Opinion ID: 2792506
Heading Depth: 1
Heading Rank: 1

Heading: Claims dismissed on the basis of res judicata

Text: We review de novo a Fed. R. Civ. P. 12(b)(6) dismissal based on principles of res judicata. Brooks v. Arthur, 626 F.3d 194, 200 (4th Cir. 2010). Federal courts are bound by 28 U.S.C. § 1738 (2012) to apply the law of the rendering state to determine the extent to which a state court judgment should have preclusive effect in a federal action. Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 293 (2005); Brooks, 626 F.3d at 200. In South Carolina, the doctrine of res judicata 3 15 U.S.C. §§ 1701-1720 (2012). 4 15 U.S.C. § 78(j) (2012). 5 17 C.F.R. § 240.10b-5 (2014) 4 will bar a claim when “(1) the identities of the parties are the same as in the prior litigation, (2) the subject matter is the same as in the prior litigation, and (3) there was a prior adjudication of the issue by a court of competent jurisdiction.” Catawba Indian Nation v. State, 756 S.E.2d 900, 907 (S.C. 2014). Moreover, res judicata “bars plaintiffs from pursuing [a claim in] a later suit where the claim . . . could have been litigated” in a prior suit, and “the claim[] arise[s] out of the same transaction or occurrence that was the subject of [the] prior action between [the same] parties.” Id. at 906. 6 Having reviewed the record, we conclude that RFT’s civil conspiracy, UTPA, and SCUSA claims meet the requirements under South Carolina law for res judicata preclusion. 7 Accordingly, we affirm the district court’s order dismissing these claims. 6 We note that the law of South Carolina distinguishes between preclusion based on res judicata and preclusion based on collateral estoppel. See Lowe v. Clayton, 212 S.E.2d 582 (S.C. 1975); S.C. Pub. Interest Found. v. Greenville Cnty., 737 S.E.2d 502, 507 (S.C. Ct. App. 2013). To the extent that RFT’s appeal relies on principles of collateral estoppel, we find its arguments inapposite. 7 The district court’s order dismissing the claims relied on the judgment of a state trial court that was subsequently affirmed on other grounds by the South Carolina Supreme Court. To the extent RFT asserts error in the district court’s reliance on a state court judgment later affirmed on other grounds, such error was harmless. See United States v. Olano, 507 U.S. 725, 734 (1993). 5