Court Opinion

ID: 4204603
Source: CourtListenerOpinion
Date Created: 2017-09-19 22:03:16.407172+00
Date Added: 2024-06-11T14:14:38.017308
License: Public Domain

Filed 9/19/17

                             CERTIFIED FOR PUBLICATION

                IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                              FOURTH APPELLATE DISTRICT

                                        DIVISION THREE

F.E.V., a Minor, etc., et al.,

    Plaintiffs and Appellants,                        G052460

        v.                                            (Super. Ct. No. 30-2015-00770859)

CITY OF ANAHEIM et al.,                               OPINION

    Defendants and Respondents.

                  Appeal from a judgment of the Superior Court of Orange County, Franz E.
Miller, Judge. Reversed and remanded.
                  Law Offices of Dale K. Galipo, Dale K. Galipo and Melanie T. Partow for
Plaintiffs and Appellants.
                  Kristin A. Pelletier, Acting City Attorney, and Moses W. Johnson IV,
Assistant City Attorney, for Defendants and Respondents.
                                    *          *          *
                                    INTRODUCTION
              The doctrine of res judicata or claim preclusion dictates that in ordinary
circumstances a final judgment on the merits prevents litigation of the same cause of
action in a second suit between the same parties. (DKN Holdings LLC v. Faerber (2015)
61 Cal.4th 813, 824 (DKN).) In rare circumstances, a final judgment may be denied
claim preclusive effect when to do so would result in manifest injustice. (People v.
Barragan (2004) 32 Cal.4th 236, 256 (Barragan); City of Sacramento v. State of
California (1990) 50 Cal.3d 51, 65, fn. 8; Greenfield v. Mather (1948) 32 Cal.2d 23, 25
(Greenfield).) This case presents such rare circumstances.
              The rare circumstances arise due to a Ninth Circuit en banc opinion that
reversed a federal court judgment against plaintiffs on their civil rights claims. (Gonzalez
v. City of Anaheim (9th Cir. 2014) 747 F.3d 789 (en banc).) Initially, a Ninth Circuit
panel decision had affirmed the federal court judgment against plaintiffs. (Gonzalez v.
City of Anaheim (9th Cir. May 13, 2013, No. 11-56360) 2013 U.S.App. Lexis 9607.)
This court relied on that federal court judgment and the Ninth Circuit panel opinion to
affirm, on the ground of collateral estoppel, a state court judgment against plaintiffs on
their related state tort claims. (F.E.V. v. City of Anaheim (June 24, 2013, G046937) opn.
mod. June 26, 2013 [nonpub. opn.] (F.E.V. I).) Long after our opinion in F.E.V. I
became final, and long after we lost the ability to change our opinion or vacate the
judgment, the Ninth Circuit issued its en banc opinion disagreeing with the Ninth Circuit
panel opinion and reversing in part the federal court judgment. By reversing the federal
court judgment, the Ninth Circuit en banc opinion eliminated the sole basis for our
decision in F.E.V. I and undermined both that decision and the judgment it had affirmed.
              Plaintiffs’ complaint in this case asserted the same claims against the same
parties as the complaint that was resolved by the judgment affirmed by F.E.V. I. For that
reason, the trial court sustained without leave to amend defendants’ demurrer on the
ground of res judicata. The judgment affirmed by F.E.V. I is final and cannot be set aside

                                             2
or vacated, but the question remains whether it should be given preclusive effect to affirm
the judgment in this case.
              We have considered the policies underlying claim preclusion and issue
preclusion and conclude they would be defeated rather than advanced by according
preclusive effect to the judgment affirmed in F.E.V. I. Plaintiffs have not had the
opportunity to litigate their state tort claims and are not vexatious litigants. Giving
preclusive effect to a judgment, the validity of which is based entirely on a judgment that
has been reversed, can only erode public confidence in judicial decisions. Finality of
judgments, the underpinning of res judicata, is an important policy, but it is a means to an
end—justice—and not an end in itself. Justice is not served by giving preclusive effect to
a judgment under the rare and, we hope, unique circumstances of this case. We therefore
reverse the judgment and remand for further proceedings.
                                     BACKGROUND
              Adolf Anthony Sanchez Gonzalez (Decedent) was shot and killed in an
incident with two Anaheim police officers. Plaintiffs are the Decedent’s mother and
minor daughter (by and through her guardian ad litem, David Vazquez).
              Plaintiffs filed a complaint in federal court (the Federal Complaint) against
the City of Anaheim (the City) and the two officers (collectively, Defendants). The
Federal Complaint asserted four claims for violation of civil rights pursuant to title 42
United States Code section 1983 and state law claims for false arrest/false imprisonment,
battery, negligence, and violation of the Bane Act, Civil Code section 52.1. The four
civil rights claims were (1) unreasonable search and seizure—detention and arrest;
(2) unreasonable search and seizure and due process—excessive force and denial of
medical care; (3) substantive due process; and (4) municipal liability for unconstitutional
custom, practice, or policy. (F.E.V. I, supra, G046937.)
              We explained in F.E.V. I: “The Federal Complaint’s allegations were
barebones: On September 25, 2009, Decedent was driving his car near the intersection of

                                              3
Santa Ana Street and Bond Street in the City of Anaheim. Decedent had not committed
any crime, and Anaheim Police Officers Daron Wyatt and Matthew Ellis had neither
reasonable suspicion to detain Decedent nor probable cause to arrest him. Officer Wyatt
‘discharged a firearm at the Decedent, striking him in the head, causing Decedent serious
physical injury and eventually killing him.’ (Some capitalization omitted.) Finally, the
Federal Complaint alleged Decedent was unarmed and posed no imminent threat of death
or serious physical injury to the officers.” (F.E.V. I, supra, G046937.)
              “The federal district court granted summary judgment in favor of the
defendants on the civil rights claims and concluded the police officers did not use
excessive force, act unreasonably, engage in conduct that shocked the conscience, or
engage in conduct amounting to an independent violation of the Fourth Amendment to
the United States Constitution. The federal court declined to exercise supplemental
jurisdiction over the state law claims and dismissed them without prejudice.” (F.E.V. I,
supra, G046937.)
              “Following the district court’s dismissal of the state law claims, Plaintiffs
filed the State Complaint, which asserted causes of action for (1) false arrest/false
imprisonment, (2) battery, (3) negligence, (4) wrongful death, and (5) violation of the
Bane Act. [¶] The State Complaint overlaps the Federal Complaint but provides more
detail. The State Complaint alleged the following: [¶] On September 25, 2009, Decedent
was driving his car near the intersection of Santa Ana Street and Bond Street in the City
of Anaheim. Anaheim Police Officers Daron Wyatt and Matthew Ellis ordered Decedent
to stop. Decedent had committed no crime and the officers did not have cause to stop
Decedent. Both officers approached Decedent’s car. Officer Ellis placed Decedent in a
carotid restraint, and Officer Wyatt struck him in the arms and head with a flashlight and
punched him in the face. Decedent never hit, punched, kicked, or threatened either police
officer. Officer Wyatt then got into Decedent’s car and fired a gun at Decedent’s head

                                              4
from six inches away. Decedent suffered serious physical injuries and later died.
Decedent was unarmed.” (F.E.V. I, supra, G046937.)
              Defendants demurred to the State Complaint on the ground of collateral
estoppel. The trial court sustained the demurrer without leave to amend and dismissed
the State Complaint. (F.E.V. I, supra, G046937.) Plaintiffs appealed from the judgment
entered after Defendants’ demurrer was sustained without leave to amend.
              At the time we held oral argument in F.E.V. I, the federal court judgment
was on appeal before the Ninth Circuit. A federal court judgment retains its collateral
estoppel effect, however, while on appeal and, therefore, the federal court judgment had
collateral estoppel effect at the time of oral argument. (Collins v. D.R. Horton, Inc. (9th
Cir. 2007) 505 F.3d 874, 882; see Younger v. Jensen (1980) 26 Cal.3d 397, 411 [“A
federal judgment ‘has the same effect in the courts of this state as it would have in a
federal court’”].)
              After we held oral argument in the prior appeal, the Ninth Circuit Court of
Appeals issued its panel opinion in Gonzalez v. City of Anaheim, supra, 2013 U.S.App.
Lexis 9607, affirming the federal court judgment. (F.E.V. I, supra, G046937.) On our
own motion, we took judicial notice of that opinion, which confirmed what would have
been the outcome based on the status of the judgment at the time of oral argument.
(F.E.V. I, supra, G046937.) Based on Hernandez v. City of Pomona (2009) 46 Cal.4th
501, 506, we held that the federal court judgment collaterally estopped Plaintiffs from
pursuing their state law causes of action based on both the shooting and on theory the
officers’ conduct before the shooting was negligent, and their battery and false
arrest/false imprisonment causes of action. (F.E.V. I, supra, G046937.) We affirmed the
judgment. Remittitur issued in August 2013.
              Nine months after we issued our opinion, the Ninth Circuit issued its en
banc opinion reversing the federal court judgment as to claims of excessive force (the en
banc panel affirmed the judgment as to claims for denial of a familial relationship).

                                              5
(Gonzalez v. City of Anaheim, supra, 747 F.3d at pp. 791-792.) The United States
Supreme Court denied certiorari in November 2014.
              In February 2015, Plaintiffs filed a new complaint in Orange County
Superior Court (the Second State Complaint) asserting the same five causes of action as
the State Complaint, namely, (1) false arrest/false imprisonment, (2) battery,
(3) negligence, (4) wrongful death, and (5) state civil rights violations (Civ. Code,
§ 52.1). As facts common to all causes of action, the Second State Complaint alleged
that on September 25, 2009, Decedent was driving his car near the intersection of Santa
Ana Street and Bond Street in the City of Anaheim. Anaheim Police Officers Daron
Wyatt and Matthew Ellis ordered Decedent to stop. Decedent had committed no crime
and the officers did not have cause to stop him. Both officers approached Decedent’s car.
Officer Ellis placed Decedent in a carotid restraint, and Officer Wyatt struck him in the
arms and head with a flashlight and punched him in the face. Decedent never hit,
punched, kicked, or threatened either police officer. Officer Wyatt then got into
Decedent’s car and fired a gun at Decedent’s head from six inches away. The bullet
struck Decedent in the head. He suffered serious physical injuries and later died.
Decedent was unarmed.
              In April 2015, Plaintiffs filed a motion to vacate the prior state court
judgment. The trial court denied the motion. Plaintiffs brought a petition for writ of
mandate in this court to challenge the order denying their motion to vacate the judgment.
A panel of this court summarily denied the writ petition.
              Defendants demurred to the Second State Complaint on the ground the
claims were barred by collateral estoppel, jurisdiction, and the applicable statute of
limitations. Plaintiffs filed opposition. After hearing oral argument, the court sustained
the demurrer without leave to amend. In a minute order, the trial court explained its
reasoning: “[T]his is a refiling of the same action that resulted in a judgment against
plaintiff[s], followed by a minute order to vacate that judgment which this court denied;

                                              6
res judicata applies to bar this action (because, among other reasons, [moving party] may
not effectively appeal this court’s ruling to another judge of this court); [statute of
limitations] acts as a bar, as well.” Plaintiffs appealed from the judgment of dismissal.
                                       DISCUSSION
                                               I.

               The Ninth Circuit En Banc Opinion, Although Reversing
                    the Federal Court Judgment, Does Not Nullify
                         the Judgment Affirmed by F.E.V. I.
              We first address whether the Ninth Circuit en banc opinion had the effect of
nullifying the judgment affirmed by F.E.V. I. Plaintiffs argue that under the analysis of
the Restatement Second of Judgments, the Ninth Circuit en banc opinion automatically
nullified the prior judgment, and, therefore, it no longer had claim or issue preclusive
effect. Defendants argue that Plaintiffs did not pursue appropriate proceedings to prevent
the opinion in F.E.V. I from becoming final before the Ninth Circuit proceedings had
been completed.
              Section 16 of the Restatement Second of Judgments addresses judgments
made in reliance on an adjudication that is later overturned or vacated. Section 16
provides: “A judgment based on an earlier judgment is not nullified automatically by
reason of the setting aside, or reversal on appeal, or other nullification of that earlier
judgment; but the later judgment may be set aside, in appropriate proceedings, with
provision for any suitable restitution of benefits received under it.” (Rest.2d Judgments,
§ 16, p. 145.) Section 16 is considered to be consistent with California law. (Grain
Dealers Mutual Ins. Co. v. Marino (1988) 200 Cal.App.3d 1083, 1088-1089.)
              Comment c to section 16 of the Restatement Second of Judgments explains:
“If, when the earlier judgment is set aside or reversed, the later judgment is still subject to
a post-judgment motion for a new trial or the like, or is still open to appeal, or such
motion has actually been made and is pending or an appeal has been taken and remains

                                               7
undecided, a party may inform the trial or appellate court of the nullification of the earlier
judgment and the consequent elimination of the basis for the later judgment. The court
should then normally set aside the later judgment.” (Rest.2d Judgments, § 16, com. c,
pp. 146-147.) Under the rule of section 16, the Ninth Circuit en banc opinion would not
have nullified the judgment affirmed in F.E.V. I. Rather, it was incumbent on Plaintiffs
to seek and obtain relief from the first state court judgment “in appropriate proceedings.”
(Rest.2d Judgments, § 16, p. 145.)
              Talley v. Valuation Counselors Group, Inc. (2010) 191 Cal.App.4th 132
(Talley) addresses the nature of “appropriate proceedings” to obtain relief from a later
judgment. The plaintiff in Talley sued three individual defendants and two corporate
defendants in state court for securities fraud. The plaintiff also initiated a related federal
court proceeding. The state trial court sustained, without leave to amend, demurrers in
favor of the defendants. In Talley v. Miller & Schroeder (Sept. 12, 2007, D048438)
[nonpub. opn.], the Court of Appeal had affirmed the judgments in favor of three
individual defendants and reversed and remanded for further proceedings the judgments
in favor of the two corporate defendants. (Talley, supra, 191 Cal.App.4th at pp.
136-137.) On remand, the trial court again sustained, without leave to amend, demurrers
by the corporate defendants, and judgment was entered in their favor. (Id. at p. 137.)
The plaintiff neither made a direct attack on that judgment by appeal nor obtained a stay
order pending the resolution of his related federal court action. (Ibid.) After the Court of
Appeal’s decision became final and the time for California Supreme Court review had
passed, the Ninth Circuit issued its decision “analyzing, modifying and narrowing the Bar
orders” that had served as the basis for the earlier judgments based on the demurrers. (Id.
at pp. 137, 141.)
              Based on the Ninth Circuit decision, the plaintiff in Talley filed a motion to
set aside the judgments in favor of the five defendants. (Talley, supra, 191 Cal.App.4th
at p. 137.) The trial court granted the motion and permitted the plaintiff to file a second

                                               8
amended complaint asserting essentially the same causes of action and updating his
allegations to conform to the prior rulings on the demurrers. (Id. at p. 138.) All five
individual and corporate defendants appealed. (Ibid.) The issue presented was whether
plaintiff’s state court claims could be revived following the Ninth Circuit decision. (Id. at
p. 150.)
              The Court of Appeal, distinguishing Grain Dealers Mutual Ins. Co. v.
Marino, held the plaintiff’s state court claims could not be automatically revived because,
“this is not a direct appeal from the challenged state court rulings that applied the
underlying federal judgment.” (Talley, supra, 191 Cal.App.4th at p. 151.) In addition,
the Court of Appeal concluded “there was no preserved opportunity to litigate the effect
of the federal ruling in state court” because the plaintiff had failed to preserve the state
court’s jurisdiction. (Ibid.) The Court of Appeal reasoned the plaintiff no longer had a
viable state court action because he had not delayed the finality of the judgments by
either directly attacking them by appeal or by obtaining a stay order in state court
pending the resolution of the Ninth Circuit proceedings. (Id. at p. 152.) The Court of
Appeal explained: “In the Restatement Second of Judgments, section 16, comment b,
page 146, the authors advise parties to keep their claims viable by seeking a stay of the
proceedings, awaiting the ultimate disposition of the underlying action. This was not
done here.” (Id. at p. 152 and fn. 12.)
              Talley would not permit Plaintiffs to automatically refile their state claims
following the Ninth Circuit en banc opinion because it did not automatically nullify the
judgment we affirmed in F.E.V. I. Instead, Plaintiffs had a “responsibility to keep [their]
case alive” (Talley, supra, 191 Cal.App.4th at p. 153) by obtaining a stay of the state
court litigation pending full and final resolution of the federal litigation. Plaintiffs
informally requested a stay from both the trial court and this court, but they did not
secure one as their requests were not granted.

                                               9
                                             II.

                  Plaintiffs Could Not Collaterally Attack or Obtain
               Equitable Relief From the Judgment Affirmed by F.E.V. I.
              Because Plaintiffs did not have the right to automatically refile their state
claims, we next address whether Plaintiffs could, and should, have sought to set aside the
judgment by collateral attack or otherwise. “A collateral attack is an attempt to avoid the
effect of a judgment or order made in some other proceeding.” (Rico v. Nasser Bros.
Realty Co. (1943) 58 Cal.App.2d 878, 882.) An attack in a second action on an earlier
judgment is collateral. (Wouldridge v. Burns (1968) 265 Cal.App.2d 82, 84.) A
judgment of a court of general jurisdiction can only be set aside on collateral attack if the
judgment is void on the face of the record. (Id. at p. 85.) A judgment is void on its face
when the invalidity appears on the judgment roll. (Cruz v. Fagor America (2007) 146
Cal.App.4th 488, 496.)
              The Ninth Circuit en banc opinion did not render void on its face the
judgment we affirmed in F.E.V. I. On its face, that judgment is valid and, therefore, was
not subject to collateral attack.
              In limited situations, a party may seek equitable relief from a final
                                      1
judgment that is not void on its face. To obtain equitable relief from a judgment, a party
must prove the judgment was the product of extrinsic fraud, meaning “‘a party has been
denied by his opponent or otherwise an opportunity to be heard or to fully present a claim
or defense.’” (In re Marriage of Grissom (1994) 30 Cal.App.4th 40, 46.) “Extrinsic
fraud usually arises when a party is denied a fair adversary proceeding because he has

1
 The writ of error coram nobis and writ of error coram vobis are available when there is
newly discovered evidence that would compel a different judgment, the evidence was
unknown to the petitioner before entry of the judgment, and the petitioner is without fault
or negligence in failing to discover the evidence sooner. (8 Witkin, Cal. Procedure (5th
ed. 2008) Attack on Judgment in Trial Court, § 4.) Coram nobis or coram vobis would
not be available to Plaintiffs because the Ninth Circuit en banc opinion is not evidence.

                                             10
been ‘deliberately kept in ignorance of the action or proceeding, or in some other way
fraudulently prevented from presenting his claim or defense.’” (Kulchar v. Kulchar
(1969) 1 Cal.3d 467, 471.)
              Plaintiffs do not, and cannot, claim the effect of the Ninth Circuit en banc
opinion was to render the judgment we affirmed in F.E.V. I to be the product of extrinsic
fraud. Their motion to vacate the judgment did not seek relief on that ground. In the
motion to vacate, Plaintiffs contended they were entitled to relief because (1) they had
taken the protective measures of appealing the first judgment and of seeking stays in the
trial court and this court pending the Ninth Circuit’s decision, and (2) the Ninth Circuit en
banc opinion constituted a substantial change in circumstances justifying relief. The
latter ground was based on section 73 of the Restatement Second of Judgments, which
permits a judgment to be set aside or modified if “[t]here has been such a substantial
change in the circumstances that giving continued effect to the judgment is unjust.” (Id.
at p. 197.) Comment c to section 73 states: “If a judgment is based on a prior judgement,
and the prior judgment is reversed or vacated, the reversal or vacating may be a change of
circumstance justifying relief from the second judgement.” (Id. at pp. 199-200.)
              The principle set forth in the Restatement Second of Judgments, section 73,
comment c is consistent with California law so long as the second judgment remains open
to challenge by direct appeal. (Talley, supra, 191 Cal.App.4th at pp. 152-153.) But once
the second judgment becomes final and not subject to direct appeal, California law would
permit the second judgment to be set aside only in limited circumstances, such as when
the judgment is void on its face or the product of extrinsic fraud. For that reason, the trial
                                                                            2
court was justified in denying Plaintiffs’ motion to vacate the judgment.

2
 Defendants fault Plaintiffs for bringing a petition for extraordinary writ instead of a
direct appeal to challenge the order denying their motion to vacate the judgment. The
means by which Plaintiffs sought to overturn that order are of no consequence because
there were no valid grounds for their motion to vacate.

                                             11
                                             III.

               It Would Be Manifestly Unjust to Give Claim Preclusion
                    Effect to the Judgment Affirmed by F.E.V. I.
              The judgment affirmed by F.E.V. I is final, we cannot modify it, and
Plaintiffs cannot seek to have it set aside or vacated. The question remains whether we
must give it preclusive effect and use it to affirm the judgment that is the subject of this
appeal. Plaintiffs argue we should not do so because the Ninth Circuit en banc opinion
reversed the federal court judgment serving as the basis of collateral estoppel.
Defendants argue the judgment we affirmed in F.E.V. I bars the Second State Complaint
because our opinion became final and remittitur issued before the Ninth Circuit en banc
opinion was filed and because Plaintiffs failed to appeal from the order denying their
motion to vacate the judgment.
              The doctrine of res judicata or claim preclusion “‘prevents relitigation of
the same cause of action in a second suit between the same parties or parties in privity
with them.’” (DKN, supra, 61 Cal.4th at p. 824.) “Claim preclusion arises if a second
suit involves (1) the same cause of action (2) between the same parties (3) after a final
judgment on the merits in the first suit.” (Ibid.) The doctrine of issue preclusion or
collateral estoppel prevents “the relitigation of issues argued and decided in a previous
case, even of the second suit raises different causes of action.” (Ibid.) “Under issue

                                              12
preclusion, the prior judgment conclusively resolves an issue actually litigated and
determined in the first action.”3 (Ibid.)
              The parties frame the issue as whether the prior state court judgment should
be given collateral estoppel effect. The issue is not collateral estoppel or issue preclusion
but claim preclusion. The Second State Complaint has the same parties and alleges the
same causes of action as the State Complaint, which was resolved by the prior judgment.
The prior judgment, once final, would, under a simple application of claim preclusion,
bar the Second State Complaint. (DKN, supra, 61 Cal.4th at p. 824.)
              But a simple application of claim preclusion is complicated by the
circumstances of this case, which are highly unusual, even extraordinary. Several months
after our prior opinion became final, the Ninth Circuit issued an en banc opinion
reversing the judgment on which we had had based that opinion. It is uncommon for the
Ninth Circuit to conduct a rehearing en banc, and even less common for the Ninth Circuit
to issue an en banc opinion rejecting the Ninth Circuit panel decision. Our prior opinion
was based entirely upon the collateral estoppel effect of the federal court judgment,
which had been affirmed by the Ninth Circuit panel opinion. Our decision, and the
judgment which it affirmed, were therefore logically dependent upon the validity and
soundness of that federal court judgment. By reversing the federal court judgment, the

3 The California Supreme Court has acknowledged its terminology in discussing the
preclusive effect of judgments “has been inconsistent and may have caused some
confusion.” (DKN, supra, 61 Cal.4th at p. 823.) The term res judicata frequently has
been used as an “umbrella term” encompassing both res judicata and collateral estoppel.
(Ibid.) To avoid confusion, the Supreme Court now uses the term claim preclusion to
refer to the primary aspect of res judicata, and issue preclusion to refer to collateral
estoppel. (Id. at p. 824.) The cases that we cite and quote use an assortment of terms.
We use the term res judicata or claim preclusion to refer to the doctrine preventing
relitigation of the same cause of action in a second suit between the same parties, and use
the term collateral estoppel or issue preclusion to refer to the doctrine preventing
relitigation of issues decided in a previous case even when second complaint asserts
different causes of action.

                                             13
Ninth Circuit en banc opinion eliminated the basis for our decision. But the Ninth Circuit
en banc opinion was issued months after the remittitur was issued, we had lost the ability
to modify our prior opinion, and the time for California Supreme Court review had
elapsed. Thus, neither we nor the Plaintiffs could undertake appropriate proceedings to
change that opinion. Defendants argue that, as a consequence, the judgment we affirmed
by our prior opinion has preclusive effect notwithstanding the fact the federal court
judgment has been reversed and Plaintiffs’ federal court claims remain viable.
               The result sought by Defendants, we conclude, would be manifestly unjust.
In Greenfield, supra, 32 Cal.2d at page 35, the California Supreme Court stated: “[I]n
rare circumstances a judgment may not be res judicata, when proper consideration is
given to the policy underlying the doctrine, and there are rare instances in which it is not
applied. In such cases it will not be applied so rigidly as to defeat the ends of justice or
important considerations of policy.”
               The California Supreme Court, in Slater v. Blackwood (1975) 15 Cal.3d
791, 794, 796 (Slater), addressed the issue whether enactment of legislation following the
original judgment was sufficient ground to deny according the judgment res judicata
effect. The court considered Greenfield to be “of doubtful validity” but did not overrule
it. (Id. at p. 796.) Instead, the Supreme Court held the rule of Greenfield was
inapplicable because “the only possible basis for its implementation is founded on a
change in law following the original judgment.” (Ibid.) The court explained: “It cannot
be denied that judicial or legislative action which results in the overturning of established
legal principles often leads to seemingly arbitrary and unwarranted distinctions in the
treatment accorded similarly situated parties. However, ‘[public] policy and the interest
of litigants alike require that there be an end to litigation.’ [Citation.] . . . . The
consistent application of the traditional principle that final judgments, even erroneous

                                               14
ones [citations], are a bar to further proceedings based on the same cause of action is
necessary to the well-ordered functioning of the judicial process.” (Id. at p. 797.)4
              In City of Sacramento v. State of California, supra, 50 Cal.3d at page 65
footnote 8, the California Supreme Court described its opinion in Slater as holding only
that “the ‘injustice’ exception . . . cannot be based solely on an intervening change in the
law.” Still more recently, the California Supreme Court recognized that “public policy
considerations may warrant an exception to the claim preclusion aspect of res judicata, at
least where the issue is a question of law rather than of fact.” (Barragan, supra, 32
Cal.4th at p. 256.) In support of that proposition, the Supreme Court cited Greenfield
without question or criticism.
              Given the rare circumstances of this case, we conclude public policy
considerations “warrant an exception to the claim preclusion aspect of res judicata”
(Barragan, supra, 32 Cal.4th at p. 256) and claim preclusion should “not be applied so
rigidly as to defeat the ends of justice or important considerations of policy” (Greenfield,
supra, 32 Cal.2d at p. 25). The holding of Slater does not compel us to reach a different
conclusion because the Ninth Circuit en banc opinion was not an intervening change in
the law, such as a legislative enactment or California Supreme Court opinion, that is
extrinsic to the proceedings at hand and “which results in the overturning of established

 4  Issue preclusion (collateral estoppel) differs from claim preclusion by incorporating
fairness as a requirement that must be satisfied in addition to the threshold requirements
of identity of issues, actually and necessarily decided issues, final decision on the merits,
and privity. (Hernandez v. City of Pomona, supra, 46 Cal.4th at p. 506.) Collateral
estoppel is an equitable doctrine, and, even when the threshold elements are met, the
court must consider when its application would be fair and just, and comport with the
public policies underlying the doctrine. (Lucido v. Superior Court (1990) 51 Cal.3d 335,
342-324 [“We have repeatedly looked to the public policies underlying the doctrine
before concluding that collateral estoppel should be applied in a particular setting”]; Title
Guarantee & Trust Co. v. Monson (1938) 11 Cal.2d 621, 630 [res judicata is an equitable
principle]; Smith v. ExxonMobil Oil Corp. (2007) 153 Cal.App.4th 1407, 1414 [“even
when the technical requirements are met, the doctrine is to be applied ‘only where such
application comports with fairness and sound public policy’”].)

                                             15
legal principles.” (Slater, supra, 15 Cal.3d at p. 797.) The Ninth Circuit en banc opinion
is intrinsic to the litigation between Plaintiffs and Defendants and did not result in the
overturning of established legal principles.
              In declining to accord preclusive effect to the prior judgment, we consider
the public policies underlying res judicata and collateral estoppel. “The doctrine of res
judicata rests upon the ground that the party to be affected, or some other with whom he
is in privity, has litigated, or had an opportunity to litigate the same matter in a former
action in a court of competent jurisdiction, and should not be permitted to litigate it again
to the harassment and vexation of his opponent. Public policy and the interest of litigants
alike require that there be an end to litigation.” (Panos v. Great Western Packing Co.
(1943) 21 Cal.2d 636, 637.) The public policies underlying collateral estoppel are
preserving the integrity of the judicial system, promoting judicial economy, preventing
inconsistent judgments, and protecting litigants from vexatious litigation. (Lucido v.
Superior Court, supra, 51 Cal.3d at p. 343; Roos v. Red (2005) 130 Cal.App.4th 870,
887; Younan v. Caruso (1996) 51 Cal.App.4th 401, 407.)
              Plaintiffs have not had the opportunity to litigate the merits of the claims
asserted in their state court complaints. When the federal district court granted summary
judgment against Plaintiffs on their federal claims, the district court dismissed their state
law claims without prejudice, and Plaintiffs reasserted those claims in the State
Complaint. Those claims have never been litigated beyond the pleading stage; at no
point has there been a resolution on the merits of any of Plaintiffs’ state law claims.
Plaintiffs cannot be called vexatious litigants for seeking adjudication of claims that have
never been properly resolved on the merits.
              In Slater, the court expressed concern that denying preclusive effect to a
judgment based on a change in the law would “call . . . ‘into question the finality of any
judgment and thus is bound to cause infinitely more injustice in the long run.’” (Slater,
supra, 15 Cal.3d at p. 797.) Invoking an exception to claim preclusion in this case could

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not have that consequence because, as we have explained, the Ninth Circuit en banc
opinion was not “judicial or legislative action which results in the overturning of
established legal principles” (ibid.), but was the application of established legal principles
as part of the ongoing litigation between the parties to a particular case.
              Giving preclusive effect to the judgment affirmed by F.E.V. I would not
comport with the policies of preserving the integrity of the judicial system. F.E.V. I was
based entirely upon the collateral estoppel effect of the federal court judgment, which had
been affirmed by the Ninth Circuit. The soundness of our decision in F.E.V. I, and the
judgment which it affirmed, were therefore logically dependent upon the validity and
soundness of that federal court judgment. By reversing the federal court judgment, the
Ninth Circuit en banc opinion eliminated the legal and logical bases of our prior opinion,
and we lacked the ability to modify that opinion. Public confidence in the wisdom and
integrity of judicial decisions is not promoted by giving preclusive effect to a judgment
the validity of which is based entirely on a judgment that has been reversed. We will not
bar Plaintiffs from pursuing their state law claims based on the fortuity of the timing of
the Ninth Circuit en banc opinion.
              Defendants argue Plaintiffs should have, but did not, request a stay from the
trial court, and did not file a motion for a stay or for a stay of issuance of the remittitur in
this court. Plaintiffs orally asked the trial court for a stay pending a decision from the
Ninth Circuit and, during oral argument in the prior appeal, counsel for Plaintiffs argued
that a stay of proceedings pending resolution by the Ninth Circuit would be appropriate.
Although Plaintiffs might have done more to secure a stay, such as by filing a written
motion with supporting evidence (see Cal. Rules of Court, rule 8.272(c)(2) [stay of
issuance of remittitur]), we are satisfied they acted with sufficient diligence.

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                                    DISPOSITION
             The judgment is reversed and the matter is remanded for further
proceedings. Appellants shall recover their costs on appeal.

                                                FYBEL, J.

WE CONCUR:

BEDSWORTH, ACTING P. J.

IKOLA, J.

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