Court Opinion

ID: 4464641
Source: CourtListenerOpinion
Date Created: 2019-12-16 20:00:26.128223+00
Date Added: 2024-06-11T14:53:33.601673
License: Public Domain

NOT PRECEDENTIAL

                        UNITED STATES COURT OF APPEALS
                             FOR THE THIRD CIRCUIT
                                 ______________

                                       No. 19-2306
                                     ______________

                                 HUGH B. MCCLUSKEY,
                                            Appellant

                                              v.

                         WASTE MANAGEMENT, INC.;
                   WASTE MANAGEMENT OF NEW JERSEY, INC.
                              ______________

                     On Appeal from the United States District Court
                               for the District of New Jersey
                                 (D.C. No. 2-19-cv-01427)
                      District Judge: Honorable Susan D. Wigenton
                                      ______________

                    Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
                                  November 20, 2019

             Before: CHAGARES, MATEY, and FUENTES Circuit Judges.

                                (Filed: December 16, 2019)
                                     ______________

                                        OPINION*
                                     ______________

       *
        This disposition is not an opinion of the full Court and, pursuant to I.O.P. 5.7, does
not constitute binding precedent.
MATEY, Circuit Judge.

       Hugh McCluskey appeals the District Court’s dismissal of his action based on the

doctrine of issue preclusion. Finding no error, we will affirm.

                                     I. BACKGROUND

       McCluskey and his long-time business associates, Michael and Alfred Luciano,

entered into a series of agreements with Morris County Transfer Station, Inc. (“MCTS”)

providing royalty payments. Waste Management, Inc. and Waste Management of New

Jersey, Inc. (together, “Waste Management”) became the legal successor to MCTS and in

2013, stopped making those payments. So the Lucianos sued Waste Management in New

Jersey state court for breach of contract. The New Jersey Superior Court twice rejected

their claim.

       And, importantly, McCluskey participated in both state proceedings. For example,

when Waste Management filed a third-party complaint against McCluskey, he

counterclaimed for breach of contract. Then, after McCluskey and Waste Management’s

claims against each other were dismissed by consent, McCluskey joined the Lucianos’

appeal. He submitted a brief to the court identifying himself as “Third Party Defendant –

Respondent”2 (Suppl. App. at 091), and the record shows he offered oral argument on his

own behalf. Not surprisingly, the Appellate Division’s decision reflects McCluskey’s role

       2
         In his briefing, McCluskey claims to have participated in the appeal as amicus
curiae. But that is not how he signed his appellate brief, and the Appellate Division labeled
him as “respondent” in the caption of its opinion. (Suppl. App. at 093.)
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in the lawsuit, holding the trial court “correctly determined that the Lucianos’ and

McCluskey’s right to royalties” had been terminated. (Suppl. App. at 110.)

       McCluskey then sued in federal court for the same claim—that Waste Management

breached its obligation to him when it ceased making royalty payments. Waste

Management moved to dismiss, and the District Court granted the motion with prejudice.

The District Court held that McCluskey’s claims were barred under the doctrine of issue

preclusion because “the issue [McCluskey] raises in this suit – whether [he] is owed

royalties . . . is identical to that litigated in state court” and because “[t]hose tribunals issued

final judgments on the merits of the issue, which was essential to those judgments.” (App.

at 10.) Thus, “the question of whether Waste Management owes [McCluskey] royalties . .

. has already been resolved [in state court] and may not be relitigated here[.]” (App. at 10.)

McCluskey appealed that judgment to this Court. We agree with the District Court’s

conclusion and will affirm.3

                        II. MCCLUSKEY’S CLAIMS ARE PRECLUDED

       Congress has long required that federal courts give preclusive effect to state court

adjudications. See 28 U.S.C. § 1738; see also Edmundson v. Borough of Kennett Square,

4 F.3d 186, 189 (3d Cir. 1993) (“When a prior case has been adjudicated in a state court,

federal courts are required by 28 U.S.C. § 1738 to give full faith and credit to the state

judgment[.]”). When so doing, courts must “apply the same preclusion rules as would the

       3
         The District Court had jurisdiction under 28 U.S.C. § 1332. As the District Court
dismissed McCluskey’s claim with prejudice, we have jurisdiction under 28 U.S.C. § 1291.
Our review is plenary. United States ex rel. Petratos v. Genentech Inc., 855 F.3d 481, 486
(3d Cir. 2017).
                                                 3
courts of that state.” Edmundson, 4 F.3d at 189 (citing Allen v. McCurry, 449 U.S. 90, 95–

105 (1980)). On that basis, we apply the principles of issue preclusion as established under

New Jersey law.

       Under a five-factor test, New Jersey precludes reconsideration of an issue when (1)

the issue is identical; (2) the issue was actually litigated in a prior proceeding; (3) the prior

court issued a final judgment on the merits; (4) determination of the issue was essential to

the prior judgment; and (5) the party opposing preclusion was either a party to, or in privity

with a party to, the earlier proceeding. See Del. River Port Auth. v. Fraternal Order of

Police, 290 F.3d 567, 573 (3d Cir. 2002) (citing In re Estate of Dawson, 641 A.2d 1026,

1034–35 (N.J. 1994)). McCluskey’s federal action satisfies each.

       His demand for royalty payments from Waste Management is the same as the suit

brought by the Lucianos. And that issue was twice argued and was twice adjudicated:

initially by the trial court’s dismissal, and later on appeal. See A.T. v. Cohen, 175 A.3d 932,

940 (N.J. 2017) (noting that in New Jersey a dismissal with prejudice is a judgment on the

merits). What is more, the decisions were essential to the outcome; indeed, they rejected

the very basis of the claim. Finally, McCluskey was a party to the prior action, or in privity

with a party. McCluskey argues that because he consented to dismissal of his state

counterclaim, he has yet to have a “full and fair opportunity to litigate” his claims.

(Opening Br. at 14.) Not so.

       First, McCluskey participated in the state action before his voluntary dismissal. And

after dismissal, he joined in the appellate proceedings by submitting briefing and offering

argument as a “Third Party Defendant – Respondent.” Second, even if McCluskey was not

                                               4
a party, he was in privity with the Lucianos. In New Jersey, a relationship is “close enough”

to satisfy privity “when the party is a virtual representative of the non-party, or when the

non-party actually controls the litigation.” Collins v. E.I. DuPont de Nemours & Co., 34
F.3d 172, 176 (3d Cir. 1994). Thus, “one person is in privity with another and is bound by

and entitled to the benefits of a judgment as though he was a party when there is such an

identification of interest between the two as to represent the same legal right.” Zirger v.

Gen. Accident Ins. Co., 676 A.2d 1065, 1071 (N.J. 1996) (citation omitted). That is the

case here. Had the Lucianos prevailed in state court, as a signatory and beneficiary of that

same 1990 agreement, McCluskey would have benefited from the judgment. Either way,

the doctrine of issue preclusion bars McCluskey from his present action in federal court.

                                     III. CONCLUSION

       For the above reasons, we will affirm the judgment of the District Court.4

       4
         McCluskey raises several other issues which do not state a claim for relief. He
argues that the District Court erred in dismissing his suit because he is entitled to a jury
trial under the Seventh Amendment to the Constitution of the United States. But that is not
correct. See, e.g., Parklane Hosiery Co. v. Shore, 439 U.S. 322, 336 (1979); Haase v.
Countrywide Home Loans, Inc., 748 F.3d 624, 631 n.5 (5th Cir. 2014). He also argues—
without explanation—that the dismissal violated his due process rights. The District Court
properly acted within the rules of civil procedure when it dismissed the complaint with
prejudice based on Waste Management’s motion under Federal Rule of Civil Procedure
12(b)(6). Lastly, McCluskey argues that this Court should vacate the District Court’s
dismissal under the dual-sovereignty doctrine. But that doctrine applies to criminal, not
civil matters. See Gamble v. United States, 139 S. Ct. 1960, 1965–66 (2019).
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