Petitioner Lytle, an Afro-American, filed an action under both
Title VII of the Civil Rights Act of 1964 and 42 U.S.C. § 1981,
alleging that respondent Schwitzer had terminated his employment
because of his race and had retaliated against him for filing a
charge with the Equal Employment Opportunity Commission by
subsequently providing inadequate references to prospective
employers. He requested a jury trial on all issues triable by a
jury. After concluding that Title VII provided the exclusive
remedy, the District Court dismissed the § 1981 claims and
conducted a bench trial on the Title VII claims. It granted
Schwitzer's motion to dismiss the discriminatory discharge claim
pursuant to Federal Rule of Civil Procedure 41(b) at the close of
Lytle's case in chief and entered a judgment for Schwitzer on the
retaliation claim after both parties had presented all their
evidence. The Court of Appeals affirmed, but noted that the
dismissal of the § 1981 claims was "apparently erroneous" because
the Title VII and § 1981 remedies were separate, independent, and
distinct. Nonetheless, it ruled that the District Court's findings
with respect to the Title VII claims collaterally estopped Lytle
from litigating his § 1981 claims, because the elements of a cause
of action under the two statutes are identical. It rejected Lytle's
claim that the Seventh Amendment -- which preserves the right to
trial by jury for suits involving legal, as opposed to equitable,
claims -- precluded according collateral estoppel effect to the
District Court's findings, reasoning that the judicial interest in
economy of resources overrode Lytle's interest in relitigating the
issues before a jury.
Held:
1. The Seventh Amendment precludes according collateral estoppel
effect to a district court's determinations of issues common to
equitable and legal claims where the court resolved the equitable
claims first solely because it erroneously dismissed the legal
claims. Pp.
494 U. S.
550-556.
(a) But for the dismissal of Lytle's § 1981 legal claims, he
would have been entitled to a jury trial on all issues common to
them and his Title VII equitable claims,
Curtis v.
Loether, 415 U. S. 189,
415 U. S. 196,
n. 11,
Page 494 U. S. 546
and the jury would have been required to resolve the legal
claims before the court considered the equitable claims,
Beacon
Theatres, Inc. v. Westover, 359 U. S. 500,
359 U. S.
510-511;
Dairy Queen, Inc. v. Wood,
369 U. S. 469,
369 U. S. 473.
The holding in
Parklane Hosiery Co. v. Shore, 439 U.
S. 322 -- that a court's determinations of issues in an
equitable action could collaterally estop relitigation of the same
issues in a subsequent legal action without violating a litigant's
right to a jury trial -- cannot be extended to the present
situation. Although the trial court had no legal issues before it
when it made its findings, relitigation in this case would not in
effect constitute a second, separate action, because it was only
the court's erroneous dismissal of the § 1981 claims that enabled
it to resolve the equitable claims first. It would be anomalous to
hold that a district court cannot deprive a litigant of his right
to a jury trial by resolving an equitable claim before a jury hears
a legal claim raising common issues, but may accomplish the same
result by erroneously dismissing the legal claim. Pp.
494 U. S.
550-552.
(b) This conclusion is consistent with this Court's approach in
cases involving a wrongful denial of a petitioner's right to a jury
trial on legal issues, which is to reverse and remand each case in
its entirety for a jury trial, rather than to accord the trial
court's factual findings collateral estoppel effect.
See, e.g.,
Granfinanciera, S. A. v. Nordberg, 492 U. S.
33. Furthermore, the purposes served by the collateral
estoppel doctrine -- to protect parties from multiple lawsuits and
the possibility of inconsistent decisions, and to conserve judicial
resources -- do not justify applying it here. This case involves
one suit in which the plaintiff properly joined his legal and
equitable claims. Furthermore, relitigation would not dissipate
judicial resources in "needless litigation," because a new trial is
essential to vindicating Lytle's Seventh Amendment rights. Pp.
494 U. S.
552-554.
2. The argument that the Court of Appeals' judgment should be
affirmed because the District Court would have directed a verdict
in Schwitzer's favor even if the § 1981 claims had been tried
before a jury is rejected. The contention that the court would have
directed a verdict on the § 1981 discriminatory discharge claim
because it dismissed the similar Title VII claim ignores the
important distinction between dismissal under Rule 41(b), which
allows the court to determine the facts and the law in deciding
whether to render judgment against the plaintiff before the close
of all the evidence, and a directed verdict under Rule 50(a), which
requires a court to draw all factual inferences in favor of the
nonmoving party. The court -- which noted that Lytle's
interpretation of the evidence supporting his claim was
"reasonable" -- would not necessarily
Page 494 U. S. 547
have taken the case away from the jury. Schwitzer's argument
with respect to Lytle's retaliation claim is even further off-base,
because the trial court declined to dismiss that claim, and nothing
in the record indicates that the court -- after hearing all the
evidence -- reached the only reasonable conclusions, or that a jury
could not have found the facts differently and entered a different
verdict. Pp.
494 U. S.
554-555.
831 F.2d 1057, vacated and remanded.
MARSHALL, J., delivered the opinion for a unanimous Court.
O'CONNOR, J., filed a concurring opinion, in which SCALIA, J.,
joined,
post p.
494 U. S.
556.
JUSTICE MARSHALL delivered the opinion of the Court.
In
Parklane Hosiery Co. v. Shore, 439 U.
S. 322 (1979), we held that a court's determinations of
issues in an equitable action could collaterally estop relitigation
of the same issues in a subsequent legal action without violating a
litigant's right to a jury trial.
Id. at
439 U. S. 333. In
this case, petitioner brought both equitable and legal claims in
the same action, but the District Court erroneously dismissed the
legal claims. We must determine whether the District Court's
resolution of the issues raised by petitioner's equitable claims
bars relitigation of the same issues before a jury in the context
of his legal claims. We hold that collateral estoppel does not
preclude relitigation of those issues in these circumstances.
I
John Lytle, an Afro-American, worked as a machinist for
Schwitzer Turbochargers, a subsidiary of Household
Manufacturing,
Page 494 U. S. 548
Inc. On August 11, 1983, Lytle asked his supervisor if he could
take a vacation day on Friday, August 12, so that he could see a
doctor. Although his supervisor approved that request, the
supervisor later told Lytle that he was required to work on
Saturday, August 13. Lytle objected because he would be too ill to
work on Saturday. He did not report for work on either day, and the
parties dispute whether he informed his employer of his intention
to be absent both days. Schwitzer classified Lytle's absences as
"unexcused." Under the company's discharge policy, more than eight
hours of unexcused absences within a 12-month period provides
grounds for dismissal. On that basis, Schwitzer fired Lytle.
Lytle filed a complaint with the Equal Employment Opportunity
Commission (EEOC), alleging that he had been treated differently
from white workers who had missed work. At the same time, Lytle
applied for jobs with other employers, several of whom sought
references from Schwitzer. Lytle alleges that his job search was
unsuccessful because Schwitzer provided prospective employers only
with Lytle's dates of employment and his job title.
After receiving a right to sue letter from the EEOC, Lytle filed
this action seeking monetary and injunctive relief under both Title
VII of the Civil Rights Act of 1964, 78 Stat. 253, 42 U.S.C. §
2000e
et seq. (1982 ed.), and 16 Stat. 144, 42 U.S.C. §
1981 (1982 ed.). He alleged that Schwitzer had discharged him
because of his race, and had retaliated against him for filing a
charge with the EEOC by providing inadequate references to
prospective employers. In his complaint, Lytle requested a jury
trial on all issues triable by a jury.
At the beginning of the trial, the District Court dismissed
Lytle's § 1981 claims, concluding that Title VII provided the
exclusive remedy for Lytle's alleged injuries. The District
Page 494 U. S. 549
Court then conducted a bench trial on the Title VII claims.
[
Footnote 1] At the close of
Lytle's case in chief, the court granted Schwitzer's motion to
dismiss the claim of discriminatory discharge pursuant to Federal
Rule of Civil Procedure 41(b) ("After the plaintiff, in an action
tried by the court without a jury, has completed the presentation
of evidence, the defendant, without waiving the right to offer
evidence in the event the motion is not granted, may move for a
dismissal on the ground that upon the facts and the law the
plaintiff has shown no right to relief. The court as trier of the
facts may then determine them and render judgment against the
plaintiff or may decline to render any judgment until the close of
all the evidence"). After both parties had presented all their
evidence, the judge entered a judgment in favor of Schwitzer on the
retaliation claim.
The Court of Appeals affirmed, 831 F.2d 1057 (CA4 1987)
(judgment order), but noted that the dismissal of the § 1981 claims
was "apparently erroneous," because "Title VII and § 1981 remedies
[are] separate, independent and distinct." App. to Pet. for Cert.
7a, n. 2. Nevertheless, it ruled that the District Court's findings
with respect to the Title VII claims collaterally estopped Lytle
from litigating his § 1981 claims, because the elements of a cause
of action under § 1981 are identical to those under Title VII. The
Court of Appeals rejected Lytle's claim that the Seventh Amendment
precluded according collateral estoppel effect to the District
Court's findings, reasoning that the judicial interest in economy
of resources overrode Lytle's interest in relitigating the
Page 494 U. S. 550
issues before a jury. [
Footnote
2] We granted certiorari, 492 U.S. 917 (1989), and now
reverse.
II
The Seventh Amendment preserves the right to trial by jury in
"Suits at common law." Respondent does not dispute that, had the
District Court not dismissed Lytle's § 1981 claims, Lytle would
have been entitled to a jury trial on those claims.
See
Patterson v. McLean Credit Union, 491 U.
S. 164,
491 U. S.
211-212,
491 U. S. 216
(1989) (BRENNAN, J., concurring in judgment in part and dissenting
in part). When legal and equitable claims are joined in the same
action, "the right to jury trial on the legal claim, including all
issues common to both claims, remains intact."
Curtis v.
Loether, 415 U. S. 189,
415 U. S. 196,
n. 11 (1974). Further, had the § 1981 claims remained in the suit,
a jury would have been required to resolve those claims before the
court considered the Title VII claims, because
"only under the most imperative circumstances, circumstances
which, in view of the flexible procedures of the Federal Rules we
cannot now anticipate, can the right to a jury trial of legal
issues be lost through prior determination of equitable
claims."
Beacon Theatres, Inc. v. Westover, 359 U.
S. 500,
359 U. S.
510-511 (1959) (footnote omitted).
Accord, Dairy
Queen, Inc. v. Wood, 369 U. S. 469,
369 U. S. 473
(1962). The Court in
Beacon Theatres emphasized the
importance of the order in which legal and equitable claims joined
in one suit would be resolved because it
"thought that, if an issue common to both legal and equitable
claims was first determined by a judge, relitigation of the issue
before a jury might be foreclosed by
res judicata or
collateral estoppel."
Parklane Hosiery Co., 439 U.S. at
439 U. S.
334.
In
Parklane Hosiery Co., this Court held that
"an equitable determination can have collateral estoppel effect
in a
subsequent legal action and that this estoppel does
not violate
Page 494 U. S. 551
the Seventh Amendment."
Id. at
439 U. S. 335
(emphasis added). In that case, a judgment had already been issued
by a District Court and affirmed on appeal in a suit in which a
jury trial was not constitutionally required. This Court held that
the District Court's resolution of issues in that case collaterally
estopped relitigation of the same issues in a second, separate
action, even though the plaintiff was entitled to a jury trial in
the second action. Respondent argues that this case is governed by
Parklane Hosiery Co., rather than by
Beacon
Theatres, because the District Court made its findings when no
legal claims were pending before it. In respondent's view, if an
appellate court finds that a trial court's dismissal of legal
claims was erroneous and remands the legal claims to the trial
court, that case would in effect constitute a separate action, and
therefore be subject to collateral estoppel under
Parklane
Hosiery Co.
We are not persuaded. Only the District Court's erroneous
[
Footnote 3] dismissal of the §
1981 claims enabled that court to resolve
Page 494 U. S. 552
issues common to both claims, issues that otherwise would have
been resolved by a jury. But for that erroneous ruling, this case
would be indistinguishable from
Beacon Theatres and
Dairy Queen. It would be anomalous to hold that a district
court may not deprive a litigant of his right to a jury trial by
resolving an equitable claim before a jury hears a legal claim
raising common issues, but that a court may accomplish the same
result by erroneously dismissing the legal claim. Such a holding
would be particularly unfair here, because Lytle was required to
join his legal and equitable claims to avoid the bar of
res
judicata. See Harnett v. Billman, 800 F.2d 1308, 1315
(CA4 1986) (holding that prior adjudication barred a claim that
arose out of the same transactions and that could have been raised
in prior suit).
Our conclusion is consistent with this Court's approach in cases
involving a wrongful denial of a petitioner's right to a jury trial
on legal issues. In such cases, we have never accorded collateral
estoppel effect to the trial court's factual
Page 494 U. S. 553
determinations. Instead, we have reversed and remanded each case
in its entirety for a trial before a jury.
See Meeker v.
Ambassador Oil Corp., 375 U. S. 160
(1963) (per curiam) (reversing trial court's decision to try
equitable claims first, and thereby to bar jury trial on legal
claims that relied on the same facts);
Tull v. United
States, 481 U. S. 412
(1987) (reversing and remanding claims for monetary penalties and
injunctive relief because trial court improperly denied plaintiff a
jury trial on the claims for monetary penalties);
Granfinanciera, S. A. v. Nordberg, 492 U. S.
33 (1989) (reversing and remanding Bankruptcy Court's
judgment because petitioners were denied a jury trial and according
no weight to trial judge's factual findings).
Furthermore, the purposes served by collateral estoppel do not
justify applying the doctrine in this case. Collateral estoppel
protects parties from multiple lawsuits and the possibility of
inconsistent decisions, and it conserves judicial resources.
Montana v. United States, 440 U.
S. 147,
440 U. S.
153-154 (1979). Application of collateral estoppel is
unnecessary here to prevent multiple lawsuits, because this case
involves one suit in which the plaintiff properly joined his legal
and equitable claims. Moreover, our refusal to apply collateral
estoppel does not dissipate judicial resources in "needless
litigation" over previously resolved issues,
Parklane Hosiery
Co., 439 U.S. at
439 U. S. 326.
Although our holding requires a new trial in this case, we view
such litigation as essential to vindicating Lytle's Seventh
Amendment rights. The relitigation of factual issues before a jury
is no more "needless" in this context than in cases in which a
trial court erroneously concludes that a claim is equitable, rather
than legal,
see, e.g., Dairy Queen, Inc. v. Wood,
369 U. S. 469
(1962), or that resolution of an equitable claim can precede
resolution of a legal claim,
see, e.g., Beacon Theatres, Inc.
v. Westover, 359 U. S. 500
(1959). In all of these circumstances, relitigation is the only
mechanism that can completely correct the error of the court below.
Thus, concern about judicial economy,
Page 494 U. S. 554
to the extent that it supports respondent's position, remains an
insufficient basis for departing from our longstanding commitment
to preserving a litigant's right to a jury trial.
III
Respondent argues that, notwithstanding our resolution of the
collateral estoppel issue, we should affirm the Court of Appeals'
judgment because the record indicates that the District Court would
have directed a verdict in favor of respondent on the § 1981 claims
even if those claims had been litigated before a jury. This
argument is not compelling with respect to either the
discriminatory discharge claim or the retaliation claim.
Pursuant to Federal Rule of Civil Procedure 41(b), the District
Court dismissed the Title VII claim relating to allegations of
discriminatory discharge. After making several factual findings on
the basis of evidence adduced by Lytle, Tr. 258, the court
concluded that he had not established a
prima facie case.
Id. at 259. Respondent contends that this ruling
establishes that the court would also have directed a verdict
against Lytle on his similar § 1981 claim, because that claim
required proof of the same
prima facie case.
Respondent's reasoning ignores the important distinction between
a dismissal under Rule 41(b) and a directed verdict under Rule
50(a). Rule 41(b) allows the court, "as trier of the facts," to
determine the facts and the law "and render judgment against the
plaintiff or . . . decline to render any judgment until the close
of all the evidence." In contrast, in considering a motion for a
directed verdict, the court does not weigh the evidence, but draws
all factual inferences in favor of the nonmoving party.
Anderson v. Liberty Lobby, Inc., 477 U.
S. 242,
477 U. S. 255
(1986) ("Credibility determinations, the weighing of the evidence,
and the drawing of legitimate inferences from the facts are jury
functions, not those of a judge. . . . The evidence of the
nonmovant is to be believed, and all justifiable inferences are to
be drawn in his
Page 494 U. S. 555
favor"). Thus, although a court might, after reviewing the
evidence, decide in favor of the party moving for a dismissal under
Rule 41(b), that court might not take the same case away from the
jury, because it might believe that the jury could reasonably find
for the nonmoving party. The District Court's observation that
Lytle's interpretation of the evidence supporting his
discriminatory discharge claims was "reasonable," Tr. 253, supports
our conclusion that that court would not necessarily have granted a
directed verdict on Lytle's similar § 1981 claim.
Respondent's argument with respect to Lytle's allegations of
retaliation is even further off-base. The District Court declined
to dismiss the retaliation claim, finding that Lytle had adduced
some evidence of disparate treatment, Tr. 256, 257, and required
respondent to present evidence on that issue. After both parties
presented closing statements, the court found no evidence of
discrimination on the part of respondent,
id. at 301, and
then entered a judgment in respondent's favor. Nothing in the
record indicates that the court reached the only reasonable
conclusions, or that a jury could not have found the facts
differently and entered a different verdict. As we have long
recognized, a jury and a judge can draw different conclusions from
the same evidence.
See, e.g., 84 U. S. v.
Stout, 17 Wall. 657,
84 U. S. 664
(1874). Thus, we are not convinced that the District Court would
have granted a motion for a directed verdict on Lytle's § 1981
claim concerning retaliation.
We decline to extend
Parklane Hosiery Co., supra, and
to accord collateral estoppel effect to a district court's
determinations of issues common to equitable and legal claims where
the court resolved the equitable claims first solely because it
erroneously dismissed the legal claims. To hold otherwise would
seriously undermine a plaintiff's right to a jury trial under the
Seventh Amendment. We therefore vacate
Page 494 U. S. 556
the judgment of the Fourth Circuit, vacate the decision of the
District Court with respect to Lytle's Title VII claims, [
Footnote 4] and remand for proceedings
consistent with this opinion.
It is so ordered.
[
Footnote 1]
Under Fourth Circuit precedent, a plaintiff does not have a
right to a jury trial on a Title VII claim.
See Keller v.
Prince George's County, 827 F.2d 952, 955 (1987). This Court
has not ruled on the question whether a plaintiff seeking relief
under Title VII has a right to a jury trial.
See Chauffeurs,
Teamsters and Helpers v. Terry, post at
494 U. S. 572.
Because Lytle does not argue that he was entitled to a jury trial
on his Title VII claims, we express no opinion on that issue here.
Instead, we assume for purposes of this opinion that he has no such
right.
[
Footnote 2]
The Fourth Circuit's decision to apply collateral estoppel in
this situation directly conflicts with the Seventh Circuit's
decision in
Hussein v. Oshkosh Motor Truck Co., 816 F.2d
348 (1987).
[
Footnote 3]
Respondent argues that dismissal of Lytle's § 1981 claims was
not erroneous, because Lytle's allegations do not state § 1981
claims in light of this Court's decision in
Patterson v. McLean
Credit Union, 491 U. S. 164
(1989). Under our Rules, "[o]nly the questions set forth in the
petition, or fairly included therein, will be considered by the
Court." This Court's Rule 14. 1(a). The question of
Patterson's effect on Lytle's claims is not even remotely
related to the question on which we granted certiorari.
See Pet. for Cert. i ("Did the Fourth Circuit correctly
hold that district court violations of the Seventh Amendment are
unreviewable by the appellate courts if the trial judge, after
violating the Amendment by refusing to empanel a jury, compounds
that constitutional infraction by deciding himself the very factual
issue which should have been presented to and decided by a
jury?").
Respondent nonetheless contends that, whether or not the
Patterson issue is fairly included in the question
presented, the Court can consider its argument because, as the
prevailing party below, it may
"defend its judgment on any ground properly raised below whether
or not that ground was relied upon, rejected, or even considered by
the District Court or the Court of Appeals."
Washington v. Yakima Indian Nation, 439 U.
S. 463,
439 U. S. 476,
n. 20 (1979). The argument that the allegations of discriminatory
discharge and retaliation did not concern conduct within the scope
of § 1981 as defined by
Patterson, however, was not
presented to either court below, nor is it supported by arguments
in the record. We therefore find nothing in the record to justify
affirming the Fourth Circuit's judgment on the ground that Lytle
has not stated a cause of action under § 1981.
Respondent also argues that, because
Patterson was
decided after Lytle filed his petition for a writ of certiorari,
but before we granted the petition, the Court can consider that
decision's effect on Lytle's § 1981 claims. In other words,
respondent claims that the intervening decision is an extraordinary
circumstance that justifies departing from our Rules. We are not
persuaded that an exception is warranted in this case. Applying our
analysis in
Patterson to the facts of a particular case
without the benefit of a full record or lower court determinations
is not a sensible exercise of this Court's discretion.
See
Blonder-Tongue Laboratories, Inc. v. University of Illinois
Foundation, 402 U. S. 313,
402 U. S. 320,
n. 6 (1971);
Sure-Tan, Inc. v. NLRB, 467 U.
S. 883,
467 U. S. 896,
n. 7 (1984).
Cf. Piccirillo v. New York, 400 U.
S. 548 (1971) (dismissing a writ of certiorari as
improvidently granted because both parties agreed that an
intervening state court judgment rendered any decision by this
Court meaningless). On remand, the Fourth Circuit should consider
the impact of
Patterson on Lytle's § 1981 claims.
[
Footnote 4]
Vacating the District Court's determination regarding Lytle's
Title VII claims is required to afford Lytle complete and
consistent relief. Had his § 1981 claims not been dismissed, the
jury's determination of legal and factual issues could not have
been disregarded when the District Court considered his equitable
claims. Moreover, vacating the District Court's judgment avoids the
possibility of inconsistent determinations.
See Montana v.
United States, 440 U. S. 147,
440 U. S. 154
(1979) (noting that inconsistent decisions pose threat of
diminishing reliance on the judiciary).
JUSTICE O'CONNOR, with whom JUSTICE SCALIA joins,
concurring.
I join the Court's opinion, but write separately to note what
the Court acknowledges in the last sentence of a footnote,
see
ante at
494 U. S.
551-552,
n 3: that
the question whether petitioner has stated a valid claim under §
1981 remains open. In the District Court, petitioner claimed that
respondent had fired him because of his race and retaliated against
him for filing a charge of discrimination with the Equal Employment
Opportunity Commission.
Ante at
494 U. S. 548.
As
Patterson v. McLean Credit Union, 491 U.
S. 164 (1989), was decided after the Court of Appeals
issued its decision, the applicability of § 1981 to these claims
was not specifically addressed. This Court's usual practice is to
decline to address questions raised for the first time here.
See United States v. Mendenhall, 446 U.
S. 544,
446 U. S.
551-552, n. 5 (1980);
Youakim v. Miller,
425 U. S. 231,
425 U. S. 234
(1976). The Court adheres to this practice, noting that arguments
based on
Patterson neither were "presented to either court
below" nor are to be found "in the record."
Ante at
494 U. S. 552,
n. 3. The Court correctly concludes that there is "therefore . . .
nothing in the record to justify affirming the Fourth Circuit's
judgment" at this juncture.
Ibid. On remand, therefore,
the parties will have ample
Page 494 U. S. 557
opportunity to present arguments, and the lower courts will have
the first opportunity to consider whether either of petitioner's
charges relates to the formation or enforcement of a contract, the
two types of claims actionable under § 1981,
Patterson,
supra, at
491 U. S.
176-178, or relates only to "post-formation conduct
unrelated to an employee's right to enforce [his] contract."
Id. at
491 U. S.
180.