Banks v. International Union Electronic , 390 F.3d 1049 ( 2004 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 03-3982
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Wilford Banks, *
*
Appellant, *
* Appeal from the United States
v. * District Court for the
* Eastern District of Arkansas.
International Union Electronic, *
Electrical, Technical, Salaried and *
Machine Workers; Communications *
Workers of America; Council of *
Industrial Organizers, *
*
Appellees. *
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Submitted: September 14, 2004
Filed: December 3, 2004
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Before RILEY, LAY, and SMITH, Circuit Judges.
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SMITH, Circuit Judge.
Wilford Banks ("Banks") appeals the dismissal of his case. The district court1
found res judicata and collateral estoppel barred Banks from suing International
Union of Electrical Workers-Communication Workers of America ("IUE-CWA") and
1
The Honorable James M. Moody, United States District Judge for the Eastern
District of Arkansas.
Council of Industrial Organizers ("CIO") a second time where the second suit was
based upon the same factual allegations as a prior suit that produced a judgment in
Banks's favor. We affirm.
I. Background
Banks was employed by IUE-CWA. Employees of IUE-CWA are members of
CIO. CIO represents them in employment disputes with IUE-CWA pursuant to a
collective bargaining agreement negotiated between IUE-CWA and CIO. Banks filed
suit ("Banks I") in the Eastern District of Arkansas against IUE-CWA and CIO
claiming violations of Title VII, 42 U.S.C. §§ 1985 and 1988, the National Labor
Relations Act, as amended, and the Labor Management Relations Act ("LMRA").
Specifically, Banks alleged that IUE-CWA violated express seniority provisions in
the collective bargaining agreement and harassed Banks through arbitrary transfers
to work locations. Additionally, Banks alleged that IUE-CWA improperly changed
his job assignment and his job requirements to require Banks to keep a detailed
written log of his activities and to report those activities to his superiors. Banks also
complained about the revocation of his possession and use of a personal computer
that Banks described as vital to the performance of his job. Banks alleged that these
actions were discriminatory, retaliatory, in breach of the collective bargaining
agreement, and for the purpose of keeping black workers from organizing. Lastly,
Banks alleged that CIO breached its duty to represent him in the grievance process
under the collective bargaining agreement.
CIO filed a motion to dismiss for failure to state a claim and the district court
granted CIO's motion. IUE-CWA then terminated Banks. After his termination, Banks
amended his complaint adding more Title VII violations against IUE-CWA, including
a claim of retaliation. Banks's amended pleadings alleged only Title VII violations.
In response to his termination, Banks also filed a grievance with CIO. In that
grievance, Banks protested and alleged that IUE-CWA retaliated and terminated him
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for filing a complaint with the Equal Employment Opportunity Commission
("EEOC") and for helping other black employees file EEOC complaints.
Banks and IUE-CWA ultimately settled Banks I pursuant to Rule 68 of the
Federal Rules of Civil Procedure. That settlement covered all claims brought by
Banks, as amended, including all claims related to Banks's termination. Pursuant to
the parties' agreement, the district court entered judgment for Banks against IUE-
CWA. Banks then requested CIO take his termination grievance to arbitration. CIO
refused the request on the grounds that the facts involved in the grievance were
resolved by the settlement and that an arbitrator would rule the case barred by res
judicata.
Subsequently, Banks filed this suit ("Banks II") in the Eastern District of
Arkansas and named IUE-CWA and CIO as defendants. In Banks II, Banks repeated
his prior allegations of LMRA and Title VII violations. Banks re-alleged that IUE-
CWA changed his job assignment and his job requirements to require Banks to keep
a detailed written log of his activities and to report those activities to his superiors
and that IUE-CWA arbitrarily revoked possession and use of his personal computer.
Banks also re-alleged that CIO ignored grievances that he filed pursuant to the
collective bargaining agreement. Finally, Banks re-alleged that IUE-CWA unlawfully
terminated him in retaliation for helping a fellow employee prepare an EEOC
complaint. There were no new facts alleged in the Banks II complaint that were not
alleged in the Banks I complaint.
IUE-CWA and CIO brought separate motions to dismiss. IUE-CWA argued
that the Banks II complaint was barred by the doctrine of res judicata. CIO argued that
the Banks II complaint was barred by the doctrine of collateral estoppel. CIO also
argued that Banks failed to state a claim against CIO. The district court ruled that the
underlying facts of Banks I and Banks II were identical and thus the claims alleged
in Banks II against IUE-CWA were barred by res judicata. The district court also
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ruled that Banks was collaterally estopped from litigating his Banks II claims against
CIO. As a result, dismissal was ordered and judgment in favor of IUE-CWA and CIO
was entered into the record. Banks now seeks reversal of the district court's order of
dismissal and judgment in favor of IUE-CWA and CIO.
II. Discussion
A. Res Judicata
We review a district court's dismissal decision on grounds of res judicata de
novo. Lundquist v. Rice Mem'l Hosp., 238 F.3d 975, 976–77 (8th Cir. 2001). The
preclusion principle of res judicata prevents "the relitigation of a claim on grounds
that were raised or could have been raised in the prior suit." Lane v. Peterson, 899
F.2d 737, 741 (8th Cir. 1990). We undertake a three part inquiry to determine whether
res judicata applies addressing these issues: (1) whether the prior judgment was
rendered by a court of competent jurisdiction; (2) whether the prior judgment was a
final judgment on the merits; and (3) whether the same cause of action and the same
parties or their privies were involved in both cases. Id. Neither party disputes that the
first two requirements are met.
With regard to the third requirement of res judicata, we "adopted the position
of the Restatement (Second) of Judgments in determining whether two causes of
action are the same for res judicata purposes." Id. at 742. Section 24 of the
Restatement (Second) of Judgments provides that:
When a valid and final judgment rendered in an action extinguishes the
plaintiff's claim pursuant to the rules of merger or bar[,] . . . the claim
extinguished includes all rights of the plaintiff to remedies against the
defendant with respect to all or any part of the transaction, or series of
connected transactions, out of which the action arose.
What factual grouping constitutes a 'transaction,' and what groupings
constitute a 'series,' are to be determined pragmatically, giving weight
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to such considerations as whether the facts are related in time, space,
origin, or motivation, whether they form a convenient trial unit, and
whether their treatment as a unit conforms to the parties' expectations or
business understanding or usage.
RESTATEMENT (SECOND) OF JUDGMENTS § 24. Thus, "a claim is barred by res judicata
if it arises out of the same nucleus of operative facts as the prior claim." Lane, 899
F.2d at 742 (citations omitted); see also Ruple v. City of Vermillion, 714 F.2d 860,
861 (8th Cir. 1983).
Banks does not dispute that Banks I and Banks II arose out of the same nucleus
of operative facts. Instead, Banks erroneously argues that because Banks I was a Title
VII case and Banks II was a LMRA case, Banks I and Banks II represent separate and
distinct causes of action or claims. As stated in Lane, "reliance . . . on different
substantive law and new legal theories does not preclude the operation of res judicata.
. . . [W]here a plaintiff fashions a new theory of recovery or cites a new body of law
that was arguably violated by a defendant's conduct, res judicata will still bar the
second claim if it is based on the same nucleus of operative facts as the prior claim."
Lane, 899 F.2d at 744. In effect, "res judicata bars relitigation not only of those
matters that were actually litigated, but also those which could have been litigated in
the earlier proceeding." King v. Hoover Group, Inc., 958 F.2d 219, 223 (8th Cir.
1992).
Banks also argues that Lawlor v. Nat'l Screen Services, 349 U.S. 322 (1955),
and Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974), preclude the application
of res judicata in this case. Both Lawlor and Alexander are distinguishable from the
present case.2 Unlike in Lawlor, Banks II fails to allege additional facts not in
2
In Lawlor, an action was brought to recover treble damages for alleged
violations of federal antitrust laws. Lawlor, 349 U.S. at 323. A previous suit had been
settled and dismissed with prejudice. Id. The subsequent suit named additional
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existence at the time Banks I was filed. In fact, the LMRA violations alleged in Banks
II were originally alleged in Banks I. Banks chose to abandon those claims after
amending his complaint. Unlike in Alexander, the district court's res judicata ruling
in Banks II was not based on an arbitration decision, but rather a final judgment by
a federal district court. Moreover, Banks I's claims against IUE-CWA were not based
defendants and alleged anti-trust violations that occurred after the previous suit had
been filed. Id. at 325. Dismissal on the grounds of res judicata was granted by the
district court and affirmed on appeal. Id. However, the United States Supreme Court
reversed, reasoning that the two suits were not based on the same cause of action
because "the conduct presently complained of was all subsequent to the . . . [previous]
judgment." Id. at 328, 330. Moreover, new antitrust violations were alleged. Id. at
328. The Court held that "[w]hile the . . . [previous] judgment precludes recovery on
claims arising prior to its entry, it cannot be given the effect of extinguishing claims
which did not even then exist and which could not possibly have been sued upon in
the previous case." Id.In Alexander, plaintiff filed a grievance under the collective-bargaining
agreement between his employer and his union. Alexander, 415 U.S. at 39. The
collective-bargaining agreement prohibited racial discrimination but, at least initially,
plaintiff made no claim of racial discrimination. Id. However, plaintiff later amended
his claim to do so. Id. at 42. After an arbitrator ruled that there was no violation of the
collective-bargaining agreement, plaintiff filed a Title VII claim in the United States
District Court for the District of Colorado. Id. at 43. The district court dismissed the
suit on grounds of res judicata and the Tenth Circuit affirmed. Id. The Court reversed
and held that "while Title VII does not speak expressly to the relationship between
federal courts and the grievance-arbitration machinery of collective-bargaining
agreements[,] . . . [t]here is no suggestion in the statutory scheme that a prior arbitral
decision either forecloses an individual's right to sue or divests federal courts of
jurisdiction." Id. at 47. The Court reasoned that "[i]n submitting his grievance to
arbitration, . . . [plaintiff sought] to vindicate his contractual right under a collective
bargaining agreement. By contrast, in filing a lawsuit under Title VII, . . . [plaintiff
asserted] independent statutory rights accorded by Congress." Id. at 49-50. As a
result, plaintiff's Title VII claim was not barred by res judicata. Id. at 59-60.
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on the grievance-arbitration machinery of his collective-bargaining agreement, but
statutory rights under LMRA that could have been and were originally brought in the
first lawsuit. Banks's LMRA claims are barred here because Banks voluntarily
amended his complaint in Banks I to exclusively allege Title VII violations and by
that amendment, abandoned or dismissed his LMRA claims. Res judicata now bars
Banks from relitigating those claims.
This reasoning does not apply to Banks claims against CIO, as, in Banks I, CIO
was dismissed without prejudice and CIO was not a party to the Rule 68 settlement.
We now examine the district court's ruling that Banks's claims against CIO in Banks
II were barred by collateral estoppel.
B. Collateral Estoppel
A district court's rulings on issues of law, including the application of collateral
estoppel, are reviewed de novo. Nat'l Fire Ins. Co. v. Terra Indus., Inc., 346 F.3d
1160, 1164 (8th Cir. 2003) (citations omitted). "Collateral estoppel 'bars the
relitigation of factual or legal issues that were determined in a prior . . . court action,
and applies to bar relitigation in federal court of issues previously determined.'" In re
Elisabeth Scarborough, 171 F.3d 638, 641 (8th Cir. 1999); see also Parklane Hosiery
Co. v. Shore, 439 U.S. 322, 326 (1979). "Originally, collateral estoppel was limited
by the principle of mutuality, which provided that 'neither party could use a prior
judgment as an estoppel against the other unless both parties were bound by the
judgment.'" Lane, 899 F.2d at 741 (citation omitted). Under federal law, the mutuality
requirement has long been abandoned and a party may now "rely on collateral
estoppel even though he or she is not bound by the prior judgment if the party against
whom it is used had a full and fair opportunity and incentive to litigate the issue in
the prior action." Id.Banks's claim against CIO for breach of duty of fair representation cannot
succeed absent a showing that his underlying claim against IUE-CWA is meritorious.
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See DiPinto v. Sperling, 9 F.3d 2, 4 (1st Cir. 1993). Banks cannot relitigate the merits
of his claims against IUE-CWA because those claims are barred by res judicata. As
a result, Banks is collaterally estopped from litigating his claims against CIO.
III. Conclusion
Banks had a full and fair opportunity, and did litigate Title VII and LMRA
claims against IUE-CWA in his prior action. The doctrine of res judicata now bars
Banks from relitigating those claims in this action. The doctrine of collateral estoppel
also bars Banks from litigating any claims arising from the same facts against CIO.
The judgment of the district court is affirmed.
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