Denturist Assoc. v. Montana DOL ( 2016 )

May 24 2016
DA 15-0580
Case Number: DA 15-0580
IN THE SUPREME COURT OF THE STATE OF MONTANA
2016 MT 119DENTURIST ASSOCIATION OF MONTANA,
Plaintiff and Appellant,
v.
STATE OF MONTANA, DEPARTMENT OF
LABOR AND INDUSTRY; and BOARD OF DENTISTRY,
Defendants and Appellees.
APPEAL FROM: District Court of the First Judicial District,
In and For the County of Lewis and Clark, Cause No. CDV-2013-924
Honorable Kathy Seeley, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Rob Cameron, Christensen & Prezeau, PLLP; Helena, Montana
Nathan Bilyeu, Hattersley & Walter, PLLP; Helena, Montana
For Appellees:
Mark Jette, Special Assistant Attorney General, Department of Labor and
Industry; Helena, Montana
Submitted on Briefs: March 23, 2016
Decided: May 24, 2016
Filed:
__________________________________________
Clerk
Justice Jim Rice delivered the Opinion of the Court.
¶1 Denturist Association of Montana, on behalf of Carl Brisendine, appeals from an
order entered by the First Judicial District Court, Lewis and Clark County, granting
summary judgment to the Defendants. We affirm in part, reverse in part, and remand for
further proceedings.
¶2 We address the following issue:
Did the District Court err in concluding Brisendine’s claims were barred by res
judicata?
PROCEDURAL AND FACTUAL BACKGROUND
¶3 The Denturist Association of Montana (Association), on behalf of denturist Carl
Brisendine (Brisendine), filed suit against the Board of Dentistry (Board), challenging the
validity of A.R.M. 24.138.2302(1)(j) (Rule J), the latest in a long line of legal disputes
between the two. See Board of Dentistry v. Kandarian, 248 Mont. 444, 813 P.2d 409(1991); Brisendine v. Dept. of Commerce, 253 Mont. 361, 833 P.2d 1019 (1992);
Christenot v. State, 272 Mont. 396, 901 P.2d 545 (1995); Wiser v. State, 2006 MT 20,
331 Mont. 28, 129 P.3d 133 (Wiser I); Wiser v. Board of Dentistry, 2011 MT 56, 360
Mont. 1, 251 P.3d 675 (Wiser II).
¶4 Included in both Wiser I and Wiser II, either implicitly or explicitly, was the claim
that the Board’s promulgation of Rule J was invalid because it conflicted with statute.
Wiser II, ¶ 16. The Wiser I plaintiffs—comprised of every denturist in Montana—made
their claims “on behalf of the profession of denturitry.” Wiser II, ¶ 18. The Wiser I
plaintiffs lost their challenge to the Board’s authority to promulgate rules regulating
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denturitry. The Wiser II plaintiffs, comprised of a smaller group of denturists, attempted
to distinguish themselves from the Wiser I plaintiffs, but the Court saw no distinction in
their capacity to challenge the Board’s promulgation of Rule J as individuals rather than
as representatives of a group. Wiser II, ¶ 18. The Court barred the Wiser II plaintiffs’
claims on res judicata grounds. Wiser II, ¶ 18.
¶5 In this case, Brisendine’s complaint contains three counts. Count I alleges Rule J
is discriminatory and restrains trade in violation of § 37-1-131(1)(a)(ii), MCA, which
provides every regulatory board will:
Apply the standards and rules referred to in subsection (1)(a)(i) in a manner
that does not discriminate against any person licensed by the board with
regard to how the standards and rules are applied to other persons licensed
by the board and that does not restrain trade or competition unless
necessary to protect public health and safety;
Count I further alleges the Board violated § 37-1-131(1)(a)(ii), MCA, by discriminatorily
applying its disciplinary rules: being unduly harsh on denturists while giving leniency to
dentists. Counts II and III allege Rule J is invalid because it conflicts with various
statutes.
¶6 Brisendine moved for summary judgment on Count II, and the Board filed a
cross-motion for summary judgment on all counts. The District Court, citing Wiser I and
II, held Brisendine’s claims were barred by res judicata as a matter of law. Brisendine
appeals.
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STANDARD OF REVIEW
¶7 An order on summary judgment is reviewed de novo, applying the same criteria as
the district court. Lorang v. Fortis Ins. Co., 2008 MT 252, ¶ 36, 345 Mont. 12, 192 P.3d
186. Under M. R. Civ. P. 56(c), summary judgment is appropriate where there is a
complete absence of genuine issues of material fact, and the moving party is entitled to
judgment as a matter of law. Lorang, ¶ 37.
¶8 A district court’s application of res judicata or collateral estoppel is reviewed de
novo. Textana, Inc. v. Klabzuba Oil & Gas, 2009 MT 401, ¶ 62, 353 Mont. 442, 222
P.3d 580; Brilz v. Metro. Gen. Ins. Co., 2012 MT 184, ¶ 13, 366 Mont. 78, 285 P.3d 494.
DISCUSSION
¶9 Did the District Court err in concluding Brisendine’s claims were barred by res
judicata?
¶10 A final judgment can have a preclusive effect on future litigation by way of either
claim preclusion (res judicata) or issue preclusion (collateral estoppel). See Baltrusch v.
Baltrusch, 2006 MT 51, ¶¶ 15-18, 331 Mont. 281, 130 P.3d 1267. The two doctrines
prevent parties from waging piecemeal, collateral attacks on judgments, thereby
upholding the judicial policy that favors a definite end to litigation. Baltrusch, ¶ 15.
Claim preclusion and issue preclusion also “conserv[e] judicial resources and encourag[e]
reliance on adjudication by preventing inconsistent judgments.” Baltrusch, ¶ 15.
Although similar, the two doctrines are not the same.
¶11 Under claim preclusion, a judgment on the merits in a prior suit bars a second suit
involving the same parties or their privies based on the same cause of action. Baltrusch,
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¶ 15; see also Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326 n.5 (1979). This
includes those issues that could have been litigated in the prior cause of action. Wiser II,
¶ 17. The elements of claim preclusion are: (1) the parties or their privies are the same;
(2) the subject matter of the present and past actions is the same; (3) the issues are the
same and relate to the same subject matter; (4) the capacities of the parties are the same
to the subject matter and issues between them; and (5) a final judgment on the merits has
been entered. Wiser II, ¶ 9.
¶12 Issue preclusion, on the other hand, bars the same parties or their privies from
relitigating issues in a second suit that is based upon a different cause of action.
Baltrusch, ¶ 15; see also Parklane Hosiery, 439 U.S. at 326 n.5. The elements of issue
preclusion are: (1) the identical issue raised was previously decided in a prior
adjudication; (2) a final judgment on the merits was issued in the prior adjudication;
(3) the party against whom collateral estoppel is now asserted was a party or in privity
with a party to the prior adjudication; and (4) the party against whom preclusion is
asserted must have been afforded a full and fair opportunity to litigate any issues which
may be barred. Baltrusch, ¶ 18. Present in both claim preclusion and issue preclusion is
the element of privity, upon which this case turns.
¶13 With respect to Count I, Brisendine argues he has no privity with the plaintiffs in
Wiser I and II, and that Count I represents an altogether different claim than those
presented in either of those cases. With respect to Counts II and III, Brisendine argues
only that he has no privity with the plaintiffs in Wiser I and II, conceding the other
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elements are met. The Board responds that privity exists between the Wiser I and II
plaintiffs and Brisendine because the interests between the two are so closely aligned that
the Wiser I and II plaintiffs were the virtual representatives of Brisendine. We agree with
the Board that privity exists, but agree with Brisendine that Count I represents a different
cause of action, with a new issue, than present in Wiser I or II.
¶14 The application of claim or issue preclusion to a party that was not a party in the
prior proceeding, otherwise known as nonparty preclusion, conflicts with the
“deep-rooted historic tradition that everyone should have his own day in court.” Taylor
v. Sturgell, 553 U.S. 880, 892-93 (2008) (internal quotations and citation omitted).
Privity, however, is an exception to the general rule against nonparty preclusion that
alleviates due process concerns. Sturgell, 553 U.S. at 893. The concept of privity in the
context of a judgment “applies to one whose interest has been legally represented at
trial.” Holtman v. 4-G’s Plumbing & Heating, 264 Mont. 432, 437, 872 P.2d 318, 321
(1994); see also Sturgell, 553 U.S. at 894 (“a nonparty may be bound by a judgment
because she was ‘adequately represented by someone with the same interests who [wa]s a
party’ to the suit.”) (citation omitted). Privity exists where “two parties are so closely
aligned in interest that one is the virtual representative of the other . . . .” Nordhorn v.
Ladish Co., 9 F.3d 1402, 1405 (9th Cir. 1993); see also United States v. ITT Rayonier,
Inc., 627 F.2d 996 (9th Cir. 1980) (EPA could not sue to enforce Water Pollution Control
Act, where same issue had been litigated in state court by the Washington Department of
Ecology). Although our precedent regarding privity in this context is limited, other
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courts instruct that privity is a “factual determination of substance, not mere form” that
requires a “consideration of the realities of litigation.” Stichting Ter Behartiging Van De
Belangen Van Oudaandeelhouders in Het Kapitaal Van Saybolt Int’l B.V. v. Phillippe
S.E. Schreiber, 327 F.3d 173, 186 (2d Cir. 2003) (citation omitted); National Fuel Gas
Dist. Corp. v. TGX Corp., 950 F.2d 829, 839 (2d Cir. 1991) (citation and internal
quotations omitted).
¶15 Applying the above rules here, we conclude that privity exists between the
litigants in Wiser I and II and Brisendine. The Wiser I litigants included every denturist
in Montana, and they brought their suit “on behalf of the profession of denturitry.” Wiser
II, ¶ 18. Even though not a denturist at the time of the earlier litigation, Brisendine’s
interests are “closely aligned,” Nordhorn, 9 F.3d at 1405, if not exactly aligned, with the
Wiser I and II denturists who made the same challenge that Brisendine now makes: the
Board’s promulgation of Admin. R. M. 24.138.2302(1)(j) is invalid because it conflicts
with statute. See Wiser II, ¶ 16. We are hard pressed to think of a more appropriate
application of claim preclusion, one that serves to “conserv[e] judicial resources,”
Baltrusch, ¶ 15, than the prevention of repeated litigation by members of the same
profession bringing the same challenges to the same laws. Otherwise, every new
denturist could again bring the same legal challenge.
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¶16 Because privity exists and the other elements of claim preclusion are not contested
with respect to Counts II and III, we affirm the District Court’s grant of summary
judgment to the Board on those claims on res judicata grounds.1
¶17 Count I of the Complaint alleges the Board has engaged in a pattern of systemic
discrimination, restraint of trade, and unfair anti-competitive practices in violation of
§ 37-1-131(1)(a)(ii), MCA. This is an entirely different claim than those made in either
Wiser I or II. First, part of Brisendine’s claim here is that the Board has applied its
disciplinary rules in a discriminatory fashion by aggressively pursuing perceived
violations by denturists, while showing leniency to dentists. This is a highly specific
factual claim that includes allegations of misconduct occurring in 2014, an altogether
different subject matter than the claims in Wiser I and II. Second, § 37-1-131(1)(a)(ii),
MCA, was enacted after Wiser I and II. Although the Denturists claimed in Wiser I that
the Board had engaged in restraint of trade in violation of the Montana Unfair Trade
Practices and Consumer Protection Act, we held the MUTPA did not apply to state
agencies. Wiser I, ¶¶ 32-33. Thus, until the passage of § 37-1-131(1)(a)(ii), MCA,
denturists were practically precluded from litigating any instance of restraint of trade by
the Board. Elements 2 and 3 of claim preclusion are therefore not satisfied with respect
1
Brisendine argues that the Denturist Association has associational standing to bring this suit on
his behalf because, according to Brisendine, his claims are not barred by res judicata, and thus he
has standing to bring the claim, which he may confer on the Denturist Association. Brisendine
appears to confuse the concept of standing, which requires an allegation of past, present, or
threatened injury, Chipman v. Nw Healthcare Corp., 2012 MT 242, ¶¶ 25-26, 366 Mont. 450,
288 P.3d 193, with the concept of res judicata, which is an affirmative defense. See Mont. R.
Civ. P. 8(c)(1). One can have standing to bring a suit, only to succumb to the affirmative defense
of res judicata, as is the case here on Counts II and III. In essence, that the Denturist Association
has associational standing to bring this suit on behalf of Brisendine is not in dispute.
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to Count I because the alleged conduct by the Board represents a new cause of action,
and contains a new issue, that Brisendine has had no opportunity to litigate. See Wiser II,
¶ 17 (“a party . . . is prohibited from relitigating a claim that he or she has already had an
opportunity to litigate.”) (citation omitted) (emphasis added). Issue preclusion is likewise
inapplicable. Although issue preclusion may apply in cases where the causes of action
are different, it contains an element similar to claim preclusion that requires the issues to
be the same. As stated above for purposes of claim preclusion analysis, Count I presents
a different issue than any of those litigated in Wiser I or II. Element 1 of issue preclusion
is therefore not met for the same reason. The District Court thus erred when it granted
summary judgment to the Board on Count I, and Brisendine is entitled to pursue this
claim.
¶18 Affirmed in part, reversed in part, and remanded for further proceedings.
/S/ JIM RICE
We concur:
/S/ MIKE McGRATH
/S/ JAMES JEREMIAH SHEA
/S/ LAURIE McKINNON
/S/ BETH BAKER
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