Ragsdale v. Rubbermaid, Inc.Ragsdale v. Rubbermaid, Inc.
[PUBLISH]
Before CARNES, Circuit Judge, HILL, Senior Circuit Judge, and HOEVELER*, Senior District Judge.
*Honorable William M. Hoeveler, Senior U. S. District Judge for the Southern District of Florida, sitting by designation.
HILL, Senior Circuit Judge:
This сase presents a single question of law issue on appeal: after a terminated whistleblowing employee files a complaint on behalf of the United States Government against his former employer pursuant to the qui tam provisions of the False Claims Act1 (FCA or the Act),
I.
Ned Miller2 was employed as a salesman by Rubbermaid Commercial Products, Inc., a subsidiary of Rubbermaid, Inc. (collectively Rubbermaid), from 1988 until he was fired in March 1992. Ten months later, in January 1993, he filed a whistleblower action (Rubbermаid I) on behalf of the government against Rubbermaid alleging fraudulent billing practices under the qui tam provisions of the FCA.3 At that time, for whatever reason, he did not state an FCA claim for retaliatory discharge in this complaint. After the government intervened in the lawsuit, Miller remained as a relator. When Rubbermaid I settled, Miller consented to the settlement agreement and received $185,000, his bounty for reporting the fraudulent activity.
Using the transactional approach to claim preclusion, the district court found that Miller‘s Act
II.
Although the two claims arise under the same chapter of the United States Code, Miller contends that those involved in Rubbermaid I and Rubbermaid II involve distinct rights and duties and different causes of action. He argues that the issue here in Rubbermaid II is not whether the government was overcharged by Rubbermaid but whether he was fired by Rubbermaid for questioning its pricing practices. In short, Miller claims, the government has no interest in the relief he now seeks.
Miller concedes that the facts in Rubbermaid I and II are related in time, and debatably, would havе formed a convenient trial unit. He suggests that, as the first case did not require a determination of the reason for his termination, his retaliation claim in Rubbermaid II therefore did not arise out of the same operative nucleus of fact as did the qui tam claim in Rubbermaid I. Id.
Rubbermaid, on the other hand, contends that Rubbermaid I and II are based upon the same factual predicate and contain the same cause of action for res judicata purposes. It argues that both claims
Similarly, Rubbermaid contends that in order to avoid piecemeal litigation, Miller could have and should have raised his Rubbermaid II claim as part of his Rubbermaid I claim. Then all claims arising out of the same facts and involving the same parties would have been litigated in one forum.5
Rubbеrmaid also strongly emphasizes the point that Miller‘s cause of action in Rubbermaid II accrued at the time his employment was terminated, some ten months before he filed Rubbermaid I. This is not a case, they argue, where an employee files a FCA claim, blowing the whistle on his or her employer; pricing violations are litigated; аnd then the employee is fired. Res judicata is applicable, Rubbermaid contends, because both of Miller‘s claims had accrued as of the date he filed his first complaint.
III.
Barring a claim on the basis of res judicata is a determination of law. Israel Discount Bank Ltd. v. Entin, 951 F.2d 311, 314 (11th Cir. 1992). Our standard of review therefore is de novo. Id., citing In re Justice Oaks II, Ltd., 898 F.2d 1544, 1548 n.1 (11th Cir.), cert. denied, 111 S.Ct. 387 (1990).
IV.
The purpose behind the doctrine of res judicata is that the “full and fair opportunity to litigate protects [a party‘s] adversaries from the expense and vexation attending multiple lawsuits, conserves judicial resources, and fosters reliance on judicial action by minimizing the possibility of inconsistent decisions.” Montana v. United States, 99 S.Ct. 970 (1979). Res judicata bars the filing of claims which were raised or could have been raised in an earlier proceeding. Citibank, 904 F.2d at 1501 (citing I. A. Durbin, Inc. v. Jefferson Nat. Bank, 793 F.2d 1541, 1549 (11th Cir. 1986)).
Under Eleventh Circuit precedent, a claim will be barred by prior litigation if all four of the following elements are present: (1) there is a final judgment on the merits; (2) the decision was rendered by a court of competent jurisdiction; (3) the parties, or those in privity with them, are identical in both suits; and (4) the same cause of action is involved in both cases.6 Id. From the record it is clear that the first three requirements are met. First, there was a final judgment on the merits in Rubbermaid I. The parties reached a settlement agreement and executed a stipulation of dismissal, barring a later suit on the same cause of action. Id. at 1501-1502. Second, the Rubbermaid I court had proper jurisdiction. Id. Third, the parties are identical.7 Id. Only the fourth element of claim preclusion, identity
In the Eleventh Circuit, “[t]he principal test for determining whether the causes of action are the same is whether the primary right and duty are the same in each case. In determining whether the causes of action are the same, a court must compare the substance of the actions, not their form.” Citibank, 904 F.2d at 1503 (citations omitted). “It is now said, in general, that if a case arisеs out of the same nucleus of operative fact, or is based upon the same factual predicate, as a former action, that the two cases are really the same ‘claim’ or ‘cause of action’ for purposes of res judicata.” Id.
We “must [therefore] look to the factual issues tо be resolved [in Rubbermaid II], and compare them with the issues explored in” Rubbermaid I. Id. Did they arise out of the same transaction or series of transactions?8 Could Miller have brought his retaliation claim when he brought his qui tam claim? Should he have brought it earlier?
Interestingly enough, both parties rely on Pleming v. Universal-Rundle Corp., 142 F.3d 1354 (11th Cir. 1998) (Pleming II) to support their different positions. The plaintiff did not receive a job for which she applied. In 1993, she filed an employment discrimination action against her employer under Title VII,
Although Pleming did not amend her Pleming I complaint to include additional allegations of discrimination arising out of the 1994 incidents, she described them in her briefs. The magistrate judge referred to them in his report and recommendation. Nevertheless, the district court granted summаry judgment for the employer, finding that Pleming had failed to prove that the company‘s non-discriminatory explanation was pretextual. Id.
The Pleming II panel, quoting Manning, stated:
[W]e do not believe that the res judicata preclusion of claims that “could have been brought” in the earlier litigation includes claims which arise after the originаl pleading is filed in the earlier litigation. Instead, we believe that, for res judicata purposes, claims that “could have been brought” are claims in existence at the time the original complaint is filed or claims actually asserted by supplemental pleadings or otherwise in the earlier action.
The real issue in Pleming II was whether the plaintiff had actually asserted her second claim in the course of briefing her first action. Miller cites Pleming II, however, for the proposition that, although his retaliation claim existed at the time he filed his qui tam action, the two claims are distinct. Comparing the substance of the actiоns, not their form, Citibank, 904 F.2d at 1503, his reading of the case is inapposite. Here it is undisputed that Miller‘s termination from Rubbermaid, the event giving rise to his retaliatory discharge claim in Rubbermaid II, occurred more than ten months before Miller filed his complaint in Rubbermaid I.9 For res judicata purposes, it was in existence at the time the original cоmplaint was filed. Pleming, 142 F.3d at 1360.
Indeed, then, both claims grew out of a common nucleus of operative fact: Rubbermaid engaged in illegal conduct and Miller‘s discovery of that conduct led to his discharge, a series of transactions closely related in time, space, and origin. Citibank, 904 F.2d at 1503; Restatement (Second) of Judgments § 24 (2) (1980). In terms of trial convenience, there is substantial overlap as both claims involve the FCA, Miller‘s employment with Rubbermaid, and the same parties and witnesses. Id.
In addition, Miller received a bounty of $185,000 in Rubbermaid I. As the district court observed, to allow him to proceed with Rubbermaid II would permit future qui tam plaintiffs strategically to sever their clаims in the hope of obtaining a second bite at the apple, should their first action prove unsuccessful. This is textbook res judicata.
V.
Finding that both Miller‘s claim for retaliatory discharge under the FCA and his FCA qui tam claim arose from the same nucleus of operative fact, we conclude that the cause of action in Rubbermaid I and the cause of action in Rubbermaid II are the same for purposes of res judicata. As all four elements of res judicata are satisfied, we affirm the district court‘s order granting Rubbermaid‘s motion for summary judgment.
AFFIRMED.
Notes
Any employee who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment by his or her employer because of lawful acts done by the employee on behalf of the employee or others in furtherance of an action under this section, including investigation for, initiation of, testimony for, or assistance in an action filed or to be filed under this section, shall be entitled to all relief necessary to make the employee whole. Such relief shall include reinstatement with the same seniority status such employee would have had but for the discrimination, 2 times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys’ fees. An emplоyee may bring an action in the appropriate district court of the United States for the relief provided in this subsection.
Restatement (Second) of Judgments § 24 (2) cmt. b (1980).The expression “transaction, or series of connected transactions,” is not capable of a mathematically precise definition; it invokes a pragmatic standard to be applied with attention to the facts of the cases. And underlying the standard is the need to strike a delicate balance betwеen, on the one hand, the interests of the defendant and of the courts in bringing litigation to a close and, on the other, the interest of the plaintiff in the vindication of a just claim.
***
In general, the expression connotes a natural grouping or common nucleus of operative facts. Among the factors relevаnt to a determination whether the facts are so woven together as to constitute a single claim are their relatedness in time, space, origin, or motivation, and whether, taken together, they form a convenient unit for trial purposes. Though no single factor is determinative, the relevance of trial сonvenience makes it appropriate to ask how far the witnesses or proofs in the second action would tend to overlap the witnesses or proofs relevant to the first. If there is a substantial overlap, the second action should ordinarily be held precluded. But the opposite does nоt hold true; even when there is not a substantial overlap, the second action may be precluded if it stems from the same transaction or series.