In
England v. Louisiana Board of Medical Examiners, 375
U.S. 411,
The first issue presented in this appeal, not precisely addressed in England, is whether a federal court plaintiff, who brings his state law issues to state court prior to federal abstention, can still reserve his federal issues and return later to federal court. The second issue addressed is the preclusive effect to be given to the state court decisions in the present case, assuming the England reservation preserved plaintiffs right to return to federal court.
I.
Appellant Melvin Wicker was appointed to a four-year term as Superintendent of Schools and Secretary of the Board of Education for Knott County, Kentucky, beginning July 1, 1980. The incumbent superintendent, Simeon Fields, resigned on May 30 and Wicker assumed office a month early. The school district then had financial problems at least partially caused by overstaffing. Wicker asserted in the state proceedings that he could not resolve the over-staffing problem because superintendent Fields had failed to send nonrenewal notices by a statutory deadline of April 30, 1980.
The record indicates that Wicker operated in an environment of considerable political controversy. A few months after taking office, Wicker had a disagreement with R.B. Singleton, the high school principal and an unsuccessful candidate for Wicker’s position. That disagreement resulted in Singleton’s termination and subsequent lawsuit against Wicker and the Board. Dissatisfied teachers and unsuccessful applicants for school staff positions filed other lawsuits.
This political unrest coincided with the reelection campaigns of three Board members. The three successful candidates, whom Wicker had not supported, took office in January 1981 and constituted a new Board majority. The Board filed charges against Wicker on February 17, 1981, and conducted hearings on the charges during March and April of 1981. It found that twelve of the charges against Wicker were true and it subsequently fired him.
Wicker filed legal actions first in federal district court and thereafter in Knott County Kentucky Circuit Court. Wicker alleged in his federal suit that defendant Board members and their attorney had infringed upon his constitutional rights in violation of 42 U.S.C. § 1983. Specifically, Wicker charged that (1) he was denied procedural and substantive due process because he was removed without a fair hearing and without legal cause, (2) the removal deprived him of first amendment rights because it was in reprisal for protected political activity, (3) the defendants conspired to remove him because of his participation in other lawsuits, and (4) Ky.Rev.Stat. § 160.-350 (governing removal of school superintendents) 1 is unconstitutional because it does not provide a fair hearing prior to discharge. After Wicker filed in state court but before that court had taken any action, the federal court abstained. 2
*445 Promptly following the abstention order, Wicker filed in Knott County Circuit Court a reservation of federal issues: “The plaintiff intends, to return to the federal court for disposition of these issues, and he does not submit them for litigation in the state court.” Wicker specifically listed the issues reserved, including his substantive and procedural due process claims, his first amendment claims, and his claim that Ky. Rev.Stat. § 160.350 was unconstitutional.
Upon Wicker’s return, the federal court concluded that Wicker was barred by lack of standing from raising his claim that Ky.Rev.Stat. § 160.350 was unconstitutional. Wicker does not appeal that determination. The court also found that Wicker’s remaining claims were precluded by the state court decisions. Wicker now seeks reversal of the district court’s order granting summary judgment to defendants on those claims held barred by the previous state decisions.
II.
As earlier observed, England acknowledged the general validity of preclusion principles and held:
if a party freely and without reservation submits his federal claims for decision by the state courts, litigates them there, and has them decided there, then ... he has elected to forgo his right to return to the District Court.
Id.
at 419,
[T]he litigant is in no event to be denied his right to return to the District Court unless it clearly appears that he voluntarily did more than Windsor required and fully litigated his federal .claims in the state courts. When the reservation has been made ... his right to return will in all events be preserved.
England,
According to his pleadings at least, Wicker carefully followed this procedure, filing an express reservation of issues in Knott County Circuit Court and limiting his state suit to issues of state law. The parties do not dispute that the federal court abstained under Pullman or that Wicker promptly filed a reservation of his federal claims. However, defendants argue that Wicker’s reservation did not preserve his right to return to district court.
England
does not guarantee an absolute right to return to federal court. By recognizing that a party can forgo that right by freely and unreservedly litigating reserved claims in state court,
England
preserves a party’s right to choose an appropriate forum while at the same time giving deference to a state court decision on an issue that was fully and fairly litigated. This procedure comports with
Pullman. Pullman
abstention requires a plaintiff to proceed to state court on those issues whose resolution may make unnecessary further action in federal court. The abstention procedure accords “appropriate deference to the respective competence of the state and federal court systems,”
England,
Defendants argue that Wicker should be precluded from returning to federal court because he filed voluntarily in state court, or conversely, that
England
should apply only where a party has been forced into state court. We do not agree with these arguments or with the cases cited in sup
*446
port of them. See,
e.g., Roy v. Jones,
The district judge here apparently considered the fact that Wicker voluntarily filed in state court to be an important if not dispositive factor in deciding whether to recognize Wicker’s reservation. We are uncertain whether the judge’s ruling was influenced by his view that Wicker voluntarily filed in state court before the federal court abstained or by his perception that Wicker did not oppose the abstention order when it was later made. Although Wicker did not file a written response to defendants’ motion for abstention, he did orally object to abstention at a pretrial conference held before the previously assigned judge on February 5, 1982. However, even if Wicker had not opposed the abstention order, we would hesitate on that account to bar Wicker’s return to federal court.
We realize that a party who is allowed to proceed in both federal and state forums may enjoy two bites of the apple. However, two safeguards exist. First, to the extent that a plaintiff does more than protect his rights under state law by fully litigating federal claims,
England
bars re-litigation of those claims. Second, if a plaintiff attempts to split a cause of action between federal and state courts where abstention is inappropriate, the federal court may accord full preclusive effect to a prior state decision.
See, e.g., Tarpley v. Salerno,
Determining what was brought in state court may be difficult: “the determination of which issues or claims were brought before the state court may on occasion necessitate subtle inquiries. In such cases, the principles of
England
would bid us focus attention on the intent of the party raising claims in state court.”
New Jersey Educ. Ass’n v. Burke,
The relief sought by Wicker in Knott County Circuit Court was an injunction against his removal, a declaration that defendants’ actions were void for being arbitrary and capricious, and costs. In his trial memorandum Wicker also requested reinstatement. He asserted that the charges against him did not constitute “legal cause” for dismissal and that in any event he was not guilty of the charges. He also asserted that the Board of Education was biased and prejudged his case, and that defendants violated Ky.Rev.Stat. § 161.162 by discriminating against him on political grounds. Finally, he charged that defendants’ removal of him did not comply with Ky.Rev.Stat. § 161.790 procedurally or substantively. Thus Wicker did not directly raise any of his reserved issues in state court, but limited the state action to the interpretation and application of Kentucky statutes. At the outset at least, Wicker apparently intended to resolve no more than state statutory claims. 3
In asserting that Wicker’s reservation was invalid because he sought a state reso
*447
lution before the actual abstention order, defendants liken these facts to those in
Oler v. Trustees of California State University and Colleges,
To the extent that
Oler
forbids relitigation of issues that were raised and fully litigated without reservation in the state courts, we agree with its conclusion. However, to the extent that
Oler
may invalidate an
England
reservation on the sole basis that plaintiff first filed in state court, that question is not before this court.
4
Unlike the plaintiff in
Oler,
Wicker did not initially seek relief in state court. This is not a situation where a party is properly barred from further litigation after first filing a reservation in state court and then proceeding to federal court after a state court decision on the merits.
See, e.g., Fuller Co. v. Ramon I. Gil, Inc.,
Therefore, we conclude that Wicker, by filing an express reservation of federal issues before the Knott County Circuit Court and by limiting his state action to issues of Kentucky law, initially preserved his right to return to federal district court for adjudication of his reserved claims following that court’s order of abstention.
III.
Our recognition of Wicker’s reservation of issues before the Kentucky courts still requires us to decide the preclusive effect of the state decisions. Chief Judge Aldisert, concurring in
Roy v. Jones,
An England-type abstention envisions two stages. Where the cause is filed in federal court before a state court decision, a Pullman-type abstention comes into being, the federal court staying its hand until the state court acts. If, after the state proceedings terminate, the plaintiff returns, the federal court must make a factual determination. It must decide whether the federal questions were presented to the state court. If they were, and were not reserved, then, on the theory of res judicata, the court may properly dismiss the federal action. It is this second stage which gives the label “England-type” to this category of abstention____
This analysis refers to the potential claim preclusive effect of a state decision. Claim preclusion bars a subsequent claim that could have been brought in the first action; issue preclusion, in contrast, bars only the relitigation of issues previously litigated. 5 If a plaintiff takes his federal claims to the state courts and fully litigates those claims *448 or adds other federal claims to his state suit, he has removed himself from the protection of England and is subject to claim preclusion. As previously noted in our discussion of Wicker’s pleadings in state court, Wicker there limited himself to issues of state law. Thus he is not barred by claim preclusion from now litigating his federal claims in federal court.
However, England acknowledged issue preclusion by its holding that, despite a reservation, a party is precluded from relitigating an issue if he “fully and unreservedly” litigated it in state court. Defendants assert that Wicker fully litigated two questions in the Kentucky courts: the existence of legal cause for the discharge and political bias on the part of Board members. We consider each issue separately.
From our review of the state court record, we conclude that Wicker fully litigated the first question of legal cause under Kentucky law for his discharge and that he received an adverse decision thereon. The Knott County Circuit Court sustained the Board’s decision to discharge Wicker on the ground that Wicker had not properly operated the business affairs of the school system by keeping expenditures within income. The Kentucky Court of Appeals affirmed, Wicker v. Board of Educ. of Knott County, No. 84-CA-1192-MR (Ky.Ct.App. April 19, 1985):
Of the numerous charges leveled at Wicker by the school board, the trial court chose to uphold his removal on the basis that Wicker had failed to provide a sound budget for the school system. Although the voluminous record filed in this case contains contradictory evidence on this point, there is ample testimony supporting the finding that during Wicker’s term as superintendent the financial condition of the Knott school system worsened and, despite offers of help from the state department of education, he did little or nothing to remedy the situation. We are convinced that the discharge of a superintendent on this basis is clearly removal “for cause” as contemplated by KRS 160.350 and it was the prerogative, if not the duty, of the board under the statute to act. We find no basis for disturbing their decision or that of the circuit court upholding it.
Considering the alleged deprivation by state action of a property interest without due process, it must be remembered that such property interests “are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law.”
Cleveland Board of Educ. v. Loudermill,
Even though Wicker reserved his federal issues in state court, there still can be issue preclusive effect accorded to both state court findings of law and findings of fact, which were not only' necessarily involved in the state law conclusion but were in fact decided by the state court under circumstances in which the parties received a full and fair opportunity to litigate the issue. The Third Circuit approved this argument in
Kovats v. Rutgers,
Appellants assert that the Supreme Court’s treatment of England in its preclusion cases requires that no preclusive effect of any kind be given to any state court decision on return to federal court following abstention. While the Court clearly has reaffirmed the validity of England’s reservation procedure, we do not read its opinions to mean that in an England reservation case no preclusive effect may ever be given to a state court determination. A state court’s resolution of the state law question that required Pullman abstention clearly must be given some preclusive effect; otherwise abstention would be a meaningless procedure.
Analyzing the facts here under this rule, we conclude that the Kentucky courts necessarily found first, that Wicker was guilty of inadequate handling of the Knott County school system’s financial affairs; second, that that was at least one reason for *449 his discharge as superintendent; and finally, that under Kentucky law it was a legally sufficient reason or cause for terminating him. Wicker thus may not reargue in federal court his claim that he was discharged without legal cause. The decisions of the Kentucky courts foreclose that claim because they found the failure to keep within an approved budget a sufficient cause and implicitly an actual cause of his discharge.
What the Kentucky courts could have decided, but in our judgment did not decide, was whether the inadequate handling of school finances was the sole cause of Wicker’s discharge. Further, the Kentucky courts failed to determine whether the Board’s decision was affected by political considerations and, if so, whether those considerations were improper. To the extent, therefore, that these issues are important to Wicker’s federal claims, we hold that the Kentucky courts’ decisions had no preclusive effect upon them and that Wicker is at liberty to litigate those questions in connection with his federal claims.
Therefore, the state court decisions do not preclude inquiry under federal law whether Wicker was placed in a worse position because of federally protected activity.
Mt. Healthy City Bd. of Educ. v. Doyle,
Concerning the question of discrimination on political grounds, we assume for purposes of this opinion that Wicker fully litigated that issue in the Kentucky courts. Wicker asked a number of witnesses about political alignment between parties to the litigation and other school personnel, and he questioned witnesses in detail about statements that he or others would be fired if certain candidates were elected to the Board.
Even though it is clear that Wicker at least raised the question of political bias in his state suit, it is equally clear that the state courts never reached that issue. Not only did the Kentucky courts fail to make any factual determination on the question of political bias, but the transcript of the state court proceedings suggests that the state trial court judge expressly disregarded the issue:
Court: Just a minute. The only thing that’s going to be considered in this trial is whether or not Melvin Wicker as Superintendent of Schools was derelict in his duties to such an extent that he should be removed from office. Now what Simeon Fields speculated or what some other fellow speculated or talked to someone in the election isn’t going to have a thing in the world to do with it in my judgment. This case or the decision of this Court won’t be made by newspaper articles and speculation. I’ll base my decision upon what I think the law is coupled with the evidence____
Hall: ... The proposition that we’re introducing this evidence to prove is not as to the merit of the charges but that there was an ulterior motive.
*450 Court: Well there might be. But we’ve got our law on books and the Board hires the Superintendent and the Board has the right to remove the Superintendent if he has to such an extent violated the law that he should be removed within the law. Now that’s all we’ve got here. But what people speculate isn’t going to be concerned at all. The Board may have been biased, I don’t know, but that has nothing to do with it. They had a right to remove him if they considered the evidence and thought that Wicker should be removed. The thing that we’re going to get at here is what I’ll answer and what some higher court will answer as to whether or not that the Board acted within the law when they removed Wicker.
Transcript of Knott County Circuit Court trial pp. 151-53.
As previously noted,
England
acknowledged that determination of an issue fully and fairly litigated bars further litigation of that issue. However, it is also true that the
England
court found the possibility of direct review in the Supreme Court of a post-abstention determination by the state courts “an inadequate substitute for the initial District Court determination ... to which the litigant is entitled in the federal courts.”
Limiting the litigant to review here would deny him the benefit of a federal trial court’s role in constructing a record and making fact findings. How the facts are found will often dictate the decision of federal claims.
To the extent the state decisions may be relevant to his federal claim, we repeat our holding that Wicker is not barred from relitigating the political discrimination issue. We so hold because the Kentucky courts refused to decide that issue.
England’s,
emphasis on a plaintiff’s right to return to federal court to resolve disputed issues of fact underlying his federal claims following abstention and following a state court ruling on those issues makes it even more important to allow Wicker that opportunity when the state court is silent. Any other result would negate the effect of an
England
reservation. The mere opportunity to raise first amendment claims in state court is not sufficient to permit dismissal of those claims by the federal court after an
England
reservation.
Promovision Int’l Films, Ltd. v. Trapani,
The Supreme Court has held that the same preclusion principles govern a section 1983 action as any other kind of action.
Allen v. McCurry,
Directing our attention therefore to Kentucky law, we find that Kentucky courts accord preclusive effect only to issues that actually or necessarily determined the relevant claim. In
Sedley v. City of West Buechel,
The general rule is that a judgment in a former action operates as an estoppel only as to matters which were necessarily involved and determined in the former action, and is not conclusive as to matters which were immaterial or unessential to the determination of the prior action or which were not necessary to uphold the judgment. The rule has been applied although such matters were presented in the former action and actually determined therein, and although they may affect the ultimate rights of the parties.
Id.
at 558.
See also Commonwealth v. Hillebrand,
As reflected in the state court opinions, neither court mentioned political discrimination. Defendants, however, would have us read from the state court’s silence a conclusion that Board members were not biased. This we must not do under Kentucky law.
First, the political discrimination inquiry under Ky.Rev.Stat. § 161.162 is neither explicitly nor logically part of a determination of legal cause under Ky.Rev.Stat. § 160.-350. See
Banks v. Board of Educ. of Letcher County,
Second, language from
Calhoun v. Cassady,
If the primary reason for making the transfers as found by the trial court was to punish the teachers and administrators for their political activities, then such action was arbitrary and void. Simply because the superintendent could have been otherwise motivated by some proper purpose does not mean that these other purposes played a real part in his decision.
Third, the lenient standard of proof under § 161.162 suggests that the state trial judge here did not consider the issue. Wicker presented quite a bit of evidence in the state court concerning political bias, and under Kentucky law a “mere inference” of arbitrariness is sufficient to void an adverse employment decision.
Harlan County Bd. of Educ. v. Stagnolia,
Finally, the state court finding of legal cause does not answer the
Mt. Healthy
inquiry whether Wicker would have been discharged despite any political bias. Preclusion rules are not as strict regarding questions of law as questions of fact,
Ward v. Southern Bell Telephone & Telegraph Co.,
We therefore conclude that Wicker is not precluded from relitigating the factual question whether the Board was biased on political grounds in deciding to discharge him.
CONCLUSION
This appeal presents novel questions heretofore unaddressed by this court and only foreshadowed by
England v. Louisiana Bd. of Medical Examiners,
We believe that our disposition best supports the rationale underlying preclusion— judicial economy and deference to previous decisions — while at the same time giving effect to
England
by preserving Wicker’s initial choice of a federal forum to determine his federal claims. We also note that the result reached is consistent with our decision in
Polk v. Yellow Freight System, Inc.,
We therefore REVERSE and REMAND to the district court for further proceedings consistent with this opinion.
Notes
. Section 160.350 of the Kentucky Revised Statutes covers the appointment, term, salary, qualifications, and removal of a school superintendent. Concerning removal, it states:
A superintendent of schools may be removed for cause by a vote of four-fifths ( 4 /s) of the membership of a board of education. Written notice setting out the charges for removal shall be spread on the minutes of the board and given the superintendent fifteen (15) days before action is taken on his removal.
The Kentucky Supreme Court has defined "cause” as "a cause relating to and affecting the administration of the [public] office and ... restricted to something of a substantial nature directly affecting the rights and interests of the public.”
Smith v. Board of Educ. of Ludlow, Kentucky,
. The federal district judge before whom this case was initially brought never stated his reasons for the abstention order. We assume that the order was entered based on Pullman principles in which state resolution of statutory claims in Wicker’s favor might have been dis-positive of the entire litigation. The parties also treat the abstention order as if it were entered under Pullman.
. Wicker’s attorney asserted at two pretrial conferences that he filed in state court to preserve Wicker’s rights under the Kentucky Teacher Tenure Act, Ky.Rev.Stat. § 161.790. We discount this argument because Wicker’s initial complaint did not raise the Teacher Tenure Act. Also,
Floyd v. Board of Educ. of Greenup County,
. Courts disagree whether an
England
reservation is valid if the plaintiff first files in state court.
Compare Gresham Park Community Organization v. Howell,
. Claim preclusion and issue preclusion are roughly synonymous respectively with res judicata and collateral estoppel. However, because the latter terms have not been used consistently, we avoid confusion by referring to either the claim preclusive or issue preclusive effects of the state decisions.
See Migra v. Warren City School Dist. Bd. of Educ.,
. Defendants argue that
Kendall v. Board of Educ. of Memphis City,
