## The Honorable George F. Gunn, Jr., United States District Judge f or the Eastern 1 

## District of Missouri. 

# United States Court of Appeals FOR THE EIGHTH CIRCUIT

____________ No. 96-3131

____________ Rosetta Hillary, * * Appellant, * * Appeal from the United States v. * District Court for the * Eastern District of Missouri Trans World Airlines, Inc., * * Appellee. *

____________ Submitted: April 17, 1997 Filed: August 20, 1997

____________ Before McMILLIAN, JOHN R. GIBSON and BEAM, Circuit Judges.

____________ McMILLIAN, Circuit Judge.

Ro setta Hillary appeals from a final order entered in the Unite d States D istrict Court for the Eastern District of Missouri grantin g 1 summary judgment in favor of defendant Trans Wor ld Airlines, Inc. ("TWA"), and dismissing her complaint against TWA. Hillary v. Trans World Airlines , Inc. , No. 91-2261(C)6 (E.D. Mo. July 17, 1996) (order and judgment of the district court) (hereinafter "slip op."). For reversal,

### -2-

Hillary argues that the district court misapplie d the Louisiana law of res judicata. For the re asons discussed below, we affirm the judgment of the district court.

I. BACKGROUND The underlying facts are as follows. On March 16, 1987, Hillary was a passenger on a TWA flight traveling from Los Angeles, California, to New Orleans, Louisiana. According to Hillary’s complaint, during a stopover inSt. Louis, Missouri, a TWA employee dropped a metal case containing a typewriter on Hillary 's head. Slip op. at 1. Hillary allegedly suffered injuries to her head, neck, back, hearing, and e yesight. Id. Nearly four years later, on April 5, 1991, Hillary filed a complaint against TWA in th e United States District Court for the Eastern District of Louisiana

. Jurisdiction was based on 28 U.S.C. § 1332, diversity of citizenship. In September 1991, TWA moved for summary judgment on the basis that Hillary's claim was barred by Louisiana 's one year statute of limitations. Hillary oppo sed TWA's motion and, in the alternative, moved for voluntary dism issal of the complaint without prejudice pursuant to Fed. R. Civ. P

. 41(a)(2). On November 5, 1991, Hillary filed an identical complai nt in the Unite dStates District Court for the Eastern District of Missouri, wher e the applicable Missouri statute of limitations period is five years. O n November 27, 1991, the district court in Louisiana granted TWA's motion for
summaryjudgment on the ground that the action was time-barred unde r Lo uisiana law. Hillary v. Trans World Airlines, Inc. , No. 91-1312D(6) , slip op. at 2 (E.D. La. Dec. 2, 1991). The district court in Louisian a further denied Hillary's motion for vol untary dismissal without prejudice, id

. at 3 (citing Phillips v. Illinois Cent. Gulf R.R. , 874 F.2d 984 (5t h Cir. 1989)), and final judgment was entered dismissing Hillary's c laim with pr ejudice. Id. In January 1994, the United States Court of Appeals fo r the Fi fth Circuit, in an unpublished opinion, affirmed the Louisian a district cou rt's grant of summary judgment in favor of TWA, the denial of Hillar y's motion for voluntary dismissal without prejudice, and th e dismissal of Hillary's claim with

### -3-

prejudice. Hillary v. Trans World Airlines, Inc. , 15 F.3d 180 (5th Cir.) (table) (No. 92-3001), cert. denied , 511 U.S. 1128 (1994).

In December 1991, TWA filed a motion to dismiss or, in th e alternative, for summary judgment in th e district court in Missouri on the basis that H illary's claim was barred by the doctrine of res judicata, or "claim preclusion." Thereafter, TWA filed for bankruptcy, and the district cour t in Missouri entered an order staying Hillary’s action. Hillary v

. Trans World Airlines, Inc. , No. 91-2261C(6) (E.D. Mo. June 10, 1992). In July 1994, t he stay was lifted, and TWA renewed its motion to dismiss or, in the alter native, for summary judgment. On July 17, 1996, the district court in Mis souri granted TWA's motion for summary judgment on the ground of r es judicata, holding that, under Louisiana law, a dismissal based o n a plea of prescription (i.e. the statute of limitations) is a fina l judgment for res judicata purposes. This appeal followed. II. DISCUSSION

"We rev iew the district court's grant of summary judgment de novo , applying the same standards and affirming only when the record shows that there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law." Rel iance Ins. Co. v. Shenandoah South, Inc. , 81 F.3 d 789, 791 (8th Cir. 1996) (citing Fed. R. Civ. P. 56(c), and Johnso nv. Group Health Plan, Inc. , 994 F.2d 543, 545 (8th Cir. 1993))

. We vie w the record in the light most favorable to the non-moving party

. Marshall v. UNUM Life Ins. Co. , 13 F.3d 282, 283 (8th Cir. 1994) ( citations omitted). Hillary argues that the preclusive effect of the judgment of th e district court in Louisiana is a matterof Louisiana state law because the case was bas ed on diversity jurisdiction. By contrast, TWA contends that fe deral law applies to determine the preclusive effect of the judgment

. Additionally , Hillary contends that the district court in Missouri should have applied a Louisiana equitable res judicata rule which grants relie f fromr es judicata in "exceptional circumstances" such as attorney error

. Hillary

## Even if the federal law of res judicata applied to thiscase, Hillary's claim would 2 

## be barred. Under federal law, the doctrine of res judicata bars litigation of a claim if: "(1) the prior judgment was rendered by a court of competent jurisdiction; (2) the prior judgment was a final judgment on the merits, and (3) the same cause of action and the same parties or their privies were involved in both cases." Lane v. Peterson , 899 F.2d 737, 742 (8t

h Cir.) (citing Murphy v. Jones , 877 F.2d 682, 684 (8th Cir. 1989)), cert. denied , 498 U.S. 823 (1990). These three elements are satisfied in the present case.
-4- al so argues that the district court in Louisiana erroneously denied he r motion to voluntarily dismiss without prejudice because a separate an d identical lawsuit had already been timely filed in Missouri.

Alth oughthe majority of circuits have held that the res judicat a eff ect of a federal court judgment in a diversity action is a matter o f federal law, "cases from this circuit have consistently concluded that [the res judicata or] collateral estoppel [effect of a prior judgment] in a divers ityaction is a question of substantive law controlled by stat e common law." Austin v. Super Valu Stores, Inc. , 31 F.3d 615, 617 (8th Cir. 1994) (quoting Lane v. Sullivan , 900 F. 2d 1247, 1250 (8th Cir.) (citations omitted), cert. denied , 498 U.S. 847 (1990)). "This Court has con sistently looked to state law to determine the effect of the judgment of anothe r federal c ourt in a case where state law supplied the rule of decision

. This rule applies when the original judgment is that of another federa l cour t sitting in diversity." Follette v. Wal-Mart Stores, Inc. , 41 F.3 d 1234 , 1237 (8th Cir. 1994) (citations omitted), cert. denied , 116 S. Ct

. 66 (1995). In determining which state's res judicata law applies, "it is fundamental that the res judicata effect of the first forum's judgment is gov ernedby the first forum's law, not by the law of the second forum. " Selm er v. Psychiatric Inst. of Washington, D.C., Inc. , 575 F.2d 922, 93 0 (D.C. Cir. 1 978) (citing Restatement (Second) Conflicts of Laws § 95 cmt.
e (1 971)); see also Austin v. Super Valu Stores, Inc. , 31 F.3d at 618

. Thus, in the present case, Louisiana law determines the preclusive effect to b e given to the dismissal with prejudice of Hillary's prior identica l action in the federal district court in Louisiana. 2

### -5- Under the Louisiana law of claim preclusion, all actio ns arising from the same "transaction or occurrence" th at is the subject matter of a prior final judgment are barred. La. Rev. St at. Ann. § 13:4231 (West 1997); see also Follette v. Wal-Mart Stores, Inc. , 41 F.3d at 1237; Centanni v. Ford Motor Co. , 636 So. 2d 1153, 1155 (La. Ct. App.), writ denied , 644 So. 2 d 656 (La. 1994). "The grant of a peremptory exception of prescriptio n constitutes a final judgment." Centann i v. Ford Motor Co. , 636 So. 2d at 1155. In other words, a dismissal based upon the expiration of th e statute of limitations constitutes a final judgment for res judicata purpo ses under Louisiana law. See Loew v. Rivers , 445 So. 2d 105 (La. Ct. App. 1984)

. "The defense of the statute of limitations is not a technical defense but substantial and meritorious. . . . [and ] a decree dismissing a bill on the gr oundof lapse of time [is] a judgment upon the merits." United State s v. Oregon Lumber Co. , 260 U.S. 290, 299-300 (1922) (citations omit ted); see also Guidry v. Bayly, Martin & Fay of Louisiana, Inc. , 545 So. 2d 567, 570- 71 (La. Ct. App.), writ denied , 551 So. 2d 638 (La. 1989); Loew v. Rivers , 445 So. 2d at 107. Both the cause of action and the parties involved i n the Missouri case are identical to thos e in the Louisiana case. The cause of action inMissouri arises from the "same transaction or occurrence" as the previ ous case in Louisiana. Therefore, the district court's fina l judgment in Louisiana precludes the Missouri case. However, Louisiana law perm its exceptions to the general rule of res jud icata; in particular, a judgment does not bar another action whe n "exceptional circumstances" justify rel ief from the res judicata effect of

## La. Rev. Stat. Ann. § 13:42 32, "Exceptions to the general rule of res judicata," 3 

## states in relevant part: A. A judgment does not bar another action by the plaintiff: (1) Whe n exceptional circumstances justify relief from the re s judicata effect of the judgment; (2) When the judgment dismissed the first action without prejudice; or (3) When the judgment reserved the right of the plaintiff to bring another action.

-6- the j udgment. La. Rev. Stat. Ann. § 13:4232(A)(1) ; see, e.g. , Fine v

. 3 Regional Transit Auth. , 676 So. 2d 1134 (La. Ct.

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App. 1 996) (exception to res judicata established when plaintiff wa s unawa re his insurer previously filed subrogation suit, plaintiff neve r receiv edproceeds, and insurer took no steps to reserve plaintiff' s potential claim); Ballex v. Naccari , 657 So. 2d 511, 513 (La. Ct. App

. 19 95) (exception to res judicata established when defendant in a sexua l harass ment suit filed a counterclaim for defamation based on allegation s in plai ntiff's original petition for damages). The “exceptiona l ci rcumstances” exception is similar to Fed. R. Civ. P. 60(b) and wa s designed "to allow the court to balance the principle of res judicata with the interest s of justice. This discretion must be exercised on a case by
cas e basis and such relief should be granted only in truly exceptiona l cases, otherwise the purpose of res jud icata would be defeated." La. Rev. Stat. Ann. §13:4232 comment (1990).
Hil laryargues that such "exceptional circumstances" exist in thi s case to just ify departure from the general rule of res judicata. Hillary argues that her attorney erroneously filed suit in Louisiana, and sh e should not b e punished for the errors of her attorney. Hillary maintains that she att empted to correct the attorney error by moving to dismiss the suit in Louisiana without prejudice and then timely filing suit i n Missouri. Hillary also argues that the district court in Louisian a and the Fi fthCircuit Court of Appeals erroneously denied her motion to dismis s without prejudice.

### -8- Hillary's "exceptional circ umstances" argument appears for the first time on appeal, and thus the issue is w aived by her failure to raise it in th e district court. See United States v. Bentley , 82 F.3d 222, 223 (8t h Cir. 1996 ); Standing Bear v. United States , 68 F.3d 271, 272 (8th Cir

. 1995), cert. denied , 116 S. Ct. 1444 (1996). Even if the issue had bee n raised in the district court, no such " exceptional circumstances" exist in this case to depart from the general rule of res judicata. Hillary relies on Jenkins v. State , 615 So. 2d 405, 406-07 (La. Ct. App.), writ denied , 617 So. 2d 932 (La. 1993), to support her argument that attorneyerror justifies applying the “exceptional circumstances ” exception. In Jenkins , the plaintiff's action for damages for fraudulent convic tionof murder and wrongful incarceration for thirty years wa s dismis sedfor failure to prosecute. The plaintiff filed the origina l action in Lo uisiana state court only to have it removed to federal court. Therea fter, the plaintiff filed a second identical action in Louisian a state court, and filed a motion in the federal district court to r emand the first suit back to the state court. Th e federal district court denied the
mo tionand only eight days later dismissed the action for failure t o prosecute. The plaintiff's attorney failed to appeal the judgment of the federa l district court dismissing the plaintiff's action. The Louisian a stat e court did not give preclusive effect to the federal district cour t judg ment and the Louisiana Court of Appeals affirmed. The Jenkins cour t stated "[the plaintiff's] interest in proceeding with the lawsuit outweighs anyin terest in the strict application of res judicata, especiall y consi dering that his predicament is the result of his attorney's conduc t not his own. " Id. The court reasoned that the plaintiff had been th e victim of "horrendous injustice" requiring relief from the princip le of res judicata. Id.
Unlike Jenkins , this case presents no "horrendous injustice " resul ting from a highly unusual or convoluted factual or legal scenario

. See Centanni v. Ford Motor Co. , 636 So. 2d at 1155. Hillary's attorne y evidentlymisunderstood the applicable law and consequently filed th e origi nal suit in federal district court in Louisiana rather than federa l distri ct court in Missouri. This attorney error is not the kind o f "exceptional

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circumstance s" justifying departure from the general law of res judicata. "[La. Rev. S tat. Ann. §] 13:4232(A)(1) is designed to protect those drawn in to error by an awkward factual or legal scenario, not by those who ca n allu de to no circumstance to justify [their actions]." Centanni v. For d Mot or Co. , 636 So. 2d at 1155; see, e.g. , Follette v. Wal-Mart Stores , Inc. , 41 F.3d at 1238 (holding awkward legal scenario constitutin g "exceptional circumstances" under La. Rev. Stat. Ann. § 13:4232(A)(1 ) existedwhen the underlying suit was dismissed due to an error of th e federa l court in Texas in case involving "highly unusual interplay o f transfer and jurisdictional doctrines"). Finally, Hillary contends that the denial of her motion t o voluntarily dismiss without prejudice by the Louisiana district court and the d ecision of the Fifth Circuit affirming the judgment were incorrect , and thus constitute "exceptional circumstances" for the purpose of La. Rev. Stat. A nn. § 13:4232(A)(1). We do not have the power to review th e decisions of the district court in Loui siana, much less those of the Fifth Circui t Court of Appeals. 28 U.S.C. § 1294 (1993). However, we ca n ex amine another court’s decision to determine whether “exceptiona l circum stances” existed for purposes of applying La. Rev. Stat. Ann. § 13:423 2(A)(1). This court, in Follette v. Wal-Mart Stores, Inc. , considere dthe correctness of a judgment of a Texas court for precisel y that reason and held that there were exceptional circumstances because of an "unusual error of the court." 41 F.3d at 1238 (noting the Texas court incorr ectlytransferred the suit to the Louisiana jurisdiction where th e Louisiana li mitations period applied and had expired). In this case, the district court in Louisiana and the Fif th Circuit Court of Appeals made no err ors, much less any "unusual errors," in the application of the law o f Louisiana

. Applying its own precedent, the Fifth Circuit held that th e district court did not abuse its discre tion in denying Hillary’s motion to dismiss with out prejudice because, absent a dismissal with prejudice, TWA would have suffered clear legal prejudice -- the loss of its statute o f limitations defense. Hillary v. Trans World Airlines, Inc. , No. 92-3001, slip op. at 4-5.

### -10- III. CONCLUSION

We agree w ith the district court that the dismissal on statute o f limitations grounds entered by the district court in Louisiana was final, with p rejudice, and constituted an adjudication on the merits for re s judicata purposes under Louisiana law. Accordingly, the judgment of the district court is affirmed.
A true copy.
Attest: CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.