Midwest Disability Initiative, The v. JANS Enterprises, Inc., 0:17-cv-04401

Background

Plaintiff Midwest Disability Initiative (MDI), an advocacy nonprofit, and individual plaintiff Gerald Doyen sued JANS Enterprises, Inc. (d/b/a Nico’s) and property lessor JC LLC under Title III of the ADA seeking injunctive relief to remove architectural barriers.
Ten days after MDI and a different individual (Paul Testa) stipulated to dismissal with prejudice of an ADA suit against the same defendants that listed nine architectural barriers (and sought relief for unlisted barriers), MDI and Doyen filed the present suit alleging largely the same architectural barriers plus two additional ones.
Doyen is an MDI member who uses a wheelchair or motor scooter; he had participated with MDI in multiple prior ADA suits and was an MDI member during the Testa case.
Defendants moved to dismiss under Rule 12(b)(6) on res judicata (claim preclusion) grounds, asserting the prior final judgment in the Testa case bars this suit; they also moved for Rule 11 sanctions against Plaintiffs’ counsel.
The district court treated the motion as a 12(b)(6) dismissal on the face of the complaint and public records, found MDI had adequately represented Doyen in the Testa case (privity), and held the claims arise from the same nucleus of operative facts; it dismissed the action with prejudice and denied sanctions.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Doyen was in privity with a party to the Testa case (adequate representation exception to nonparty preclusion)	MDI did not act as a representative for Doyen in the Testa case; Doyen was not a party	MDI’s interests aligned with its members and MDI intended to represent members; Doyen was an MDI member during the Testa case	Held: Privity exists—MDI adequately represented Doyen (Taylor adequate-representation test satisfied)
Whether the Doyen claims are the same as those in the Testa case (same-claim / same nucleus of operative facts)	Doyen alleges two additional barriers not in Testa, so claims differ	Testa sought correction of all barriers (not just those listed); both suits challenge the same architectural problems at the same premises	Held: Claims are the same—arise from the same nucleus of operative facts and are part of the same series of connected transactions
Whether res judicata bars the present suit	Plaintiffs: privity and same-claim elements not satisfied so res judicata does not apply	Defendants: prior final judgment, proper jurisdiction, privity, and same claim exist so claim is barred	Held: All four res judicata elements met; dismissal with prejudice granted
Whether Rule 11 sanctions are appropriate	Counsel argues reasonable grounds to dispute privity and claim identity; no reckless or intentional misconduct	Defendants argue counsel should have known claims were barred and pursued suit improperly	Held: Denied—counsel’s arguments were nonfrivolous; conduct did not meet Rule 11 sanctions standard (objective recklessness not shown)

Key Cases Cited

Taylor v. Sturgell, 553 U.S. 880 (2008) (establishes adequate-representation exception and three-part test for binding nonparties)
Yankton Sioux Tribe v. United States Dep’t of Health & Human Servs., 533 F.3d 634 (8th Cir. 2008) (elements for claim preclusion/res judicata)
First Nat’l Bank in Sioux Falls v. First Nat’l Bank South Dakota, 679 F.3d 763 (8th Cir. 2012) (same-transaction / nucleus-of-operative-facts test)
C.H. Robinson Worldwide, Inc. v. Lobrano, 695 F.3d 758 (8th Cir. 2012) (public records may be considered on 12(b)(6) for res judicata defense)
Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading plausibility standard under Rule 12(b)(6))
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading plausibility standard)
Adams v. USAA Cas. Ins. Co., 863 F.3d 1069 (8th Cir. 2017) (Rule 11 sanctions require objective showing of intentional or reckless disregard)