108 F.

3d 42

73 Fair Empl.Prac.Cas. (BNA) 338,

70 Empl. Prac. Dec. P 44,746
G.V.V. RAO, Plaintiff-Appellant,
v.
COUNTY OF FAIRFAX VIRGINIA; Iftikar Khan, in his
individual
and official capacities; Richard Gozikoski, in his
individual and official capacities; John Di Zerega, in his
individual and official capacities; Anthony Griffin, in his
individual and official capacities; William J. Leidinger,
in his individual and official capacities, Defendants-Appellees,
and
Thomas M. Davis, III, in his individual and official
capacities, Defendant.
No. 96-1189.

United States Court of Appeals,

Fourth Circuit.
Argued Jan. 29, 1997.
Decided March 3, 1997.

ARGUED: Solaman G. Lippman, Washington, D.C., for PlaintiffAppellant. Robert Lyndon Howell, Deputy County Attorney, Fairfax, VA,
for Defendants-Appellees. ON BRIEF: Richard H. Semsker, Shannon M.
Salb, Washington, D.C., for Plaintiff-Appellant. David P. Bobzien,
County Attorney, Robert M. Ross, Assistant County Attorney, Fairfax,
VA, for Defendants-Appellees.
Before HAMILTON, WILLIAMS, and MICHAEL, Circuit Judges.
Vacated and remanded by published opinion. Judge HAMILTON wrote
the opinion, in which Judge WILLIAMS and Judge MICHAEL joined.
OPINION

HAMILTON, Circuit Judge:

The principal issue in this appeal is whether the findings of the Civil Service
Commission of Fairfax County (CSC), which were not reviewed by a Virginia
state court, may be afforded preclusive effect in a subsequent action under Title
VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e to 2000e-5 (1996). The
district court held that the findings of the CSC were entitled to preclusive effect
in a subsequent Title VII action. Because such findings may not be afforded
preclusive effect under the Supreme Court's decision in University of Tenn. v.
Elliott, 478 U.S. 788, 106 S.Ct. 3220, 92 L.Ed.2d 635 (1986), we vacate the
district court's judgment and remand for further proceedings consistent with this
opinion.

I.
2

Plaintiff/appellant, G.V.V. Rao, is a United States citizen of Indian descent

who was hired as a civil engineer by the defendant/appellee, County of Fairfax,
Virginia (Fairfax), on January 3, 1989. On May 2, 1989, Rao was dismissed.
As a result of that dismissal, Rao filed a discrimination charge with the Fairfax
office of the Equal Employment Opportunity Commission (EEOC). On July 7,
1989, Rao and Fairfax entered into a settlement agreement pursuant to which
Rao's EEOC discrimination charge was withdrawn and Rao was reinstated with
no loss in position or benefits.

Rao began working for Fairfax again on July 10, 1989. Thereafter, Rao filed
another charge of discrimination, this time with the CSC. Rao requested the
CSC to hold a hearing on his charges of national origin discrimination and
retaliation against Fairfax. In October 1991, the CSC issued its ruling,
concluding that Rao was neither discriminated against nor retaliated against by
Fairfax. The CSC hearing panel's decision was issued after the CSC held
prehearing conferences to define issues, made a record of the evidentiary
proceeding before it, allowed the parties to introduce testimony from witnesses,
subjected those witnesses to cross examination, and made detailed findings of
fact and conclusions based on those findings.1

In June 1993, Rao filed yet another charge of discrimination with the EEOC,
raising claims of national origin discrimination and retaliation. The EEOC
determined in August 1993 that Rao was discriminated against and retaliated
against by Fairfax, but Fairfax refused conciliation. Later, after a protracted
disagreement with a supervisor over a particular sewer project, Rao was
suspended in September 1994 and then terminated by Fairfax three months

later. Rao filed a final charge of national origin discrimination and retaliation
with the EEOC in January 1995 as a result of his termination. The EEOC
issued Rao a right to sue letter, and Rao timely brought this action in the United
States District Court for the Eastern District of Virginia.
5

Rao sued Fairfax, alleging, inter alia, claims of national origin discrimination
and retaliation pursuant to Title VII. The district court granted summary
judgment to Fairfax on these claims based on its conclusion that the 1991 CSC
determination that Rao was not discriminated against by Fairfax was entitled to
preclusive effect as to Rao's Title VII claims.2 Rao appeals.II.

Our analysis of the preclusive effect of a state administrative or judicial

proceeding on a subsequent federal court action begins with 28 U.S.C. 1738,
which extends to federal courts the principles embodied in the Full Faith and
Credit Clause of the Constitution, U.S. Const. Art IV, 1, cl. 1. Section 1738
provides in relevant part:

7 records and judicial proceedings of any court of any ... State ... shall have the
The
same full faith and credit in every court within the United States ... as they have by
law or usage in the courts of such State ... from which they are taken.
8

According to the Supreme Court, in promulgating 1738, Congress

"specifically required all federal courts to give preclusive effect to state-court
judgments whenever the courts of the State from which the judgments emerged
would do so." Allen v. McCurry, 449 U.S. 90, 96, 101 S.Ct. 411, 415, 66
L.Ed.2d 308 (1980).

In Kremer v. Chem. Constr. Corp., 456 U.S. 461, 102 S.Ct. 1883, 72 L.Ed.2d
262 (1982), the Supreme Court discussed the relationship between 1738 and
Title VII. In that case, Kremer lost his discrimination claim before the state
agency responsible for enforcing New York's anti-discrimination law. Both an
administrative appeal board and the Appellate Division of the New York
Supreme Court affirmed the agency's decision. Kremer then filed a Title VII
action in federal district court. The district court held that the agency decision
should be afforded preclusive effect as to Kremer's Title VII action. The Second
Circuit affirmed. The Supreme Court agreed that the Title VII claim was
barred, rejecting Kremer's argument that Congress intended Title VII to be
exempt from the requirements of 1738. The Court noted in a footnote,
however, that 1738 and state rules of preclusion would not apply to
"unreviewed administrative determinations by state agencies." 456 U.S. at 470
n. 7, 102 S.Ct. at 1892 n. 7. The Court reasoned:

EEOC review of discrimination charges previously rejected by state agencies would

10
be pointless if the federal courts were bound by such agency decisions. Nor is it
plausible to suggest that Congress intended federal courts to be bound further by
state administrative decisions than by decisions of the EEOC. Since it is settled that
decisions by the EEOC do not preclude a trial de novo in federal court, it is clear
that unreviewed administrative determinations by state agencies also should not
preclude such review even if such a decision were to be afforded preclusive effect in
a State's own courts.
11

Id. (citations omitted).

12

The footnote in Kremer became the holding of the Supreme Court's decision in
Elliott. In Elliott, a black University of Tennessee employee, threatened with
discharge, sought a hearing under the Tennessee Uniform Administrative
Procedures Act in much the same way Rao requested a CSC hearing into his
discrimination charges against Fairfax. See 478 U.S. at 790, 106 S.Ct. at 322122. Before the hearing was held, however, Elliott filed suit in the United States
District Court for the Western District of Tennessee alleging that his proposed
discharge was racially motivated and seeking relief under Title VII, 1983, and
other civil rights statutes. See id.

13

Following the administrative hearing involving the testimony of more than 100
witnesses and the presentation of 150 exhibits, a University of Tennessee
administrative assistant, acting as an Administrative Law Judge (ALJ) under
state law, determined that the University of Tennessee was not motivated by
racial prejudice when it sought to discharge Elliott. See id. at 791, 106 S.Ct. at
3222. Elliott did not seek review of the administrative decision in the Tennessee
courts, choosing instead to pursue his Title VII and civil rights claims in federal
court. See id. at 792, 106 S.Ct. at 3222-23. In that suit, the University of
Tennessee claimed that the ALJ's ruling was entitled to preclusive effect and
moved for summary judgment on the ground that Elliott's suit amounted to an
improper collateral attack on the ALJ's ruling. See id. The district court agreed
and granted summary judgment to the University of Tennessee. See id. The
Sixth Circuit reversed. As to Elliott's Title VII claim, the Sixth Circuit
concluded that, under Kremer, res judicata did not foreclose Elliott's Title VII
claims because unreviewed administrative determinations by state agencies do
not preclude a trial de novo in federal court on a Title VII claim, even if the
adverse administrative decision is afforded preclusive effect in the state's own
courts. See id. at 792-93, 106 S.Ct. at 3222-23. As to Elliott's claims under
1983 and other civil rights statutes, the Sixth Circuit concluded that these
claims also were not foreclosed by the unreviewed administrative decision. Id.
at 794, 106 S.Ct. at 3223-24 (emphasis added).

14

In affirming in part and reversing in part, the Supreme Court first noted that
1738 applies to state court judgments and not unreviewed administrative
determinations. See id. at 794, 106 S.Ct. at 3223-24. Next, the Court considered
whether a federal common-law rule of preclusion would be consistent with
Congress' intent in enacting Title VII and the Reconstruction civil rights
statutes. With respect to the claims arising under the Reconstruction civil rights
statutes, the Court held that the administrative fact-finding could have issue
preclusive (collateral estoppel) effect. See id. at 797, 106 S.Ct. at 3225 (no
language in the Reconstruction civil rights statutes " 'remotely expresses any
congressional intent to contravene the common-law rules of preclusion' "
(quoting Allen, 449 U.S. at 97, 101 S.Ct. at 416)); see also Layne v. Campbell
County Dep't of Social Servs., 939 F.2d 217, 219-21 (4th Cir.1991)
(administrative factfinding can have issue preclusive effect on 1983 claim).
However, the Court reached the opposite conclusion with regard to the Title
VII claim, because "Congress did not intend unreviewed state administrative
proceedings to have preclusive effect on Title VII claims." Elliott, 478 U.S. at
796, 106 S.Ct. at 3225. The Court found Congressional intent for such a result
in Title VII's direction that the EEOC accord " 'substantial weight to final
findings and orders made by State and local authorities in proceedings
commenced under State or local [employment discrimination] law.' " Id. at 795,
106 S.Ct. at 3224 (quoting 42 U.S.C. 2000e5(b)). The Court reasoned that,
through the Congressionally-enacted "substantial weight" standard, Congress
intended something less than preclusion. Id. ("[I]t would make little sense for
Congress to write such a provision if state agency findings were entitled to
preclusive effect in Title VII actions in federal court.").

15

Following Elliott, circuit courts have uniformly held that unreviewed

administrative agency findings can never be afforded preclusive effect in a
subsequent Title VII action. See Roth v. Koppers Indus., Inc., 993 F.2d 1058,
1060-63 (3d Cir.1993); McInnes v. California, 943 F.2d 1088, 1093-94 (9th
Cir.1991); DeCintio v. Westchester County Med. Ctr., 821 F.2d 111, 114-15
(2d Cir.1987); Duggan v. Board of Educ., 818 F.2d 1291, 1293-95 (7th
Cir.1987); Abramson v. Council Bluffs Community Sch. Dist., 808 F.2d 1307,
1308-09 (8th Cir.1987). As the Ninth Circuit explained in McInnes:

16 clear teaching of Elliott is that in a Title VII action a prior state decision enjoys
The
issue preclusive effect only if rendered or reviewed by a court. Under either of those
circumstances, 28 U.S.C. 1738 applies by its own terms. In contrast, unreviewed
administrative determinations lack preclusive effect in a subsequent Title VII action,
regardless of any preclusive effect state law might accord to them. Section 1738 does
not apply to such determinations, and the Court in Elliott refused to fashion a federal
common-law rule of preclusion in the Title VII context.

17

943 F.2d at 1093-94.

18

Under Elliott, the district court's decision in this case cannot stand. The district
court erred because it failed to note that despite the "adjudicatory" nature of the
CSC hearing, the October 1991 decision remains, at bottom, an unreviewed
state administrative determination which is not entitled to any preclusive effect
in a Title VII case. See id. at 797, 106 S.Ct. at 3225.3

19

Absent the district court's erroneous reliance on the 1991 CSC decision for
preclusive effect on Rao's Title VII claims against Fairfax, there is no proper
legal conclusion contained in the district court's order upon which Fairfax could
be granted summary judgment. Thus, the record in this case is not subject to
meaningful appellate review, and any appellate review of the merits of Rao's
claims would be improvident at this time. Under the circumstances, it is more
appropriate to vacate the district court's judgment granting summary judgment
to Fairfax and remand the case to the district court with instructions to address
the merits of Rao's Title VII discrimination and retaliation claims against
Fairfax.

III.
20

For the reasons stated, the judgment of the district court is vacated and the case
is remanded for further proceedings consistent with this opinion.

21

VACATED AND REMANDED FOR FURTHER PROCEEDINGS.

Under Virginia law, the factual findings and decisions of the CSC are binding
in Virginia state courts. See Va.Code Ann. 15.1-7.2(10)(a)(6) (Michie 1991)

Rao's complaint also alleged claims of national origin discrimination and

retaliation against several individual defendants, violations of 42 U.S.C. 1983
against Fairfax and several individual defendants, and violations of state law
against certain individual defendants. The district court granted summary
judgment to the defendants on these claims, and Rao does not attack these
rulings on appeal. Accordingly, we review only the district court's grant of
summary judgment to Rao on his national origin discrimination and retaliation
claims against Fairfax

Fairfax argues that the CSC hearing panel was an actual court. This argument is
without merit. When deciding whether a state hearing panel constitutes an

actual court, we must engage in a two-step process. First, we look to state law to
see what powers the Commonwealth vests in the CSC hearing panel. See
Kremer, 456 U.S. at 466-67, 102 S.Ct. at 1889-90. Second, we look to federal
law to determine whether the CSC hearing panel constitutes a "court" within
the meaning of 1738. See Adam v. Saenger, 303 U.S. 59, 64, 58 S.Ct. 454,
457, 82 L.Ed. 649 (1938). The CSC certainly enjoys adjudicatory-type powers.
For example, it can conduct hearings, make evidentiary rulings, apply the law,
and a Virginia trial court can enforce its decisions. See Va.Code Ann. 15.17.2. However, those adjudicatory provisions do not render the CSC hearing
panel an actual court. First, a county grievance panel is provided for separately
from the section of the Virginia Code defining the role of its courts. See
Va.Code Ann. 16.1-69.1 to 17-237. Second, the terminology used by the
Virginia Code is quite instructive; it uses the term "panel hearing" to describe
the process undertaken by the CSC but later mentions that "[e]ither party may
petition the [local] circuit court " for enforcement of the CSC decision. See
Va.Code Ann. 15.1-7.2(A)(11) (emphasis added). Moreover, the powers
enjoyed by the CSC are certainly no greater than those possessed by the state
agency at issue in Kremer, nor the ALJ in Elliott. Accordingly, the CSC
hearing panel is not a "court" within the meaning of 1738