F.E v. v. City of Anaheim, G052460

Background

Decedent was shot and killed by Anaheim police officers; plaintiffs (mother and minor daughter) sued in federal court under 42 U.S.C. § 1983 and alleged related state-law torts.
Federal district court granted summary judgment for defendants on federal claims and dismissed state claims without prejudice; plaintiffs then filed a state action asserting the same state tort causes of action.
The trial court sustained defendants’ demurrer to the state complaint on collateral-estoppel grounds; this court affirmed in an earlier unpublished opinion (F.E.V. I) relying on a Ninth Circuit panel opinion that had affirmed the federal judgment.
After remittitur issued and the state appeal became final, the Ninth Circuit granted rehearing en banc and reversed the panel/federal-court judgment on excessive-force claims.
Plaintiffs filed a new state complaint and moved to vacate the prior state judgment; the trial court denied relief and sustained defendants’ demurrer on res judicata grounds. Plaintiffs appealed; this court reversed and remanded, holding that applying claim preclusion under these rare timing/circumstances would be manifestly unjust.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Ninth Circuit en banc reversal automatically nullified the prior state judgment (Resurrection of claims)	Ninth Circuit en banc reversal nullifies the federal judgment that underlay F.E.V. I, so the state judgment loses preclusive effect under Restatement §16	Plaintiffs failed to obtain a stay or timely pursue appropriate proceedings, so the prior state judgment became final and remains effective	Reversal did not automatically nullify the state judgment; plaintiffs had to seek appropriate post-judgment relief but failed to timely preserve the state judgment before it became final
Whether plaintiffs could collaterally attack or obtain equitable relief from the final state judgment	The changed circumstances (Ninth Circuit en banc reversal) justify vacating the state judgment under equitable doctrines/Restatement §73	The state judgment is facially valid and not void; no extrinsic fraud; equitable relief is unavailable once judgment is final absent narrow grounds	Plaintiffs could not collaterally attack the final judgment; equitable relief (vacatur) was not available because the judgment was not void on its face and extrinsic-fraud relief was not shown
Whether claim preclusion bars the Second State Complaint	Claim preclusion would be inappropriate because the federal judgment basis was later reversed and plaintiffs never had the chance to litigate state claims on the merits	Finality of the prior state judgment and plaintiffs’ failure to secure stays or timely appeals compel preclusive effect	Although the prior state judgment would ordinarily bar refiling, extraordinary circumstances (reversal of the federal basis after finality) counsel against applying claim preclusion here
Whether public-policy/fairness exceptions to claim preclusion apply	Public-policy and fairness require an exception because plaintiffs never litigated state claims and reversal of the federal judgment undermines the basis for the prior state judgment	Allowing an exception undermines finality and encourages indefinite relitigation; plaintiffs could have done more to preserve a stay	Court applied a narrow "manifest injustice" exception: decline to give preclusive effect to the final state judgment and remand for further proceedings

Key Cases Cited

DKN Holdings LLC v. Faerber, 61 Cal.4th 813 (California 2015) (defines claim preclusion and issue preclusion principles)
People v. Barragan, 32 Cal.4th 236 (California 2004) (recognizes limited public-policy exceptions to preclusion)
Greenfield v. Mather, 32 Cal.2d 23 (California 1948) (rare circumstances may defeat res judicata to avoid injustice)
Gonzalez v. City of Anaheim, 747 F.3d 789 (9th Cir. 2014) (en banc) (reversed federal-court judgment on excessive-force claims)
Talley v. Valuation Counselors Group, Inc., 191 Cal.App.4th 132 (California 2010) (explains necessity of timely steps—appeal or stay—when related federal judgment may change)
Slater v. Blackwood, 15 Cal.3d 791 (California 1975) (declines Greenfield exception when change is only intervening legal development)
Lucido v. Superior Court, 51 Cal.3d 335 (California 1990) (discusses public policy considerations for collateral estoppel)
Hernandez v. City of Pomona, 46 Cal.4th 501 (California 2009) (treats collateral estoppel as equitable and subject to fairness review)
City of Sacramento v. State of California, 50 Cal.3d 51 (California 1990) (addresses limits on injustice exception to res judicata)
Grain Dealers Mutual Ins. Co. v. Marino, 200 Cal.App.3d 1083 (California 1988) (discusses Restatement §16 and finality of judgments)