Opinion ID: 622593
Heading Depth: 5
Heading Rank: 1

Heading: State Requirements

Text: Federal courts must give preclusive effect to a state-court judgment only if the rendering state court would do the same. Kremer v. Chem. Const. Corp., 456 U.S. 461, 466, 102 S.Ct. 1883, 72 L.Ed.2d 262 (1982). Under Arkansas law, [t]he claim-preclusion aspect of res judicata bars re-litigation of a subsequent suit when: (1) the first suit resulted in a final judgment on the merits; (2) the first suit was based on proper jurisdiction; (3) the first suit was fully contested in good faith; (4) both suits involve the same claim or cause of action; and (5) both suits involve the same parties or their privies. Baptist Health v. Murphy, 2010 Ark. 358, ___ S.W.3d ___, 2010 WL 3835844, at -8 (Ark. Nov. 11, 2010). When state and federal cases percolate simultaneously... the first forum to dispose of the case is the forum whose judgment ... is binding on the parties. Id. at ___, 2010 WL 3835844, at . The parties do not dispute that the Runyan judgment is final for purposes of res judicata. See also Crager v. Runyan, ___ U.S. ___, 132 S.Ct. 243, 181 L.Ed.2d 139 (2011) (denying petition for writ of certiorari with respect to Runyan settlement after settlement was affirmed by the Arkansas Supreme Court). Rather, Gooch contests only the second and third requirements: jurisdiction and good-faith contestation. The Arkansas Supreme Court has disposed of Gooch's arguments, making us certain that Arkansas would give preclusive effect to its judgment. First, the Arkansas court that certified the Runyan class had proper jurisdiction. On the direct appeal in Runyan, the Arkansas Supreme Court expressly made this holding, distinguishing both cases on which Gooch now relies. Runyan, ___ S.W.3d at ___ - ___, 2011 WL 478594, at -10 (distinguishing MacSteel Div. of Quanex v. Ark. Okla. Gas Corp., 363 Ark. 22, 210 S.W.3d 878 (2005), and UHS of Ark., Inc. v. Charter Hosp. of Little Rock, Inc., 297 Ark. 8, 759 S.W.2d 204 (1988)). Second, the parties to Runyan fully contested the settlement in good faith. The Arkansas Supreme Court held that the record does not demonstrate that the settlement agreement was reached prior to th[e Runyan ] suit being filed because a month and a half passed between filing the complaint and executing the written settlement. Id. at ___, 2011 WL 478594, at  12. Moreover, [t]hat settlement negotiations were underway at the time the complaint was filed in [ Runyan ] ... does not demonstrate that the parties were not adverse. Id. at ___, 2011 WL 478594, at . [T]here was indeed a history of contentious litigation between these parties, stemming back to June 2007. Id. [E]ven if the general parameters of a settlement had been reached, the fact remains that the parties were adverse and negotiations could have broken down at any time before the written agreement was executed. Id. Under Arkansas law, the parties fully contested the settlement in good faith. Because the Arkansas Supreme Court's opinion in Runyan expressly rejected Gooch's arguments, we have no doubt that Arkansas would give preclusive effect to the Runyan settlement.