NO T R EC OM M EN DE D F OR F UL L- TEX T P UB LIC AT ION F ile Nam e: 07a0380n.06 F iled: Jun e 7, 2007 No. 06-4200 UN ITED STA TES C OU RT OF AP P EA LS F OR THE SI XT H C IR CU IT
MA RK AP S EL OFF, Pla int if f- Ap pe lla nt,
v. FAMI L Y DOL L AR STORES, I NC., Def endant- Appellee
. ) ) ) ) ) ) ) ) ) ON APPEALFROM THE U NI TED STATES DI STRI CT COURT FOR THE S O U T H E R

N D IS T R IC T O F O H IO

Be for e : S UH RH EIN RI CH , C LA Y, and R OG ER S, C ir c uitJudg e s. ROGERS, Circ uit Jud ge. Mark Apse loff a ppeals the ma g istrate judg e’s or der g ranting Family Dollar’s motion to dismis s on the basis of re s judicat a. Ap s el o ff, a former Family Dollar
e mpl oy e e , fil e d this su it fo r wr on g fu l ter min a tio n und e r Oh io law af te r pr e vio us ly lit ig a tin g in O hio
sma ll c la ims c ourt

tw o s e pa rate laws uit s f

or va cat io n and stoc k o pti on be ne fi ts a lle g e dly

ow e d to him a s p art of his e mpl oy

me nt a g re e me nt. Th e ma g istra te jud g e g ra

nte d F a mil y

Do lla r’ s mo tio n to dis mis s a ft e r c onclu di ng th at the s ub je c t matte r o f t

he e arl ie r a

nd pr e se nt s uit s is pa

rt of the same tr ans a c tio n o r o c c ur

re nc e . We no w a ff

ir m. Mark Apse loff wa s hired by Family Dollar to ser

ve as a district manag er in July 2001. Family Dollar fir ed Apse loff in F ebrua ry 2002. This lawsuit is the third that Apseloff has br oug ht ag ainst Family

Dollar since his termination.No. 06-4200

Apseloff v. Family Dollar Stores

On April 11, 2002, bef

ore A pseloff’ s first small claims lawsuit, Apseloff f iled a cha rg e of 1 discrimination with the EEOC. The cha rg e cla imed unlawful re taliation in violation of Titl e VI Ifor the same r eason A

pseloff a rg ues F amily

Dollar violated O hio law in this case. - 2 - F ir st, on Au g us t 26 , 2 00 2, Ap se lof f fi le d a Sma ll Cl a im Co mpl a int

a g a ins t F a mil y

Do lla r i n Hamilton County

Mun i ci p al C o u rt. Acc ording to the complaint, Apseloff soug ht $2,480 for “nonpay ment of stock options that w[ ere ] part of [the] hiring ag ree ment.” On F ebrua ry 14, 2003, judgme nt was en t er ed for F amily Dollar. The rec ord does not re veal the ba sis for the cour t’s decision.
Se c on d, on

Marc h 1 2, 20 03 , Aps e lof f f ile d a no the r S ma ll Cl a im Co mpl a int a g a ins t F a mil y Dollar in Hamilton C ounty Municipal Court. This tim e, Apse loff sought $2,059.08 for “ vacation du e a s part of [ th e ] hir ingof fe r. ” On May 21 , 2 00 3, the c ourt

g ra nte d F a mil y

Do lla r’ s mo tio n to dismiss on the g rounds of re s judicata. Third, on Fe bruar

y 10, 2006, Apseloff

filed the c urre nt lawsuit ag ainst Family Dollar in the Hamilton County

Court of Common P leas. Apse loff alleg ed that in J anuar y and F ebrua

ry of 2002, he complaine d t o Fa m i l y Dollar c orporate manag ement that a pur ported F amily

Dollar policy opposing “ the place ment of male e mploy ees in t h e posi tion of cashier , based on the rationale that male emp loy ees a

re more prone to stea l money than fe male employ ees” constituted unlawful
e mpl oy me nt d isc ri min a tio n. Ap se lof f a lle g e s th a t F a mil y Dol lar f ir e d h im i n F e br

ua ry 20 02 in reta liation for voicing these concer ns, in violation of Ohio Revised Code sec tion 4112.01 et seq and Ohio public policy
. Apseloff sued for past and future earning s he would have rec eived had he not 1No. 06-4200

Apseloff v. Family Dollar Stores

- 3 - be e n te rm inate d, c omp e ns a tio n f or pa in a nd su ff e ri ng , p un iti ve dama g e s, a tto rn e y ’s fe e s and c os ts, and “a ny other re lief to which he is leg ally and equitably

entitled.”
On Marc h 10, 2006, Family Dollar remove d the ac tion to the United States District Court for the Southe r

n D is tric t of Ohio in acc ordanc e with 28 U.S.C. § 1446(a), c laiming diver sity jurisdiction. On that same date, Fa

mily Dollar filed a mot ion to dismi ss under F eder al Rule of Civil P roce dure 12(b)( 6) base d on res judicata. The mag istrate judg e, who wa s assig ned to the ca se with the conse nt of the par ties, g rante d Family Dollar’s motion to dismis s on the basis of re s judicata. The mag istrate judge stated that res judicata require s four e lements of proof : (1) that t h e i n s t ant ac tion involves the same two parties; (2) that the instant action ar ose out of the same transa ction or occ urre nce that was the subjec t of earlier actions; (3) that the i nstant action could have bee n asser ted in at least one of those previous actions; and (4) that there was a final dec ision on the prior ac tion by

a cour t of compete nt jurisdiction. J A 2 6 (c i t i n g Davis v. Sun O il Co. , 1 48 F .3 d 6 06 , 6 11 (6 th C ir . 1 99 9) (p e r c ur iam) ; In re Fordu , 201 F.3d 693, 703- 04 (6th Cir. 1999)).
Th e ma g istrate jud g e he ld t hat Aps e lof

f c on c e de d the fi rs t two el e me nts of the te st b e c a us e in his memorandum in oppositi on to Family Dollar’s motion to dismis s, Apseloff c hara cter ized the
sma ll c la ims c ourt a c tio ns a s “ 1) an a c tio n c la imi ngmon e y fo r s toc k o pti on s upon his separation from F am ily Dollar ; and 2) an a c tio n c la imi ngva c a tio n p ay du e to h im upon his separation f rom F am ily Dollar .” J A 26 (quoting motion, empha sis in mag istrate judge ’s opinion). Acc ording to theNo. 06-4200

Apseloff v. Family Dollar Stores

Ap se lof f d oe s n ot c ha lle ng e the se c on c lus ion s o n a pp e a l. 2 - 4 - mag istrate judg e, “both the f irst and sec ond actions cle arly arose out of [Apseloff’s] termination from F amily

Dollar ( i.e. , ‘his s e p a

r a ti o n from F amily

Dollar’) ” and A

pseloff’ s curr ent lawsuit “a rises direc tly from the ‘ same tra

nsaction’— i.e. , [Apseloff’s] separation from Family Dollar.” The mag istrate judg e also he ld that the third and four th elements of the te st were met. The 2 jud g e h e ld

th a t t h e th ir d e le me n t w a s me t b e c a

u s e A p s e lo f

f c o u ld h a v e b r o u g h t t

h e wrong ful termination action in the previous actions, even though he could not ha ve broug ht the action in the Municipal Court (a c ourt of limited jurisdiction), beca use he c ould have br oug ht all the actio ns toge ther in the Ha

milton C ounty Court of C ommon Pleas. The mag istrate judg e also he ld that the fo ur th e le me nt wa s me t be c a us e the Munic ipa l Court “ wa s c e rt a inl y c omp e te nt to adj ud ic a te [Apseloff’s] claims for vac ation pay and stock options upon his separation from Family Dollar.” Ap se lof f t ime ly fi le d a no tic e of a pp e a l.
This court reviews a district court’s gr ant of a 12(b)(6) motion de novo. Gao v. Je nifer , 185 F.3d 548, 552 (6th Cir. 1999). “In consideringthe motion, all factua l alleg ations in the complaint
are acc epted a s true.” Id. “ A c ourt may dis mis s a c ompla int

on ly if it i s c le ar t

hat no re lie f c ou ld be g rante d under a

ny set of fa cts that coul d b e p ro v ed consistent with the alleg ations.” Hishon v. King & Spalding , 467 U. S. 6 9, 73 (1 98 4) ; accord Swierk iewicz v. Sorem a N.A. , 534 U.S. 506, 514 (2002).No. 06-4200

Apseloff v. Family Dollar Stores

Ordinar ily , only

the first Municipal C ourt judgme nt would be entitled to claim pre clusive 3 e ff e c t be c a us e the se c on d M un ic ipa l Co ur t ju dg me nt w a s b a se d o n r e s jud ic a ta , a nd thu s w a s n ot a judgme nt “ rende red on the merits.” How ever , neither pa rty argues this disti nction, and it does not make a differ ence to the resolution of this case
. - 5 - “ [W]he n a sk e d to g ive pr e c lus ive e ff e c t to a pr ior state c ourt jud g me nt, a fe de ra l c ourt mus t look to the law of the rende ring state to de termine whether and to w hat extent that prior judgme nt should r ece ive prec lusive eff ect in a fe dera l action.” Hapgood v. City of W arren , 127 F.3d 490, 493 (6th Cir. 1997)
. This r

ule applies equally wher e the prese nt suit i s a diversity action. See M

cAdoo v. Dallas Corp. , 9 32 F .2 d 5 22 , 5 24 (6 th Cir
. 19 91 ). Th e re fo re , thi s c ourt a pp lie s Oh io re s ju dic a ta law. The mag istrate judg e did not err by holding that the doctrine of res judicata (otherwise know n as “c laim prec lusion”) pre vented Apse loff fr om rec overingin this wrong ful termination suit. Unde r Ohio law, “[a] valid, final judg ment rende red upon the merits bars all subsequent ac tions based upon any claim ar ising out of the tr ansac tion or occur ren ce t h at wa s the subject matter of the pre vious action.” Grava v. P a r km an Twp. , 6 53 N. E. 2d 22 6, Sy lla

bu s ¶ 1 ( Oh io 1 99 5) . T he on ly iss ue in dispute here is whether A pseloff’ s curr ent ac tion is “based upon any claim ar ising out of the tr ans a c tio n o r o c c ur

re nc e that w a s th e su

bje c t matte r” of

the pr e vio us Mu nic ipa l Co ur t a c tio ns . 3 Although O hio law controls, the Ohio Supre me Court “expressly ad h e r e [s ] to the modern a

pplication of the doc trine of re

s ju dic ata , as stated in 1 Restateme nt of the L aw 2d, Judgments (1982) , SectionsNo. 06-4200

Apseloff v. Family Dollar Stores

Th e Re state me nt p ro vid e s: 4 (1) When a valid and final judgme nt rende red in a n action extinguishes the plaintiff’ s claim pursuant to the r

ules of merg er or bar (see §§ 18, 19), the c laim ext inguishe d inc lud e s a ll r ig hts of

the pla int if

f t o r e me die s a g a ins t th e def e nd ant w ithre sp e c t to all or any part of the transac tion, or series of conne cted tra nsactions, out of which the action ar ose. (2 ) What f

a c tua l g ro up ingc on sti tut e s a “ tr ans a c tio n” , a

nd wh a t g ro up ing s c on sti tut e a “se ries”, a

re to be deter

mined prag matically , g iving weig ht to such considerations as whe ther the f

acts a re r elated in time, spac e, orig in , o r m o tivation, whether the y for m a c o n v e n ie n t tr ia l u n it , an d w h e th e r th e ir tr e a tm e n t a s a un it c o n f o r ms to the parties’ expectations or business understa nding or usag e. Restatement (Sec ond) of Judgments § 24. - 6 - 24-25.” Id. Thus, the Restatement a nd case s from other jurisdictions apply ing the Restatement ar e 4 instructive as to how the O hio Supreme Court would answe r the que stion in t his case.
Family Dollar’s termination of Apseloff formed the transac tion or occur renc e out of which Apseloff ’s forme r and c urre nt la ws uits arose. Apse loff’s pr ior suits in Muni cipal Court wer e for “nonpay ment of stock options that w[ere] part of [ the] hiring ag ree ment” and “ vacation due as par t of [t he] hiring offe r.” The prese nt suit is f or wrong ful termination and conce rns Fami l y Dol lar’s mot ivat i o n s f

o r f i r i n g A p s e l o f

f
. A s A p s e l o f

f c o n c e d e d

b e l o w , v a c a t i o nan d

s t o c k o p t i o nb e n e fi ts
we re du e to h im “ up on

his se pa ratio n f ro m F a mil y

Do lla r. ” Ap se lof

f’ s p re se nt a

nd fo rm e r s uit s a ll involve the same transac tion—namely , Apseloff ’s termination—and res judicata pre vents Apseloff from litigating piece meal differ ent cause s of action arising out of this transaction. Cf. Cl ark v. H aas Group , 953 F.2d 1235, 1239 ( 10th Cir. 1992) (apply ing the Restatement and holding that decision
on ear lier suit unde r the Fa ir L abor Standards Act seeking unpaid over time compensation pre cludedNo. 06-4200

Apseloff v. Family Dollar Stores

- 7 - later suit under the Equal Pay Act and the Age Discrimination in Employ ment Act see king, a

mong other thing s, damag es for ag e discrimination).
The fact that Apseloff

’s present suit involves a differe nt cause of ac tion, alleg es a diff ere nt inj ur y , a nd inv olv e s d if

fe re nt f a c tua l is su e s th an h is e arl ie r su its do e s n ot c ha ng e the re su lt. I n th is
re g ard , Aps e lof

f’ s si tuatio n is no dif

fe re nt f ro m I llu str a tio n 5 of

the Re state me nt: A bring s an ac tion ag ainst B Co., a stre et ra i l way company , alleg ing that the mot or man w a s neg lig e nt in start ing the c ar wh ile A wa s ali g hti ng and that as a r e su lt A b ro ke his arm . Af

te r a ve rd ic t and jud g me nt fo r A, A b ri ng s a ne w a c tio n a g a ins t B Co. alleg ing that after

alig hting f

rom the car h e fell into a trench ne g lige ntly left by B Co. beside the roa d and broke his leg . The a ction is preclude d. Restatement (Sec ond) of J udg ments § 24 cmt. d, illus. 5. I n this il lustration, A suffe red two distinct injuries resulting from two distinct acts of neg lige nce on the part of B , a nd the fa c ts r e le va

nt t o b oth
cause s of ac tion were differ ent as we ll. Si milarly here , Apseloff alleg edly suffe red two distinct inj ur ie s f ro m tw o d ist inc t ill e g a l a c ts ( la c k o f b e ne fi ts f ro m br e a c h o f c on tr a c t ve rs us fi ri ngdu e to discrimination), and the two cause s of ac tion involve differe nt sets of fac ts (terms of e mploy ment contra ct ver sus Family

Dollar’s motivation for f iring Apseloff

). Apseloff also adva nces two policy rea sons for rever sing the mag istrate judg e’s or der, w hich
are ult imate ly

un pe rs ua siv e . F ir st, Ap se lof f a rgue s th a t a

pp lyingre s ju dicat a

in t his c a se “ wi ll discourag e litiga

nts from bring ing relatively simple c ases” to sma ll c laims c ourt. Although this may be true , the doctrine of

res judicata adva

nces the opposing policy

conce rn of pr eventingpiece meal litigation and pr omoting judicial ef ficienc y . Nat ion al Am us e me nts , Inc . v. City of S pr ing da le , 558No. 06-4200

Apseloff v. Family Dollar Stores

- 8 - N. E. 2d 11 78 , 1 18 0 ( Oh io 1 99 0) . In a dd iti on , Ohi o co ur ts ro uti ne ly

g ive pr e c lus ive e ff

e c t to sma ll claims court judg ements, and the ref ore have demonstrated a pre fer ence for the latter, rather than the former , policy
. See, e .g. , Heisler v. Mallard Mec h. Co. , – N. E. 2d –, 20 07 WL77 86 22 (O hio Ct. App. 2007). Second, Apse loff cla ims that apply ing r es judicata here results “in a de facto shortening of the c urre nt Ohio six -y ear statute of limitations for bring ing a wrong ful termination [claim] .” But this is t rue in e very

res judicata ca se whe re the claim pre cluded ha s a statute of li m i t at ions period longe r than the e arlier

claim that forme d the basis of the e arlier lawsuit that was g iven pre clusive eff ect. This is simply a conseque nce of Ohio having adopted the mode rn application of res judicata, which focuse s on transac tions rather than cause s of ac tions. See G rava , 653 N. E. 2d a t 228- 29 . Thi s court, whe n sitti ng in diversity , is not fre e to disag ree with the pol icy rea sons behind a state ’s leg al
ru le s.
For

the fore g oing r easons , w e A F F I RM th e mag istrate judg e’s or der g ranting Family Dollar’s mot ion to d ism iss
.