Court Opinion

ID: 9705405
Source: CourtListenerOpinion
Date Created: 2023-08-26 01:05:05.699867+00
Date Added: 2024-06-11T18:22:10.471003
License: Public Domain

Taylor, J.
(dissenting). Plaintiffs filed a lawsuit in federal court in 1989, seeking recovery of costs for an environmental cleanup of a landfill it owned. Plaintiffs filed a third amended complaint on October 15, 1992. At this time, plaintiffs could have included, but did not, any state law counts (such as a claim under the Michigan Environmental Response Act1) in then-federal lawsuit. Extensive discovery occurred, and the case was mediated. On the eve of trial, approximately one year after the third amended complaint had been filed, the parties filed cross motions for summary disposition. The federal district court granted summary disposition for defendants.2 The United States Court of Appeals for the Sixth Circuit subsequently affirmed this ruling.3 Soon thereafter, plaintiffs instituted a state court action that sought relief under various state law theories including the MERA.
Defendants moved for summary disposition of the state lawsuit, citing MCR 2.116(C)(7) (action barred because of a prior judgment, i.e., res judicata). The trial court denied the motion, and the Court of Appeals affirmed.4 This Court subsequently granted *389defendants’ applications for leave to appeal. 457 Mich 870 (1998).
The majority concludes that plaintiffs’ lawsuit is not barred by res judicata. I dissent. As explained below, well established principles of res judicata require dismissal of plaintiffs’ state court lawsuit. Further, refusal to so find is inconsistent with Michigan’s “broad” approach to res judicata and undermines the very core policies that underlie res judicata principles.
The majority concludes that a proper application of established principles of res judicata does not bar plaintiffs’ state lawsuit. It reaches this conclusion notwithstanding that (1) there is no dispute that the plaintiffs’ claims and theories in the state lawsuit arise out of the same alleged transactions and occurrences that led to the prior federal litigation, and (2) there is also no question that the relief plaintiffs are seeking in the state lawsuit is the same relief they sought in the federal lawsuit.
As recognized by the majority, Michigan has a broad approach to application of res judicata. Hackley v Hackley, 426 Mich 582, 584; 395 NW2d 906 (1986). Indeed, the doctrine was created in order to “relieve parties of the cost and vexation of multiple lawsuits, conserve judicial resources, and, by preventing inconsistent decisions, encourage reliance on adjudication.” Id. Further, res judicata applies not only to points on which the court actually ruled, but also on every point that the parties, exercising reasonable diligence, might have brought forward in the first lawsuit. Gursten v Kenney, 375 Mich 330, 335; 134 NW2d 764 (1965).
*390The majority adopts an exception to res judicata found in the Second Restatement of Judgments. More specifically, the majority adopts and finds applicable comment e to § 25 of the Restatement, which states that a second action is not precluded by operation of the doctrine of res judicata where the court, having jurisdiction of the first action, would “clearly” have declined to exercise jurisdiction over the second as a matter of discretion. Id. at 213.
i
First, I would not adopt this exception from the Restatement of Judgments because it is not consistent with Michigan’s following a “broad” approach to res judicata, and it depends on a suspect proposition, i.e., one can surmise whether a federal court “clearly” would have done something when it had discretion to do it or not to do it as the court saw fit.5
The caveat in comment e of the Restatement of Judgments has been persuasively criticized. In particular, the interpretation has been found unworkable because: (1) it requires a court to engage in “speculative gymnastics,”6 (2) calls for “pure speculation,”7 and (3) requires an exercise in “prognosticative futility.”8 In my judgment, it is inherently impossible to determine whether a federal court “clearly” would *391have declined to do something that is a matter within its discretion.
This exception in the Restatement inappropriately allows a plaintiffs voluntary choice not to include state law claims in a federal complaint to subvert the strong policy grounds underlying the doctrine of res judicata.9 There is no question that adopting this exception from the Restatement does not conserve judicial resources and that it subjects defendants to the vexation and costs associated with multiple lawsuits.
If a plaintiff wants to preserve state law claims, the plaintiff should be obligated to plead them, or at least attempt to plead them, in the federal court. If the federal court does in fact later decline to exercise supplemental jurisdiction over state law claims, then and only then, would filing such state claims in a state court not be barred by res judicata. The reason for this rule is evident. The rule of res judicata is designed to forestall a plaintiff from getting “two bites at the apple.” We should not countenance, by adopting the exception from the Restatement, a plaintiffs action in failing to plead a state law theory in a federal court (perhaps with the hope of later litigating the theory in a state court) because it was possible, or even probable, that the federal court would have declined to exercise its supplemental jurisdiction. Rather, such a plaintiff should plead state claims in the federal court, and, if that court fails to hear the *392claims, the plaintiff would then be allowed to pursue state law claims in a state court.
If a plaintiff does plead or attempt to plead state law claims in federal court and the court later dismissed all federal jurisdiction granting claims, then the federal court will decide whether to decline jurisdiction over the state law claims. Only then will a state court know for certain whether the federal court declined to exercise its supplemental jurisdiction over the state law claims. By even agreeing to participate in the inherent speculation required by the exception to the Restatement, the majority does a disservice to the policy considerations res judicata was designed to protect.
n
Even if I were persuaded to adopt this exception from the Restatement, I would find it inapplicable here because I cannot conclude that the federal court “clearly” would have dismissed plaintiffs’ state law counts upon dismissal of the federal jurisdiction granting count (if plaintiffs had included them in their federal lawsuit).
The majority concludes that the federal judge “clearly” would have declined to exercise supplemental jurisdiction over plaintiffs’ MERA claim because of the strong general tendency of the federal courts to decline to exercise jurisdiction over lone state claims and because the mera had only recently been amended to allow private causes of action.
I do not challenge the fact that the federal courts have a general reluctance to exercise supplemental *393jurisdiction over lone state claims10 or that a mera private cause of action had recently been enacted at the time that the federal judge dismissed plaintiffs’ lawsuit. Nevertheless, I cannot agree with the majority’s post hoc conclusion that the federal court “clearly” would have declined to exercise supplemental jurisdiction over a MERA claim had plaintiffs chosen to include such a claim in their third amended federal complaint.
The majority correctly recognizes that the expenditure of excessive resources by the parties in preparing for trial might be sufficient to sway a federal court to exercise supplemental jurisdiction over state claims, even in the absence of any remaining federal claims. The majority then states that no such factors in the instant case merit such a determination. I disagree. The federal lawsuit had been pending for four and a half years when it was dismissed. Extensive discovery had taken place. The federal action had been mediated, and dismissal occurred on the eve of trial. Under such circumstances, one cannot reasonably conclude that the federal court “clearly” would have refused to exercise its supplemental jurisdiction over any state-related claims that plaintiffs could have included, but did not, in their third amended complaint.11 Plaintiffs had the power to prevent the state *394court from having to speculate regarding what the federal court “clearly” would have done.
Despite professing fealty to the vital policy grounds supporting Michigan’s broad res judicata doctrine, the majority reaches a result in this case that is incongruent with the doctrine. Moreover, without identifying any countervailing concerns, the majority reaches a result that contravenes the important public policy considerations that led to development of the res judicata doctrine.12 Indeed, today’s ruling may have profoundly negative ramifications for future cases where there are parallel federal and Michigan remedies that arise from the same transaction or occurrence. Under the majority’s holding, plaintiffs will have an incentive to split their causes of action and assert only federal claims in federal court. Given the overburdened trial court dockets, this Court ought not give aid and comfort to those who would, as legal strategy (whether formulated before or after dismis*395sal of a federal lawsuit), split their cause of action. The majority’s holding unfairly deprives the instant defendants, and undoubtedly will be cited to deprive future defendants, of the certainty and closure promoted by res judicata. Our courts can ill afford the narrowing of our res judicata doctrine that this case represents.
CONCLUSION
Because plaintiffs did not give the federal court an opportunity to exercise its discretion, by pleading state law counts in the federal lawsuit, and because all requirements for applying the doctrine of res judicata in this case have been met, I would reverse the judgments of the Court of Appeals and the trial court and remand this case for entry of an order dismissing plaintiffs’ claims against defendants.
Young, J., took no part in the decision of this case.

 Then found at MCL 299.601 et seq.; MSA 13.32(1) et seq.

 851 P Supp 850 (WD Mich, 1994).

 Unpublished opinion listed in the table of cases at 89 F3d 835 (CA 6, 1996).

 Unpublished opinion per curiam, issued February 7,1997 (Docket No. 185124).

 Street v Corrections Corp of America, 102 F3d 810, 818 (CA 6, 1996) (district courts enjoy “wide discretion” in deciding whether to retain supplemental jurisdiction over a state claim after all federal claims have been dismissed).

 Nwosun v General Mills Restaurants, Inc, 124 F3d 1255, 1258 (CA 10, 1997).

 Gilles v Ware, 615 A2d 533, 541 (DC App, 1992).

 Anderson v Phoenix Investment Counsel of Boston, Inc, 387 Mass 444, 451; 440 NE2d 1164 (1982).

 See, e.g., Mohamed v Exxon Corp, 796 SW2d 751, 756-757 (Tex App, 1990) (holding that when no effort was made to present state claims to a federal court, the state court must presume that federal judgment is res judicata).

 The majority quotes language from a Supreme Court opinion regarding pendent jurisdiction in United Mine Workers of America v Gibbs, 383 US 715, 725-727; 86 S Ct 1130; 16 L Ed 2d 218 (1966), to the effect that if the “ ‘federal claims are dismissed before trial, . . . the state claims should be dismissed as well’ ” (emphasis added). However, the Supreme Court has since clarified this statement in Gibbs and held that it “does not establish a mandatory rule to be applied inflexibly in all cases.” Carnegie-Mellon v Cohill, 484 US 343, 350, n 7; 108 S Ct 614; 98 L Ed 2d 720 (1988).

 See, e.g., Taylor v First of America Bank-Wayne, 973 F2d 1284, 1288 (CA 6, 1992) (interests of judicial economy and fairness favored the dis*394trict court’s retention of jurisdiction where the case had been on the court’s docket for almost two years and the parties had completed discovery and compiled a voluminous record), and Purgess v Sharrock, 33 F3d 134, 138 (CA 2, 1994) (If, however, the dismissal of the federal claim occurs late in the action, after there has been substantial expenditure in time, effort, and money in preparing the pendent state claims, knocking them down with a belated rejection of supplemental jurisdiction may not be fair. Nor is it by any means necessary).

 The result in this case also seems contrary to the amendment of MCR 2.203(A), which became effective on June 1, 1999. MCR 2.203(A) requires, consistent with res judicata principles, a party to join every claim that the pleader has against the opposing party. MCR 2.203(A)(2), however, states that, if a party does not object to another party’s failure to join all claims against it, the joinder rules are waived. Thus, a party’s failure to object could prevent application of Michigan’s broad res judicata doctrine. Effective, June 1, 1999, MCR 2.203 has been amended to delete the provision that the failure to object will constitute a waiver of joinder rules. By so deleting this waiver language, this Court has broadened our res judicata jurisprudence. Yet, the majority’s ruling, issued so closely to the court rule change, narrows our res judicata jurisprudence.