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.â€
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.â€
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.â€
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.â€
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.
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.â€
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.â€
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.
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