Taylor v. Sturgell

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Authorship:Stanford Law student Menaka Kalaskar maintains this page.

Contents 1 Briefs and Documents 2 Pre-Argument Articles 2.1 Argument Preview 2.2 Background 2.3 Petition for Certiorari 2.4 Merits Briefing 3 Oral Argument Recap 4 Opinion Analysis 5 Links and further information

[edit] Briefs and Documents

Docket: 07-371

Issue: Whether a FOIA request may be barred by res judicata on grounds the petitioner was “virtually represented” by a close associate who previously sought disclosure of the same documents.

Argument Transcript

Certiorari filings

• Opinion below (D.C. Circuit)
• Petition for certiorari
• Brief in opposition
• Brief in opposition (United States)
• Petitioner’s reply

[edit] Pre-Argument Articles

[edit] Argument Preview

In Taylor v. Sturgell, No. 07-371, the Supreme Court will decide whether a non-party to a prior case can nevertheless be bound by the judgment in that case when there is no legal relationship between the two parties, but the court concludes, based on a fact-sensitive inquiry into the nature of the previous litigation, that the non-party’s claims are precluded under a form of res judicata known as “virtual representation.”

[edit] Background

The Freedom of Information Act (FOIA), 5 U.S.C. § 552, allows individuals both to petition government agencies for information and to seek court review if the relevant federal agency refuses to release the requested records. In November 1997, Greg Herrick, who is not a party to this case, filed an FOIA request before the Federal Aviation Administration (FAA). Herrick sought detailed plans and drawings of a vintage aircraft known as the F-45 to use in restoring an F-45 that he owned. The FAA rejected the request on the ground that the records contained trade secrets of the Fairchild Corporation, the corporate successor of the original company that manufactured the aircraft in the 1930s. Herrick then filed suit in the U.S. District Court for the District of Wyoming, seeking review of the FAA’s decision.

The district court granted summary judgment to the FAA. It noted that the documents were part of a type-certificate file, which the airplane manufacturer was required by law to submit to the FAA before it produced new aircraft. The court agreed with the FAA that the document fell within FOIA’s “trade secret” exemption, reasoning that the materials represented an “end product of innovation and substantial effort.” On appeal, the Tenth Circuit affirmed.

In August 2002, Brent Taylor, the petitioner in this case, made the same FOIA request for the F-45 records. He sought review in the U.S. District Court for the District of Columbia after the FAA denied his request. Taylor had hired Michael J. Pangia, who had also represented Herrick, as counsel. In his filings to the court, Taylor acknowledged that Herrick had asked for his assistance in restoring Herrick’s F-45, but he also claimed to want the information for the public and to serve “the interest of the preservation of antique aircraft heritage.”

The Fairchild Corporation moved to intervene in the case, and both the FAA and Fairchild moved for summary judgment. The district court granted their motions, finding that—among other factors—Herrick and Taylor had a close relationship and shared identical interests in seeking disclosure of the records. Moreover, the court determined, Herrick had adequately represented Taylor’s interests in the initial suit. The court concluded that Herrick was Taylor’s “virtual representative,” such that Taylor was estopped from bringing suit.

Taylor appealed the district court’s decision to the U.S. Court of Appeals for the District of Columbia, which affirmed. It agreed that a “nonparty’s claim [can be] precluded by a prior suit based on a particular form of privity known as ‘virtual representation.’” Noting that this was a case of first impression, the appellate court looked to other circuits’ interpretations of the virtual representation doctrine and found that the approach “var[ied] widely.” Observing that “an appropriate test for virtual representation must consider and balance competing interests in due process and efficiency,” the court articulated its own test for determining whether a party was barred from asserting a claim due to virtual representation: First, the court required both an “identity of interests” and “adequate representation” in the former case. The court required the presence of at least one other factor: “a close relationship between the present party and his putative representative, or substantial participation by the present party in the first case, or tactical maneuvering on the part of the present party to avoid preclusion by the prior judgment.”

Applying that test to the record before it, the court held that Herrick was indeed Taylor’s “virtual representative.” First, it found that Herrick and Taylor not only wanted the same result—the release of the F-45 documents—but also had “the same incentive to achieve it.” Second, although Taylor may not have had notice about Herrick’s suit, the court concluded that “adequate representation” was present because Herrick had an incentive to litigate zealously and Taylor had used Herrick’s lawyer. Third, the court found, Herrick and Taylor had a “close relationship.”

[edit] Petition for Certiorari

Taylor filed a petition for certiorari in which he emphasized that the courts of appeals are divided on the issue of virtual representation. First, he contended, there is a circuit split regarding whether a “legal relationship” between the parties must exist before one party can be estopped from bringing a suit that has already been litigated by the other. Indeed, Taylor noted, the D.C. Circuit acknowledged in his case that its test (as well as that of the Eighth and Ninth Circuits) conflicted with that of the Fourth, Fifth, and Sixth Circuits, which hold that a legal relationship is the only type of association between parties that may satisfy a prong of the virtual representation doctrine. Moreover, Taylor asserted, the split has far-reaching implications beyond the FOIA context, and thus could affect the ability of plaintiffs to vindicate their rights in court in other contexts.

Taylor next focused on another division among the courts of appeals: whether the party to the second case must “receive[] notice of and the opportunity to” participate in the first suit. The First Circuit, for example, holds that virtual representation doctrine may not bar a non-party to a suit from bringing her own claim “unless that person, at the least, had actual or constructive notice of the earlier suit and, thus, a chance to join it.” Taylor noted importantly that no circuit considered notice and an opportunity to participate in litigation sufficient for res judicata to apply.

Finally, Taylor argued that the D.C. Circuit’s opinion is at odds with Supreme Court precedent such as Richards v. Jefferson County (1996), in which the Court held that a party’s claim could not be barred by previous litigation on the same issue, because petitioners had not received notice of, nor adequate representation in, the previous litigation; thus, the Due Process Clause guaranteed petitioners a right to litigate their claims. Taylor argued that, like the plaintiffs in Richards, he was deprived of due process by being bound to a decision of which he had no notice, constructive or actual. In closing, Taylor restated the famous due process standard that an “elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections,” from Mullane v. Cent. Hanover Bank & Trust Co. (1950).

In its brief opposing certiorari, the FAA sought to distinguish both Richards and Mullane. It argued that in Richards, the court described the two plaintiffs as “mere ‘strangers’ to one another,” whereas the Taylor court had found specifically that Herrick and Taylor shared a “close relationship.” The FAA noted that Herrick and Taylor worked together to restore antique aircraft, had sought the same plans with their FOIA request, and had shared discovery materials.

In addition, the FAA argued that the case at hand involved a public-law issue, whereas Richards and Mullane had involved private interests. To that end, the FAA claimed that the Richards Court had distinguished public-law claims, with regard to which “courts have greater latitude to preclude relitigation.” The FAA emphasized the unreasonable costs that would ensue if every allied plaintiff were permitted to litigate an FOIA claim. Such a scheme, the FAA noted, would fly in the face of important values such as judicial economy.

On the notice question, the FAA argued that the case was a poor vehicle to resolve the res judicata issue, due to the private- and public-law differences involved. The finding of privity in private-law cases was generally inappropriate on the same grounds as public-law cases, the FAA argued, precisely because private cases involved individualized inquiries into the nature of the res judicata claim.

By contrast, Fairchild’s brief focused on whether a rigid legal test was suitable for determining privity. First, Fairchild argued that the Fourth, Sixth, and Eleventh Circuits did not require a legal relationship in all virtual representation cases. Fairchild then sought to distinguish the case from the precedent cited in Taylor’s petition, noting that none of them involved facts similar to the case at hand. Fairchild disputed Taylor’s contention that the outcome of the case depended on the jurisdiction in which review was sought; because of the fact-sensitive approach employed by many circuits, Fairchild asserted, there was no way to be sure how any circuit would rule on Taylor’s case. Indeed, it could be that most would reject his claim.

The Court granted certiorari on January 11, 2008.

[edit] Merits Briefing

In his brief, Taylor makes three main arguments: first, he argues that a legal relationship is necessary for the principles of preclusion to apply to a non-party; second, he asserts that the factors articulated in the D.C. Circuit’s test do not replace the need for a legal relationship between parties; and last, Taylor argues that at a minimum, notice is required before a non-party may be bound to the judgment in a case.

In his first argument, Taylor uses Supreme Court precedent to argue that res judicata applies in cases in which a non-party “has his interests adequately represented by someone with the same interests who is a party.” Taylor argues that the parties must share a “special representational relationship,” in which a party “recognize[s] that the suit is on behalf of the non-party and, accordingly . . . protect[s] the non-party’s interests.” A legal relationship ensures that a party has the authority to litigate on behalf of a party who is not before the court. Herrick failed to protect Taylor’s interest in acquiring the F-45 records, Taylor argues, because the pleadings were not filed on behalf of anyone other than Herrick, and the judgment did not claim to bind any non-parties. Importantly, Taylor argues that he had no relationship with Herrick at any time during Herrick’s case. Thus, Herrick and Taylor were, in fact, “mere ‘strangers’” for claim preclusion purposes.

Turning to the common law principles of claim preclusion, Taylor argues that though the concept of privity has been expanded in modern times, the more liberal definition still requires a legal relationship between a party and non-party. Taylor cites an example from Richards (noting that a judgment binding a guardian may also bind the ward), and pulls language from the Restatement (Second) of Judgments to argue that accepted cases of claim preclusion contemplate a party with the “requisite authority” to represent a non-party. Indispensable due process requirements are met in legal relationships because specific protections and notice are provided to non-parties concerning pending litigation.

Second, petitioner argues, the multi-factor test adopted by many circuits does not replace the need for a legal relationship. Taylor walks through each of the five factors outlined by the D.C. Circuit, and, using examples from his own case, refutes the adequacy of each factor. He then argues that the five-factor test not only violates principles of res judicata but is also wasteful of judicial resources and—because of its fact-sensitive inquiry—undermines predictability. A better test would be one that fosters certainty by promulgating rules on which cases are barred by res judicata.

Taylor refutes respondents’ claim that a public-law case such as his makes virtual representation “‘particularly appropriate.’” Though FOIA strives to increase transparency with the public, Congress also conferred individual rights on those making FOIA requests. Thus, Taylor asserts that each person denied a FOIA request suffers a personal injury, akin to a private-law harm.

Taylor’s third argument says that, at the very least, notice is required before a non-party can be bound by the judgment in a case. Canvassing the Court’s important due process decisions, Taylor characterizes notice as an “‘elementary and fundamental requirement.’” Because he was not provided with constructive or actual notice of Herrick’s suit, Taylor argues, he should not be barred from litigating his own claim.

The FAA’s brief begins by considering the important policy objectives furthered by barring the relitigation of an issue. The brief argues that the D.C. Circuit’s decision draws a “fine line” between preventing abusive relitigation on the one hand, and allowing independent plaintiffs their “day in court” on the other. Like Fairchild, the FAA urges the Court to allow courts of appeals to make fact-sensitive determinations about whether parties are in privity, rather than ruling inflexibly that a legal relationship is required between them. Indeed, throughout centuries of privity analysis, the FAA notes, courts have shown that a legal relationship is not a necessary precondition to binding a non-party to the judgment in a case. Next, the FAA defends the judgment below, falling back on familiar arguments that FOIA creates a public right rather than an individual claim, and that the nature of the statute makes vexatious litigation hard to prevent unless the Court defers to courts of appeals in their fact-bound determinations.

The FAA also rejects Taylor’s notice requirement as “beside the point” when the second suit is “essentially derivative” of the first. Finally, the FAA addresses Taylor’s due process arguments, reiterating that “due process does not protect one’s right to sue on behalf of the public interest in the same manner it protects the right to sue on behalf of one’s own property interest.”

Fairchild’s brief repeats the arguments it made in opposing certiorari. First, it contends, privity is a “functional, fact-based inquiry” that requires an equitable consideration of all the circumstances. As such, “fixed requirements” would be “both unworkable and unwise,” as they may prevent a common-sense approach to res judicata that takes into account the defendant’s interest in avoiding relitigation, as well as the plaintiff’s right to her day in court. Fairchild then reviews the factors of the D.C. Circuit’s test and argues that the holding is narrow and conforms to res judicata principles.

Second, Fairchild attacks Taylor’s “legal relationship” concept as contrary to the principles of res judicata, which have long barred relitigation of an issue even in the absence of a legal relationship between parties. Fairchild also surveys Supreme Court precedent and finds that privity enjoys an expanded definition in modern times that cannot be squared with a narrow legal relationship requirement. Fairchild rejects the proposition that due process mandates a legal relationship theory, noting that due process, like privity, is also a factual inquiry that turns on the specific situation at hand.

Transitioning into its third argument attacking Taylor’s notice theory, Fairchild argues that the D.C. Circuit afforded Taylor due process in its individualized review of his case. Fairchild also claims that, in this case, it is possible that notice could be imputed to Taylor due to the close association between him and Herrick. Here, in a case where there is no personal property, monetary damage, or civil right at stake, imputing notice may be “particularly appropriate.”

Last, Fairchild repeats its policy arguments in favor of judicial economy and discretion in weeding out vexatious litigation. It emphasizes the narrow holding of the court below and its general inapplicability in other areas of law, and asks for affirmance.

[edit] Oral Argument Recap

Arguing for petitioner Brent Taylor, Adina Rosenbaum began with a restatement of the most forceful legal principle conveyed by the petitioner in his merits brief: the right of every person to have his day in court, and the corollary canon that “a lawsuit does not decide the rights of non-parties.” She jumped into the facts of the case directly, noting at the outset that Taylor had no legal relationship to Herrick, or any parties in the first case.

Chief Justice Roberts asked about the res judicata principles behind associational standing, which proved to be a recurring theme throughout the argument. Ms. Rosenbaum answered that the association must have authority to bring a case on behalf of an individual; otherwise, the individual cannot be bound by the court’s determination.

Justice Souter then stepped in and asked a series of questions about the court’s power to estop a collusive second party from bringing a case—even absent a legal relationship between the first and second party. Ms. Rosenbaum answered that on the bare facts of Justice Souter’s hypothetical, where one litigant solicits another to file the same case, the second party would not be precluded from moving forward with the suit. When pressed, Ms. Rosenbaum clarified that collusion can lead to preclusion in cases in which one party exercises control over the other’s suit. Justice Ginsburg jumped in to help, noting that in the instant case, there was no finding of solicitation or collusion. Just as Ms. Rosenbaum agreed, Justices Souter and Alito pressed her further on the details of the petitioner’s collusion theory. Ms. Rosenbaum reiterated that the facts of petitioner’s case did not demonstrate collusion between Taylor and Herrick, and that the contours of collusion for the purposes of a res judicata inquiry need not be decided by the Court.

Justice Souter next asked Ms. Rosenbaum for any other conceivable reason for Taylor to file a FOIA request besides his interest in repairing Herrick’s plane. Ms. Rosenbaum answered that Taylor’s position as executive director of the Antique Aircraft Association, and his “interest[] in antique aircraft and in aviation generally,” could easily have motivated Taylor to file the request. Justice Scalia jumped in to note that a person does not have to have a reason for filing a FOIA request—naked curiosity would be sufficient to entitle the person to request information from the government. Justice Souter countered that a person off the street wouldn’t face the same collusion charges that two connected parties would face.

The next major theme concerned the structure of the FOIA statute. Ms. Rosenbaum pointed out that FOIA is set up to allow “repeated litigation over the same records.” That is, even though Congress could have structured FOIA in any way it saw fit, it chose explicitly to allow every individual to request information from the government. “And once they have requested those records and [have] been denied . . . they have suffered a concrete and particular injury; and they have the right to seek judicial review of that injury.” Also, Congress chose not to specify a single venue for FOIA suits—instead, the suit could be brought where the records were located, where the requester resided, or in the District of Columbia. Because of the unique plan contemplated by Congress, this “chosen scheme should not be altered through the back door of preclusion doctrine.”

Ms. Rosenbaum next urged that a clear set of rules was critical in an area like res judicata, so that non-litigants may be able to determine easily when they will be bound by a judgment. Justice Scalia entered the conversation and asked which clear rules petitioner was advocating. Ms. Rosenbaum laid out clearly the three factors in which a non-party to a case may be bound by a judgment: first, where there is a legal relationship between the parties; second, where a non-party has had “their full and fair opportunity to litigate in the prior case”; and third, where the non-party was officially “represented in the prior case.” The discussion turned to class action lawsuits, which was a “very good example of [the] representational relationship” due to the protections built in for class members, such as members’ ability to withdraw from the suit and the “judge’s obligation” to look out for absent class members.

Justice Kennedy asked Ms. Rosenbaum whether providing a non-party with notice of the prior litigation would be sufficient to fit into the second category of having a “full and fair opportunity to litigate.” Ms. Rosenbaum answered no, because that would “set[] up a system of mandatory voluntary intervention.” In other words, the non-party receiving notice is still not “fully and fairly litigating” the prior case. A nonparty’s knowledge of a case is not enough to ensure that her interests would be represented, or that she would be able to exercise control over the strategic decisions of the prior litigation.

The Justices continued to present Ms. Rosenbaum with a series of hypotheticals to flesh out petitioner’s theory on the required relationship between parties, including an extended dialogue on law firms and their representation of companies. Ms. Rosenbaum walked through the questions, making clear that a simple case involving a law firm’s representation of a company would bar the company from later litigating the case on its own. She then reserved her remaining four minutes for rebuttal.

Douglas Hallward-Driemeier, Assistant to the Solicitor General, then presented his argument for the Government. He began by asserting that it was not “critical to find that [Taylor] was [Herrick’s] agent in the very technical sense of the Restatement of Agency” to hold that Taylor was barred from litigating the FOIA request for records. Instead, he argued, a case in which “multiple persons engage in coordinated successive litigation to vindicate a joint interest” fell perfectly in line with normal principles of res judicata, even though it didn’t have certain hallmark characteristics of other estopped cases.

Justice Ginsburg jumped in right away and distinguished the case, highlighting the lack of notice given to Taylor regarding Herrick’s suit. Mr. Hallward-Driemeier responded that even “[p]etitioner acknowledge[d] that there can be circumstances in which Taylor would be bound” to a judgment absent notice, namely, if the two parties had formed an agency relationship after the first suit. Justice Ginsburg clarified that, in Mr. Hallward-Driemeier’s hypothetical, the outcome would be premised on the idea that the person really litigating the second claim is the principal, who is bound by the prior unfavorable ruling that she brought without an agent. Mr. Hallward-Driemeier agreed.

Mr. Hallward-Driemeier offered a case that illustrated how a court may act when the connection between the two parties is “just shy of a true agency relationship.” The court of appeals case, United States v. Des Moines Valley Railroad, involved the Government bringing a claim on behalf of a homesteader. Though the two parties did not share an official relationship, the Des Moines court found privity between them because the Government lent its name to allow “the [homesteader] a second bite at the apple.” Thus, though there was “no section of the Restatement (Second) that specifically govern[ed]” the case, the “reality of the situation [was] that there[ was] a sufficient relationship between [the two parties] that they ought to be barred.” Justice Ginsburg seized on Mr. Hallward-Driemeier’s hypothetical to point out that Taylor’s case was inapposite—here, there was no evidence of collusion between the two parties. Mr. Hallward-Driemeier agreed that Justice Ginsburg’s facts were correct, but emphasized that the court of appeals did find that Taylor had brought the “suit in order to vindicate the exact same interests” that were involved in the prior suit.

The discussion that followed concerned the effects of stare decisis on FOIA litigation. Justice Stevens asked counsel why “the defense of stare decisis” wasn’t adequate to solve the vexatious litigation around identical FOIA claims. Mr. Hallward-Driemeier responded that the text of FOIA allowed a number of different venues to hear the suit, which allowed individuals “scattered throughout the country” to maintain an identical lawsuit in diverse venues. Given the government’s and Fairchild’s “burden of persuading the court in each case” that a FOIA exemption is warranted, repeated litigation forced the two parties to travel around the country litigating the same case repeatedly. Such an outcome was unfair to the respondents, Mr. Hallward-Driemeier argued. Also, given the “public-right nature” of the FOIA interest, preclusion was particularly appropriate because the individual interests of plaintiffs were lower, and the “almost infinite” quantity of plaintiffs would compound the litigation problem indefinitely.

Mr. Hallward-Driemeier then went on to praise the virtue of the narrow rule advocated by the Government, despite Justice Scalia’s assertion that, for a “thousand-headed monster of litigation . . . [your] solution is to cut off one eyebrow.” Mr. Hallward-Driemeier pointed out that the goal was to still allow “multiple individuals on entirely independent grounds” to bring suit. The Government’s narrow rule would merely bar the very few people whose relationship was based on relitigating the same claim. In a case such as this one, though there was no legal relationship, “[i]t is the substance of the relationship that counts.”

Catherine E. Stetson, counsel for Fairchild Corporation, opened by seizing upon the endless, “vexing hypotheticals” that the Justices had posed to the previous attorneys. Such hypotheticals showed that privity was a changing concept with no precise statutory or constitutional definition. But instead of the “freewheeling, totality-of-the-circumstances test” that Justice Scalia had earlier pressed, Ms. Stetson asserted that there were definite inquiries that must be made in a res judicata inquiry: first, an examination must be made into the relationship between the litigants; second, the court must look at how the parties conducted themselves during the suits. Turning to the latter inquiry, Ms. Stetson urged the court to acknowledge the lower court’s factfinding that there was indeed a request from Herrick to Taylor to assist in repairing the F-45. Justice Souter interjected that an inference of factfinding is something that the Court, as a court of appellate jurisdiction, was not equipped to do. Ms. Stetson responded that the trial court held “precisely” that there was “deliberate maneuvering” between Herrick and Taylor. Justice Ginsburg responded that because the court of appeals failed to reach the same question, the relevant trial facts were not before the Court. Ms. Stetson went on to concede that the case was factually unique, but argued that it still fell “well within the wheelhouse of privity cases that [the] Court is quite comfortable with.”

Chief Justice Roberts pressed Ms. Stetson on whether the interests in an associational standing case were sufficiently aligned to bind individual members to a decision binding the organization. Ms. Stetson asserted that it was not sufficient to have similar interests. For preclusion to apply, the interests of the two parties had to be identical; that bar was met here, “because one [case] was literally factually derivative of the other.” Taylor had standing to bring the FOIA request, but that did not give him a “free pass from a res judicata inquiry.”

Ms. Stetson closed by noting that respondents were “not advocating[,] nor is the government, a privity rule that [would] result in the widespread preclusion of FOIA plaintiffs who seek[] the same documents for independent reasons.” But when a case presented a “square privity issue,” the case should be barred under normal res judicata principles.

Ms. Rosenbaum’s four-minute rebuttal began with a response to the cases brought up by Government counsel. Ms. Rosenbaum asserted that the “exact[] . . . point” was that the legal relationships defined in those cases gave rise to privity, and that those same relationships were missing in Taylor’s case.

Second, Ms. Rosenbaum argued, Congress set up a clear remedial structure in FOIA, involving multiple venues, that should not be second-guessed.

Third, Ms. Rosenbaum clarified that although the district court had found “tactical maneuvering” between Herrick and Taylor, the court of appeals “specifically said that the district court had erred in concluding there had been an agreement.” Ms. Rosenbaum acknowledged Chief Justice Robert’s suggestion that the case could be remanded to the lower court to answer the question of whether collusion had occurred. She closed by stating that “privity should be based on [underlying] rationales that protect the litigant’s right to be heard and ensure that they do have their day in court.”

[edit] Opinion Analysis

On Thursday, June 12, the Supreme Court unanimously disapproved of the doctrine of “virtual representation” in its opinion in Taylor v. Sturgell, and more clearly defined its previous decisions on non-party claim preclusion. It held that the current record did not bind Taylor, a non-party to a previous case filed by “close associate” Greg Herrick, to the judgment in Herrick’s Freedom of Information Act (FOIA) case. The Court vacated and remanded the case to the lower courts for them to determine whether Taylor is litigating as Herrick’s agent, and thus should be barred from moving forward with his case.

Taylor v. Sturgell centered on a pair of FOIA requests seeking identical information. Greg Herrick, the owner of a vintage F-45 airplane, made a FOIA request to retrieve F-45 specifications from the Federal Aviation Administration (FAA). Herrick planned to use the detailed airplane plans to restore his aircraft. The FAA denied his request, however, and prevailed in the subsequent litigation on the ground that the requested documents fell under a statutory trade secret exemption. Less than a month after the final decision in Herrick’s case, Taylor – a friend of Herrick’s and a member of the same vintage aircraft association – filed an identical FOIA request with the FAA. . The FAA did not respond to Taylor’s request, prompting him to file a complaint based on the FAA’s constructive denial of his FOIA request. The U.S. District Court for the District of Columbia held that Taylor’s suit was barred by “virtual representation,” whereby a non-party may be bound to the judgment in a previous case if certain factors are met. The D.C. Circuit agreed on appeal, but fashioned a new five-factor virtual representation test that broke from similar tests in sister circuits.

Writing for the Court, Justice Ginsburg reviewed the history of Herrick’s and Taylor’s suits before jumping into Court precedent on the issue of non-party claim preclusion. While acknowledging that the Court had never addressed virtual representation doctrine, she emphasized that the Court had developed “well-established precedent” regarding non-party preclusion. Moreover, she noted, “[t]he application of claim and issue preclusion to nonparties . . . runs up against the ‘deep-rooted historic tradition that everyone should have his own day in court.’” The general rule against non-party preclusion, she continued, does have some exceptions, which she distilled down to six categories. First, “[a] person who agrees to be bound” by a judgment will be bound according to the terms of the agreement. Second, a variety of pre-existing “substantive legal relationship[s]” between a non-party and party, such as bailee and bailor, or assignee and assignor, can legitimately bind a non-party to a judgment. Third, a non-party may be precluded from bringing her own claim when she was “adequately represented by someone with the same interests” who served as a party to a previous suit. Justice Ginsburg identified class action suits and suits brought by trustees, guardians, and other fiduciaries, as proper examples of adequate representation. Fourth, a non-party who “assume[s] control” over a case may be bound by the judgment in that case. Fifth, a party may not relitigate an issue by using a proxy – a scenario that would include a non-party bringing suit as an agent for the previous party. Sixth, special statutory schemes may prohibit repetitive litigation by non-parties if the scheme is consistent with due process.

Virtual representation, argued Justice Ginsburg, represents a unique exception to the ban on non-party claim preclusion that reaches far beyond the six exceptions delineated in the Court’s opinions. In Richards v. Jefferson County, the Supreme Court reversed an Alabama Supreme Court decision that barred a group of taxpayers from challenging a tax that had been upheld in a prior suit involving different taxpayers. The Court held that claim preclusion violated due process in that case because there was a lack of either special procedures to ensure protection of nonparty interests or an understanding “that the first suit was brought in a representative capacity.” Justice Ginsburg emphasized that one of those two factors must be present for non-party representation to be adequate. The D.C. Circuit’s definition strayed impermissibly from this core Richards holding by explicitly disregarding the two factors and focusing instead on Herrick’s strong incentive to litigate and Taylor’s use of Herrick’s lawyer as evidence of adequate representation.

Justice Ginsburg acknowledged that Fairchild Corporation and the FAA did not argue that virtual representation doctrine fit within any of the six exceptions. Instead, the defendants had urged the Court to “abandon the attempt to delineate discrete grounds” by allowing courts to spearhead their own fact-driven and equitable inquiries into claim preclusion. Justice Ginsburg rejected this “diffuse balancing” test for three reasons. First, prior Court decisions “emphasize the fundamental nature of the general rule that a litigant is not bound by a judgment to which she was not a party,” and existing caselaw recognized only a handful of exceptions. The “amorphous balancing test” advocated by defendants would not serve this constrained preclusion approach well. Second, the meaning of adequate representation must include 1) an aligning of interests between the party and non-party, and 2) either an understanding that the party is acting as a representative for the non-party or, alternatively, court protection of the non-party’s interests. The Court also noted, without deciding, that adequate representation may require notice of the suit to the non-party before binding him to the judgment. Third, an equitable case-by-case inquiry would likely create more problems than it would solve, as it could lead to protracted discovery battles and would not provide clear guidance to judges faced with difficult preclusion questions. Thus, the original purpose of preclusion doctrine as a relief from burdensome relitigation would be frustrated.

Justice Ginsburg moved next to the FAA’s claim that non-party preclusion should be treated more expansively under public-law litigation. She refuted the notion that FOIA litigation is properly deemed public law, however, by noting that FOIA documents are made available only to the individual requester. FOIA is replete with references to individual plaintiff relief, rather than a “decree” directed towards public benefit. Congress did not see fit to limit the number of judicial proceedings under FOIA, the Court noted, and it would not be wise for the Court to do so by applying common law principles to the statute.

The Court dismissed the defendants’ argument that limitless numbers of plaintiffs would be able to litigate vexatious FOIA claims if not restricted. Stare decisis allows courts to dismiss cases, and the “human tendency to not waste money” will ensure that repetitive cases would come to a halt. The Court noted that vexatious FOIA suits did not appear to be a problem in circuits that do not employ the virtual representation doctrine.

The Court concluded by emphasizing that non-party preclusion questions should be decided under the six categories outlined in the case. Applying each doctrine to Taylor’s case, the Court found that only the fifth category could conceivably apply: a non-party may not relitigate a claim as the agent of a party bound by prior litigation. Thus, it remanded to the courts below to determine whether Taylor was Herrick’s “undisclosed agen[t].” If the courts below find that Taylor is Herrick’s agent, then nonparty claim preclusion will apply. The Court declined to define the required showing for nonparty agency, but admonished courts to be “cautious about finding preclusion.” Principles of agency law suggest that nonparty preclusion is appropriate only where the agent’s conduct is controlled by the party to the prior suit.

Last, the Court rejected Fairchild’s burden-shifting scheme requiring Taylor to prove that he is not Herrick’s agent. Claim preclusion is an affirmative defense, and as such, must be pleaded and proved by the defendant.

[edit] Links and further information

FOIA attorney Scott A. Hodes had this entry discussing the decision on his FOIA blog.

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