Opinion ID: 8704070
Heading Depth: 3
Heading Rank: 3

Heading: Exceptions to Res Judicata

Text: There are, however, certain exceptions to the general rule of res judicata. See generally Wright & Miller at § 4415. For instance, “[r]es judicata does not bar parties from bringing claims based on material facts that were not in existence when they brought the original suit.” Apotex, 393 F.3d at 218 (citing Drake, 291 F.3d at 66); accord Stanton, 127 F.3d at 78 (“Federal law is clear that post judgment events give rise to new claims, so that claim preclusion is no bar.”) (emphasis deleted); Page, 729 F.2d at 820 & n. 12 (citing Lawlor v. Nat’l Screen Serv. Corp., 349 U.S. 322, 327-28, 75 S.Ct. 865, 99 L.Ed. 1122 (1955)). “And, in a small set of cases, a change in controlling legal principles may allow a party to relitigate a claim that would otherwise be barred by res judicata.” Apotex, 393 F.3d at 218 (citing Hardison, 655 F.2d at 1288-89 (noting that “on rare occasions the courts have been willing to override the bar of res judicata” in cases involving “paramount questions of constitutional law” (citing Moch v. E. Baton Rouge Parish Sch. Bd., 548 F.2d 594 (5th Cir.1977); Griffin v. State Bd. of Educ., 296 F.Supp. 1178 (E.D.Va.1969)))). 4 Some authorities have suggested that cases involving a post judgment change in statutory law may fall within that small set. If this is so, then reading § 1083(c)(3) (which was enacted years after the Hegnas won their first judgment) to authorize this suit would not conflict with the normal operation of res judicata. And if reading § 1083(c)(3) to authorize this suit would not affect the operation of res judicata, then the court need not avoid that reading by invoking the canon of constitutional doubt. The court must therefore investigate the authorities that assert a change-in-statutory-law exception to the general rule of res judicata. The principal authority for this proposition is the case of Alvear-Velez v. Mukasey, 540 F.3d 672 (7th Cir.2008), which involved the preclusive effect of administrative proceedings. Mr. Alvear-Velez was a lawful permanent resident who pled guilty to a criminal charge of sexual assault in 1993. The immigration authorities brought a deportation proceeding against him under 8 U.S.C. § 1251(a)(2)(A)®, which authorizes the deportation of aliens who have been convicted of a crime involving moral turpitude within five years of entry and imprisoned or sentenced to imprisonment for one year or more. In 1994, an immigration judge determined that Mr. Alvear-Velez had not been sentenced to imprisonment or confined for more than a year. Alvear-Velez, 540 F.3d at 675. The immigration judge entered an administrative order dismissing the deportation proceedings; that order became final. Id. Two years later, “Congress amended the statutory definition of aggravated felony, another ground for removal, to include sexual abuse of a minor, and it specifically applied that new definition retroactively ‘regardless’ of how long ago the ‘conviction was entered.’ ” Id. at 679 (quoting Illegal Immigration Reform and Immigrant Responsibility Act of 1996, Pub.L. No. 104-208, §§ 321(a)(1), (b), 110 Stat. 3009, 3009-628 (codified at 8 U.S.C. § 1101(a)(43)(A))). Mr. Alvear-Vel’s crime was an aggravated felony under this new definition, though it had not qualified as such under the definition in place during his 1994 deportation proceeding. Id. (citing 8 U.S.C. § 1101(a)(43) (1995)). The question in Alvear-Velez was whether the administrative order ending that first proceeding precluded the immigration authorities from bringing a second deportation proceeding on the grounds that the same crime was now (though it had not been then) a deportable offense. Although administrative adjudications are generally accorded preclusive effect, that background rule can be altered by Congress without raising any separation-of-powers concerns. Astoria Fed. Sav. & Loan Ass’n v. Solimino, 501 U.S. 104, 108, 111 S.Ct. 2166, 115 L.Ed.2d 96 (1991) (explaining that “the question is ... whether administrative estoppel ... is intended by the legislature”); see also Plant, 514 U.S. at 232, 115 S.Ct. 1447 (explaining that “legislation that alter[s] rights fixed by the final judgments of ... administrative agencies” does not raise separation-of-powers concerns (citing Paramino Lumber Co. v. Marshall, 309 U.S. 370, 60 S.Ct. 600, 84 L.Ed. 814 (1940))). It is for that reason that both the Seventh Circuit and this one “have applied res judicata much more flexibly in the administrative context” than in the context of the final judgments of Article III courts. Alvear-Velez, 540 F.3d at 677; accord Martin v. Malhoyt, 830 F.2d 237, 265 (D.C.Cir.1987) (Bader Ginsburg, J.) (citing with approval Purter v. Heckler, 771 F.2d 682, 691 (3d Cir.1985); Cartier v. Sec’y of State, 506 F.2d 191, 196 (D.C.Cir. 1974) (observing that “the doctrine of administrative res judicata ... has not evolved into a rigid system that is to be blindly applied in every context”)). The Alvear-Velez court noted that “in determining whether the doctrine of res judicata should be applied with less rigidity than usual,” courts have found that “statutory changes that occur after the previous litigation has concluded may justify a new action.” 540 F.3d at 678. That statement appeared limited to the preclusive effect of administrative determinations — the class of determinations for which res judicata can be “applied with less rigidity than usual.” Id. But a later formulation suggested that a change in statutory law can justify a “less rigid application of res judicata” outside of the administrative context — that a change in statutory law provides a reason to deviate from the general rule of res judicata independent of the institutional context in which the question arises. See id. at 680 (“[T]wo circumstances require a less rigid application of res judicata in this case. The relevant change here is statutory in nature ... and that change is being applied in the administrative context.”). The authorities on which Alvear-Velez relies for this proposition do not support the existence of a general change-in-statutory-law exception to the rule of res judicata. Alvear-Velez places the heaviest emphasis on United States v. Fisher, 864 F.2d 434 (7th Cir.1988) (Posner, J.), which involved the EPA’s enforcement of several environmental statutes. In 1982, the agency obtained a consent decree under the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq., under which it would monitor the groundwater on David Fisher’s farm. Fisher, 864 F.2d at 436. In 1987, the EPA again brought suit against Mr. Fisher, based upon “various events since the entry of the consent decree in 1982.” Id. at 437. This second suit was brought under the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §§ 9601 et seq., as amended by the Superfund Amendments and Reauthorization Act of 1986, Pub.L. No. 99-499, 100 Stat. 1613. The amended Act “authorize[d] the EPA to enter property when ‘there is a reasonable basis to believe that there may be a release or threat of release of a hazardous substance or pollutant or contaminant.’ ” Fisher, 864 F.2d at 437 (quoting 42 U.S.C. § 9604(e)(1)). When the EPA came to believe that hazardous substances were being released on Mr. Fisher’s farm, it “decided that it needed greater access to the farm than the consent decree authorized, in order to investigate fully the nature and extent of the soil and groundwater contamination and decide on appropriate remedial measures.” Id. Mr. Fisher refused to grant that access, and the EPA brought the second suit. “The basic difference between the two suits ... [was] that the first sought to enjoin Fisher and his corporation from handling, storing, or disposing of toxic wastes in a hazardous manner, whereas the second [sought] to enjoin Fisher from interfering with the EPA’s access to the farm to perform additional tests and, depending on what the tests showfed], to order additional steps taken to determine the hazards that the farm pose[d] to the public health.” Id. Mr. Fisher argued that the consent decree in the first suit precluded the EPA from bringing a second suit about hazardous waste treatment on his farm. As the Seventh Circuit recognized, “[a] consent decree is res judicata and thus bars either party from reopening the dispute by filing a fresh lawsuit.” Id. at 439. “The passage of a new statute, although it may require the modification of the decree, does not alter the general principle that a consent decree bars a fresh lawsuit arising from the same dispute that underlay the litigation in which the decree was entered.” Id. (citations omitted) (emphasis added). Nonetheless, the Seventh Circuit ruled that the EPA’s second suit could proceed. First, the court noted that there was “no indication that all the hazardous leakage with which the EPA [was] concerned occurred before the entry of the decree, and leakage occurring afterward would create a fresh cause of action.” Id.; accord Apotex, 393 F.3d at 218 (“Res judicata does not bar parties from bringing claims based on material facts that were not in existence when they brought the original suit.”). Moreover, the Fisher court observed, “[t]he Superfund amendments under which the present suit was filed were enacted four years after the consent decree was signed,” and “[t]he EPA has no authority to refuse to enforce the statute just because its staff made commitments before Congress spoke.” 864 F.2d at 439. Fisher does not stand for the proposition that a change in statutory law generally authorizes a second suit based on the same transaction or occurrence at issue in an earlier case that has gone to final judgment. Rather, Fisher rests in part on the uncontroversial proposition that new facts give rise to new claims, and in part on a harder-to-defme principle having to do with the allocation of power between Congress and the administrative agencies it has created. Fisher suggests that the actions of those agencies, such as their approval of a consent decree, cannot negate Congress’s authority to establish new standards and procedures by which agencies are to ensure the public health and safety. As the D.C. Circuit explained in rejecting the argument that, “by assessing a noncompliance penalty against a source subject to a consent decree” on the basis of statutory authority that did not exist when the decree was entered the “EPA interferes with the res judicata effect of the decree,” “Congress always has the power to impose a new penalty on continuing activity.” Duquesne Light Co. v. EPA, 698 F.2d 456, 469 (D.C.Cir.1983). In Fisher, Congress did no more than that, imposing a new inspection regime on continuing activity. That Congress can do as much does not mean that it can also alter the legal effect of concluded activity that has already been the subject of a final judicial judgment. The other cases relied on by AlvearVelez similarly fail to support a broad rule that changes in statutory law justify an exception to the preclusive effects of final judgments. Alvear-Velez cites Car Carriers, Inc. v. Ford Motor Co., 789 F.2d 589 (7th Cir.1986), and Wedow v. City of Kansas City, Mo., 442 F.3d 661 (8th Cir.2006), for the proposition that “the rule against claim splitting, which is one component of res judicata, is inapplicable when a statutory change creates a course of action unavailable in the previous action.” Alvear-Velez, 540 F.3d at 678. Car Carriers, which held that a claim was barred by res judicata because it arose from the same nucleus of facts at issue in an earlier suit, 789 F.2d at 595-96, includes the familiar maxim that “prior litigation acts as a bar not only to those issues which were raised and decided in the earlier litigation but also to those issues which could have been raised in that litigation,” id. at 593. Wed-ow similarly notes that “[r]es judicata bars claims that were or could have been litigated in the earlier proceeding, but it does not apply to claims that did not exist when the first suit was filed.” 442 F.3d at 669 (citation omitted). The Wedow court held that the claims before it could not have been litigated in an earlier suit, because they arose from facts that post-dated that case. Id. Because those facts did not exist at the time of the earlier litigation, the claims that derived from them did not exist, either. Thus, the well-established rule that “[r]es judicata does not bar parties from bringing claims based on material facts that were not in existence when they brought the original suit,” Apotex, 393 F.3d at 218, is one common meaning of the rule that “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,” Allen v. McCurry, 449 U.S. 90, 94, 101 S.Ct. 411, 66 L.Ed.2d 308 (1980), but not from litigating issues that could not have been raised. The other common meaning of that rule has to do with jurisdictional limits that sometimes prevent a claim from being brought before the tribunal that issues the potentially preclusive judgment. See generally Wright & Miller at § 4412. Indeed, to say that “a claim is not barred by res judicata if the forum in which the first action was brought lacked subject matter jurisdiction to adjudicate that claim” is simply “[ajnother way of stating the ... principle” that “[i]f a claim could not have been asserted in prior litigation, no interests are served by precluding that claim in later litigation.” Clark v. Bear Stearns & Co., 966 F.2d 1318, 1321 (9th Cir.1992). All of the cases that Alvear-Velez cites to support its assertion that “courts consistently have refused to apply res judicata to preclude a second suit that is based on a claim that could not have been asserted in the first suit,” 540 F.3d at 678, refer to some issue with the jurisdiction of the earlier tribunal. See Mass. Sch. of Law v. Am. Bar Ass’n, 142 F.3d 26, 38-39 (1st Cir.1998) (plaintiff could have asserted claims in earlier action because that tribunal had jurisdiction over them); Computer Assocs. Int’l, Inc. v. Altai, Inc., 126 F.3d 365, 370 (2d Cir.1997) (federal judgment does not bar foreign suit where the federal court “could not have exercised jurisdiction” over “a principal party to the [foreign] suit”); Clark, 966 F.2d at 1321 (arbitration decision does not preclude federal lawsuit where arbitration panel had no jurisdiction over federal claims); Kale v. Combined Ins. Co., 924 F.2d 1161, 1167 (1st Cir.1991) (discussing the “jurisdictional competence exception” to res judicata); Browning v. Navarro, 887 F.2d 553, 558 (5th Cir.1989) (“It is black-letter law that a claim is not barred by res judicata if it could not have been brought. If the court rendering judgment lacked subject-matter jurisdiction over a claim or if the procedural rules of the court made it impossible to raise a claim, then it is not precluded.”). Having examined Alvear-Velez and the cases cited therein, the court concludes that there is not — as that case may be read to suggest — any generally-applicable exception to res judicata for post judgment changes in statutory law. Rather, Alvear-Velez is best read to hold only that the preclusive effect of an administrative adjudication (to which res judicata applies less strictly than to a judicial judgment) may be diminished by changes in statutory law. 5 And the accepted maxim that res judicata does not bar claims that could not have been raised in the earlier action is best understood to refer to the usual rule that a judgment will not bar a later claim that the rendering body had no jurisdiction to hear, nor one that arose from post judgment events. Indeed, to hold otherwise would fly in the face of the Supreme Court’s reasoning in Plant The Plant Court concluded that because “virtually all of the reasons why a final judgment on the merits is rendered on a federal claim are subject to congressional control,” 514 U.S. at 228, 115 S.Ct. 1447 (emphasis deleted), a principle that allowed Congress to alter the elements of a cause of action and then authorize a second trial under the “new liberal (or alternatively, stringent) rule of pleading” despite a “final judgment[ ] rendered on the basis of [the former] stringent (or, alternatively, liberal) rule of pleading” would “provide! ] massive scope for undoing final judgments and would substantially subvert the doctrine of separation of powers,” id. at 229, 115 S.Ct. 1447. For that reason, and others discussed above, the court is content to adopt the following summary of the law in this area: Passage of a new statute will not per se create grounds for a new claim. However, on rare occasions, when a new statute provides an independent basis for relief which did not exist at the time of the prior action, a second action based on the new statute may be justified. Alvear-Velez, 540 F.3d at 678. These occasions may arise when threatened or continuing acts which were the subject of the prior action involve substantial public policy concerns, such as environmental pollution, Fisher, 864 F.2d at 439, or civil rights violations. Also, when a new statute conveys jurisdiction upon a court to entertain claims that were previously beyond its jurisdiction, a previous action dismissed for lack of jurisdiction will not preclude an action under the new statute. Outside of these limited circumstances, the general rule that a change in law will not abrogate the preclusive effect of a prior judgment still controls.... [Wjhile a statute may define the preclusive effect to be given to pending or future cases, it may not do [so] for cases that have achieved repose through a final judgment, and any party asserting such a statutory construction as the basis for a subsequent action will fail. 18 Moore’s Federal Practice § 131.22[3] (footnotes deleted or incorporated into text) (citations omitted and emphases added).