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Gonzalez v. Banco Central Corp.

United States Court of Appeals for the First Circuit
27 F.3d 751 (1st Cir. 1994)


Real estate developers sold lots of what turned out to be swampland to around 3,000 purchasers. A group of the disgruntled purchasers (the Rodriguez plaintiffs) sued the sellers, banks, and others involved in the transactions for alleged violations of the Interstate Land Sales Full Disclosure Act (ILSFDA) and several other federal statutes. The Rodriguez plaintiffs attempted to form a class action suit but the court did not allow it. Gonzalez (plaintiff) represents a new group of plaintiffs (the Gonzalez plaintiffs) who sued the same defendants, had the same lawyers, and alleged very similar claims about five years after the Rodriguez plaintiffs filed their complaint. The Rodriguez plaintiffs lost their suit at trial. The court dismissed the Gonzalez suit on the grounds that it was barred by res judicata under a theory of privity. The Gonzalez plaintiffs appealed. The Supreme Court held that the court erred in dismissing the Gonzalez plaintiffs’ suit on res judicata grounds because they were not parties or in privity with parties to the earlier Rodriguez suit. The district court’s order dismissing the Gonzalez plaintiffs’ suit was reversed and the case was remanded.

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Holding and Reasoning (Selya, J.)

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