RSM Production Corp. v. Freshfields Bruckhaus Deringer U.S. LLP
800 F. Supp. 2d 182
D.D.C.2011Background
- RSM Production Corporation sues Freshfields Bruckhaus Deringer U.S. LLP and two lawyers (Paulsson, King) alleging a RICO conspiracy related to Grenada’s ICSID arbitration over an exclusive offshore license.
- RSM previously pursued related claims in the Southern District of New York, where the complaint was dismissed for failure to state a claim and later affirmed on appeal.
- RSM contends that Freshfields participated in a conspiracy to assist Grenada in corruptly terminating RSM’s contract and securing a license for Global Petroleum.
- The alleged conspiracy centers on bribery of Grenadian officials and the financing/assistance of Grenada’s defense in the ICSID arbitration by Global Petroleum and related actors.
- The court notes that the current complaint largely repackages allegations from the Fridman case and seeks damages allegedly arising from the same core facts.
- The court grants the motion to dismiss on res judicata grounds, concluding that the New York action’s final judgment on the merits bars the present claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether res judicata bars the current suit | RSM argues the New York action did not adjudicate all claims against Freshfields. | Defendants contend the Fridman action resolved the same core conduct and parties, precluding relitigation. | Yes; res judicata bars the current suit. |
| Whether the Fridman case involved the same claims | RSM claims different legal theories avoid preclusion. | Fridman addressed the same nucleus of operative facts. | Yes; same nucleus of facts and claims. |
| Whether Freshfields was in privity with Fridman defendants | Freshfields not named in Fridman, so privity not established. | Co-conspirators are in privity for res judicata purposes; Freshfields is in privity with alleged coconspirators. | Yes; privity established through conspiracy structure. |
| Whether the New York judgment was a final judgment on the merits | New York dismissal lacked merits-based adjudication as to Bowen. | Second Circuit affirmed dismissal on the merits; Bowen was dismissed on merits. | Yes; there was a final judgment on the merits. |
Key Cases Cited
- Capitol Hill Grp. v. Pillsbury, Winthrop, Shaw, Pittman, LLC, 569 F.3d 485 (D.C. Cir. 2009) (en banc; res judicata requires final judgment on the merits and same claims)
- Fridman v. Bowen, 643 F. Supp. 2d 382 (S.D.N.Y. 2009) (merits-based dismissal; later affirmed by the Second Circuit (2010))
- Fridman v. Bowen, 387 Fed. Appx. 72 (2d Cir. 2010) (affirmed dismissal for failure to state a claim)
- San Remo Hotel L.P. v. City and Cty. of San Francisco, Cal., 545 U.S. 323 (U.S. 2005) (final judgment on the merits; preclusion applies to issues that could have been raised)
- Nader v. Democratic Nat'l Comm., 590 F. Supp. 2d 164 (D.D.C. 2008) (res judicata applicability in the District of Columbia context)
- Allied-Signal, Inc. v. Allied Signal, Inc., 985 F.2d 908 (7th Cir. 1993) (ripe-for-litigation concept; res judicata scope)
- Nat. Res. Def. Council, Inc. v. EPA, 513 F.3d 149 (D.C. Cir. 2008) (claim preclusion; same transaction or nucleus of facts)
- Youngin’s Auto Body v. District of Columbia, 775 F. Supp. 2d 1 (D.D.C. 2011) (claims arise from same nucleus of facts; theory irrelevant)