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DeGUELLE v. CAMILLI
MICHAEL J. DeGUELLE, Plaintiff,
v.
KRISTIN J. CAMILLI, MARK H. ECKHARDT, GAYLE P. KOSTERMAN, ROBERT S. RANDLEMAN, DANIEL J. WENZEL, and S.C. JOHNSON & SON, INC., Defendants.
Case No. 10-CV-103-JPS.
United States District Court, E.D. Wisconsin.
May 29, 2012.
Michael J DeGuelle, Plaintiff, represented by R Douglas Rees, Jenner & Block LLP.
ORDERJ.P. STADTMUELLER, District Judge. This matter comes before the Court on a motion for summary judgment filed by the defendants, S.C. Johnson & Son, Inc. ("S.C. Johnson") and several of its employees, on March 1, 2012, after the Seventh Circuit reversed and remanded the Court's prior dismissal of the action. (Docket #25). The action stems from the defendants' firing of the plaintiff, Michael DeGuelle, a former employee of S.C. Johnson's accounting department who publicly made allegations that S.C. Johnson had engaged in tax fraud. (Compl.) S.C. Johnson filed suit against DeGuelle in state court for defamation, and DeGuelle counterclaimed; after that case was decided—unfavorably for DeGuelle—the defendants moved for summary judgment based upon issue preclusion and claim preclusion principles. (Docket #38). With the benefit of the parties' submissions, together with the analysis which follows, the defendants' motion will be granted. 1. BACKGROUND As mentioned above, this dispute stems from DeGuelle's allegations that S.C. Johnson engaged in tax fraud. (Compl.). After DeGuelle made that accusation, he was fired. (Compl.). This core set of facts—recounted in greater detail below—spawned two lawsuits, one in state court and one in federal court (the matter at hand). (See, e.g., DPFF ¶ 5). Further, DeGuelle has appealed the outcome of the state case, and the appeal is currently pending; the federal case was reversed by the Seventh Circuit on appeal and remanded to this Court following our prior dismissal of the action (Docket #11, #25). Given these multiple and complex strands of intertwining litigation, the Court will recount the factual background and other court proceedings that have occurred in considerable detail. 1.1 Factual Background DeGuelle was employed by S.C. Johnson in its tax department from 1997 until 2009. (DPFF ¶ 4). DeGuelle alleges that, during his employment with S.C. Johnson, he witnessed a number of acts of tax fraud, dating back as far as 1998, which were approved by Robert Randleman and Daniel Wenzel. (PPFF ¶¶ 55-68).1 Finally, in late 2007 and early 2008, DeGuelle met with Kristin Camilli, S.C. Johnson's Director of Human Resources, and informed her of the alleged tax fraud and also that he had received threats from Wenzel as a result of objecting to the company's tax practices. (PPFF ¶¶ 69-72 (disputed)).
1. The legality of S.C. Johnson's actions (and whether those actions did, in fact, occur) is of no importance to the Court's consideration of the defendants' motion for summary judgment. Therefore, at this stage of litigation, it suffices for the Court to simply state that DeGuelle has "alleged" several acts of tax fraud. Similarly, the Court's description of DeGuelle's intra-company notification of the alleged fraud is ultimately irrelevant to the motion at hand; as such, despite DeGuelle's alleged facts being wholly conclusory, the Court will set forth those alleged facts in order to provide as much depth and background to this story as possible. In such instances, the Court has noted, parenthetically, that such facts remain "disputed."
2. At this point, the Court should note that it does not hold any opinion on the decision of the state court judge to refuse to make a procedural exception for DeGuelle. DeGuelle, while not a lawyer, is certainly a well-educated individual who should be able to follow instructions, retain a new and knowledgeable lawyer, or at the very least to inquire into the proper procedure he should follow. The proof of this is in the pudding: if DeGuelle was able to spot potential tax inaccuracies, he is certainly a detail-oriented enough individual to make a good faith effort to comply with standard court practice—if prison inmates with limited access to court materials can do it, then certainly an individual holding himself out to be a certified public accountant can.
This Court sympathizes with the state court judge. Throughout the course of this litigation, DeGuelle's actions have been somewhat perplexing, from his apparent inability to retain a lawyer to his direct contacting of this Court via letter to dispute alleged facts (Docket #52) in spite of the problems that sort of action caused him at the state court. At some point in litigation, the font of goodwill and understanding from judge to litigant is bound to run dry—thus, this Court, not being aware of the events preceding the state court judge's decision, cannot begin to fault the state court judge.
This Court cannot pass upon the actions of the state court judge; rather, it passes only upon whether the procedure he conducted should be sufficient to preclude DeGuelle from arguing his case before this Court.
3. After reviewing the case law, the Court has concluded that it can pass upon the preclusive nature of the state trial court's ruling, despite the pending state court appeal. It is sometimes "sensible to stay proceedings until an earlier filed state case has reached a conclusion." Rogers v. Desiderio, 58 F.3d 299, 302 (7th Cir. 1995) (citing Colorado River Water Conservation District v. United States, 424 U.S. 800, 817-21, 96 S.Ct. 1236, 1246-48, 47 L.Ed.2d 483 (1976)); LaDuke v. Burlington Northern R.R., 879 F.2d 1556 (7th Cir. 1989); Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 16, 25-26, 103 S.Ct. 927, 941-42, 74 L.Ed.2d 765 (1983); Gonzalez v. Cruz, 926 F.2d 1 (1st Cir. 1991); Interstate Material Corp. v. Chicago, 847 F.2d 1285 (7th Cir. 1988); Telesco v. Telesco Fuel & Masons' Materials, Inc., 765 F.2d 356 (2d Cir. 1985). But here, because the Court ultimately concludes that this action is not barred by issue or claim preclusion as to some individuals, it will not temporarily delay this case; the action has been pending for over two years at this point—it is nigh time for it to conclude. The Court's decision is also consistent with Wisconsin law on the preclusion issue, which the Court must follow, Allen v. McCurry, 449 U.S. 90, 95-96, 101 S.Ct. 411, 66 L.Ed.2d 308 (1980), and which holds that a pending appeal does not deprive the lower court judgment of its preclusive effect. Town of Fulton v. Pomeroy, 111 Wis. 663, 87 N.W. 831, 833 (1901); see also Kaprelian v. Bowers, 11-CV-1582, 2012 WL 70180 (7th Cir. Jan. 10, 2012); Virnich v. Vorwald, 664 F.3d 206, 215-16 (7th Cir. 2011); Vince v. Randy Iten Chevrolet, Inc., 02-C-0088-C, 2002 WL 32350054 (W.D. Wis. Dec. 5, 2002); Omernick v. La Rocque, 406 F.Supp. 1156, 1160 (W.D. Wis. 1976).
4. That case, an anti-trust action, holds that litigation should not be viewed as a "sham" when it is successful; while this case is not directly applicable to the situation at hand, the Court views it as both instructive and logical—an employer should not be deemed to be retaliating against an employee when the employer files a suit to stop what is ultimately determined to be unlawful activity). In a later case, involving alleged employer retaliation, the D.C. Circuit stated that "on proof of retaliation, employer suits that are better than baseless ... may evidently be classified as sham litigation after the employer-plaintiff loses," but otherwise adopted Prof'l Real Estate Investors, thus implying that, if the employer succeeds in its action, the suit should not be viewed as a retaliatory act. Petrochem Insulation, Inc. v. N.L.R.B., 240 F.3d 26, 32 (D.C. Cir. 2001) (citing Prof'l Real Estate Investors, 508 U.S. at 59-61; Bill Johnson's Restaurants, Inc. v. N.L.R.B. 461 U.S. 731, 741, 747 (1983)).
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