In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 13‐2654
GARDELL L. COUNCIL,
Plaintiff‐Appellant,
v.
VILLAGE OF DOLTON, et al.,
Defendants‐Appellees.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 13 C 93 — James B. Zagel, Judge.
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ARGUED AUGUST 5, 2014 — DECIDED AUGUST 22, 2014
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Before BAUER, POSNER, and TINDER, Circuit Judges.
POSNER, Circuit Judge. The plaintiff sued an Illinois town
by which he had been employed, and one of the town’s em‐
ployees, under 42 U.S.C. § 1983; he claims to have been fired
in violation of his federal constitutional rights to due process
of law and freedom of speech. The district court dismissed
the suit as barred by collateral estoppel.
2 No. 13‐2654
Initially the plaintiff asked the state’s Department of Em‐
ployment Security for benefits under the state’s Unemploy‐
ment Insurance Act. The town opposed his claim, arguing
that he was ineligible for unemployment benefits because he
had constructively resigned “without good cause” by failing
to obtain a commercial driver’s license within one year of
starting work, a condition of his employment. The depart‐
ment agreed with the town, deeming the failure to obtain the
license as tantamount to a voluntary resignation. The plain‐
tiff appealed to the Illinois court system—unsuccessfully. An
Illinois appellate court, agreeing with the department, ruled
that because the plaintiff had been fired for failing to obtain
the required license his termination amounted to a “volun‐
tary” departure under the state’s unemployment law. That’s
the ruling that the district court held prevented, by opera‐
tion of collateral estoppel, the plaintiff from prevailing in
this suit, and thus required dismissal.
We disagree that the Illinois appellate court’s ruling was
entitled to collateral estoppel effect (nor was the earlier rul‐
ing, reinstated by the appellate court, by the Department of
Employment Security, that the plaintiff had left his employ‐
ment without good cause). The state’s Unemployment In‐
surance Act provides that “no finding, determination, deci‐
sion, ruling or order (including any finding of fact, statement
or conclusion made therein) issued pursuant to this Act …
shall … constitute res judicata.” 820 ILCS 405/1900(B) (as
amended in 1991). The finding by the Illinois appellate court
concerning the cause of the plaintiff’s losing his job was a
ruling made pursuant to the Unemployment Insurance Act,
under which he was seeking the benefits that the agency that
administers the Act denied him. It squarely fits the list of de‐
No. 13‐2654 3
terminations in section 1900(B) that shall not have preclusive
effect.
Now it’s true, though not argued by the defendants, that
the statute doesn’t mention collateral estoppel. But collateral
estoppel is a branch of res judicata, Rekhi v. Wildwood Indus‐
tries, Inc., 61 F.3d 1313, 1316–17 (7th Cir. 1995) (Illinois law),
and Illinois collateral estoppel doctrine embraces rulings on
issues of law as well as of fact. Du Page Forklift Service, Inc. v.
Material Handling Services, Inc., 744 N.E.2d 845, 849–50 (Ill.
2001). Whether the “without good cause” ruling should be
considered a fact ruling or a law ruling is unclear, but it
makes no difference which it is.
The ground of the district judge’s conclusion that collat‐
eral estoppel does apply in this case was his belief that the
Illinois appellate court’s ruling had been pursuant not to the
Unemployment Insurance Act but to the Illinois statute that
authorizes judicial review of administrative decisions, such
as those by the Department of Employment Security. That is
the Illinois Administrative Review Law, 735 ILCS 5/3‐101–
113. We have found no precedent that supports the district
judge’s view, a view implying that the plaintiff’s proceeding
in this court arises not under 42 U.S.C. § 1983, a civil rights
statute, but under 28 U.S.C. § 1291, which authorizes appeals
to the federal courts of appeals from final judgments by dis‐
trict courts. The plaintiff got to this court by virtue of section
1291, but once he’s here the claim he is pressing is pursuant
to section 1983.
Any doubt on this score is dispelled by the provision in
the Unemployment Insurance Act that “judgments and or‐
ders of the circuit court under this Act shall be reviewed by
appeal in the same manner as in other civil cases.” 820 ILCS
4 No. 13‐2654
405/1100. If the proceeding in the circuit court (the trial
court), challenging the decision by the Department of Em‐
ployment Security, arose under the Unemployment Insur‐
ance Act—as this provision implies it did—so must the ap‐
peal to the Illinois appellate court have arisen under that
Act. It would be anomalous to deny collateral estoppel effect
to rulings by the circuit court when there was no appeal, but
to give such effect to rulings by the appellate court when
there was an appeal.
And even if the ruling by the Illinois appellate court
could be thought to have been pursuant to the Administra‐
tive Review Law, it may have been pursuant to the Unem‐
ployment Insurance Act as well. Illinois courts commonly
distinguish between the basis of appellate jurisdiction and
the basis of the substantive claim in the appeal, as when in
Doran v. Department of Labor, 452 N.E.2d 118, 119, 121–22 (Ill.
App. 1983), the court noted that the plaintiff had sought re‐
view “pursuant” to the Administrative Review Law but had
lost her case “pursuant” to the Unemployment Insurance
Act. That is the same distinction we suggested in contrasting
the statutory basis for a federal appeal to the statutory basis
for the substantive claim in the appeal.
Furthermore, the judgment of the Illinois appellate court
merely ordered “reinstate[ment of] the order” of the De‐
partment of Employment Security. Since the Department’s
determination that the plaintiff had left his employment
without good cause had no collateral estoppel effect, neither
did the judgment reinstating that order.
The background of the 1991 amendment to the Unem‐
ployment Insurance Act also undermines the defendants’
position. Unemployment insurance is federal, and though it
No. 13‐2654 5
is administered by the states, the federal government impos‐
es some requirements on the states’ administration of their
unemployment insurance programs. See 42 U.S.C.
§ 503(a)(1). That year the federal Department of Labor pub‐
lished an Unemployment Insurance Program Letter, inter‐
preting the Act to require that judicial hearings to review
unemployment insurance rulings made at the administrative
level be “Simple, Speedy and Inexpensive.” 56 Fed. Reg.
29719 (June 28, 1991). The Department criticized the applica‐
tion of collateral estoppel to the rulings made in such hear‐
ings, pointing out that “parties to a UI [unemployment in‐
surance] claim may feel obligated to assure that issues are
addressed in far greater depth than is normally required for
a UI hearing” and as a result cause both claimants and em‐
ployers to “require legal representation.” A defendant in
such a proceeding will have an incentive, if rulings in that
proceeding will be given collateral estoppel effect in a law‐
suit, to put up a strong defense in the proceeding. For by do‐
ing so it may be able to obtain rulings that it can use defen‐
sively in a future suit, or at least that it can use to ward off
rulings that the plaintiff might be able to use offensively in
his future suit. It cannot defer its strong defense to the circuit
court to which the decision by the Department of Employ‐
ment Security can be appealed, because that court is not
permitted to take evidence in such a proceeding; it acts pure‐
ly as an appellate tribunal. Acevedo v. Department of Employ‐
ment Security, 755 N.E.2d 93, 97 (Ill. App. 2001).
The Department of Labor’s program letter suggested that
states adopt statutory language similar to what Illinois did
adopt, shortly afterward, in 820 ILCS 405/1900(B), denying
collateral estoppel effect to rulings in unemployment insur‐
ance proceedings. The statute is fully applicable to this case.
6 No. 13‐2654
The judgment of the district court is therefore reversed and
the case remanded to that court for further proceedings con‐
sistent with this opinion.