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Finkelstein v. Capuano

decided: May 29, 1986.


Appeal from a judgment of the United States District Court for the Southern District of New York, Hon. Nina Gershon, United States Magistrate, dismissing plaintiff's civil rights complaint. Reversed and remanded.

Author: Pratt

Before: MANSFIELD, PIERCE, and PRATT, Circuit Judges.

PRATT, Circuit Judge :

After prevailing in a state court proceeding brought under Article 78 of the New York Civil Practice Law and Rules ("CPLR") in which he sought, in addition to having his prison records expunged of all reference to an earlier disciplinary proceeding, a reinstatement of his prisoner benefits and the return of property taken from his prison cell by challenging the procedures followed in his prison disciplinary proceeding, Ronald Finkelstein amended his complaint in this federal action brought under 42 U.S.C. § 1983 to assert similar claims, but seeking only damages. On consent of the parties the case was referred to United States Magistrate Nina Gershon, who dismissed the amended complaint on the ground that Finkelstein's failure to raise his § 1983 damage claims in the prior Article 78 proceeding barred this action under the doctrine of res judicata. Because Finkelstein could not properly have obtained in the state court Article 78 proceeding the damage relief he seeks here, we hold that his present action is not barred by res judicata. Accordingly, we reverse and remand for further proceedings.


In June 1978, while incarcerated at the Green Haven Correctional Facility in Stormville, New York, Finkelstein commenced an Article 78 proceeding (first Article 78 proceeding) alleging that a Green Haven employee had negligently disbursed funds from his inmate account. In September 1978, shortly after a decision was rendered in that proceeding, prison officials charged Finkelstein in a misbehavior report with fraud. Upon Finkelstein's plea of not guilty, the superintendent commenced a disciplinary proceeding to determine the validity of the charge. After two days of hearings Green Haven's deputy superintendent for administration, Clement Capuano, issued a final report on October 10, 1978, finding Finkelstein guilty as charged.

In the meantime, Finkelstein had commenced a civil rights action in the United States District Court for the Southern District of New York, naming as defendants Capuano and two other Green Haven employees, Sunny Shriver and Catherine Keane. While that federal complaint, which alleged that the superintendent's disciplinary proceeding had been commenced in retaliation for Finkelstein's first Article 78 proceeding, was still pending, Finkelstein commenced a new Article 78 proceeding (second Article 78 proceeding) seeking an order in the nature of mandamus compelling defendant Harris, the superintendent of Green Haven, and Richard O. Hongisto, the acting commissioner of correctional services, to vacate and set aside Capuano's October 10 decision on the ground that the superintendent's proceeding had been conducted in violation of Finkelstein's due process rights.

To determine the merits of Finkelstein's second Article 78 proceeding, a hearing was held in Supreme Court, Dutchess County, before Acting Supreme Court Justice Raymond E. Aldrich, Jr., who on January 31, 1979, issued a written decision finding: (1) that Finkelstein had not been afforded the opportunity to make a statement at the superintendent's proceeding; (2) that defendant Capuano had failed to consider documentary evidence offered by Finkelstein; and (3) that the respondents in the second Article 78 proceeding, including defendant Harris, had failed to act in accordance with established state procedures. Justice Aldrich concluded that Finkelstein had been denied his constitutional right to due process of law and ordered that the findings of the superintendent's hearing be set aside and that Finkelstein's records be expunged of any reference to the October disciplinary proceedings.

Finkelstein then sought leave to amend his federal court complaint to include allegations concerning Justice Aldrich's disposition of his second Article 78 proceeding. Leave to amend was granted in June 1979 and, after the case was referred to Magistrate Gershon and counsel was appointed to aid Finkelstein, a second amended complaint was filed on October 29, 1984, substituting David Harris, superintendent of Green Haven, and Joseph Keenan, deputy superintendent for security at Green Haven, as defendants for original defendants Shriver and Keane. That complaint which is the subject of this appeal, abandoned the original retaliation claim, and instead alleged the same factual circumstances that gave rise to the second Article 78 proceeding, asserting that Finkelstein had been deprived of his fourteenth amendment right to procedural due process of law. As a proximate result of this deprivation, Finkelstein claimed that from October 10, 1978 through January 31, 1979, he was precluded from receiving or purchasing various supplies, was prevented from sending money to his attorney or his common-law wife for support, and was wrongfully transferred, first to Auburn Correctional Facility, and then to Clinton Correctional Facility, for all of which Finkelstein sought $25,000 compensatory damages, punitive damages, and attorneys' fees.

Based on the favorable determination of his second Article 78 proceeding, Finkelstein moved in this federal civil rights damage action for partial summary judgment on liability. Defendants cross-moved for summary judgment on the ground, inter alia, that plaintiff's failure to assert his § 1983 damage claim in the second Article 78 proceeding precluded him from pursuing that relief here. The magistrate agreed with defendants and, holding that plaintiff's § 1983 claim was barred under New York's law of res judicata, dismissed the complaint. This appeal followed, presenting squarely the issue of whether under New York law the judgment in an Article 78 proceeding precludes a later civil rights claim for damages based on the same underlying facts.


I. General Principles.

The full faith and credit clause of the Constitution of the United States requires a federal court to give the same preclusive effect to a state court judgment as would be given in the state in which it was rendered. Migra v. Warren City School District, 465 U.S. 75, 81, 104 S. Ct. 892, 896 (1984); see also 28 U.S.C. § 1738. New York courts have adopted the "transactional approach" to res judicata, holding that if claims arise out of the same "factual grouping" they are deemed to be part of the same cause of action and the later claim will be barred without regard to whether it is based upon different legal theories or seeks different or additional relief. Smith v. Russell Sage College, 54 N.Y.2d 185, 192-93, 445 N.Y.S.2d 68, 71 (1981); see also O'Brien v. City of Syracuse, 54 N.Y.2d 353, 357, 445 N.Y.S.2d 687, 688 (1981); Reilly v. Reid, 45 N.Y.2d 24, 27, 407 N.Y.S.2d 645, 647 (1978).

This bar against later claims based upon the same cause of action is, however, subject to certain limitations, one of which is that it will not be applied if the initial forum did no have the power to award the full measure of relief sought in the later litigation. Heimbach v. Chu, 744 F.2d 11, 14 (2d Cir. 1984), cert. denied, 105 S. Ct. 1842 (1985); see McLearn v. Cowen & Company, 48 N.Y.2d 696, 698, 422 N.Y.S.2d 60, 61 (1979); Salwen Paper Co., Profit Sharing Retirement Trust v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 72 A.D.2d 385, 391, 424 N.Y.S.2d 918, 922 (2d Dep't 1980). Where "formal barriers" to asserting a claim existed in the first forum it would be "unfair to preclude [the plaintiff] from a second action in which he can present those phases of the claim which he was disabled from presenting in the first." Restatement (Second) of Judgments § ...

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