Opinion ID: 770211
Heading Depth: 2
Heading Rank: 3

Heading: Bancorp II

Text: 73 After the district court granted summary judgment in favor of the FDIC in Bancorp I, Plaintiffs, acting this time as the Bank alone, filed a second action in state court, Bancorp II, alleging the same misconduct by the FDIC. In Bancorp II, the Bank raised only state law claims against the FDIC for breach of fiduciary duty, unjust enrichment, intentional misrepresentation, and an accounting. The FDIC removed the action to federal court. The district court dismissed the action, concluding that the Bank sought the same relief in the present action that was denied in the prior action. The district court ruled that Bancorp I resolved this case. Plaintiff cannot create identical state law claims to get around the comprehensive federal statutory system. 74 The district court held that these claims were barred by res judicata. We agree. 75 When considering the preclusive effect of a federal court judgment, we apply the federal law of claim preclusion. See Sullivan v. First Affiliated Sec., Inc., 813 F.2d 1368, 1376 (9th Cir. 1987). A final federal court judgment on the merits bars a subsequent action between the same parties which involves the same cause of action. See Fund for Animals, Inc. v. Lujan, 962 F.2d 1391, 1398 (9th Cir. 1992). 76 Review is de novo. See United Parcel Serv., Inc. v. California Pub. Util. Comm'n, 77 F.3d 1178, 1182 (9th Cir. 1996). 77 The Bank argues that Bancorp I should not be given preclusive effect because the court disposed of the action on summary judgment rather than adjudicating factual questions. However, the central question is whether the Bank had a right to proceed in state court when a federal court had already entered judgment. Thus, we ask whether the two causes of action are the same for purposes of claim preclusion. 78 To answer that question, we look to the following factors: (1) whether rights or interests established in the prior judgment would be destroyed or impaired by prosecution of the second action; (2) whether substantially the same evidence is presented in the two actions; (3) whether the two suits involve infringement of the same right; and (4) whether the two suits arise out of the same transactional nucleus of facts. International Union of Operating Eng'rsEmployers Constr. Indus. Pension, Welfare and Training Trust Funds v. Karr , 994 F.2d 1426, 1429 (9th Cir. 1993) (quoting Costantini v. Trans World Airlines, 681 F.2d 1199, 1201-02 (9th Cir. 1982)). The last of these criteria is the most important. See Costantini, 681 F.2d at 1202. 79 The two actions in these consolidated cases arise from the same transactional nucleus of facts. The Bank's dissatisfaction with the FDIC's accounting reports of its receivership lies at the heart of both actions. Bancorp I is based on Plaintiffs' attempt to force the FDIC to produce the accounting reports required by 12 U.S.C. S 1821(d)(15), and every cause of action brought in Bancorp II is based on alleged defects in the reports appellants actually received. Plaintiffs could have brought in Bancorp I the claims asserted in Bancorp II. Claim preclusion bars grounds for recovery which could have been asserted in a prior suit between the same parties on the same cause of action. See Federated Department Stores, Inc. v. Moite, 452 U.S. 394, 398 (1981) (A final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action.). Indeed, Plaintiffs conceded at oral argument that they would not have caused the Bank to bring suit in Bancorp II if they had prevailed in Bancorp I. The Plaintiffs' remedy, whatever its extent, lies in Bancorp I. The district court correctly dismissed Bancorp II.