OPINION
Appellant challenges the district court’s dismissal of his claims against respondent, a state university and his former employer. In 2011, appellant sued respondent in tort, citing USERRA violations. USERRA requires state employers to promptly reemploy employees upon completion of military service, prohibits discrimination against employees based on their military status, and provides for exclusive state jurisdiction over private damages claims against state employers. 38 U.S.C. §§ 4301(a)(1)-(3), 4323(b)(2) (2016). The district court dismissed appellant’s first lawsuit, and this court affirmed. Breaker v. Bd. of Trs., Minn. State Colls. & Univs. (Breaker I), No. All-2286,
In this case, appellant sued respondent for violating USERRA based on the same factual circumstances supporting his tort claim in Breaker I. Appellant argues the district court erred when it applied res judicata because he did not receive a full and fair opportunity to litigate his USER-RA claims in Breaker I. More specifically, appellant asserts that his USERRA claims would have been barred in Breaker I because sovereign immunity precluded US-ERRA claims until legislative changes were made in 2012, which occurred after Breaker I was dismissed. We conclude that the district court erred and, therefore, reverse and remand for additional proceedings.
FACTS
Between 1997 and 2005, appellant Martin Breaker was a faculty member at respondent Bemidji State University (BSU),
In 2011, Breaker, proceeding as a self-represented litigant, sued BSU, the State of Minnesota, Minnesota State Colleges and Universities, and several individual defendants in state court, claiming intentional infliction of emotional distress. See Breaker I,
The defendants moved for judgment on the pleadings, asserting that the complaint failed to plead a legally sufficient claim. Id. On October 20, 2011, the district court granted the motion, and this court affirmed on July 16, 2012, reasoning that Breaker’s complaint did not sufficiently allege extreme and outrageous conduct by the defendants. Id. at *2.
In April 2012, the Minnesota Legislature passed a law waiving state sovereign immunity from USERRA claims. 2012 Minn. Laws ch. 192, § 1, at 1. In February 2016, Breaker sued BSU and asserted two US-ERRA claims.
BSU moved to dismiss the complaint with prejudice, arguing that res judicata barred Breaker’s USERRA claims. The district court determined “that nothing prevented [Breaker] from bringing his US-ERRA claims” in Breaker I. The district court therefore concluded that res judicata barred Breaker’s claims and dismissed the complaint. Breaker appeals.
ISSUE
Did the district court err in determining that res judicata barred Breaker’s USER-RA claims because he had a full and fair opportunity to litigate in Breaker I, which was dismissed before the state waived its sovereign' immunity from' USERRA claims?
ANALYSIS
I. Res judicata requires that the es-topped party had a full and fair opportunity to litigate in the earlier action.
Appellate courts review the application of res judicata de novo. Mach v. Wells Concrete Prods. Co.,
Res judicata “should not be applied rigidly in contravention of public policy.” Schober v. Comm’r of Revenue,
This appeal only concerns the fourth res judicata element—whether Breaker had a full and fair opportunity to litigate his 'USERRA claims in Breaker I.
II. Sovereign immunity would have barred Breaker’s USERRA claims against his state employer in Breaker I.
We review issues of sovereign immunity de novo. Nichols v. State,
When a state is sued by its own citizens for damages under a federal act, sovereign immunity bars relief. Alden v. Maine,
Valid abrogation of state sovereign immunity by Congress must meet two prongs: (1) the federal statute must contain an unequivocal expression of congressional intent to abrogate, and (2) Congress must have “acted pursuant to a valid grant of constitutional authority.” Kimel v. Fla. Bd. of Regents,
Here, it is undisputed that BSU is an arm of the State of Minnesota and therefore entitled to sovereign immunity. See Minn. Stat. §§ 136F.06, .10 (2016) (providing powers and duties of Minnesota State Colleges and Universities as state agency, and designating BSU as member of Minnesota State Colleges and Universities). It is further undisputed that Minnesota did not waive its sovereign immunity from USERRA claims until April 2012, after dismissal of Breaker’s tort claim in Breaker I. Accordingly, we must determine whether Congress validly abrogated state sovereign immunity from USERRA claims.
No Minnesota case has directly analyzed Congress’s authority to abrogate state sovereign immunity from civil liability under a federal statute.
Second, we determine whether Congress had authority to abrogate state sovereign immunity from USERRA claims. Congress had abrogation authority only “if there is compelling evidence that the States were required to surrender this power to Congress pursuant to the constitutional design.” Alden,
Congress promulgated USERRA under the Article 1 War Powers Clause. Bedrossian v. Nw. Mem’l Hosp.,
In Alden, the Supreme Court held that “the powers' delegated to Congress under Article I of the United States Constitution do not include the power to subject non-consenting States to private suits for damages in state courts.”
First, BSU’s argument is inconsistent with Minnesota precedent and federal caselaw. In Raygor, the Minnesota Supreme Court interpreted Alden, stating “that a federal statutory provision that purports to allow private actions against unconsenting states in their own court is unconstitutional.”
Second, BSU’s argument has been rejected by other state appellate courts. At least four other state courts have interpreted Alden as precluding Congress from abrogating state sovereign immunity in state court under the War Powers Clause and have held that USERRA did not subject states to private damages claims. Larkins,
We find the Virginia Supreme Court’s analysis persuasive. In Clark, the Virginia' Supreme Court concluded that Alden’s holding was “unqualified” and precluded suits against nonconsenting states in state court for liability created by federal laws enacted under “all congressional powers recognized in Article 1.”
In sum, we conclude that Congress lacked authority under the Article 1 War Powers Clause to abrogate state sovereign immunity from USERRA claims in state court. Accordingly, 'sovereign immunity barred private damages actions against state employers for USERRA violations until the state waived its immunity in April 2012, which occurred after Breaker I was dismissed. Breaker therefore lacked a full and fair opportunity to litigate his USER-RA claims in Breaker I. We note that our decision has no bearing on the merits of Breaker’s claims. We merely hold that the state is not entitled to dismissal on res judicata grounds.
Equity supports our conclusion that res judicata does not apply. Strong public policy considerations support US-ERRA’s enactment. 38 U.S.C. § 4301(a)(1)-(3); see also 38 U.S.C. § 4327(b) (providing that there is no statute of limitations for USERRA claims). When Congress gave state courts exclusive jurisdiction over USERRA claims against state employers, it sought to provide state employees with the same protection as private and federal employees. H.R. Rep. 105-448 (1998),
For the reasons discussed, we conclude the district court erred in dismissing Breaker’s claims on the ground of res judi-cata.
DECISION
Because the state did not waive its sovereign immunity from USERRA claims until after Breaker I was dismissed, and
Reversed and remanded.
Notes
. Minnesota State Colleges and Universities is also a respondent. See Minn. Stat. § 136F.10 (2016) (designating BSU as member of Minnesota State Colleges and Universities).
. USERRA does not contain a statute of limitations. 38 U.S.C. § 4327(b) (2016). We also note that in 2013 and 2015, Breaker filed two separate USERRA lawsuits against' BSU in federal' district court, which lacks subject-matter jurisdiction over USERRA claims brought against state employers. See Townsend v. Univ. of Alaska,
. Res judicata is distinct from collateral es-toppel, also known as "issue preclusion,” which precludes a party from relitigating an issue that was decided in a prior lawsuit between the same parties involving a different cause of action. Mach,
. BSU asserts that courts only apply res judi-cata flexibly when the first action was an administrative action. For support, BSU cites non-binding federal decisions and unpublished decisions from this court. But our supreme court has consistently stated that courts should not apply res judicata if doing so will contravene public policy or cause an injustice. See, e.g., Hauschildt,
.Breaker concedes that the first two res judi-cata elements are met, but asserts that the third element is not satisfied because there was no final judgment on the merits of his USERRA claims in Breaker /. But in the district court, Breaker conceded that this case "hinge[d] on the fourth” res judicata element, and the parties litigated only the fourth element. Breaker cannot shift legal theories on appeal. See Thiele v. Stick,
. The Minnesota Supreme Court has recognized that how sovereign immunity operates as a defense is the source of some disagreement. Regents of Univ. of Minn. v. Raygor,
. Alden relied, in part, on the Eleventh Amendment.
. There áre two other well-recognized exceptions to sovereign immunity, neither of which has any bearing on this appeal. See Principality of Monaco v. Mississippi, 292 U.S. 313, 328-29,
. The Minnesota Supreme Court discussed abrogation of sovereign immunity in Raygor, but did not conduct the two-prong abrogation analysis. Also, Raygor decided a different issue: whether Minnesota’s waiver of immunity in state court under a state statute was also a valid waiver of immunity in federal court.
. At least three courts have interpreted the phrase, "in accordance with the laws of the State,” as expressing Congress’s intent to abrogate state sovereign immunity, but only to the extent that state law permits suits against a state. Larkins v. Dep’t of Mental Health & Mental Retardation,
. Section 4323(b)(2)'s legislative history supports this reading of the statute’s plain language. When Congress enacted USERRA
. Since Alden, the Supreme Court and the lower courts, including the Eighth Circuit - Court of Appeals, have unambiguously stated that Congress’s only recognized source of abrogation power is the Fourteenth Amendment. See Coleman,
. ‘ BSU relies on an amicus brief filed in New Mexico and a federal circuit court decision, Neither authority is persuasive. In Ramirez v. State, CYFD, the Department of Justice filed an amicus brief arguing that Congress had abrogation authority under the War Powers Clause.
