Davani v. Clement

UNPUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 06-1781

MOZAFAR H. DAVANI,

Plaintiff - Appellant,

versus

WITT CLEMENT, in his official capacity as
Secretary, Virginia Department of
Transportation; STEVEN E. WELCH; WILLIAM V.
JOHNSON, JR.,

Defendants - Appellees,

and

VIRGINIA DEPARTMENT OF TRANSPORTATION,

Defendant.

Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. Claude M. Hilton, Senior
District Judge. (1:04-cv-01397-CMH)

Argued: October 31, 2007 Decided: February 6, 2008

Before WILLIAMS, Chief Judge, and NIEMEYER and SHEDD, Circuit
Judges.

Affirmed by unpublished per curiam opinion. Judge Shedd wrote a
dissenting opinion.
ARGUED: Michael Wayne Beasley, Falls Church, Virginia, for
Appellant. Ronald Nicholas Regnery, Senior Assistant Attorney
General, OFFICE OF THE ATTORNEY GENERAL, Richmond, Virginia, for
Appellees. ON BRIEF: Robert F. McDonnell, Attorney General,
Maureen Riley Matsen, Deputy Attorney General, Peter R. Messitt,
Senior Assistant Attorney General/Chief, OFFICE OF THE ATTORNEY
GENERAL, Richmond, Virginia, for Appellees.

Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:

Mozafar Davani commenced this action to redress what he

alleges was an unlawful termination of his employment with the

Virginia Department of Transportation on April 22, 2003. The

Department asserts that it discharged Davani because it had given

him three separate “Group II Written Notices,” which are notices of

disciplinary action for conduct warranting discharge, the most

recent on April 7, 2003. The third notice was given to him for

failing to follow instructions to investigate issues relevant to

the presence of utilities at a construction site. Davani claims,

however, that in discharging him, the Department of Transportation

discriminated against him on the basis of his race (Middle

Eastern), national origin (Iran), and religion (Muslim); retaliated

against him for filing complaints with the Equal Employment

Opportunity Commission; and violated state law by conspiring to

injure his reputation.

Although Davani had previously filed a complaint with the

Equal Employment Opportunity Commission (“EEOC”), he elected to

challenge his discharge through state employee grievance

procedures, even while the EEOC investigation was still pending.

That state administrative process led to the conclusion, affirmed

by a Virginia state court, that Davani’s discharge was justified,

was not contrary to law, and was not based on any unlawful

discrimination.

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 After the EEOC concluded its investigation about a year later,

Davani commenced the present action. The district court dismissed

Davani’s complaint, concluding that it was barred by principles of

collateral estoppel and res judicata, based on the determinations

by the Virginia agency and the state court that Davani’s claims

were without merit. This appeal followed, and we now affirm.

The district court had previously dismissed Davani’s complaint

in this case under the Rooker-Feldman doctrine. In light of the

Supreme Court’s subsequent decision in Exxon Mobil Corp. v. Saudi

Basic Industries Corp., 544 U.S. 280 (2005), however, we vacated

the district court’s decision and remanded the case to the district

court to consider the alternative arguments raised by the

defendants, based on principles of collateral estoppel and res

judicata. See Davani v. Va. Dep’t of Transp., 434 F.3d 712, 720

(4th Cir. 2006) (noting that “prudence counsel[ed] that, because of

the undeveloped state of the record, we refrain from [addressing

the alternative arguments] at [that] time”). After considering the

alternative issues, the district court has now concluded that

Davani’s present claims of discrimination and retaliation were

litigated and rejected in state proceedings and affirmed by the

state court, and that this action is therefore precluded.

Under Virginia law, the decision of a state administrative law

judge (“ALJ”), following an administrative proceeding, is treated

as the equivalent of a state court determination; it carries the

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same weight as a jury’s verdict and will not be disturbed on appeal

unless it is plainly wrong or without evidence to support it. See

Willis v. Magette, 491 S.E.2d 735, 736 (Va. 1997); see also Univ.

of Tenn. v. Elliott, 478 U.S. 788, 799 (1986) (“[W]hen a state

agency acting in a judicial capacity . . . resolves disputed issues

of fact properly before it which the parties have had an adequate

opportunity to litigate, federal courts must give the agency’s

factfinding the same preclusive effect to which it would be

entitled in the State’s courts” (internal quotation marks and

citation omitted)). In addition, a state circuit court’s review of

an ALJ decision constitutes a valid state court judgment to which

federal courts must give the same preclusive effect that another

state court would, under the principle stated above. See Davenport

v. N.C. Dep’t of Transp., 3 F.3d 89, 93 n.4 (4th Cir. 1993) (“28

U.S.C. § 1738 requires application of state preclusion law . . .

where, as here, the state administrative decision has been

judicially reviewed . . .”).

Having carefully reviewed the record in this case, we agree

with the district court that Davani’s claims are now barred. The

ALJ’s findings that “no credible evidence was presented suggesting

that the [Department of Transportation] disciplined [Davani] for

any impermissible reason” can be understood only as a rejection of

his evidence introduced during the administrative hearing,

including the voluminous collection of exhibits he submitted, to

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support his claim that the Department had subjected him to an

ongoing campaign of discrimination and retaliation since 2001.

Although Davani’s counsel claimed at the hearing before the ALJ

that such issues were not before the ALJ -- asserting that the only

issue presented was the propriety of the third Group II Written

Notice -- he nonetheless proceeded to describe for the ALJ

precisely the same history of discrimination and retaliation that

he now presents in his federal complaint. The ALJ had the

authority and the responsibility to consider this broader evidence

as potential mitigation of the Department’s disciplinary action

against Davani based on the third Group II Written Notice. And the

ALJ specifically ruled that this broader evidence was not credible

and declined to mitigate Davani’s discharge because of the alleged

discrimination and retaliation. To the contrary, the ALJ relied on

the fact that Davani had “accumulated a sufficient number of active

disciplinary actions to uphold removal,” even after the ALJ elected

to reduce Davani’s third Group II Written Notice to a Group I

Written Notice, which alone would not justify the discharge.

Considering the entire record of Davani’s claims of improper

discrimination and retaliation as presented, the ALJ specifically

determined that the evidence was not credible, making that

determination because it was essential to his judgment that

Davani’s discharge should not be mitigated. We conclude,

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therefore, that collateral estoppel now precludes Davani from

maintaining his current action.

In addition, we are persuaded that the general bar of res

judicata is applicable here. In April 2003, after receipt of his

third Group II Written Notice and his subsequent discharge, Davani

elected to file a grievance over his discharge through the State

Department of Employee Dispute Resolution, as he was entitled to

do, eventually requesting and receiving a formal hearing before an

ALJ. Further, he chose to appeal the ALJ’s adverse decision to the

Fairfax County Circuit Court, as he again was entitled to do.

Having made those choices, however, he committed himself to the

results of those proceedings, including the fact that any

subsequent attempt to relitigate his discharge would constitute

claim-splitting under Virginia law.

Both in the state proceedings and in the present case, Davani

alleged that he was wrongfully discharged as part of an ongoing

campaign of harassment, discrimination and retaliation. The ALJ

took testimony from the parties and reviewed the records submitted

to him, concluding that Davani’s discharge was proper and that

there was no credible evidence of discrimination. Thus, to permit

Davani now to maintain the present action would be to allow him to

seek the same remedy on the same cause of action that the ALJ

decided adversely to him and the Fairfax County Circuit Court

reviewed and held was not contrary to law. Under Virginia law,

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Davani may not “bring[] successive suits on the same cause of

action where each suit addresses only a part of the claim.” Bill

Greever Corp. v. Tazewell Nat’l Bank, 540 S.E.2d 854, 856 (Va.

1998). Yet, that is precisely what Davani is attempting to do, by

suggesting that he is splitting off from his claim in the present

case all issues pertaining to the third Group II Written Notice and

the ALJ’s decision on it.

We reject Davani’s argument that the scope of the state

administrative proceedings before the ALJ was limited to the third

Group II Written Notice. While we agree with Davani that the basis

for the ALJ proceeding was his challenge to the third Group II

Written Notice, it did not preclude the ALJ from considering the

effect of the earlier Group II Written Notices. Indeed, such

consideration was necessary to support relief entered by the ALJ.

Moreover, much of the testimony presented during the hearing before

the ALJ centered on events that took place six months or more prior

to the issuance of the third Group II Written Notice. While it is

true that the ALJ could not have directly modified or overturned

the first and second Group II Written Notices, he was fully

authorized to mitigate Davani’s discharge based on the third Group

II Written Notice if he had found credible Davani’s claim that all

discipline of Davani was based on improper discrimination or

retaliation. As noted, however, the ALJ rejected that claim as

unsupported by the evidence.

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 We also reject Davani’s argument that the two earlier Group II

Written Notices were not actually presented for review by the ALJ.

While the ALJ clearly did not intend to open up and relitigate the

propriety of the first two Group II Written Notices themselves, he

did have to consider whether they were part of a scheme of

discrimination to resolve Davani’s defense to the third Group II

Written Notice that the entirety of disciplinary action against him

arose from illegal discrimination and retaliation. Critically for

our purposes, it is this latter issue, and not the validity of the

first two Group II Written Notices themselves, which Davani seeks

to litigate again in the federal forum.

At bottom, Davani’s central claim is that he was subjected to

an ongoing course of illegal discrimination and retaliation that

lasted for years and culminated in the termination of his

employment. He maintained consistently that the first two Group II

Written Notices were part of the alleged campaign of discrimination

against him and that the third Group II Written Notice was just

another part of that campaign.

After considering the long and tortured procedure Davani

pursued before the EEOC, before the state agency and the state

court, and now in federal court, we conclude that Davani chose in

the first instance to submit his claims to the offices of the

Commonwealth of Virginia, a choice he was legally free to make.

Having done so, however, he is now bound by both the results and

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its consequences. See Rao v. County of Fairfax, Va., 108 F.3d 42,

45 (4th Cir. 1997) (noting that while “an unreviewed state

administrative determination . . . is not entitled to any

preclusive effect,” such determinations do have preclusive effect

“if rendered or reviewed by a court”).

The judgment of the district court is

AFFIRMED.

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SHEDD, Circuit Judge, dissenting:

Davani has asserted a litany of employment discrimination and

retaliation allegations that span several years, culminating in his

termination from employment. The district court dismissed this

case under Fed. R. Civ. P. 12(b)(6), holding that the doctrine of

collateral estoppel bars all of Davani’s claims, and the majority

affirms this decision. I respectfully dissent.

“The doctrine of collateral estoppel precludes parties to a

prior action from litigating in a subsequent action any factual

issue that was actually litigated and essential to a valid, final

judgment in the prior action.” Scales v. Lewis, 541 S.E.2d 899,

901 (Va. 2001). In order for the doctrine to apply, the party

asserting it bears the burden of proving by a preponderance of the

evidence that the issue is precluded by a prior judgment. Id.

Among other things, that party must establish that the issue sought

to be litigated in the subsequent action (1) was actually litigated

in the prior action and (2) was essential to the judgment in the

prior action. Id. Moreover, collateral estoppel does not apply

when the party against whom it is asserted did not have a “full and

fair opportunity” in the prior action to litigate the issue sought

to be precluded. Slagle v. Slagle, 398 S.E.2d 346, 349 (Va. App.

1990).

The prior action in this case is Davani’s grievance proceeding

relating to his third Group II notice. Davani’s receipt of this

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notice led to his termination. The presiding administrative law

judge (“ALJ”) reduced the severity of this third Group II notice

but nonetheless upheld Davani’s termination because he had

accumulated two prior Group II notices.

Although it is true that other issues related to Davani’s

employment came up during the grievance hearing, the critical fact

of the matter is that the ALJ expressly confined the proceeding

only to consideration of the merits of Davani’s third Group II

notice. For example, during the grievance hearing the ALJ

(referring to Davani’s first two Group II notices) stated: “I don’t

want to litigate these two other incidences because I’m really not

that concerned about it.” J.A. 170. Later, the ALJ again made

this point clear, stating in regard to the first Group II notice:

But I will tell you that if it’s completely . . . bogus,
if it had been grieved and . . . it would have clearly,
hundred percent been reversed, it doesn’t matter at this
point because it’s not before me. It’s only before me in
the sense that there’s a . . . history. And so I am
bound by that group notice and . . . the fact that,
assuming it’s completely . . . frivolous for lack of a
better term, I still treat it . . . as if it was
completely valid.

J.A. 339.1

1
As Davani’s counsel explained during closing arguments: “We
did not spend time going into the details of the first grievance or
the second grievance, going into the details of these totally false
and spurious workplace violence allegations. Ah, we did not pull
in witnesses for all of those issues. There’s an entirely other
appropriate forum for doing so however.” J.A. 424.

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 In light of the ALJ’s comments, and based on my review of the

record of the administrative proceedings, I cannot agree with the

majority’s conclusion that all of Davani’s discrimination and

retaliation allegations and claims were actually litigated in the

prior action or were essential to the prior judgment. Further, I

do not believe that Davani had a “full and fair opportunity” to

litigate all of those allegations and claims.2 For these reasons,

I would hold that collateral estoppel does not compel dismissal of

this case. Because the district court did not rule on any of the

alternate bases for dismissal raised by appellees, including res

judicata, I would leave those issues for the district court to

decide in the first instance on remand.

2
Although the ALJ noted in his order that “[n]o credible
evidence was presented suggesting the Agency disciplined [Davani]
for any impermissible reason,” J.A. 99, I find that conclusion to
be immaterial for our purposes because, as set forth above, the ALJ
limited the scope of the proceeding in such a manner that Davani
could not have litigated all of his discrimination and retaliation
allegations.

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