Res judicata: the doctrine of collateral estoppel, or issue preclusion, is firmly embedded in both federal and California common law. It is grounded on the premise that “once an issue has been resolved in a prior proceeding, there is no further fact-finding function to be performed.” (Parklane Hosiery Co. v. Shore (1979) 439 U.S. 322, 336, fn. 23.) “Collateral estoppel . . . has the dual purpose of protecting litigants from the burden of relitigating an identical issue with the same party or his privy and of promoting judicial economy, by preventing needless litigation.” (Id. at p. 326, fn. omitted.); collateral estoppel is a distinct aspect of res judicata. “ ‘The doctrine of res judicata gives conclusive effect to a former judgment in subsequent litigation between the same parties involving the same cause of action. A prior judgment for the plaintiff results in a merger and supersedes the new action by a right of action on the judgment. A prior judgment for the defendant on the same cause of action is a complete bar to the new action. (4 Witkin, Cal. Procedure (2d ed. 1971) Judgment, §§ 147-148, pp. 3292-3293.) Collateral estoppel . . . involves a second action between the same parties on a different cause of action. The first action is not a complete merger or bar, but operates as an estoppel or conclusive adjudication as to such issues in the second action which were actually litigated and determined in the first action. (Id., § 197, at p. 3335.)’ (Preciado v. County of Ventura (1982) 143 Cal.App.3d 783, 786-787, fn. 2.)” (Rymer v. Hagler (1989) 211 Cal.App.3d 1171, 1178 (Rymer)); it is settled that the doctrine of collateral estoppel or issue preclusion is applicable to final decisions of administrative agencies acting in a judicial or quasi-judicial capacity. (See Astoria Federal S. & L. Assn. v. Solimino (1991) 501 U.S. 104, 107 [extending the doctrine to the final adjudications of both state and federal agencies]; United States v. Utah Constr. Co. (1966) 384 U.S. 394, 421-422 (Utah Constr. Co.); People v. Sims (1982) 32 Cal.3d 468, 479 (Sims); French v. Rishell (1953) 40 Cal.2d 477, 480‑481; Knickerbocker v. City of Stockton (1988) 199 Cal.App.3d 235, 242.) As we explained in McDonald v. Antelope Valley Community College Dist. (2008) 45 Cal.4th 88, judicial exhaustion “may arise when a party initiates and takes to decision an administrative process—whether or not the party was required, as a matter of administrative exhaustion, to even begin the administrative process in the first place. Once a decision has been issued, provided that decision is of a sufficiently judicial character to support collateral estoppel, respect for the administrative decisionmaking process requires that the prospective plaintiff continue that process to completion, including exhausting any available judicial avenues for reversal of adverse findings. (Johnson v. City of Loma Linda (2000) 24 Cal.4th 61, 69-72.) Failure to do so will result in any quasi-judicial administrative findings achieving binding, preclusive effect and may bar further relief on the same claims. (Id. at p. 76.)” (McDonald, supra, at p. 113.)
This court has further explained that “indicia of administrative proceedings undertaken in a judicial capacity include a hearing before an impartial decision maker; testimony given under oath or affirmation; a party’s ability to subpoena, call, examine, and cross-examine witnesses, to introduce documentary evidence, and to make oral and written argument; the taking of a record of the proceeding; and a written statement of reasons for the decision.” (Pacific Lumber Co. v. State Water Resources Control Bd. (2006) 37 Cal.4th 921, 944 (Pacific Lumber)); in short, this case involves a variation of the usual factual pattern that implicates the doctrine of collateral estoppel and its corollary principle of judicial exhaustion. The AIR 21 statutory scheme afforded Murray an absolute right to a full de novo trial-like hearing before an ALJ, a hearing we find would fully comport with the requirements set forth in Pacific Lumber for establishing that the administrative proceedings were “undertaken in a judicial capacity.” (Pacific Lumber, supra, 37 Cal.4th at p. 944); the high court has explained that the focus of our inquiry should be on whether the party against whom issue preclusion is being sought had “an adequate opportunity to litigate” the factual finding or issue in the prior administrative proceeding. (Utah Constr. Co., supra, 384 U.S. at p. 422.) We followed Utah Constr. Co. in Sims, supra, 32 Cal.3d 468, 479, commenting that “this standard formulated by the Supreme Court is sound . . . .” Appellate courts of this state have followed suit, likewise recognizing that “it is the opportunity to litigate that is important in these cases, not whether the litigant availed himself or herself of the opportunity. (Teitelbaum Furs, Inc. v. Dominion (1962) 58 Cal.2d 601, 607 . . . .)” (Rymer, supra, 211 Cal.App.3d at p. 1179, [no showing complainant was denied opportunity to present relevant evidence in administrative proceeding]; see also Castillo v. City of Los Angeles (2001) 92 Cal.App.4th 477, 482 [same]); the hearing officer concluded the agency had jurisdiction to hear the case, and that the County, through its inaction, had failed to meet its burden of proving welfare fraud. The director of the DSS adopted the hearing officer’s result. The County neither requested a rehearing nor sought judicial review of the agency’s decision. (Ibid.)
Thereafter, in the criminal proceeding, the superior court applied the doctrine of collateral estoppel to dismiss the criminal charges against the respondent. We affirmed on appeal, concluding that the agency’s determination of an issue (welfare fraud) common to both the administrative and criminal proceedings could properly be accorded collateral estoppel effect in the later criminal prosecution because the traditional requirements and policy reasons for applying collateral estoppel had been satisfied. The administrative hearing was a quasi-judicial adversarial proceeding, since the administrative agency resolved disputed issues of fact properly before it, and since the hearing process provided both parties with an adequate opportunity to fully litigate the issues underlying their claims. Although the hearing was not conducted according to the rules of evidence applicable to judicial proceedings, we found this distinction did not preclude a finding that the administrative agency was acting in a quasi-judicial capacity. The welfare fraud issue litigated in the administrative proceeding was identical to that involved in the criminal prosecution. (Sims, supra, 32 Cal.3d at pp. 484-489.) We further found that the public policy considerations underlying the doctrine were satisfied, in that according the administrative agency’s final decision collateral estoppel effect promoted judicial economy, avoided the possibility of inconsistent judgments, and protected the accused from harassment through repetitive litigation. (Ibid.); a determination may be based on a failure of . . . proof . . . . (Rest.2d, Judgments (1982) § 27, com. d, p. 255); it is the opportunity to litigate that is important in these cases, not whether the litigant availed himself or herself of the opportunity.) (Rymer, supra, 211 Cal.App.3d at p. 1179); (Vandenberg v. Superior Court (1999) 21 Cal.4th 815, 829; see also Rest.2d Judgments, § 28(1), p. 273 [issue preclusion will not apply if the party to be precluded could not, as a matter of law, obtain review]); this court’s decision in Johnson v. City of Loma Linda (2000) 24 Cal.4th 61 (Johnson) explains that unless a party to “a quasi-judicial administrative agency proceeding” exhausts available judicial remedies to challenge the adverse findings made in that proceeding, those findings may be binding in later civil actions. (Id. at p. 65.); the Ninth Circuit’s cases are also in accord. (See, e.g., Eilrich v. Remas (9th Cir. 1988) 839 F.2d 630, 632, quoting Plaine v. McCabe (9th Cir. 1986) 797 F.2d 713, 719, fn. 12 [“ If an adequate opportunity for review is available, a losing party cannot obstruct the preclusive use of the state administrative decision simply by forgoing the right to appeal.”]); but we went on to explain that Johnson was distinguishable from the matter there before us, because “here . . . we have specific statutory language suggesting that adverse findings by the State Personnel Board are not binding in a subsequent Government Code section 8547.8, subdivision (c) damages action . . . .” (State Bd. of Chiropractic Examiners v. Superior Court, at p. 976.) We explained further that “the Legislature expressly authorized a damages action in superior court for whistleblower retaliation, and in doing so it expressly acknowledged the existence of the parallel administrative remedy. It did not require that the board’s findings be set aside by way of a mandate action; rather, it gave as the only precondition to the damages action authorized in Government Code section 8547.8, subdivision (c), that a complaint be filed with the board and that the board ‘issue, or fail to issue, findings.’ (Ibid.) The bareness of this statutory language suggests that the Legislature did not intend the State Personnel Board’s findings to have a preclusive effect against the complaining employee.” (State Bd. of Chiropractic Examiners v. Superior Court, at p. 976.)
Here, in contrast to State Bd. of Chiropractic Examiners v. Superior Court, there is no language in the AIR 21 statute suggesting Congress intended that conclusive findings made by the Secretary in a final nonappealable order should not have preclusive effect in a subsequent state court action; considerations of comity and federalism further support application of the doctrine of collateral estoppel in this case. The AIR 21 whistleblower statute offers complainants strong incentives to invoke the administrative remedies as an alternative to a court action. If the Secretary finds a statutory violation, she must provide relief that includes immediate reinstatement with back pay and other compensatory damages (§ 42121(b)(3)(B)). By choosing to proceed under the AIR 21’s federal administrative whistleblower protection scheme, Murray availed himself of these distinct advantages. To allow him to relitigate the factual issue of causation decided against him in the Secretary’s final nonappealable order in this subsequent court action between the same parties would reduce the AIR 21 statutory scheme to a mere “rehearsal for litigation” (Johnson, supra, 24 Cal.4th at p. 72) should the complainant not prevail (Cal. S. Ct., 23.08.10, Murray v. Alaska Airlines, S162570).