Res Judicata means "the thing decided." This basic rule embedded in our court system means that a final judgment on the merits of the case by a court with jurisdiction is deemed to be conclusive between the parties as to all matters that were litigated or that could’ve been litigated in that lawsuit. As the District Court of the U.S. Virgin Islands recently decided, this also applies to administrative rulings that are decided on an issue.
Cherie Allahar alleged several claims regarding her employment and termination from Clinical Lab. She claimed that Clinical Lab violated the Virgin Islands Civil Rights Act and the Virgin Islands Wrongful Discharge Act (“WDA”). Both claims were based on Clinical Lab’s alleged retaliatory acts and patterns and practices of discrimination on the basis of Allahar’s race. Clinical Lab asked the court to dismiss these counts of the Complaint.
Allahar alleged that her treatment by Clinical Lab’s management was race discrimination in violation of the Virgin Islands Civil Rights Act. Clinical Lab responded that such a claim “must be dismissed as the noted statutes do not provide for a private cause of action.” Chief Judge Wilma A. Lewis of the District Court said no, and explained in her opinion that the Virgin Islands Civil Rights Act prohibits discrimination and differential treatment in employment based on race; private litigants are permitted to sue for damages for violating that law. Allahar’s Complaint included the statutory sections that provide for a private right of action, and as a result, Clinical Lab’s argument failed.
In her other claim at issue, Allahar alleged that the discrimination and retaliatory acts committed by Clinical Lab constituted a violation of the WDA. However, Allahar previously had filed a charge with the Virgin Islands Department of Labor (“DOL”) in 2009 in which she alleged a violation of the WDA stemming from the same facts, employment relationship, and termination. An administrative hearing was conducted on that allegation in 2011 before an Administrative Law Judge (“ALJ”). Both parties were represented by the same counsel as in this case, and the ALJ issued a Memorandum Opinion and Order finding no violation of the WDA and the complaint was dismissed. Clinical Lab argued in its Motion to Dismiss that the WDA claim was precluded based on res judicata. Chief Judge Lewis agreed.
The Chief Judge wrote that res judicata principle is a pillar of common law that bars a party from litigating the same claim against the same adversary as was litigated in a prior suit. Citing earlier Third Circuit and US Supreme Court cases, she explained that the doctrine’s purpose is to “relieve parties of the cost and vexation of multiple lawsuits, conserve judicial resources, and, by preventing inconsistent decisions, encourage reliance on adjudication.”
In addition the Chief Judge held that res judicata principles applied to administrative adjudications as well as judicial proceedings, and final administrative decisions may have preclusive effect on subsequent litigation. When the administrative body in question acts “in a judicial capacity and resolves disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate, the courts have not hesitated to apply res judicata to enforce repose.”
If the ALJ’s decision was a final judgment, the Chief Judge wrote, it would preclude the same parties’ subsequent litigation of the same claim in a judicial forum. A decision constitutes a final judgment on the merits when it “disposes of the whole subject, gives all the relief that was contemplated, provides with reasonable completeness for giving effect to the judgment and leaves nothing to be done in the cause save superintend, ministerially, the execution of the decrees.” To successfully assert the defense of res judicata, a party must demonstrate that:
(1) there has been a final judgment on the merits in a prior action;
(2) the prior action involved the same parties; and
(3) the subsequent suit is based on the same cause of action.
The Chief Judge reviewed the ALJ’s Opinion and Order adjudicating the merits of the claim filed with DOL, which contained findings of fact based on the evidence presented at the 2011 hearing. It disposed of the entirety of the claim, she held, and no further action was needed to give the judgment effect. Accordingly, she said that it was a final judgment on the merits and satisfied the first element of res judicata, and noted that if a party wished to appeal a DOL administrative decision, the proper course for appeal is with the Superior Court of the Virgin Islands within 30 days of the issuance of the decision.
The Chief Judge found Allahar’s complaint filed with DOL to be identical to the one against Clinical Lab in this lawsuit. Because the parties and cause of action for wrongful termination therein were identical to the WDA claim of her complaint in this matter, the final two elements of res judicata were met. Litigating the WDA claim in the District Court was thus precluded by the res judicata principle.
As a consequence, Clinical Lab’s Motion to Dismiss was granted as to the WDA claim and denied as to the civil rights claim. Allahar v. Clinical Laboratory Inc., Slip Copy, 2013 WL 6578988 (D.Virgin Islands December 13, 2013).