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Federated Department Stores v. Moitie

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


Facts

The Government 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 class action antitrust lawsuits comprised of local retailers were filed, including one by Moitie (defendant) in state court and Brown in the federal court. Both Moitie and Brown’s complaints were nearly indistinguishable from the Government’s complaint, except that Moitie’s complaint was couched in state, rather than federal, law. Moitie’s case was removed to federal court based on diversity and federal question jurisdiction, and the district court dismissed both 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. Moitie and Brown’s re-filed claims were dismissed on res judicata grounds, and they appealed. 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 United States Court of Appeals for the Ninth Circuit 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

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Issue

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Holding and Reasoning (Rehnquist, J.)

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Concurrence (Blackmun, J.)

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Dissent (Brennan, J.)

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