574 S.W.3d 347
Tenn. Ct. App.2018Background
- Plaintiffs filed a Tennessee state antitrust and consumer-protection class action alleging automakers conspired to block export of nearly-new Canadian cars to the U.S., causing higher U.S. prices.
- The same theory was litigated in a federal MDL (In re New Motor Vehicles Canadian Export Antitrust Litig.), where state and federal plaintiffs coordinated discovery and prosecution under a Joint Coordination Order and a confidential joint prosecution agreement.
- Cohen Milstein, a national plaintiffs’ firm, signed pleadings, participated in MDL strategy, negotiated settlements, and submitted declarations describing work on behalf of state plaintiffs, though it never physically appeared in the Tennessee chancery court case file.
- The MDL court granted defendants’ summary judgment (dismissing state-law claims), a judgment later applied in multiple state courts that held companion state plaintiffs were bound by the MDL outcome under res judicata principles.
- The Washington County Chancery Court found Tennessee plaintiffs were in privity with the MDL plaintiffs (adequately represented and exercised control through coordinated counsel) and entered judgment dismissing the Tennessee action against the remaining defendants; the plaintiffs appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether res judicata bars the Tennessee suit because of the MDL judgment | Johnson: Tennessee plaintiffs were not bound because they were separate parties and Cohen Milstein did not formally represent them in chancery court | Defendants: Tennessee plaintiffs participated in and were represented in the MDL; adequate representation and control justify nonparty preclusion | Court: Res judicata applies — plaintiffs were adequately represented and exercised control; MDL judgment binds them |
| Whether the MDL process and coordination provided the due-process protections required for nonparty preclusion | Johnson: Coordination did not substitute for formal representation of Tennessee plaintiffs | Defendants: Joint Coordination Order, joint prosecution agreement, and MDL procedures protected state plaintiffs’ interests | Court: Due-process protections satisfied by MDL coordination and counsel’s role |
| Whether res judicata dismissal could be entered for all remaining defendants (not just those who moved) | Johnson: Preclusion should not automatically extend to all defendants | Defendants: Res judicata bars the entire claim (not just particular defendants); court may dismiss sua sponte | Court: Affirmed — claim preclusion bars entire claim against all identical-defendant defendants |
| Whether Tennessee courts should follow companion states that applied MDL judgment | Johnson: Tennessee should not follow other states (separate sovereignty/rights) | Defendants: Consistent precedent (MN, AZ, NM, WI, CA) supports preclusion here | Court: Relied on similar reasoning and affirmed, noting other state decisions support result |
Key Cases Cited
- Taylor v. Sturgell, 553 U.S. 880 (2008) (recognizes nonparty preclusion exceptions for adequate representation and control)
- Richards v. Jefferson Cnty., 517 U.S. 793 (1996) (standards for representation-based preclusion)
- Hansberry v. Lee, 311 U.S. 32 (1940) (due-process considerations in preclusion of absent parties)
- In re New Motor Vehicles Canadian Exp. Antitrust Litig., 522 F.3d 6 (1st Cir. 2008) (vacating class certification; critical MDL appellate decision)
- In re New Motor Vehicles Canadian Exp. Antitrust Litig., 632 F. Supp. 2d 42 (D. Me. 2009) (MDL district-court summary judgment for defendants on state-law claims)
- Richardson v. Tenn. Bd. of Dentistry, 913 S.W.2d 446 (Tenn. 1995) (res judicata bars later suits on same cause of action)
- Tenn. Eastman Co. v. Adams, 381 S.W.2d 269 (Tenn. 1964) (control over litigation can bind a party under preclusion principles)