Marrese v. American Academy of Orthopaedic Surgeons

Brief Fact Summary.

Petitioners sued Respondent in Illinois state court alleging violations of their state common law rights to association. The state court dismissed the action. Petitioners then sued Respondent in federal court, alleging federal antitrust law violations. The Court of Appeals held that the federal lawsuit was barred by the preclusive effect of the state lawsuit.

Synopsis of Rule of Law.

The full faith and credit statute requires a federal court to look first to a state’s claim preclusion law to determine a prior state court’s judgment’s preclusive effect.

Facts.

Petitioners sued Respondent in Illinois state court alleging violations of their state common law rights to association based on Respondent’s denial of their application for membership in Respondent’s association. The state court dismissed the action for failure to state a cause of action. Petitioners then sued Respondent in federal court, alleging that Respondent’s actions violated federal antitrust laws.  The Court of Appeals held that the federal lawsuit was barred by the preclusive effect of the state lawsuit.

Issue.

Did the Court of Appeals err in concluding that the dismissal of the state court complaint barred Petitioners from bringing a federal antitrust claim based on the same facts, suggesting that the federal court should determine the preclusive effect of the state court judgment without regard to state law.

Held.

Yes. The Court of Appeals should have first referred to Illinois claim preclusion law to determine the preclusive effect of the state court judgment.

Concurrence.

Justice Burger

This opinion asserted that principles of Illinois claim preclusion law probably did not speak directly to the question of the preclusive effect of the state court judgment. In such a case, it  would be consistent with the full faith and credit statute for a federal court to formulate a federal rule; Justice Burger would have resolved this issue in the pending proceeding.

Discussion.

To determine the preclusive effect of a state court judgment, the full faith and credit statute directs a federal court to refer to state claim preclusion law. The fact that a claim is within the exclusive jurisdiction of the federal courts does not make the full faith and credit statute inapplicable. The full faith and credit statute requires a federal court to look first to a state’s claim preclusion law to determine the state court’s judgment’s preclusive effect; the Court of Appeals erred in not applying this approach.