Court Opinion

ID: 9495933
Source: CourtListenerOpinion
Date Created: 2023-08-05 16:13:45.120887+00
Date Added: 2024-06-11T17:52:45.888213
License: Public Domain

MORRIS SHEPPARD ARNOLD, Circuit Judge,
dissenting.
I respectfully dissent from the conclusion that Mr. Friez’s claims against Messrs. Kolb and Espegard are barred by res judicata.
The burden is on the defendants to establish that principles of res judicata bar the action against them. See Howard v. Green, 555 F.2d 178, 181 (8th Cir.1977); Fed.R.Civ.P. 8(c). Here the res judicata effect of the first judgment, which was entered in federal court and based on federal law, is governed by federal law. See Canady v. Allstate Ins. Co., 282 F.3d 1005, 1014 (8th Cir.2002). In federal court, a plaintiff is not required to sue all defendants in one action, see Headley v. Bacon, 828 F.2d 1272, 1275 (8th Cir.1987); and generally, a claim is precluded under res judicata principles if the first suit resulted in a final judgment on the merits and was based on proper jurisdiction, and both suits involve the same parties or those in privity with them and are based upon “the same nucleus of operative fact,” see Kolb v. Scherer Bros. Financial Servs. Co., 6 F.3d 542, 544 (8th Cir.1993).
In addressing the matter of res judicata, the district court first concluded that the present action arose out of the same nucleus of operative facts as the first one, and that the second action against the bank was therefore barred. I have no difficulty with this conclusion. See Baker by Thomas v. General Motors Corp., 522 U.S. 222, 237-38, 118 S.Ct. 657, 139 L.Ed.2d 580 (1998).
The district court further ruled that although Mr. Kolb and Mr. Espegard were not sued in the previous action, the action against them was nevertheless barred because they were in privity with the bank. The district court cited United States v. Gurley, 43 F.3d 1188, 1195 (8th Cir.1995), cert. denied, 516 U.S. 817, 116 S.Ct. 73, 133 L.Ed.2d 33 (1995), for the familiar proposition that “directors, officers, and shareholders may be in privity with a corporation and thereby assert a res judicata defense if they are named as defendants solely in their capacity as directors, officers and shareholders” (internal quotations omitted). The court found that res judicata applied because Mr. Kolb is the bank’s personnel officer and Mr. Espegard is the bank’s president, and Mr. Friez’s “claims against them are brought against them in their capacity as directors and officers.”
The court in this case correctly observes that both lawsuits “revolve around Kolb and Espegard’s statements to Friez as of*583ficers and managers of Bremer Bank,” and then agrees with the district court that Mr. Kolb and Mr. Espegard “are sued as officers” and are therefore in privity'with the bank. But the relevant papers in this case do not indicate that Mr. Kolb and Mr. Espegard were in fact sued as officers of the bank. For one thing, the caption to the complaint says nothing about the capacity in which the defendants were sued. The complaint itself does recite the fact that Mr. Kolb was the personnel manager of the bank and that Mr. Espegard was its president, and it refers to them as the bank’s “officers and managers,” but there is nothing in it to indicate that the action was brought against them solely as officers or managers. I therefore believe that the district court erred in concluding that Mr. Kolb and Mr. Espegard were sued solely “in their capacity as directors and officers.”
Moore’s Federal Practice § 131.40[3][a] (3d ed.2001) observes that “in the context of the preclusion doctrines, the concept of privity is an amorphous concept that is difficult to define. It does not serve well as a touchstone for determining whether a particular relationship with a party to litigation will result in preclusion. Rather, it describes those relationships that the courts have already determined will qualify for preclusion.” The Supreme Court has said that the “orthodox categories of privies” include “ ‘those who control an action although not parties to it ...; those whose interests are represented by a party to the action ...; successors in interest,’ ” Lawlor v. National Screen Serv. Corp. 349 U.S. 322, 329 & n. 19, 75 S.Ct. 865, 99 L.Ed. 1122 (1955) (quoting Restatement of Judgments § 83 cmt. a), but noted more recently that the “term ‘privity’ is now used to describe various relationships between litigants that would not have come within the traditional definition of that term,” Richards v. Jefferson County, Ala., 517 U.S. 793, 798, 116 S.Ct. 1761, 135 L.Ed.2d 76 (1996) (citing generally to Restatement (Second) of Judgments, ch. 4 (1980)). But however broadly one might define the concept, I have discovered no case that would allow for a conclusion that privity exists in the circumstances present here.
It is true that the mere relationship of employer and employee sometimes gives rise to a preclusive effect being given to a prior judgment in favor of one or the other. See Restatement (Second) of Judgments § 51; see also 18A Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 4463, at 689-691 (2002). But this principle is not available here because the prior judgment was in an ERISA case where the matter of vicarious liability in tort was entirely irrelevant.
For the foregoing reasons, I respectfully dissent.