Opinion ID: 3175160
Heading Depth: 2
Heading Rank: 1

Heading: Dismissal Based on Res Judicata2

Text: We review de novo § 1915(a)(2)(B)(ii) dismissals. Kay v. Bemis, 500 F. 3d 1214, 1217 (10th Cir. 2007). Res judicata is a question of law that we review de novo. Plotner v. AT&T Corp., 224 F.3d 1161, 1168 (10th Cir. 2000). Res judicata bars a claim when “(1) the prior suit . . . ended with a judgment on 2 Although not raised on appeal, we briefly address whether the court had authority under 28 U.S.C. § 1915 to dismiss Appellants’ complaint sua sponte based on res judicata, which is an affirmative defense. We have held a “complaint may be dismissed sua sponte under § 1915 based on an affirmative defense . . . only when the defense is obvious from the face of the complaint and no further factual record is required to be developed.” Fogle v. Pierson, 435 F.3d 1252, 1258 (10th Cir. 2006) (internal quotations omitted); see also Fratus v. DeLand, 49 F.3d 673, 675 (10th Cir. 1995) (stating a complaint may not be dismissed “by raising sua sponte an [affirmative defense] that was neither patently clear from the face of the complaint nor rooted in adequately developed facts”). Here, the court could clearly recognize the defense of res judicata from Appellants’ complaint. The court was familiar with the First Suit and did not need to have additional facts to address res judicata. See Arizona v. California, 530 U.S. 392, 412 (2000) (“[I]f a court is on notice that it has previously decided the issue presented, the court may dismiss the action sua sponte, even though the defense has not been raised. This result is fully consistent with the policies underlying res judicata: it is not based solely on the defendant’s interest in avoiding the burdens of twice defending a suit, but is also based on the avoidance of unnecessary judicial waste.”). -4- the merits; (2) the parties [are] identical or in privity; (3) the suit [is] based on the same cause of action; and (4) the [Appellants have] had a full and fair opportunity to litigate the claim in the prior suit.” Id. The first two elements are satisfied. The court entered a final judgment against Appellants for failing to state a claim in the First Suit, and the parties in the two suits are identical. As to the third element, we apply a “transactional approach” to determine whether the two suits are based on the same claim. See id. at 1169. Under the transactional approach, “a claim arising out of the same transaction, or series of connected transactions as a previous suit, which concluded in a valid and final judgment, will be precluded.” Yapp v. Excel Corp., 186 F.3d 1222, 1227 (10th Cir. 1999); see also Plotner, 224 F.3d at 1169 (“[A] cause of action includes all claims or legal theories of recovery that arise from the same transaction, event, or occurrence.” (quotations omitted)). In the First Suit, Appellants brought a RICO claim alleging Appellees falsely claimed a security interest on Appellants’ home and that Appellees sought payment based on a mortgage on Appellants’ home. In the Second Suit, Appellants alleged Appellees violated TILA in connection with the same mortgage. Appellants argue the two suits are not the same because Appellants did not raise any TILA claims in the First Suit. But both suits involve the same mortgage, and Appellants could have brought the TILA claim when they alleged the RICO claim. Appellants do not argue they lacked facts needed to raise the TILA claim in the First Suit. Thus, because both suits involve a transaction regarding the same mortgage and no additional facts were needed to bring the TILA -5- claim, the third res judicata element is satisfied. As to the fourth element, we “focus on whether there were significant procedural limitations in the prior proceeding, whether the party had the incentive to litigate fully the issue, or whether effective litigation was limited by the nature or relationship of the parties.” SIL-FLO, Inc. v. SFHC, Inc., 917 F.2d 1507, 1521 (10th Cir. 1990). Appellants do not allege any facts suggesting the First Suit was deficient for these reasons. They argue only that they did not have a “full and fair opportunity” to litigate the TILA claim because of an intervening change of controlling law. We address this argument in the next section. The court did not err in finding all four elements of res judicata satisfied.