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Seventh Circuit: Physician’s State-Court suit Challenging Denial of Privileges Precluded Subsequent Federal Discrimination Claim

The Seventh Circuit Court of Appeals has reminded one Illinois physician that he only gets one bite at the apple when it comes to federal discrimination claims— and the case presents a unique and potentially powerful new defense for employers of physicians and other regulated professionals. The case, Dookeran v. County of Cook, No. 11-3197 (7th Cir. May 3, 2013), arose when the defendant hospital denied the plaintiff physician’s reappointment following his two-year review, during which he acknowledged for the first time that he had been reprimanded by his former employer for creating a hostile work environment. The physician subsequently filed suit in Illinois state court requesting judicial review of the hospital’s decision under a writ of common-law certiorari and, at the same time but in a separate EEOC action, he lodged charges of race and national origin discrimination. The Illinois courts upheld the decision to deny his privileges in the certiorari suit. Shortly after that state court proceeding had concluded, however, the physician received an EEOC right-to-sue letter and filed a second lawsuit against the hospital in federal court. 

The hospital immediately moved to dismiss the physician’s discrimination claims, arguing that the physician’s earlier state court claim — in which he had not mentioned his discrimination argument —effectively barred his subsequent federal claim. The hospital’s argument relied upon the res judicata (i.e., “claim preclusion”) doctrine, which in Illinois bars any claim that could have been raised in an earlier lawsuit involving: (a) a final judgment; (b) the same parties; (c) sufficiently related causes of action; and (d) a “full and fair opportunity” to litigate the claim. Because the first two requirements clearly were present in this case, the question before the Seventh Circuit was whether the earlier Illinois certiorari suit involved a sufficiently related cause of action and provided a “full and fair opportunity” to litigate the federal discrimination issues.

The Seventh Circuit concluded that it did. First, the panel found that the discrimination and judicial review claims were sufficiently related because they arose “from a single group of operative facts;” in other words, the doctrine “precludes the sequential pursuit not only of claims actually litigated, but of those that could have been litigated.”  Second, relying upon a recent Illinois Supreme Court decision, the panel held that “an action in Illinois circuit court seeking judicial review” of decision by certiorari “provides the ‘full and fair opportunity’ necessary for claim preclusion to apply” to a federal civil-rights claim. Thus, the Seventh Circuit, concluded, the physician “had a full and fair opportunity to litigate his federal claims in the state-court proceedings.”  In other words, he “could have joined his Title VII claims with the state-court certiorari proceeding. Because he did not, claim preclusion applies.”

This decision presents a new, unique opportunity for hospitals and other employers of physicians and other regulated professions to defeat federal discrimination claims. In any case where the professional has already sought judicial review of a decision to deny privileges or another license, a claim may be available that discrimination claims are subject to res judicata/claim preclusion. That argument has the potential to bring an otherwise problematic discrimination case to a quick end.

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