federal courts - preclusion - doctrine of "virtual representation" disapproved
Taylor v. Sturgell - US Supreme Court - June 12, 2008
Facts: Herrick, an antique plane enthusiast, brought an FOIA suit against the Federal Aviation Administration (FAA), seeking information about a classic plane in which he was interested; he lost the case. His friend Taylor later brought an FOIA suit seeking the same information.
The courts below held that Taylor's later suit was precluded under the doctrine of "virtual representation," based on their finding of a) an identity of interests, b) adequate representation, c) a close relationship between the parties, and d) other factors.
The U.S. Supreme Court reversed, stating that the theory of preclusion by "virtual representation" is disapproved and holding that the preclusive effects of a judgment in a federal-question case decided by a federal court should instead be determined according to the established grounds for nonparty preclusion.
The preclusive effect of a federal-court judgment is determined by federal common law, subject to due process limitations. Extending the preclusive effect of a judgment to a nonparty runs up against the "deep-rooted historic tradition that everyone should have his own day in court."
The Court has often repeated the general rule that "one is not bound by a judgment in personam in a litigation in which he is not designated a party or to which he has not beenmade a party by service of process."
The rule against nonparty preclusion is subject to exceptions, grouped for present purposes into six categories.
- a person who agrees to be bound by the determination of issues in anaction between others is bound in accordance with the agreement’s terms.
- nonparty preclusion may be based on a pre-existing substantive legal relationship between the person to be bound and a party to the judgment, e.g., assignee and assignor.
- in certain limited circumstances, a nonparty may be bound by a judgment because she was " ‘adequately represented by someone with the same interests who was a party’ " to the suit.
- a nonparty is bound by a judgment if she "assumed control" over the litigation inwhich that judgment was rendered.
- a party bound by a judgment may not avoid its preclusive force by relitigating through a proxy. Preclusion is thus in order when a person who did not participate in litigation later brings suit as the designated representative or agent of a person who was a party to the prior adjudication.
- a special statutory scheme otherwise consistent with due process—e.g., bankruptcy proceed-ings—may expressly foreclose successive litigation by nonlitigants.
Reaching beyond these six categories, the D. C. Circuit recognized a broad "virtual representation" exception to the rule against nonparty preclusion. None of the arguments advanced by that court or the FAA justify such an expansive doctrine. The D. C. Circuit’s definition of "adequate representation" strayed from the meaning the Court has attributed to that term.
The FAA wanted the Court "to abandon altogether the attempt to delineate discrete grounds and clear rules for nonparty preclusion, contending that only an equitable and heavily fact-driven inquiry can account for all of the situations in whichnonparty preclusion is appropriate. This argument is rejected. A balancing test is at odds with the constrained approach advanced by this Court’s decisions, which have endeavored to delineate discrete, limited exceptions to the fundamental rule that a litigant is not bound by a judgment to which she was not a party."
Second, a party’s representation of a nonparty is "adequate" for preclusion purposes only if, at a minimum: (1) the interests of the nonparty and her representative are aligned, and (2) either the party understood herself to be acting in a representative capacity or theoriginal court took care to protect the nonparty’s interests. Adequate representation may also require (3) notice of the original suit to the persons alleged to have beenrepresented. In the class-action context, these limitations are implemented by FRCivP 23’s procedural safeguards. But an expansive virtual representation doctrine would recognize a common-law kind of class action shorn of these protections.
Third, a diffuse balancing approach to nonparty preclusion would likely complicate the task of district courts faced in the first instance with preclusion questions.
The Court also rejected the FAA's argument that nonparty preclusion should apply more broadly in "public-law" litigation than in "private-law"controversies, citing Richards v. Jefferson County, 517 U. S. 793 (1996). Richards said only that, for the type of public-law claims envisioned there, states were free to adopt procedures limiting repetitive litigation. The Court said that while Congress can adopt such procedures, it doesn't follow that the Court should proscribe or confine successive FOIA suits by different requesters.
In addition, the potential risk that several persons would coordinate a series of vexatious repetitive lawsuits does not justify departing from the usual nonparty preclusion rules. Stare decisis allows courts to dispose of repetitive suits in the same circuit, and even when stare decisis is not dispositive, the human inclination not towaste money should discourage suits based on claims or issues already decided.
Concerning preclusion on the basis of agency, the Court said that a mere whiff of tactical maneuvering will not suffice. Instead, principles of agency law indicate that preclusion is appropriate only if the putative agent’s conduct of the suit is subject to the control of the party who is bound by the prior adjudication.
The Court also rejected the suggestion that Taylor must bear the burden of proving he was not acting as Herrick’s agent.