Northwest Title Agency, Inc. v. Minnesota Department of Commerce, 685 F. App'x 503

Background

NWTA, a Minnesota title insurance producer, had its insurance license revoked and a $20,000 fine imposed by the Minnesota Department of Commerce after an administrative hearing found statutory violations.
The Department's Commissioner adopted the ALJ’s findings and imposed the sanctions retroactively.
NWTA appealed to the Minnesota Court of Appeals, raising (among other claims) federal constitutional challenges to the Department’s document seizure and hearsay evidence; the Court of Appeals affirmed.
The Minnesota Supreme Court denied review and NWTA did not seek certiorari from the U.S. Supreme Court.
NWTA then filed a § 1983 action in federal district court against the Department and related defendants, asserting violations of federal rights arising from the administrative proceedings.
The district court dismissed the federal suit on two independent grounds: lack of jurisdiction under the Rooker–Feldman doctrine and on res judicata/preclusion grounds; the Eighth Circuit affirmed on res judicata grounds.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether federal court had jurisdiction under Rooker–Feldman to review state court judgment	NWTA sought federal review of alleged federal constitutional violations arising from the state administrative proceedings	Defendants argued Rooker–Feldman bars federal review of state-court judgments	District court invoked Rooker–Feldman; Eighth Circuit avoided jurisdictional question and resolved on preclusion instead
Whether NWTA’s § 1983 claims are barred by res judicata (claim preclusion)	NWTA argued its federal claims could be litigated in federal court despite prior state-court adjudication	Defendants argued the state-court judgment precludes relitigation of claims that were or could have been raised	Court held res judicata bars NWTA’s claims because same facts, same parties/privities, final judgment on merits, and NWTA had full and fair opportunity to litigate
Whether non-party defendants are in privity with state-court defendants for preclusion	NWTA contended some federal defendants were not parties and thus not bound	Defendants argued closely related interests and identity of interests make them effectively the same parties	Court treated additional defendants as in privity and bound by the state judgment
Whether NWTA preserved meaningful challenge to district court’s res judicata analysis on appeal	NWTA offered limited briefing on res judicata	Defendants asserted waiver due to insufficient appellate argument	Court noted potential waiver but assumed preservation and affirmed because res judicata clearly applied

Key Cases Cited

Rooker v. Fid. Tr. Co., 263 U.S. 413 (issue is federal courts’ lack of authority to review state-court judgments)
D.C. Court of Appeals v. Feldman, 460 U.S. 462 (clarifies limits on federal review of state judicial proceedings)
Hauschildt v. Beckingham, 686 N.W.2d 829 (Minn. 2004) (elements for claim preclusion under Minnesota law)
Laase v. County of Isanti, 638 F.3d 853 (8th Cir. 2011) (standard of review and application of Full Faith and Credit preclusion principles)
In re Athens/Alpha Gas Corp., 715 F.3d 230 (8th Cir. 2013) (permissibility of addressing preclusion before Rooker–Feldman)
Allen v. McCurry, 449 U.S. 90 (federal courts must give preclusive effect to state-court judgments under Full Faith and Credit)
Brown‑Wilbert, Inc. v. Copeland Buhl & Co., 732 N.W.2d 209 (Minn. 2007) (res judicata applies to claims that could have been litigated)
Ruple v. City of Vermillion, 714 F.2d 860 (8th Cir. 1983) (privity and identity-of-interests discussion for preclusion)
State v. Joseph, 636 N.W.2d 322 (Minn. 2001) (full and fair opportunity to litigate standard under Minnesota law)