Opinion ID: 444219
Heading Depth: 1
Heading Rank: 3

Heading: The Anti-Injunction Act's Relitigation Exception

Text: 30 The Anti-Injunction Act prohibits a federal court from enjoining state court litigation unless the injunction falls within one of three limited exceptions: (1) if expressly authorized by Congress; (2) where necessary in aid of a federal court's jurisdiction; and (3) to protect or effectuate a federal court's judgment. 28 U.S.C. Sec. 2283. The district court in the present case issued its injunction under the third of these exceptions, the relitigation exception. As stated in Woods Exploration, [t]he 'relitigation' principle ... means simply that a federal court may enjoin a state court proceeding which is precluded under the doctrine of res judicata. 438 F.2d at 1312. 31 The district court's earlier judgment in the BHCA action was in favor of the Bank. This judgment was res judicata as to the state action which resulted in a contrary judgment, awarding appellants the damages that were denied them in the federal action. Accordingly, the district court enjoined appellants from enforcing that state court judgment in order to effectuate its own previous judgment. 32 Although district courts have been warned to be hesitant in enjoining state litigation, see Atlantic Coast Line Railroad Company v. Brotherhood of Locomotive Engineers, 398 U.S. 281, 90 S.Ct. 1739, 26 L.Ed.2d 234 (1970), the decision of whether to take such action remains one of discretion for the district court. Delta Air Lines, Inc. v. McCoy Restaurants, Inc., 708 F.2d 582 (11th Cir.1983) (Within the limits of that discretion, a district court in a given case might go either way and not be reversed.). Because of the sensitive nature of interfering with state court systems, district courts require that parties requesting an injunction make a strong and unequivocal showing of relitigation. In re Corrugated Container Antitrust Litigation, 659 F.2d 1332, 1334 (5th Cir.1981), cert. denied, 456 U.S. 936, 102 S.Ct. 1993, 72 L.Ed.2d 456 (1982). This approach is justified by the idea that [i]f the federal court is too cautious, 'all is not lost. A state court is as well qualified as a federal court to protect a litigant by the doctrines of res judicata and collateral estoppel.'  Delta Air Lines, Inc. v. McCoy Restaurants, Inc., 708 F.2d 582, 585-86 (11th Cir.1983) (quoting Southern California Petroleum Corp. v. Harper, 273 F.2d 715, 719 (5th Cir.1960)). 33 In the present case, however, the district court had the benefit of knowing that the Bank was denied the protections of res judicata and collateral estoppel in state court. As noted by the district court, it is easy to understand how the state court was misled into thinking that the federal cause of action was distinct from the state claims because the pleadings were vague and complicated. The federal district judge, having tried the federal action, was in a uniquely qualified position to determine that the federal action was res judicata as to the state action. See Delta Air Lines, 708 F.2d at 586 (district judge who presided over federal action was in best position to assess whether claims raised in state court were the same as those asserted in federal action). After finding the BHCA action to be res judicata to the subsequent state action, the district court was justified in holding that an injunction was necessary to effectuate its prior judgment. 34 Appellants raise a variety of arguments as to why the injunction was an abuse of discretion. First, they assert that the state court has already ruled on the question of whether the BHCA was res judicata as to the state court action. Because the state court held that the federal action was not res judicata, appellants argue, the Bank is now collaterally estopped from relitigating this issue in federal court. 35 It is true that, as between courts in two states, if one court (court A) holds that a prior judgment in the court of another state (court B) is not res judicata as to the action in court A, court B is then bound by this determination under the Full Faith and Credit Clause of the Constitution. U.S. Const. Art. IV, Sec. 1. See Wright, Miller, & Cooper, Federal Practice and Procedure, Sec. 4404 (1981). It is also true that federal courts are generally bound by state court rulings under the Federal Full Faith and Credit Statute, 28 U.S.C. Sec. 1738. In absence of federal law modifying the operation of Sec. 1738, we would give the Alabama circuit court's res judicata ruling the same effect it would be accorded in the courts of that state. Migra v. Warren City School District Board of Education, --- U.S. ----, 104 S.Ct. 892, 896, 79 L.Ed.2d 56 (1984). In the present case, however, the operation of Sec. 1738 is modified by federal law: the relitigation exception of the Anti-Injunction Act, 28 U.S.C. Sec. 2283. 36 The relitigation exception was added to the Anti-Injunction Act in 1948 to codify the doctrine which allowed federal courts to enjoin relitigation in state courts of issues that federal courts had already adjudicated. International Association of Machinists & Aerospace Workers v. Nix, 512 F.2d 125, 130 (5th Cir.1975). The legislation abrogated the Supreme Court decision in Toucey v. New York Life Insurance Company, 314 U.S. 118, 62 S.Ct. 139, 86 L.Ed. 100 (1921), which had rejected this doctrine. 12 In discussing the nature of the relitigation exception, the Fifth Circuit stated, 37 Rather than doing violence to principles of federalism, [the relitigation exception], when applied in a proper case, enhances them. As we observed in [Jacksonville Blow Pipe Co. v. Reconstruction Blow Pipe Corp., 244 F.2d 394 (5th Cir.1957) ], nothing would be as productive of friction between the state and the federal courts as to permit a state court to interpret and perhaps to upset such a judgment of a federal court. 244 F.2d at 400. We advanced an even more practical justification for this doctrine in the Woods Exploration case: the relitigation exception prevents multiple litigation of the same cause of action and it assures the winner in a federal court that he will not be deprived of the fruits of his victory by a later contrary state judgment which the Supreme Court may or may not decide to review, 438 F.2d at 1312, citing Note, Federal Power to Enjoin State Court Proceedings, 74 Harv.L.Rev. 726, 734 (1961). 38 International Association of Machinists & Aerospace Workers v. Nix, 512 F.2d at 130-131. 39 It is now settled that the relitigation exception enables a federal court to enjoin state litigation which is precluded by the doctrine of res judicata. Woods Exploration, 438 F.2d at 1312. A state court's determination of the res judicata effect of a federal court's prior judgment cannot be used to vitiate a federal court's injunction power under the relitigation exception. We therefore hold that, while a federal court is generally bound by other state court determinations, the relitigation exception empowers a federal court to be the final adjudicator as to the res judicata effects of its prior judgments on a subsequent state action. 13 40 Appellants' next two arguments relate to the point in time at which the Bank requested a federal injunction. First, appellants argue that the Bank waived its right to an injunction by waiting until after the state action had been tried before requesting an injunction under the relitigation exception. The Bank argues that if it had requested an injunction before the state trial, the federal court would have been inclined to deny the injunction since the state court pleadings obfuscated the fact that the state action involved the same basic cause of action which was tried in the BHCA action. The district court agreed that the pleadings were the source of confusion in these two actions and held that the Bank had not waived its right to an injunction by delaying until after the state trial. We see no reason to disturb this holding. The Bank should not be penalized for its reluctance to come back to federal court while it was not clear whether the federal court's prior judgment was in danger of being nullified. 41 Alternatively, appellants argue that the Bank's request for an injunction is premature. They assert that an injunction is improper so long as the Bank continues to have a remedy at law. The remedy at law in this case, appellants argue, is the Bank's right to appeal the Alabama circuit court judgment to a state appellate court. This argument has no merit. It would apply with equal force to a party seeking an injunction before a state trial. There, the argument would be that the party's remedy at law was resolution of the issue in the state trial court. In both situations, once it is apparent that a prior federal judgment is res judicata, there is no need to allow a state court system to waste time and effort on the issue. No remedy at law exists to protect the Bank from having to pursue the state action on appeal, just as no remedy at law exists to protect a party from having to relitigate an issue at trial. A federal court is empowered to enjoin state court proceedings to protect its judgment and Sec. 2283 does not limit this power to specific points in time in state court trials or appellate procedure. See, e.g., Bank of Heflin v. Miles, 621 F.2d 108 (5th Cir.1980) (district court properly granted injunction which nullified Alabama Supreme Court directive). 42 Appellants' next argument is that an injunction is unfair in this case because they could not properly join their state claims in federal court. The district court held that appellants could have, and should have raised these claims under pendent jurisdiction. See United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966) (pendent jurisdiction available where claims arise out of a common nucleus of operative fact and be of such nature that one would expect the plaintiff to try them together). Appellants argue, however, that to properly litigate their fraud claims, it would have been necessary to join Michael Orange and OSI, Inc. as defendants in the federal action. 14 Because no independent federal claims were asserted against these additional defendants, appellants argue that they could not be joined as defendants in federal court. This argument misconstrued the doctrine of pendent party jurisdiction. This circuit explained the nature of pendent party jurisdiction in Williams v. Bennett, 689 F.2d 1370 (11th Cir.1982), cert. denied, --- U.S. ----, 104 S.Ct. 335, 78 L.Ed.2d 305 (1983): 43 Under this theory, a court in some limited circumstances may bring in state parties over which it could not otherwise exercise jurisdiction. See Aldinger v. Howard, 427 U.S. 1, 96 S.Ct. 2413, 49 L.Ed.2d 276 (1976); Arango v. Guzman Travel Advisors Corp., 621 F.2d 1371, 1377 n. 7 (5th Cir.1980); Boudreaux v. Puckett, 611 F.2d 1028, 1030-31 (5th Cir.1980); see, e.g., Connecticut General Life Insurance Co. v. Craton, 405 F.2d 41 (5th Cir.1968). The exercise of such pendent party jurisdiction turns on judicial economy considerations and whether ... Congress has expressly or impliedly negated the existence of jurisdiction of a pendent claim or party. Boudreaux, 611 F.2d at 1031. 44 689 F.2d at 1379 (footnote omitted). 45 Congress has not expressly or impliedly negated the existence of pendent party jurisdiction in the BHCA, the statute which gave rise to federal jurisdiction in the first action. 15 Compare Aldinger v. Howard, 427 U.S. 1, 96 S.Ct. 2413, 49 L.Ed.2d 276 (1976) (holding that Congress had negated pendent party jurisdiction over a county in a Sec. 1983 action) with Lykins v. Pointer Incorporated, 725 F.2d 645 (11th Cir.1984) (holding that pendent party jurisdiction is available in the context of 28 U.S.C. Sec. 1346(b), which grants federal jurisdiction over torts claims against the United States). 46 The district court therefore had the power to assert pendent party jurisdiction over Michael Orange and OSI, Inc. The exercise of this jurisdiction is a discretionary decision reserved to the district court. Williams v. Bennett, 689 F.2d at 1379. See also Lykins v. Pointer Incorporated, 725 F.2d 645 (11th Cir.1984). 47 The possibility that the district court might have refused to exercise pendent party jurisdiction does not help appellants' position. We agree with the Seventh Circuit's view of this argument. 48 We fail to discern the unfairness in requiring a plaintiff to join all relevant theories of relief in a single proceeding. The uncertainty over whether a trial judge would exercise pendent jurisdiction does not justify permitting the institution of a multiplicity of proceedings which may have the effect of harassing defendants and wasting judicial resources. If appellant entertained any doubts at the pleading stage, they should have been resolved in favor of joinder. See Federated Department Stores v. Moitie, 452 U.S. 394, 101 S.Ct. 2424, 69 L.Ed.2d 103 (1981) (Blackmun, J., concurring); Woods Exploration and Producing Co. v. Aluminum Company of America, 438 F.2d 1286 (5th Cir.1971). 49 Harper Plastics v. Amoco Chemicals Corporation, 657 F.2d 939, 946 (7th Cir.1981).