ruled against Whitfield and said he did not have any case under the First Amendment and that he did not suffer discrimination because of his criminal record. He then sued in federal court, prompting a motion to dismiss on res judicata grounds on the theory that he was improperly trying to relitigate these issues in a different court.

The Court of Appeals (Carney and Liman [D.J.]) holds that plaintiff can bring this lawsuit despite the Article 78 loss. Why? Because the Article 78 judge did not determine if plaintiff could recover any damages from the Article 78, and the Article 78 ruling was not quite the constitutional ruling that plaintiff seeks in the federal case. The Court holds that, for claim preclusion purposes, a "pure" Article 78 proceeding, which did not result in the award of any damages or squarely resolve the issue now raised in federal court, does not prevent the plaintiff from pursuing a similar claim in federal court under constitutional or other federal provisions. 

Bottom line: we presume that an Article 78 proceeding will be a "pure" proceeding, without the availability of damages. In this case, while Whitfield sought damages in his Article 78, his primary purpose in filing that petition was to vacate the state agency's decision not to hire him and to win a court order entitling him to the position. The state court did not treat the Article 78 petition as a "hybrid" proceeding that might have involved other damages or relief. Nor did the state court resolve plaintiff's claim under the First Amendment - it instead ruled against plaintiff in finding that adverse employment was arbitrary and capricious as a matter of law, a much different test than the First Amendment analysis.

For an issue as complex as this one, you can count on a dissent. Judge Sullivan dissents, stating that this was really a hybrid Article 78 proceeding that has res judicata effect on plaintiff's federal lawsuit because plaintiff did seek damages in the Article 78 that were not incidental to the primary relief that he sought. He notes further that, separate and apart from determining the adverse personnel decision was arbitrary and capricious, the Appellate Division in plaintiff's case rejected plaintiff's argument that the state agency violated the First Amendment in denying him the position.

The lengthy nature of the majority and dissent opinions highlights to complexity of this issue: how to balance the expedited Article 78 process with the more drawn-out Section 1983 litigation available to parties in federal courts and the overriding res judicata principles that would normally apply anytime someone tries to re-litigate issues in two different courts.