Opinion ID: 791778
Heading Depth: 2
Heading Rank: 2

Heading: Ordinary preclusion principles

Text: 55 We now turn to whether the federal action is barred by ordinary preclusion principles. Exxon Mobil teaches that the narrow Rooker-Feldman inquiry is distinct from the question whether claim preclusion (res judicata) or issue preclusion (collateral estoppel) will defeat a federal plaintiff's suit. Because under pre- Exxon Mobil Second Circuit law, Rooker-Feldman was held to be coextensive with preclusion, the parties fully briefed the preclusion issues in this case, and the district court's decision not to apply Rooker-Feldman was equally a decision that neither claim nor issue preclusion foreclosed the voters' suit. We therefore review the district court's decision as a matter of preclusion law, apart from the Rooker-Feldman question. Because the Full Faith and Credit Act, 28 U.S.C. § 1738, requires federal courts to accord state judgments the same preclusive effect those judgments would have in the courts of the rendering state, New York preclusion law applies.
56 Claim and issue preclusion are affirmative defenses that frequently turn on pure questions of law, or on the application of law to undisputed facts, and we therefore generally review de novo a district court's ruling on preclusion. See, e.g., Diorinou v. Mezitis, 237 F.3d 133, 138-39 (2d Cir.2001); SEC v. Monarch Funding Corp., 192 F.3d 295, 303 (2d Cir.1999). In some cases, however, whether preclusion applies will turn on the question of privity. Courts and commentators differ as to whether privity is a question of law or of fact. The Fifth Circuit seems to have taken both positions, first observing that the determination of identity between litigants for the purpose of establishing privity is a factual question, Astron Indus. Assocs., Inc. v. Chrysler Motors Corp., 405 F.2d 958, 961 (5th Cir.1968), and later stating (without suggesting that Astron was being overruled) that federal cases have recognized that `privity' denotes a legal conclusion rather than a judgmental process, Southwest Airlines Co. v. Texas Int'l Airlines, Inc., 546 F.2d 84, 95 (5th Cir.1977). 57 Decisions from this circuit, too, are in discord on the question. In Expert Electric, Inc. v. Levine, this court observed that the identity of parties, qualified by the doctrine of privity . . . is a factual determination of substance, not mere form. 554 F.2d 1227, 1233 (2d Cir.1977) (citing Astron Indus., 405 F.2d at 961). Subsequently, however, Stone v. Williams, 970 F.2d 1043, 1059 (2d Cir.1992), cited with seeming approval the Fifth Circuit's characterization in Southwest Airlines of privity as a legal conclusion. More recently still, Chase Manhattan Bank cited Expert Electric for the proposition that [s]ome courts have. . . held that the [privity] inquiry is a factual issue. 56 F.3d at 346. The language in Chase Manhattan Bank — some courts where this court would have been proper — suggests ambivalence over whether privity should always be considered a question of fact. 58 The Seventh Circuit has tackled the question head-on and resolved it by holding that because privity sometimes turns on facts and other times turns on legal questions, [t]he question of privity is therefore particularly amenable to a sliding-scale standard of review. In re L & S Indus., Inc., 989 F.2d 929, 932-33 (7th Cir.1993). Similarly, a leading treatise notes that 59 the ultimate conclusion [about privity] may turn essentially on matters of fact in some cases, while in other cases it may turn primarily on legal concepts. The standard of review is shaped by the specific setting, permitting free review when legal appraisal of the underlying relationships dominates the inquiry and limiting review to a clear-error standard when factual issues dominate. 60 18A Wright, Miller & Cooper, Federal Practice & Procedure: Jurisdiction 2d § 4449, at 353 (2002). 61 We need not resolve in this case when, as a general matter, privity should be treated as a question of law or a question of fact. Instead, we note that the district court's determination about privity rested on the purely legal proposition that `[c]andidates' rights, though related to voters' rights, are said to be distinct from them.' Hoblock, 341 F.Supp.2d at 173 (quoting Griffin v. Burns, 570 F.2d 1065, 1072 (1st Cir.1978)). Based on this proposition, the district court found that the candidates' interest in having the voters' absentee ballots counted was insufficient to create privity. Id. Because we review questions of law de novo, we will review de novo the district court's no-privity finding under the circumstances of this case, as well as its rulings on other legal questions related to claim and issue preclusion.
62 Under New York law, issue preclusion will apply only if (1) the issue in question was actually and necessarily decided in a prior proceeding, and (2) the party against whom [issue preclusion] is asserted had a full and fair opportunity to litigate the issue in the first proceeding. Moccio, 95 F.3d at 200 (internal quotation marks omitted). The issue in question in the federal suit is whether voters' federal constitutional rights are violated by the Board of Elections' refusal to count absentee ballots on the ground that those ballots, although issued to voters by the Board of Elections, were invalid under state law. The Board maintains that the New York Court of Appeals necessarily decided this constitutional question in Gross III, 3 N.Y.3d 251, 785 N.Y.S.2d 729, 819 N.E.2d 197, and points out that Judge Rosenblatt's dissent refers to a First Circuit case, Griffin v. Burns, 570 F.2d 1065 (1st Cir.1978), that decided an election dispute similar to the one in this case on federal constitutional grounds. See Gross III, 785 N.Y.S.2d 729, 819 N.E.2d at 206 n. 2 (Rosenblatt, J., dissenting). The Board also points out that the opinion dissenting in part from the New York Appellate Division's ruling in Gross II accuses the majority of depriv[ing] voters of their constitutional right to vote. . . . 781 N.Y.S.2d at 176 (Spain, J., concurring in part and dissenting in part). 63 Certainly the authors of the dissenting opinions cited by the Board believed that the voters' constitutional rights were at stake. But to determine what issues were actually and necessarily decided by the New York Court of Appeals — and it is the preclusive effect of that decision alone that is in question — we look to the majority opinion. Where, as here, that opinion unambiguously relies on state law alone, we cannot say that the court decided federal constitutional questions just because a dissenting judge in the Court of Appeals (let alone dissenting judges in the Appellate Division) would have preferred that the case be decided differently on constitutional grounds. The New York Court of Appeals held that the absentee ballots collected in violation of both a federal court order and article 8 of the [New York] Election Law are invalid. . . . Gross III, 785 N.Y.S.2d 729, 819 N.E.2d at 199. It explained further that in New York, the right to vote by absentee ballot is purely a statutory right. Id. Nowhere does the Court of Appeals discuss the voters' constitutional rights, and we therefore agree with the district court that [t]he issue of whether the invalidation of the absentee ballots would violate the Fourteenth Amendment was not addressed by the Court of Appeals, Hoblock, 341 F.Supp.2d at 173, and issue preclusion thus does not bar the voters from litigating this issue in federal court. 64 The district court further held that issue preclusion does not apply because the voters were not parties in the state-court proceeding and therefore lacked the requisite full and fair opportunity to litigate the question of their constitutional rights in state court. Id. Because our finding that the voters' constitutional rights were not at issue in the state-court litigation disposes of the issue-preclusion question, we can resolve that question without deciding whether the voters were (actually or constructively) parties to that litigation.
65 The claim-preclusion question, by contrast, turns entirely on whether the voters were parties, or were in privity with parties, to the state-court litigation. See Ferris v. Cuevas, 118 F.3d 122, 126 (2d Cir.1997) (explaining that claim preclusion only applies against parties to a prior lawsuit and their privies). If so, the voters' constitutional claims will be barred by claim preclusion if they could have been raised in state court and they arise from the same transaction or series of transactions as the state-court claims. Id. (internal quotation marks omitted). No one disputes that the voters' constitutional claims could have been raised before the state court and arise from the same transaction — the disputed election and the Board's refusal to count certain absentee ballots — that gave rise to the state-court suit. Also, no one disputes that the voters were not formally parties to the state-court litigation. The only question, then, is whether the voters should be deemed to be in privity with the candidates (the state-court plaintiffs). 66 The district court held that the voters were not in privity with the candidates because the candidates' interest in having the voters' absentee ballots counted was insufficient to create privity. Hoblock, 341 F.Supp.2d at 173. The district court's no-privity finding was driven by its conclusion that voters' rights and candidates' rights are distinct. Id. The Board disagrees, arguing in its brief that there is no viable distinction between the interests of the plaintiff candidates and the plaintiff voters. . . . The Board also argues that the voters and the candidates have a sufficiently close relationship to support a finding of privity. On the record before this court and, in particular, the current state of the pleadings, we are unable to conclude whether the voters are in privity with the candidates. 67 We arrive at this determination by reasoning similar to that reflected in our discussion above of privity for Rooker-Feldman purposes. But because the Rooker-Feldman privity question turns on federal law, while the question of privity for claim-preclusion purposes is a matter of state law, we consider the privity question again in this section in light of New York law. 68 On facts very similar to those in this case, a panel of this court distilled from New York claim-preclusion cases the following rule: plaintiffs in a federal suit that follows a state suit are in privity with the state plaintiffs where their interests are the same and [the federal plaintiffs] are controlled by the same party or parties as the state plaintiffs. Ferris, 118 F.3d at 128. Ferris v. Cuevas involved two lawyers who had organized a referendum campaign to amend the New York City Charter. The lawyers first sued the city in state court because the city clerk refused to place on the ballot the referendum questions, despite the lawyers' submission of petitions, signed by over 100,000 voters, that the lawyers contended complied with state law about referendums. The state trial court held that the city clerk acted properly in refusing to place the referendum questions on the ballot; that decision was upheld on appeal. Id. at 124-25. 69 Following the lawyer-organizers' loss in state court, two voters who had signed the petitions sued the city clerk in federal district court on behalf of themselves and other petition signers, arguing that the city clerk violated their First Amendment rights by refusing to place the referendum questions on the ballot. The voters were represented by one of the lawyers who had organized the referendum campaign and who had been a plaintiff in the failed state lawsuit. Id. at 125. The federal district court dismissed the plaintiffs' complaint. This court upheld the dismissal, finding that claim preclusion barred the federal suit notwithstanding that the federal plaintiffs were not parties to the state suit. Noting that mere identity of interest between the state and federal plaintiffs was necessary but not sufficient to establish privity between them, we found privity because the lawyer-organizer/state plaintiff's involvement in and control of every aspect of both the state and federal actions presents a connection of much greater magnitude than identity of interest alone. Id. at 128. 70 To find privity under New York law between the voters and candidates in this case, therefore, we must find two things: (1) identity of interest, and (2) sufficient control by the candidates over the voters that we should deem them to be in privity with each other. In this case, these two findings depend largely on the same facts. The facts that tend to suggest that the voters may be controlled by the candidates also suggest that the interests of the voters before the court, to the extent that those interests differ from the interests of all similarly situated voters, may coincide exactly with the candidates' interests. If the candidates have so far controlled the plaintiff voters that the voters advance only those interests that they share with the candidates, then the voters are in privity with the candidates and claim preclusion bars their federal constitutional claims. Control is thus the crux of the finding of privity in a case such as this. Id. 71 Unlike the voters in Ferris, the voters in this case have lawyers who are at least formally unconnected to the candidates or their lawyers. The allegations in the voters' complaint, however, call into question whether the lawyers for the voters and the candidates have so closely coordinated their litigation strategies that the voters are in effect the candidates' puppets. Having discussed this question in detail above in relation to Rooker-Feldman privity, we need not reiterate here why the voters' federal complaint and the record of the state-court proceedings suggest that the candidates may be controlling the voters. If, however, the plaintiff voters choose not to amend their complaint upon remand to advance the rights of all similarly situated voters, this will demonstrate that they are in privity with the candidates and are subject to claim preclusion under New York law (in addition to being barred by Rooker-Feldman from maintaining their suit).