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Civil Procedure Keyed to Babcock
Federated Department Stores v. Moitie
Citation:
452 U.S. 394 (1981)5Facts
The United States sues Defendant Department Stores Federated for violating the Sherman Act. Thereafter, a few other local retailers filed class action antitrust suits against Defendant, too. Plaintiff Moitie filed in state court and Brown files in federal court. Moitie and Brown’s suits were basically identical to the United States’ case, except Moitie’s claim was premised on state rather than federal law. Defendant Federal Department Stores removed Plaintiff Moitie’s complaint to federal court based on diversity and federal question jurisdiction. The federal court then dismissed Moitie’s, Brown’s, and the other class action claims, reasoning that none of them sustained cognizable injuries under the Clayton Act. Instead of appealing like the other 5 plaintiffs, Moitie and Brown refiled their claims in state court. Brown’s lawsuit included four distinct state law claims. The state court nonetheless dismissed both Brown and Moitie’s suits citing res judicata. Brown and Moitie appealed to the Ninth Circuit. While their appeal was pending the Supreme Court issued a decision that held that retailers could sustain legal injury to their business upon which relief could be granted under the Clayton Act. In response the federal court of appeals reversed and remanded the dismissal of the five other antitrust cases. The court of appeals also reversed the district court’s dismissal of Moitie and Brown’s re-filed claim. Although the state appeals court noted that res judicata prevented reversal, justice demanded an exception. The Supreme Court granted certiorari to review whether the Ninth Circuit’s exception to the res judicata doctrine was appropriate.
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