JohnJay Portillo v. Gregory Cunningham
872 F.3d 728
5th Cir.2017Background
- Portillo, a former HCC police officer, alleges supervisors retaliated against him after he raised safety concerns; he was placed on leave, investigated, terminated, and later acquitted of criminal charges based on allegations he falsified a report.
- Portillo filed multiple suits: a first state-court action (nonsuited), a second state action (court dismissed most claims with prejudice except §1983 claims; later Portillo nonsuited), and a federal suit asserting the same claims.
- The district court dismissed the federal suit with prejudice for failure to state a claim, treating the claims as precluded by res judicata from the prior state litigation.
- Defendants sought and the district court awarded $110,000 under Fed. R. Civ. P. 41(d) for costs incurred in the prior state action; the award was treated as 90% of defendants’ stated prior attorneys’ fees.
- On appeal the Fifth Circuit affirmed dismissal (res judicata) but vacated and remanded the Rule 41(d) fee award because (1) fees are recoverable under Rule 41(d) only if the underlying statute defines "costs" to include fees (and §1988 does), (2) the district court made no finding that claims were frivolous, and (3) defendants’ evidentiary showing of fees was inadequate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether res judicata barred Portillo’s §1983 claims | Res judicata cannot bar §1983 claims because they were dismissed without prejudice by nonsuit | State-court dismissal with prejudice of other claims and the transactional test preclude relitigation; §1983 claims could have been raised earlier | Held: Res judicata bars the §1983 claims — the partial dismissal became final and the §1983 claims arose from same transaction and should have been litigated earlier |
| Whether district court could dismiss §1983 claims on res judicata grounds without defendants expressly seeking that relief | Portillo: no notice/prejudice; Rule 54(c) shouldn’t permit unrequested relief here | Defendants: court addressed preclusion at conferences; Rule 54(c) allows relief if not prejudicial | Held: Rule 54(c) allowed dismissal; Portillo had notice and opportunity to argue against preclusion |
| Whether Rule 41(d)’s reference to "costs" includes attorneys’ fees | Portillo: attorneys’ fees are not recoverable as "costs" under Rule 41(d) absent statutory authorization | Defendants: Rule 41(d) permits awarding fees as costs; district court properly applied Rule 41(d) | Held: Adopted Fourth/Seventh Circuits — fees count as "costs" under Rule 41(d) only when underlying statute defines costs to include fees (here §1988 could supply that) |
| Whether the district court properly awarded $110,000 under Rule 41(d) on this record | Portillo: no finding of frivolousness; insufficient documentation of fees; no prevailing-party finding under §1988 | Defendants: they prevailed in state litigation and submitted affidavits showing hours and rates | Held: Vacated and remanded — district court made no finding that claims were frivolous (required for §1988 fees), and defendants’ evidence (conclusory affidavit, no contemporaneous billing) was inadequate to support the award |
Key Cases Cited
- Gines v. D.R. Horton, Inc., 699 F.3d 812 (5th Cir. 2012) (standard of review for dismissal for failure to state a claim)
- Test Masters Educ. Servs., Inc. v. Singh, 428 F.3d 559 (5th Cir. 2005) (res judicata reviewed de novo)
- Citizens Ins. Co. of Am. v. Daccach, 217 S.W.3d 430 (Tex. 2007) (Texas res judicata elements and transactional test)
- Marek v. Chesny, 473 U.S. 1 (1985) (interpretation of "costs" under Rule 68 and relation to fee-shifting statutes)
- Esposito v. Piatrowski, 223 F.3d 497 (7th Cir. 2000) (Rule 41(d) fees: fees allowed only if underlying statute defines costs to include fees)
- Andrews v. America’s Living Ctrs., LLC, 827 F.3d 306 (4th Cir. 2016) (adopting Seventh Circuit approach on Rule 41(d) and balancing American Rule with deterrence)