Maria Auqui,, et al., Respondents,v.Seven Thirty One Limited Partnership, et al., Appellants.BriefN.Y.January 8, 2013To Be Argued By: NAME Time Requested: __ Minutes APL-2011-00309 New York County Clerk’s Index No. 100232/04 Court of Appeals STATE OF NEW YORK MARIA AUQUI, as Guardian of the Property of JOSE VERDUGO, and MARIA VERDUGO, Plaintiffs-Respondents, —against— SEVEN THIRTY ONE LIMITED PARTNERSHIP, BOVIS LEND LEASE LMB, INC. and NORTH SIDE STRUCTURES, INC., Defendants-Appellants. BRIEF OF AMICUS CURIAE d BEVAN, MOSCA, GIUDITTA & ZARILLO, P.C. 30 Broad Street, Suite 2603 New York, New York 10004 Telephone: (212) 471-0012 Facsimile: (212) 471-0020 Attorneys for Amicus Curiae Federation of Defense and Corporate Counsel Dated: October 3, 2013 CORPORATE DISCLOSURE STATEMENT Pursuant to Rule 500.1 (f), Amicus Curiae Federation of Defense and Corporate Counsel, Inc. hereby discloses that it has no corporate parents, subsidiaries, or affiliates. The only other related legal entity is the Federation of Defense and Corporate Counsel Foundation. ii TABLE OF CONTENTS TABLE OF AUTHORITIES .................................................................................... iv I. Interest of Amicus Curiae ............................................................................... 1 II. Preliminary Statement ..................................................................................... 2 III. Statement of the Case ...................................................................................... 2 IV. Question for Review ....................................................................................... 4 V. Issue Preclusion Applies to Necessary Determinations that were Actually Litigated before the Workers' Compensation Board ....................... 4 A. Issue Preclusion Prevents Repetitious Litigation of Disputes .............. 5 B. Issue Preclusion Applies to Determinations by Administrative Bodies ................................................................................................... 6 C. Issue Preclusion Applies to Determinations by Workers' Compensation Boards ........................................................................... 9 VI. Conclusion ..................................................................................................... 11 iii TABLE OF AUTHORITIES Cases Alba v. Raytheon Co., 809 N.E.2d 516 (Mass. 2004) ............................................. 10 Auqui v. Seven Thirty One Ltd. P'ship, 20 N.Y.3d 1035 (2013) reargument granted, 21 N.Y.3d 995 (2013) and reargument granted, 21 N.Y.3d 998 (2013) ....................................................................... 3,4 Babineaux v. Ford Motor Co., 95 F.3d 1148 (5th Cir. 1996) (unpublished) (interpreting Louisiana law) ......................................................... 9 Barna v. Morgan, 341 F. Supp. 2d 164 (N.D.N.Y. 2004) ........................................ 8 Brugman v. City of New York, 102 AD2d 413 (1st Dept 1984), aff'd 64 N.Y.2d 1011 (1985) ....................................................................................... 5 Crosby v. Prysmian Commc 'ns Cables & Sys. USA, LLC, 723 S.E.2d 813 (S.C. Ct. App. 2012) ................................................................................... 10 Dodd v. Hood River Cty., 136 F.3d 1219 (9th Cir. 1998), cert. denied 525 U.S. 923 (1992) ............................................................................................ 8 EZ Loader Boat Trailers, Inc. v. Cox Trailers, Inc., 746 F .2d 375 (7th Cir. 1984) ............................................................................................................. 8 Frederickv. Action Tire Co., 744 A.2d 762 (Pa. Super. Ct. 1999) ......................... 10 Levich v. Liberty Cent. Sch. Dist., 361 F. Supp. 2d 151 (S.D.N.Y. 2004) .................................................................................................................... 8 McCall v. Dynic USA Corp., 906 P.2d 295 (Or. Ct. App. 1995) ............................ 10 McKean v. Municipality of Anchorage, 783 P.2d 1169 (Alaska 1989) .................... 9 Ryan v. New York Tel. Co., 62 N.Y.2d 494, 467 N.E.2d 487 (1984) ....................... 6 State Farm Gen. Ins. Co. v. Workers' Compo Appeals Bd., 159 Cal. Rptr. 3d 779 (Cal. Ct. App. 2013) ..................................................................... 10 Tyco Electronics V. Vanpelt,743 S.E.2d 293 (Va. Ct. App. 2013) ......................... 10 iv United States v. Utah Const. & Min. Co., 384 U.S. 394, 86 S. Ct. 1545 (1966) .................................................................................................................. 6 Wickham Contracting Co., Inc. v. Bd. of Educ. of City of New York, 715 F.2d 21 (2d Cir. 1983) .............................................................................. 5, 8 Other Authorities 18 Charles Alan Wright et aI., Federal Practice and Procedure § 4421 (2d ed. 2002) ........................................................................................................ 5 18B Fed. Prac. & Proc. Juris. § 4475 (2d ed.) ........................................................... 6 Restatement (Second) of Judgments § 27 (1982) .................................................. 4, 5 v I. Interest of Amicus Curiae The Federation of Defense and Corporate Counsel ("FDCC") was formed in 1936 and has an international membership of 1 ,400 defense and corporate counsel. FDCC members work in private practice, as general counsel, and as insurance claims executives. Membership is limited to attorneys and insurance professionals nominated by their peers for having achieved professional distinction and demonstrated leadership in their respective fields. The FDCC is committed to promoting knowledge and professionalism in its ranks and has organized itself to that end. Its members have established a strong legacy of representing the interests of civil defendants. Across the country, Worker's Compensation Courts are making binding determinations on issues similar to those at issue in this litigation. FDCC members represent defense interests in many of those actions. If issue preclusion does not apply to scenarios such as those found in this lawsuit, overburdened dockets in New York will needlessly expand and claimants will leave out arguments most appropriately brought at the administrative level. Such an outcome is unnecessary and illogical. Other states around the country successfully enforce issue preclusion. FDCC experience shows that New York should as well. 1 II. Preliminary Statement The FDCC submits this amicus brief in support of defendants-appellees Seven Thirty One Limited Partnership, Bovis Lend Leasing LMB, Inc., and North Side Structures, Inc. in the reargument of this Court's Memorandum Decision and Order dated February 14, 2013 which held that "[t]he determination of the [Workers' Compensation Board] should be given preclusive effect as to the duration of plantiff s disability, relevant to lost earnings and compensation for medical expenses." If a party is given a full and fair opportunity to contest an issue before the Worker's Compensation Board ("WCB") and the issue was necessary to the WCB's determination, the decision of the WCB should be given preclusive effect in subsequent litigation. This is the law in New York. This is the law in many other jurisdictions around the United States. And that is exactly what happened in this case. The New York Court of Appeals should not permit parties to have two opportunities to fully litigate the same issue. The Court's original ruling comports with this fundamental notion of fairness and should be upheld. III. Statement of the Case In late 2003, plaintiff Jose Verdugo was injured when he was hit with plywood that fell from a building Seven Thirty One Limited Partnership owned. Auqui v. Seven Thirty One Ltd. P'ship, 20 N.Y.3d 1035, 1036 (2013) reargument 2 granted, 21 N.Y.3d 995 (2013) and reargument granted, 21 N.Y.3d 998 (2013). Mr. Verdugo received Workers' Compensation benefits covering his medical treatment. Id. He also commenced this personal injury action. Id. Two years later, the insurance carrier for Mr. Verdugo's employer moved the WCB to discontinue his workers' compensation benefits. Id. On January 23, 2006, a Workers' Compensation Law Judge ("WCLJ") held a hearing on Mr. Verdugo's claim. Reserved Decision, Record on Appeal, p. 134. Four medical professionals provided medical testimony regarding Mr. Verdugo's disability: a psychiatrist/neurologist, an orthopedist, a neurologist, and a psychiatrist. Id. at 134-35. The WCLJ weighed the evidence and issued a written decision concluding that plaintiff had "no causally related disability since January 24,2006." Id. at 135. Mr. Verdugo applied for review of the WCLl's decision to the WCB. Memorandum of Board Panel Decision, Record on Appeal, p. 129. A full three- member panel of the WCB affirmed the WCLl's decision. Id. at 130. The WCB noted that "[i]t is the WCLl's function to resolve conflicting medical opinions; he or she is free to reject or accept any part based on its credibility" and concluded "claimant had no further disability after January 24, 2006 and no further need for treatment." Id. In April 2009, the defendants-appellees in Mr. Verdugo's personal injury action moved to preclude plaintiffs from relitigating the duration of his work- 3 related injury. Order to Show Cause, Record on Appeal, pp. 108-09. The trial court granted the WCB ruling preclusive effect. Id. The Appellate Division, First Department reversed. Auqui v. Seven Thirty One Ltd. P'ship, 920 N.Y.S.2d 79, 80 (2011). This Court reversed the Appellate Division, again granting the WCB's ruling preclusive effect. Auqui, 20 N.Y.3d at 1037. Plaintiffs-appellants' then filed a motion to reargue, which this Court granted. 1 Auqui, 21 N.Y.3d 995 (2013); Auqui, 21 N.Y.3d 998 (2013). IV. Question for Review As stated by this Court: "The issue disputed on this appeal is whether the WCB decided a necessary issue of fact about the duration of Jose Verdugo's disability and, if so, whether the plaintiffs had a full and fair opportunity to contest the determination." Auqui, 20 N.Y.3d at 1037. V. Issue Preclusion Applies to Necessary Determinations that were Actually Litigated before the Workers' Compensation Board. If a party had a full and fair opportunity to contest the determination, issue preclusion applies-whether the contest was before a trial court or an administrative body. Workers' Compensation Board decisions provide litigants with a full and fair opportunity to contest cases and their decisions on factual issues necessary to the case should be given preclusive effect. 1 Amicus notes that defendants-appellees moved the Court to clarify its original Memorandum Decision and Order regarding a factual issue. Defendants-appellees' motion is not related to the Court's legal decision. 4 A. Issue Preclusion Prevents Repetitious Litigation of Disputes. Issue preclusion2 is "[a] doctrine barring a party from relitigating an issue determined against that party in an earlier action, even if the second action differs significantly from the first one." Collateral Estoppel, Black's Law Dictionary (9th ed. 2009). It applies "[ w ]hen an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim." Restatement (Second) of Judgments § 27 (1982). The requirement that an issue must have been actually litigated by the parties is meant to ensure that a party had a full and fair opportunity to contest the determination in the prior proceeding. See, e.g., Brugman v. City of New York, 102 AD2d 413, 415 (1st Dept 1984), aff'd 64 N.Y.2d 1011 (1985). Thus, the parties cannot relitigate an issue when they were aware of the issue, deemed it important, and contested it in an earlier adversarial proceeding. See Wickham Contracting Co., Inc. v. Bd. of Educ. of City of New York, 715 F.2d 21, 28 (2d Cir. 1983). (parties must have "sufficient notice and incentive to litigate matters in earlier proceedings which may bind them in subsequent matters"). The necessity requirement also ensures the issue at stake was given sufficient judicial attention in 2 Also known as collateral estoppel. 5 the decision and was an appealable determination. See Restatement (Second) of Judgments § 27, cmt. h., see also 18 Charles Alan Wright et aI., Federal Practice and Procedure § 4421, p. 539 (2d ed. 2002) (discussing these "[t]wo common explanations" regarding the necessity requirement). Issue preclusion is a common-sense doctrine, more important in the high- caseload reality of the modem court system than ever, meant "to prevent repetitious litigation of what is essentially the same dispute." Restatement (Second) of Judgments § 27 (1982) cmt. c. It prevents the unnecessary expenditure of judicial resources. It controls the litigation costs of the parties. It preserves the integrity of administrative and judicial proceedings by preventing inconsistent decisions on the same issue by different tribunals. Parties do not deserve a second bite at the apple when they fully litigated the same issue in a prior proceeding. B. Issue Preclusion Applies to Determinations by Administrative Bodies. Agency determinations are equally binding on the courts. "When an administrative agency is acting 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." United States v. Utah Const. & Min. Co., 384 U.S. 394,422, 86 S. Ct. 1545, 1560 (1966), see also Ryan v. New York Tel. Co., 62 N.Y.2d 494, 499, 467 N.E.2d 487, 489-90 (1984) ("At the outset, it should be made clear that the doctrines of res 6 judicata and collateral estoppel are applicable to give conclusive effect to the quasi-judicial determinations of administrative agencies, when rendered pursuant to the adjudicatory authority of an agency to decide cases brought before its tribunals employing procedures substantially similar to those used in a court of law." (citations omitted)). "Preclusion now frequently extends from an administrative adjudication to a judicial proceeding, both when the government is a party to the judicial proceeding and when the judicial proceeding is among private parties." § 4475 Administrative Action Precluding Judicial Decision, 18B Fed. Prac. & Proc. Juris. § 4475 (2d ed.). There is not a precise line to determine when an administrative agency is acting in a judicial capacity with sufficient procedural safeguards for preclusion to apply. Id. ("It is difficult to state a general formula to capture the essential elements of adjudicatory procedure that may entitle administrative decisions to preclusion effects in subsequent judicial proceedings."). Nevertheless, courts routinely apply issue preclusion to a wide variety of administrative decisions, including determinations made only on a written record, in the absence of a jury trial, and with limitations on discovery. See id. For example, issue preclusion has been applied to decisions by the Oregon Land Use Board of Appeals regarding a claim for unconstitutional regulatory where there was no sworn testimony and no witnesses were cross-examined. Dodd v. Hood River Cty., 136 F.3d 1219, 1226- 7 1227 (9th Cir. 1998), cert. denied 525 U.S. 923 (1992). A court has also granted preclusive effect to a no probable cause determination of the New York State Department of Human Rights on disparate treatment and unlawful termination claims where a party did not take advantage of opportunities to present further evidence and was not able to argue before the agency. Barna v. Morgan, 341 F. Supp. 2d 164, 168 (N.D.N.Y. 2004). Many other administrative agency decisions have been given preclusive effect in court, including decisions by the National Labor Relations Board, Wickham Contracting Co. v. Board o/Education o/City o/New York, 715 F.2d 21, 26 (2d Cir. 1983) ("Since there is no reason to believe that legal results in section 303 actions will be superior to those arrived at in the administrative proceedings, or that inconsistent results before the different tribunals will increase procedural or substantive fairness, the judicial and other resources consumed in relitigating such issues is pure waste."), the Trademark Trial and Appeal Board, EZ Loader Boat Trailers, Inc. v. Cox Trailers, Inc., 746 F.2d 375, 378 (7th Cir. 1984), and factual decisions by a School Board hearing officer, Levich v. Liberty Cent. Sch. Dist., 361 F. Supp. 2d 151, 159 (S.D.N.Y. 2004) ("Accordingly, because we find that the [Board of Education disciplinary] hearing afforded plaintiff a full and fair opportunity to litigate the issues of whether the September 4th letter is protected and whether the disciplinary charges were in retaliation for his public speech prior 8 to the letter, it follows that any related issues of fact resolved by the hearing officer are precluded in this action."). C. Issue Preclusion Applies to Determinations by Workers' Compensation Boards. Just as issue preclusion is routinely applied to the decisions of many other administrative agencies, issue preclusion is frequently applied to necessary factual determinations by Workers' Compensation Boards. Parties before the Workers' Compensation Board are given a full and fair opportunity to be heard and the factual determination of when a disability has ended is necessary to the decision of the agency. In this case, the parties were able to submit medical reports, present expert testimony, and cross-examine the other parties' experts through depositions. The parties were represented by counsel and had the opportunity to appeal WCLJ's opinion to a three-member appellate panel. Workers' Compensation procedures have all of the hallmarks of judicial proceedings and should be given preclusive effect. Many other jurisdictions around the country also give preclusive effect to decisions by Workers' Compensation Boards including Alaska, California, Massachusetts, Pennsylvania, North Carolina, and Virginia. See, e.g., Babineaux v. Ford Motor Co., 95 F.3d 1148 (5th Cir. 1996) (unpublished) (interpreting Louisiana law); McKean v. Municipality of Anchorage, 783 P.2d 1169, 1171 (Alaska 1989) ("[I]t is well-settled that res judicata may be applied to decisions of 9 workers' compensation boards."); State Farm Gen. Ins. Co. v. Workers' Compo Appeals Bd., 159 Cal. Rptr. 3d 779, 786 (Cal. Ct. App. 2013) ("An order of the WCAB is final for the purpose of seeking judicial review when it settles, for purposes of the compensation proceeding, an issue critical to the claim for benefits, whether or not it resolves all the issues in the proceeding or represents a decision on the right to benefits." (quotation omitted»; Alba V. Raytheon Co., 809 N.E.2d 516, 523 (Mass. 2004) (although the findings by the Workers' Compensation Law Judge were subsidiary to its final determination, those subsidiary factual findings were necessary to the final conclusion and therefore entitled to preclusive effect in a subsequent proceeding); Frederick V. Action Tire Co., 744 A.2d 762, 767 (Pa. Super. Ct. 1999) ("Pennsylvania appellate courts have consistently held findings in workers' compensation cases may bar relitigation of identical issues in collateral civil actions, even third party tort actions."); McCall V. Dynic USA Corp., 906 P.2d 295, 298 (Or. Ct. App. 1995) (granting preclusive effect to WCB finding on reason for employee's termination); Crosby V. Prysmian Commc'ns Cables & Sys. USA, LLC, 723 S.E.2d 813, 818 (S.C. Ct. App. 2012) (affirming the circuit court's grant of preclusive effect to the factual finding of the WCB that the plaintiff was injured in the course and scope of employment); Tyco Electronics V. Vanpelt,743 S.E.2d 293,299 (Va. Ct. App. 2013) (granting preclusive effect to factual finding of intent by ALJ). 10 Amicus curiae for the plaintiffs express concerns about the tactical decisions a worker might face in contesting matters before the WCB. See, e.g., New York Bar Ass 'n Amicus Curie for Reargument. But that is not the issue before this Court. The issue is whether, when an issue was fully litigated before the WCB, the claimant is allowed to relitigate the issue in another forum. The Plaintiff in this case chose to litigate before the WCB, and the duration of injury was one of the fact issues decided at that level. This Court should join the better authority, holding that issue preclusion bars Plaintiff from relitigating the issue of duration of injury. VI. Conclusion Issue preclusion prevents litigations from repeatedly litigating what is essentially the same dispute-wasting judicial resources and unfairly forcing the opposing party to continue to litigate an issue already decided. Workers' Compensation Boards across the country have consistently been recognized as tribunals that provide litigants full and fair opportunities to contest cases in an atmosphere similar to a judicial proceeding. When the factual issues underlying WCBs' decisions have been necessary to the determinations, courts have given them preclusive effect in subsequent litigation in other courts. The New York WCB should be granted the same degree of deference. 11 TO: Clerk of the Court MatthewW. Naparty, Esq. Mauro Lilling Naparty, LLP 130 Crossways Park Drive Suite 100 Woodbury, NY 11797 516-487-5800 Annette G. Hasapidis, Esq. Law Offices of Annette G. Hasapidis P. O. Box 827 South Salem, New York 10590 Seymour W. James, Jr. New York State Bar Association One Elk Street Albany, New York 12207 518-463-3200 9260813.1 Respectfully submitted, FEDERATION OF DEFENSE AND CORPORATE COUNSEL By~~~ ______ ~-=~ ______ __ Antliony 1. Zarillo, Jr. (Attorneys for Federation of Defense and Corporate Counsel) BEVAN, MOSCA, GUIDITTA & ZARILLO, PC 30 Broad Street, Ste. 2603 New York, NY 10004 Tel: (212) 471-0012 Fax: (908) 848-6424 12