Opinion ID: 615602
Heading Depth: 2
Heading Rank: 2

Heading: The Agreement Requires Dismissal

Text: The Board found error in applying res judicata to dismiss Petitioner's November 9, 2009 appeal because the AJ had not examined the underlying merits of the DVA removal in his prior decision. Rather, the Board held that the legal doctrine preventing Petitioner's new appeal was the law of the case doctrine. Under this doctrine, [i]ssues decided at an earlier stage of litigation, either explicitly or by necessary inference from the disposition, constitute the law of the case. Kori Corp. v. Wilco Marsh Buggies & Draglines, Inc., 761 F.2d 649, 657 (Fed.Cir.1985) (citation omitted). The Board dismissed Petitioner's second appeal based on this doctrine, relying on the terms of the Agreement. We affirm the Board's final decision dismissing the November 9, 2009 appeal, but we find that the law of the case doctrine is not the correct analysis to employ here. The Board has sometimes refused to apply res judicata where a prior dispute was dismissed pursuant to settlement agreement, maintaining that such resolutions do not reach the merits and cannot have preclusive effect. See Vargo v. USPS, 62 MSPR 156, 159 (1994). The Board has relied instead on the law of the case doctrine to prevent relitigation of settled matters. Id. As explained below, we look with disfavor on the use of the law of the case doctrine by administrative agencies when a final order dismissing a case was earlier made on the basis of a settlement agreement. [2] In such circumstances, a subsequent appeal is barred by res judicata. Pursuant to the doctrine of res judicata, a final judgment on the merits bars a second action involving the same parties and the same claim. See Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326 n. 5, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979); Carson v. Dep't of Energy, 398 F.3d 1369, 1374-75 (Fed.Cir.2005); see also Wade v. Dep't of the Air Force, 70 MSPR 396, 399 (1996), aff'd, 104 F.3d 375 (Fed.Cir.1996). It is widely agreed that an earlier dismissal based on a settlement agreement constitutes a final judgment on the merits in a res judicata analysis. See Epic Metals Corp. v. H.H. Robertson Co., 870 F.2d 1574, 1576 (Fed.Cir.1989), cert. denied, 493 U.S. 855, 110 S.Ct. 160, 107 L.Ed.2d 117 (1989) (construing Third Circuit law and stating that under principles of res judicata . . . consent judgments have the same force and effect as judgments entered after a trial on the merits); see also Larken, Inc. v. Wray, 189 F.3d 729, 732 (8th Cir.1999) (When the parties to a previous lawsuit agree to dismiss a claim with prejudice, such a dismissal constitutes a `final judgment on the merits' for purposes of res judicata. ); Chase Manhattan Bank, N.A. v. Celotex Corp., 56 F.3d 343, 345 (2d Cir.1995) (A voluntary dismissal with prejudice is an adjudication on the merits for purposes of res judicata. ); Langton v. Hogan, 71 F.3d 930, 935 (1st Cir.1995) (A judgment that is entered with prejudice under the terms of a settlement, whether by stipulated dismissal, a consent judgment, or a confession of judgment, is not subject to collateral attack by a party or a person in privity, and it bars a second suit on the same claim or cause of action.). For res judicata purposes, therefore, consent judgments entered pursuant to settlement agreements have the same effect as judgments after a trial on the merits. Hallco Mfg. Co. v. Foster, 256 F.3d 1290, 1294-95 (Fed.Cir.2001); see also Pactiv Corp. v. Dow Chem. Co., 449 F.3d 1227, 1230 (Fed.Cir.2006) (A dismissal with prejudice is a judgment on the merits for purposes of claim preclusion.). The record establishes that the Agreement was lawful and a full and complete settlement of all issues in the appeal. A17. The AJ entered it into the record, dismissing the case on March 26, 2009. That decision became final April 30, 2009. Upon Petitioner's subsequent appeal, the AJ confronted the same parties and the same claims as in the original suit, namely, Ms. Ford-Clifton challenging her January 23, 2009 removal by the DVA. Since the AJ's earlier dismissal based on the Agreement resolved all issues regarding Petitioner's removal, that decision is a final judgment on the merits for res judicata purposes. Hallco, 256 F.3d at 1294-95. The AJ thus properly found the second appeal barred by res judicata, and dismissal was appropriate on that ground. See Sullivan v. Dep't of Justice, 282 Fed. Appx. 828, 830 (Fed.Cir.2008) (affirming dismissal on res judicata grounds because the petition arose from the same event Mr. Sullivan previously challenged and eventually settled. . . .); cf. Fletcher v. LISPS, No. SF-0353-08-0383-I-1, 2008 MSPB LEXIS 3404, at , rev. denied, 110 MSPR 151 (2008) (It is well-settled that, where a party requests a voluntary dismissal of his appeal with an affirmative expression of the intent to abandon the appeal, the dismissal will be considered to be `with prejudice.' Under such circumstances, the dismissal is considered final, and relitigation of such appeal is barred by res judicata. ). We also believe that the AJ's dismissal, in addition to res judicata, could be characterized in terms of waiver. See Mannion v. Dep't of Treasury, 429 Fed. Appx. 986, 987-90 (Fed.Cir.2011) (affirming the Board's decision that the petitioner could not reinstate or reopen her appeal because she entered into a settlement agreement wherein she voluntarily waived any and all rights to file, pursue or litigate in any forum, including . . . the MSPB . . . any and all of her claims). By the Agreement's express terms, Petitioner withdrew any pending action and waived all additional claims, grievances, and proceedings arising from her DVA removal. Since the March 26, 2009 decision was based on the Agreement, which fully and completely resolved this matter, we affirm the Board's determination on this ground as well.