Federated Department Stores, Inc. v. Moitie

452 U.S. 394 (1981)

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Nature of the Case

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Facts

In 1976, the United States (P) brought an antitrust action against Federated (D) alleging that they had violated Section 1 of the Sherman Antitrust Act by agreeing to fix the retail price of women's clothing sold in Northern California. Seven parallel civil actions were subsequently filed by private plaintiffs seeking treble damages on behalf of proposed classes of retail purchasers, including that of Moitie (P) in state court (Moitie I) and Brown (P) in federal court (Brown I). Each of these complaints tracked almost verbatim the allegations of the Government's (P) complaint, though the Moitie I complaint referred solely to state law. The district court dismissed all of the actions on the ground that P had not alleged any injury to their business or property within the meaning of Section 4 of the Clayton Act. The plaintiffs in five of the suits appealed that judgment to the Ninth Circuit Court of Appeals. The single counsel representing Moitie (P) and Brown (P), however, chose not to appeal and instead refiled the two actions in state court. Although Moitie II and Brown II purported to raise only state law claims, they made allegations similar to those made in prior complaints. After those cases were removed to federal court, the district court concluded that because Moitie II and Brown II involved the same parties, the same alleged offenses, and the same time periods as Moitie I and Brown I, the doctrine of res judicata required that the subsequent actions be dismissed. The court of appeals reversed, holding that non-appealing parties may benefit from a reversal when their position is closely interwoven with that of appealing parties. (The prior five parties had their exact same cases reversed and remanded to the federal court). D appealed.