Court Opinion

ID: 36671
Source: CourtListenerOpinion
Date Created: 2010-04-25 19:43:26+00
Date Added: 2024-06-11T17:15:25.904918
License: Public Domain

United States Court of Appeals
                                                                                             Fifth Circuit
                                                                                           F I L E D
                                                   In the                                  October 11, 2004
                          United States Court of Appeals                               Charles R. Fulbruge III
                                        for the Fifth Circuit                                  Clerk
                                             _______________

                                               m 04-30098
                                             _______________

                             ENERGY DEVELOPMENT CORPORATION,

                                                                Plaintiff-Appellant,

                                                  VERSUS

                  MICHAEL X. ST. MARTIN; VIRGINIA RAYNE ST. MARTIN;
                      QUALITY ENVIRONMENTAL PROCESSES, INC.,

                                                                Defendants-Appellees.

                                      _________________________

                              Appeal from the United States District Court
                                 for the Eastern District of Louisiana
                                           m 98-CV-3395
                                   _________________________

Before JONES, SMITH, and STEWART,                       of interrelated lawsuits. It is therefore unfor-
  Circuit Judges.                                       tunate, yet understandable, that in denying
                                                        plaintiff’s request for an injunction that would
JERRY E. SMITH, Circuit Judge:*                         have yielded finality, the district court relied on
                                                        clearly erroneous factual assumptions. Lack-
   The parties are engaged in a dizzying web            ing guidance from this court’s jurisprudence,
                                                        the district court further misapplied applicable
                                                        Supreme Court precedent in exercising its
   *
     Pursuant to 5TH CIR. R. 47.5, the court has        discretion. Regrettably, therefore, we reverse
determined that this opinion should not be pub-         and remand, thereby allowing the wheels of
lished and is not precedent except under the limited    justice to continue spinning a bit longer.
circumstances set forth in 5TH CIR. R. 47.5.4.
                        I.                                                      B.
    The facts and proceedings are aptly de-                In 1997, EDC sued in state court (Jefferson
scribed in our prior opinion,1 so we only brief-        Parish), seeking a declaratory judgment that it
ly summarize the relevant history here. Plain-          had a valid mineral servitude on a tract of land
tiff Energy Development Corporation                     neighboring the one at issue in the federal
(“EDC”) and defendants Michael St. Martin,              case, a tract of land also owned by SMG. Al-
Virginia Rayne St. Martin, and Quality Envi-            though that case involved a separate tract of
ronmental Processes, Inc. (collectively, “the           land, it hinged on the same factual and legal
St. Martin Group” or “SMG”) have been en-               issues relating to the validity of EDC’s mineral
gaged in a longstanding dispute over the min-           servitude.
eral rights to a particular oilfield (the Sunrise
Field) in Terrebonne Parish, Louisiana.                    The state court entered summary judgment
                                                        for SMG in 1998, but that judgment was
    We greatly oversimplify by stating that             reversed and remanded for trial. Energy Dev.
SMG is the surface owner of the disputed                Corp. v. Quality Envtl. Processes, Inc., 734
tracts, and EDC claims mineral rights to much           So. 2d 965 (La. App. 5th Cir. 1999). On re-
of the disputed land under a purported mineral          mand, the trial court found that EDC did not
servitude granted to its predecessors in 1971.          have a valid mineral servitude and in 1999 en-
SMG, for its part, also claims ownership of the         tered judgment in favor of SMG in December
minerals underlying the land. The crux of the           1999. The Court of Appeal affirmed on De-
dispute goes to whether the 1971 conveyance             cember 12, 2000SSjust eight days before the
resulted in a valid servitude that extends to the       federal district court issued its opinion and just
present or whether, instead, SMG’s claim is             over a month before it entered judgment. The
superior.                                               Louisiana Supreme Court denied EDC’s
                                                        application for writs on March 9, 2001.3
                       A.
    In 1998, EDC sued for a declaratory judg-
ment establishing its mineral rights with re-              3
                                                              In June 2001, SMG sought to have the Jef-
spect to a portion of the disputed property             ferson Parish court amend its ruling to encompass
(“the federal case”). The suit was later con-           much more disputed areaSSincluding the lands the
solidated with an action brought when a min-            mineral rights to which were awarded to EDC in
eral lessee of EDC and SMG deposited with               the federal case. EDC sought, from the federal
the district court payments due under the               court, a restraining order barring such an amend-
leases and interpleaded EDC and SMG. A                  ment. That court denied the request because, inter
bench trial was held in May 2000 before Judge           alia, the federal case was on its first appeal to this
Schwartz,2 who, in December 2000, granted               court, and the district court therefore doubted that
                                                        it had jurisdiction over the case while appeal was
EDC a declaratory judgment that we affirmed
                                                        pending. Energy Dev. Corp. v. St. Martin, 2001
in the aforementioned opinion.                          WL 839851, at *1 (E.D. La. July 20, 2001).

   1
     Energy Dev. Corp. v. St. Martin, 296 F.3d              The Jefferson Parish court initially did expand
356, 357-61 (5th Cir. 2002) (per curiam).               its ruling but later was reversed by the Louisiana
                                                        Court of Appeal, which noted that in amending the
   2
     The case was later transferred to Judge Ber-       ruling, the trial court “exercise[d] his authority
rigan because of Judge Schwartz’s illness.              beyond the bounds of Louisiana law” and “un-

                                                    2
    After judgment was entered in state                   ish judgment. Mandalay Oil & Gas, LLC v.
courtSSan act with preclusive effect under                Energy Dev. Corp., 2002 WL 1434422 (La.
Louisiana law4SSSMG did not raise the issue               App. 1st Cir. July 3, 2002).5
of res judicata with the district court, but rath-
er waited until its appeal to this court to raise            On remand, the trial court reversed course,
the defense, arguing that the state ruling was            finding that the Jefferson Parish judgment was
not binding for res judicata purposes until af-           preclusive of the first concursus in that, despite
ter all appeals had been exhausted. Energy                involving different areas of land, the Jefferson
Dev. Corp., 296 F.3d at 361. This court re-               Parish decision was based on the same factual
jected that argument and held that SMG’s res              and legal disputes as that at issue in the first
judicata argument was not properly before the             concursus. EDC appealed, and recently, after
court, because it had been waived by SMG’s                briefing in the instant appeal was complete, the
not raising it in the federal district court. Id.         Louisiana Court of Appeal affirmed the trial
We further opined, in dictum, that the state              court’s decision granting judgment to SMG on
case would not be issue-preclusive of the                 grounds of res judicata. Mandalay Oil &
federal case, because its ruling on the validity          Gas, LLC v. Energy Dev. Corp., 2004 WL
of the purported mineral servitude conveyance             1737466 (La. App. 1st Cir. Aug. 4, 2004).
was not essential to its decision. Id. at 362.
We therefore affirmed.                                       To recap, at this point, with the parties
                                                          having conclusively litigated their rights to
                       C.                                 three separate neighboring tracts of land in
   While all this was transpiring, three related          three different courts (two state and one fed-
suits sprang up in the Louisiana courts. In               eral) that had considered nearly identical legal
September 1998, the lessees of EDC and SMG                and factual disputes, one court (the federal
brought a concursus proceeding (the Louisiana             court) had found in favor of EDC, and the two
equivalent to a federal interpleader action)              state courts had ruled for SMG. Thus, al-
(“the first concursus”) in state court (Terre-            though there are inconsistencies between the
bonne Parish), involving yet another tract of             factual and legal conclusions of the federal
land in dispute between the partiesSSnot the              court and those of the two state courts, the
same portion of land at issue in the Jefferson            cases involved different tracts of land, and thus
Parish case or the tracts adjudicated in the              the judgments were not incapable of being
federal case. Although the trial court initially          honored simultaneously.6 The matter be-
found in favor of EDC, the Louisiana Court of
Appeal remanded for consideration of SMG’s                   5
res judicata claim based on the Jefferson Par-                 See also LA. CODE CIV. PROC. ANN. art. 2163
                                                          (allowing res judicata claims to be raised for first
                                                          time on appeal).
dermine[d] the federal judgment.” Energy Dev.
Corp. v. Quality Envtl. Processes, Inc., 834 So. 2d          6
                                                                Significantly, the district court stated that the
513, 517 (La. App. 5th Cir. Nov. 26, 2002).               first concursus involved the same tracts of land
   4
                                                          whose mineral rights were later adjudicated by the
    See Avenue Plaza, LLC v. Falgoust, 676                federal case to belong to EDC. Energy Dev. Corp.
So. 2d 1077 (La. 1996) (holding that a final              v. St. Martin, 2004 WL 117606, at *2 (E.D. La.
judgment renders a claim res judicata unless              Jan. 23, 2004). As discussed infra, this was
and until the judgment is reversed on appeal).            clearly erroneous.

                                                      3
comes, however, more confusing.                         case rendered the concursus res judicata, and
                                                        SMG urged that the Jefferson Parish case had
                        D.                              preclusive effect and required a judgment on
   Regarding the so-called “collateral at-              their behalf.
tacks,”7 the lessees of EDC and SMG, on May
23, 2000SSfour days after the trial in the fed-            On June 30, 2003, the Terrebonne Parish
eral case came to a close but before the district       court granted EDC’s motion for summary
court’s opinion was released or judgment en-            judgment and ruled against SMG, finding that
teredSSfiled another concursus proceeding in            the federal case has res judicata effect over the
Terrebonne Parish (the “first collateral at-            concursus action. SMG has appealed that
tack”). This suit pitted EDC and SMG against            decision to the Louisiana First Circuit Court of
each other as claimants to a disputed sum.              Appeal, where it pends.8
The only difference in parties between that suit
(as well as the second collateral attack,                   Shortly after filing the first collateral attack,
discussed infra) and the federal case is that the       the parties’ lessees filed yet another concursus
stakeholders who initiated the concursus and            action (actually two that have been
interpleader actions were different.                    consolidated) (the “second collateral attack”)
                                                        in Terrebonne Parish, again naming EDC and
   Importantly, the land at issue in the first          SMG as competing claimants to revenues from
collateral attack is wholly within the area ad-         disputed lands, among which are several tracts
judicated by the federal court. That is, a vic-         that are within the lands the mineral rights to
tory for SMG in this attack would be physi-             which were awarded to EDC in the federal
cally irreconcilable with the federal judgment.         case. Again, therefore, a judgment for SMG in
EDC and SMG filed cross-motions for sum-                the second collateral attack would create
mary judgment; EDC argued that the federal              irreconcilable federal and state judgments that
                                                        the parties could not possibly harmonize.
   7
      The parties devote a considerable amount
of space in their briefs debating whether this is          Not surprisingly, the parties have filed
an appropriate taxonomy. Although the dis-              cross-motions for summary judgment, with
trict court referred to the cases EDC seeks to          EDC urging that the federal case be given pre-
have enjoined as the first and second “col-             clusive effect and SMG arguing that the Jef-
lateral attacks,” SMG argues that this labeling         ferson Parish case should render the concursus
was “obviously for organizational purposes              res judicata. As of the briefing of this case,
and perhaps clarity . . . . Judge Berrigan did             8
not rule that the concursus proceedings are                  As we have noted, the Louisiana First Circuit
attacks.” EDC replies that “unlike Appellees,           Court of Appeal recently affirmed the trial court’s
                                                        ruling in the first concursus, holding that the Jef-
EDC believes the district court used the term
                                                        ferson Parish judgment is claim-preclusive over
‘collateral attacks’ advisedly, not merely for          that case. After this decision was issued, SMG
convenience.”                                           moved the same appellate court, in which its appeal
                                                        in the first collateral attack is pending, to reverse
   We decline to take sides in this endless de-         the decision in the first collateral attack on the
bate. Our use of the phrase “collateral at-             premise that the recent decision is “clearly
tacks” is not meant to connote any pejorative           controlling” of the first collateral attack. EDC has
judgment on the nature of the suits.                    opposed the motion, and the court has yet to rule.

                                                    4
the Terrebonne Parish trial court had not ruled                                   II.
on these motions.                                                                 A.
                                                              Application of the exceptions to the Anti-
                        E.                                Injunction Act is reviewed de novo,9 but the
    Fearing the potentially irreconcilable con-           decision to grant or deny a preliminary injunc-
flicts that could result from an adverse deci-            tion lies within the sound discretion of the dis-
sion in the first or second collateral attack,            trict court, and that decision will be reversed
EDC in October 2003 moved the district court              only on abuse of discretion.10 In exercising its
for a preliminary injunction prohibiting SMG              discretion, the district court inevitably makes
from pursuing the first and second collateral             preliminary factual determinations and con-
attacks, ordering SMG to dismiss its appeal in            clusions of law.11 Those factual findings are
the first collateral attack, and directing SMG            reviewed for clear error, the legal conclusions
to dismiss its claims in the second collateral            de novo.12 Where a denial of an injunction is
attack. EDC argued that the collateral attacks            based on clearly erroneous factual bases or
were res judicata as a result of the federal case         incorrect application of law to facts, a district
and therefore must be enjoined.                           court has abused its discretion.13

    EDC acknowledged that although the All                                       B.
Writs Act, 28 U.S.C. § 1651, authorizes the                  In its explanatory order, the district court
court to issue such an injunction, its power is           referred to the first concursus in Terrebonne
sharply circumscribed by the Anti-Injunction              Parish, which, in reality, dealt with land that
Act, 28 U.S.C. § 2283, which prohibits federal            does not overlap with the land at issue in the
courts from enjoining state court proceedings             federal case. Nevertheless, the court described
except in three narrowly tailored situations:             this action as “involving, again, tracts of land
(i) where expressly authorized by an act of
Congress, (ii) where necessary in aid of its                 9
jurisdiction, or (iii) to protect or effectuate its            See St. Paul Mercury Ins. Co. v. Williamson,
                                                          332 F.3d 304, 308 (5th Cir. 2003) (“The applica-
judgments (commonly known as the “relitiga-
                                                          tion of the relitigation exception to the Anti-In-
tion exception”). EDC argued, and continues               junction Act . . . is a question of law that we review
to urge on appeal, that all three exceptions              de novo.”)
apply, so the district court is entitled to grant
the injunction it requests.                                  10
                                                                See Quintero v. Klaveness Ship Lines, 914
                                                          F.2d 717, 720 (5th Cir. 1990).
   The district court denied EDC’s motion,
                                                             11
Energy Dev. Corp. v. St. Martin, 2004 WL                        See Sugar Busters LLC v. Brennan, 177
117606, at *7 (E.D. La. Jan. 23, 2004), decid-            F.3d 258, 265 (5th Cir. 1999).
ing that, although the relitigation exception                12
                                                                  Id.
undoubtedly applies, the court, in the exercise
of its broad discretion with respect to issuing              13
                                                                Cf. G.C. & K.B. Invs., Inc., 326 F.3d 1096,
injunctions, would not do so here. EDC                    1107 (9th Cir. 2003) (concluding that the grant of
appeals that denial.                                      an injunction under the relitigation exception to the
                                                          Anti-Injunction Act where the district court “rests
                                                          its conclusions on clearly erroneous factual
                                                          findings” is an abuse of discretion).

                                                      5
the mineral rights to which were later                    Although it may not be an abuse of discretion
adjudicated by the federal case to belong to              to deny the injunction sought by EDC, denying
EDC.” Energy Dev. Corp., 2004 WL 117606,                  it based on a clearly erroneous finding of fact
at *2. This is a clearly erroneous statement of           that obviously was significant to the court’s
fact. Although EDC makes much of this in its              disposition of the case does constitute such an
brief, SMG does not attempt to refute EDC’s               abuse.
arguments.
                                                                                  C.
    This factual misunderstanding, by itself,                As we have said, the Anti-Injunction Act
would not be significant. After all, EDC is not           precludes federal courts from staying proceed-
now trying to enjoin the first concursus                  ings in state courts except where the case falls
proceeding. Unfortunately, however, in calcu-             into one of the three narrowly-tailored statu-
lating whether to issue the requested injunc-             tory exceptions. 28 U.S.C. § 2283.14 Only
tion, the district court found this “fact” signifi-       where (i) expressly authorized by statute,
cant. Denying the request for an injunction,              where (ii) necessary to aid the court’s jurisdic-
the district court concluded,                             tion, or (iii) to protect or effectuate its judg-
                                                          ments may a federal court proceed with the
   [S]hould the Louisiana First Judicial Cir-             extraordinary step of enjoining a state court
   cuit Court of Appeal or the Louisiana                  action. At the district court and again on ap-
   Supreme Court decide that the federal                  peal, EDC urges that all three of these excep-
   judgment is not claim preclusive as to                 tions apply.
   the first collateral attack and the [first
   concursus], then this Court’s decision to                  The district court unambiguously ruled that
   enjoin the second collateral proceeding                the third exception (commonly known as the
   under the relitigation exception would                 “relitigation exception”) applies. Energy Dev.
   cause a permanent inconsistency in the                 Corp., 2004 WL 117606, at *4. The court did
   judgments of the three proceedings.                    not, however, make explicit findings with re-
                                                          spect to the other two exceptions. The court
Id. at *4. It is apparent, from the order, that           noted that “[a]lthough EDC argued in brief
this fear of inconsistency was central to the             that all three exceptions applied and Defen-
court’s logic in denying the injunction.                  dants argued in brief that none of the excep-
                                                          tions apply, both parties focused in oral argu-
    As EDC points out, however, though the                ment on the relitigation exception. The Court
decision in the first concursus is legally incon-         finds that to be the appropriate exception to
sistent with the logic underpinning the federal           consider.” Id. at *3. But, as SMG concedes,
case, the two are not physically inconsistent.            the district court “simply chose to focus on the
Because the two judgments affect different                relitigation exception at oral argument,” rather
tracts of land, the parties are perfectly capable         than EDC steering the discussion in that dir-
of respecting both judgments simultaneously.
As EDC puts it, “EDC can enjoy its servitude                 14
                                                                 See also Chick Kam Choo v. Exxon Corp.,
on the federal property while the St. Martin              486 U.S. 140, 145-46 (1988) (quoting Atl. Coast-
Group simultaneously enjoys its servitude over            line R.R. v. Locomotive Eng’rs, 398 U.S. 281, 287
the property covered by the first concursus.”             (1970)) (“[T]he exceptions are narrow and are ‘not
                                                          [to] be enlarged by loose statutory construction.’”).

                                                      6
ection. In any case, the order does not analyze
the other two exceptions.                               Regions Bank v. Rivet, 224 F.3d 483, 488 (5th
                                                        Cir. 2000) (internal quotation marks and
    Such failure to address EDC’s argument              citations omitted).
was not reversible error. After all, only one of
the exceptions need apply, and therefore, be-               SMG weakly argues that EDC cannot make
cause the district court held that the relitiga-        such a showing because the suits do not in-
tion exception applies, yet declined to issue the       volve the same parties in that the petitioners
injunction, it did not matter whether the other         (the stakeholders as opposed to the claimants)
two exceptions apply. Nevertheless, the par-            in the concursus are different from the stake-
ties expend significant energy arguing whether          holders who initiated the federal interpleader
we should find those exceptions to apply. We            action.16 In reality, the additional parties,
decline the invitation and, instead, invite the         Mandalay Oil & Gas and Voyager Petroleum
district court to weigh in on those issues on           (lessees of the parties to this suit), are mere
remand.                                                 stakeholders in the concursus proceedings; the
                                                        competing claimants (the same parties as in
   The district court did rule, on the other            this suit) are the real parties in interest. Thus,
hand, with respect to the relitigation excep-           the inclusion of the additional part ies in the
tionSSspecifically, holding that it undoubtedly         captions of the concursus proceedings is not
applies. We agree.                                      sufficient to defeat the identity of the parties
                                                        for res judicata purposes.
   SMG argues strenuously that the relitiga-
tion exception, “grounded in principles of res              Moreover, Voyager and Mandalay are suc-
judicata and collateral estoppel,”15 cannot ap-         cessors in interest to Louisiana Land and Ex-
ply to the collateral attacks because there is          ploration Company (“LL&E”), the stakeholder
not exact similarity of parties among those             in the federal interpleader action that was con-
cases and the federal case. For res judicata            solidated with the federal declaratory action
(and thus the relitigation exception) to apply,         that formed the basis of the federal judgment.17
four elements must be present:                          Thus, as LL&E’s successors in interest, they
                                                        are deemed t o be in privity with LL&E, and
   (1) [T]he parties in a later action must             there is therefore identity of the parties for res
   be identical to (or at least in privity
   with) the parties in a prior action; (2) the
                                                           16
   judgment in the prior action must have                      SMG makes this argument despite the fact
   been rendered by a court of competent                that EDC prevailed on the res judicata issue in the
   jurisdiction; (3) the prior action must              first collateral attack.
   have concluded with a final judgment on                 17
                                                               See Benson & Ford, Inc. v. Wanda Petrol-
   the merits; and (4) the same claim or                eum Co., 833 F.2d 1172, 1174 (5th Cir. 1987)
   cause of action must be involved in both             (opining that successors in interest are bound by
   suits.                                               prior judgments); see also Southmark Props. v.
                                                        Charles House Corp., 742 F.2d 862, 869 (5th Cir.
                                                        1984) (stating that “parties” to be bound refers to
   15
     Vasquez v. Bridgestone/Firestone, Inc.,            real parties in interest, “not formal or paper par-
325 F.3d 665, 675 (5th Cir. 2003).                      ties”).

                                                    7
judicata purposes. As a result, the district             the first collateral proceeding, full faith and
court was correct to hold that the relitigation          credit.” Id. The court had very little caselaw
exception to the Anti-Injunction Act applies.            from this circuit interpreting and applying
                                                         Parsons Steel to analogous situations from
                        D.                               which to draw guidance, and we disagree with
    Even though it held that the relitigation            its decision.
exception applies, the district court declined to
issue an injunction, concluding that Parsons                 The district court described Parsons Steel
Steel v. First Ala. Bank, 474 U.S. 518 (1986),           as precluding injunctions under the relitigation
precluded it from doing so, at least with re-            exception to instances where “the state court
spect to the first collateral attack (in which the       has yet to rule on a claim of res judicata based
trial court had already ruled on the res judi-           on the federal action.” Id. In reality, as noted
cata issue). In Parsons Steel, the Court con-            above, the Court’s holding precludes issuing
sidered whether a federal court could enjoin             an injunction only where “the state court has
the enforcement of a state court judgment                finally rejected a claim of res judicata . . . .”
where the state court had already rejected a             Parsons Steel, 474 U.S. at 524 (emphasis
res judicata claim. Id. The Court held that              added). As for the finality requirement, that
even where a federal court found that res                determination must be made under state law,
judicata should bar a parallel state court action        i.e., whether a Louisiana state court would
(i.e., the relitigation exception applies), an           view the res judicata determination of the trial
injunction may not issue “[o]nce the state               court in the first collateral attack as final
court has finally rejected a claim of res                enough to be binding upon other state courts.
judicata . . . .” Id. at 524. Issuing an
injunction in such a circumstance would                     Because the answer to that question is not
violate the Full Faith and Credit Act, which             necessary to our judgment and was not suffi-
provides that state court proceedings “shall             ciently briefed, we decline to venture a guess.
have the same full faith and credit [in federal          Notwithstanding finality, however, the state
court] as they have by law or usage in the               court in the first collateral attack did not even
courts of such State . . . from which they are           reject the argument that the federal case was
taken.” 28 U.S.C. § 1738. Accordingly, “a                claim preclusive over that action, but instead,
federal court must give the same preclusive              the trial court in the first collateral attack em-
effect to a state-court judgment as another              braced the argument. Granting an injunction
court of that State would give.” Parsons                 under these circumstances would therefore not
Steel, 474 U.S. at 523.                                  run afoul of the Full Faith and Credit Act or
                                                         Parsons Steel. As a result, the district court’s
   The district court believed that Parsons              denial of an injunction, based as it was upon an
Steel barred it from issuing the requested in-           erroneous interpretation of applicable law, was
junction, at least with respect to the first col-        an abuse of discretion.
lateral attack. Energy Dev. Corp., 2004 WL
117606, at *4. Specifically, the court stated                                   E.
that the Full Faith and Credit Act “requires this           EDC contends that the district court further
Court to give the trial court’s decision, that the       erred as a matter of law by failing to hold that
federal court decision is claim preclusive as to         the law of the case doctrine precludes SMG

                                                     8
from pursuing collateral attacks in state court.                                 III.
According to EDC, this court in its July 2002                As the parties’ briefs indicate, they are fully
opinion conclusively determined that the Jef-             aware that the mere fact that an injunction may
ferson Parish judgment cannot have preclusive             issue under the Anti-Injunction Act, does not
effect superior to that of the federal judgment.          necessarily require that the district court must
Therefore, goes the argument, SMG’s collat-               issue the requested injunction. See Chick Kam
eral attacks, in which it urges that the Jefferson        Choo v. Exxon Corp., 486 U.S. 140 (1988).
Parish judgment requires victory in its favor,            On remand, the district may again, in its sound
are themselves doomed to failure. That being              discretion, find that the extraordinary remedy
the case, EDC believes it is all the more                 of enjoining state court proceedings is
appropriate that the district court enjoin those          inappropriate.     Nevertheless, the district
proceedings.                                              court’s decision to deny EDC’s request, based
                                                          as it was on erroneous factual underpinnings
   This argument is unpersuasive. Not only is             and a misapplication of Supreme Court
EDC incorrect in its characterization of our              precedent, constituted an abuse of discretion.
July 2002 opinion, but even if it were correct,
that does not necessarily compel the district                 In reconsidering its earlier denial of EDC’s
court to grant its request for an injunction.             request for an injunction, the district court
                                                          must proceed with the understanding that the
    In the July 2002 opinion, we declined                 first concursus, although legally inconsistent
SMG’s request to reverse the federal judgment             with the federal judgment, is not physically in-
on the ground that the Jefferson Parish judg-             consistent. Moreover, because the state court
ment was preclusive. Energy Dev. Corp., 296               has not yet finally rejected EDC’s res judicata
F.3d at 361. SMG had not raised this argu-                claim, Parsons Steel does not preclude the
ment at the district court and pursued it for the         court from preventing a physically conflicting
first time on appeal. Id. Because SMG failed              judgment in the first collateral attack.
to raise the argument in the district court, we
“decline[d] to consider the defendants’ asser-               As a result, the denial of EDC’s motion for
tion of res judicata or collateral estoppel at this       preliminary injunction is REVERSED, and this
stage of the litigation.” Id. at 363.                     matter is REMANDED for further pro-
                                                          ceedings consistent with this opinion.
    Nevertheless, EDC continues to urge that
“this Court necessarily found that the St. Mar-
tin Group’s res judicata motion failed on the
merits.” This is incorrect. Because this court
unambiguously determined that the res judi-
cata claim was not properly before the court,
any discussion of the merits of the argument is           App. 1st Cir. Aug. 8, 2004) (affirming judgment
obvious dictum and cannot be relied on as the             for SMG in the first concursus) (“Because it chose
law of the case.18                                        not to consider the exception on what are essen-
                                                          tially procedural grounds, the court’s alleged find-
                                                          ings regarding the limits of the Jefferson Parish
   18
     See also Mandalay Oil & Gas, LLC v.                  judgment are irrelevant to its decision, and are
Energy Dev. Corp., 2004 WL 1737466, at *7 (La.            merely dicta.”).

                                                      9