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Federated Department Stores v. Moitie

United States Supreme Court
452 U.S. 394 (1981)


Facts

The United States filed suit against Federated Department Stores (plaintiff), alleging Federated had violated the Sherman Act by engaging in price fixing of women’s clothing at Federated’s California stores. Subsequently, several local retailers filed class-action antitrust lawsuits, including a class-action suit filed by Moitie (defendant) in state court and Brown in federal court. Both Moitie and Brown’s complaints were nearly indistinguishable from the United States' complaint, except that Moitie’s complaint was couched in state, rather than federal, law. Federated removed Moitie’s case to federal court based on diversity and federal question jurisdiction. The district court dismissed Moitie’s, Brown’s, and the other five plaintiffs’ antitrust suits on the basis that none of them had sustained a legally cognizable injury within the meaning of the Clayton Act. The plaintiffs in five of the lawsuits appealed. However, Moitie and Brown refiled their claims in state court instead of appealing. Brown’s second lawsuit alleged four distinct state law causes of action. The district court dismissed Moitie and Brown’s re-filed claims on res judicata grounds. Moitie and Brown appealed to the United States Court of Appeals for the Ninth Circuit. While the appeals were pending, the United States Supreme Court issued a decision holding that retailers could sustain a legal injury to their business or property upon which relief could be granted under the Clayton Act. As a result of this holding, the court of appeals reversed and remanded the dismissals in the five antitrust cases. The court of appeals also reversed the district court’s dismissal of Moitie and Brown’s claims. Although the court acknowledged that res judicata prevented this reversal, it held that public policy and justice demanded an exception to the doctrine. The United States Supreme Court granted certiorari to determine whether the Ninth Circuit’s exception to the res judicata doctrine was valid.

Rule of Law

Issue

Holding and Reasoning (Rehnquist, J.)

Concurrence (Blackmun, J.)

Dissent (Brennan, J.)

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