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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

ROBERT N. GOLDSTEIN, §

GOLDSTEIN/HABEEB §

ENTERTAINMENT, INC., and §

CHEATERS, LTD., §

§

Plaintiffs, §

§

v. § CIVIL ACTION NO. 3: 04-CV-0677-B

§

TOMMY HABEEB, §

§

Defendant. §

MEMORANDUM ORDER

By this action Plaintiffs ask this Court to enjoin, under the All Writs Act and Anti-Injunction

Act, Defendant from prosecuting a pending state court action against them and their attorney.

Plaintiffs maintain that because the claims and issues involved in the state court action should have

been brought as compulsory counterclaims in an earlier federal court suit that they brought against

Defendant, principles of res judicata, collateral estoppel, and judicial estoppel should operate to bar

Defendant from proceeding in the state court case. The parties have filed cross motions for summary

judgment on these issues. For the reasons that follow, the Court DENIES Plaintiffs’ motion and

GRANTS Defendant’s motion.

I. Factual and Procedural Background

On February 6, 2003, Plaintiffs Robert N. Goldstein, Goldstein/Habeeb/McCalmont

Entertainment, Inc., f/k/a Goldstein/Habeeb Entertainment, Inc. (“GHE”) and Cheaters, Ltd. filed

suit against Defendant Tommy Habeeb in the United States District Court for the Northern District

 

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of Texas (the “First Federal Action”). Judge David C. Godbey presided. On December 2, 2003,

Plaintiffs filed an amended complaint asking the Court to declare Goldstein the sole owner of the

copyright for the concept for the television show “Cheaters”, and to declare him the owner of certain

trademarks and names associated with the show. (Pls.’ App. at Tab A, p. 5). Plaintiffs also alleged

that Habeeb committed trademark infringement and business disparagement, and that he breached

fiduciary duties owed to GHE by usurping GHE’s corporate opportunities. (Pls.’ App. at Tab A, pp.

5-7). The First Federal Action was resolved by an agreed judgment entered by Judge Godbey on

January 6, 2004. (Pls.’ App. at Tab C). 

Before the agreed judgment was entered, Habeeb, as a shareholder of GHE, filed suit against

Plaintiffs herein and against Timothy Sorenson (Plaintiffs’ legal counsel in this case and in the First

Federal Action) on December 17, 2003 in the 193 Judicial District Court of Dallas County (the rd

“State Action”). In Habeeb’s First Amended Original Petition in the State Action he asserts claims

against Goldstein for breach of contract, breach of fiduciary duty, and conversion, and claims against

Sorenson for negligence and breach of fiduciary duty. Habeeb also brings a claim for accounting.

(Def.’s App. at Ex. A, Tab 1). On April 1, 2004, Plaintiffs filed this case seeking to enjoin Habeeb

from prosecuting the State Action. 

II. Analysis

The All Writs Act grants federal courts the authority to “issue all writs necessary or

appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law.”

28 U.S.C. § 1651(a). This authority islimited by theAnti-Injunction Act, which generally prohibits

federal courts from enjoining state court proceedings except when doing so is (1) expressly authorized

by a federal statute; (2) necessary in aid of its jurisdiction; or (3) necessary to protect or effectuate

 

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a prior judgment by a federal court. 28 U.S.C. § 2283; Vines v. Univ. of Louisiana at Monroe, 398 F.3d

700, 704 (5 Cir. 2005). Plaintiffs urge the application of the third exception, known as the

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“relitigation exception”, which “was designed to permit a federal court to prevent state litigation of

an issue that previously was presented to and decided by the federal court.” Chick Kam Choo v.

Exxon Corp., 486 U.S. 140, 147 (1988). Here Plaintiffs argue that the claims brought by Habeeb in

the State Action arose out of the same nucleus of operative facts at issue in the First Federal Action

and were thus required to have been brought there as compulsory counterclaims. Because, Plaintiffs

contend, those claims could have and should have been raised in the First Federal Action, principles

of res judicata and collateral estoppel bar Habeeb from asserting them in the State Action.

Habeeb counters by arguing that the claims he is asserting in the State Action were not

compulsory counterclaims in the First Federal Action because he was sued in his individual capacity

in the First Federal Action while he brought suit only in a representative capacity in the State

Action. He also contends that a lack of complete identity of parties between the First Federal

Action and the State Action bars the application of res judicata and that, in any event, the claims

brought in the State Action do not arise out of the same set of operative facts that were at issue in

the First Federal Action. 

The Court need not determine whether the claimsraised by Habeeb in the State Action were

compulsory counterclaims in the First Federal Action because, even assuming that they were, this

Court would not be empowered to enjoin the State Action. The Fifth Circuit, relying on the

Supreme Court’s decision in Chick Kam Choo, has held that the relitigation exception of the AntiInjunction Act applies only to those claims that were actually litigated in the federal court and not

those claims that would be precluded by res judicata merely because they could have been litigated

 

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 Indeed, a comparison of the complaint in the First Federal Action and the petition in the State 1

Action reveals that the claims asserted in those actions are dissimilar. Plaintiffs’ claims in the First Federal

Action revolved around their charge that Habeeb infringed their intellectual property rights, breached

fiduciary duties by usurping corporate opportunities, and damaged them by making certain disparaging

remarks. In contrast, Habeeb’s claims in the State Action center around Habeeb’s contention that Plaintiffs

mismanaged the affairs of GHE and breached various contracts and fiduciary duties. 

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there. Texas Commerce Bank Nat’l Assoc. v. State of Florida, 138 F.3d 179, 182 (5 Cir. 1998); Farias th

v. Bexar County Bd. of Trustees for Mental Health Mental Retardation Serv., 925 F.2d 866, 879-80 (5th

Cir. 1991); Summit Design Serv., Inc. v. La Place Sand Co., Inc., 1999 WL 10386, at *1 (E.D. La. Jan.

7, 1999). Courts have explicitly held that a federal court is barred by § 2283 from enjoining state

proceedings involving claims that should have been, but were not, pleaded as compulsory

counterclaims in a prior federal action. Seattle Totems Hockey Club, Inc. v. Nat’l Hockey League, 652

F.2d 852, 855, n.5 (9 Cir. 1981) (“Rule 13(a) has been held not to create an express statutory

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exception to the proscriptions of § 2283"); Movado Group, Inc. v. Matagorda Ventures, Inc., 2000 WL

1154317, at *1 (S.D. N.Y. Aug. 14, 2000) (“Undoubtedly, res judicata can bar claims that might and

should have been raised but were not, but, for Anti-Injunction Act purposes, only ‘relitigation’ can

be enjoined.”); Wells’ Dairy, Inc. v. The Estate of J.P. Richardson, 89 F.Supp. 2d 1042, 1065 (N.D.

Iowa 2000) (same); 6 CHARLES A. WRIGHT ET AL., FEDERAL PRACTICE & PROCEDURE, at § 1418

(“Clearly the language of Rule 13(a) cannot be construed as empowering the federal court to restrain

state court proceedings.”). 

Plaintiffs here have neither alleged nor presented any evidence showing that any of the claims

asserted by Habeeb in the State Action were actually litigated in the First Federal Action. Instead 1

Plaintiffs merely contend that the claims involved in the State Action arose from the same core of

facts at issue in the First Federal Action and therefore should have been litigated there. Because the

 

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State Action does not involve claims that were actually litigated by a prior federal court, this Court

has no authority under § 2283 to enjoin the State Action from proceeding. Chick Kam Choo, 486

U.S. at 148 (“An essential prerequisite for applying the relitigation exception is that the claims or

issues which the federal injunction insulates from litigation in state proceedings actually have been

decided by the federal court.”).

Nor can Plaintiffs show (and, in fact, they do not even attempt to show) that any issues

present in the State Action were actually litigated in the First Federal Action such to trigger the

doctrine of collateral estoppel, or issue preclusion. Collateral estoppel is only appropriate if, among

other things, an issue was “fully and vigorously litigated in the prior action.” U.S. v. Shanbaum, 10

F.3d 305, 311 (5 Cir. 1994). Here, the First Federal Action was resolved through an agreed th

judgment. “Such a judgment ordinarily does not give rise to issue preclusion or collateral estoppel.”

Avondale Shipyards, Inc. v. Insured Lloyd’s, 786 F.2d 1265, 1272 (5 Cir. 1986); Arizona v. California,

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530 U.S. 416, 414 (2000); 18 CHARLES A. WRIGHT ET AL., FEDERAL PRACTICE & PROCEDURE , at

§ 4443 (“In most circumstances, it is recognized that consent agreements ordinarily are intended to

preclude any further litigation on the claim presented but are not intended to preclude further

litigation on any of the issues presented. Thus consent judgments ordinarily support claim preclusion

but not issue preclusion.”). Plaintiffs’ request that this Court enjoin the State Action on grounds

of collateral estoppel is therefore denied.

Finally, Plaintiffs have provided absolutely no basis for this Court to enjoin the State Action

based on judicial estoppel. The doctrine is designed to “prevent[] a party from asserting a position

in a legal proceeding that is contrary to a position previously taken in the same or some earlier

proceeding.” Hall v. GE Plastic Pac. PTE Ltd., 327 F.3d 391, 396 (5 Cir. 2003) (quoting Ergo th

 

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Science, Inc. v. Martin, 73 F.3d 595, 598 (5 Cir. 1996)). Two conditions must be satisfied before th

judicial estoppel can attach. First, the position of the party sought to be estopped must be clearly

inconsistent with a position previously taken by that party, and second, that party must have

convinced the court to accept the previously-held position. Id. Plaintiffs have failed to offer any

argument or evidence on either element, nor have they put forth any legal basis by which the

doctrine of judicial estoppel allows this Court to thwart a pending state court proceeding. In short,

Plaintiffs have failed to demonstrate any basis permitting this Court to interfere with the State

Action.

III. Conclusion

For the reasons set forth above, the Court DENIES Plaintiffs’ Motion for Summary Judgment

and GRANTS Defendant’s Cross Motion for Summary Judgment. The Court further finds that

Plaintiffs are not entitled to a preliminary or permanent injunction in this matter. Finding no basis

for this action to proceed, the Court will separately enter a final judgment in accordance with this

opinion. The Clerk is directed to close this case.

SO ORDERED.

SIGNED August 26 , 2005 th

_________________________________

JANE J. BOYLE

UNITED STATES DISTRICT JUDGE

 

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