Manego v. Orleans Board of Trade
773 F.2d 1 (1985)
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Rule of Law:
Under the transactional approach to res judicata, a final judgment on the merits bars a subsequent lawsuit if it arises from the same transaction or series of connected transactions as the first suit, regardless of whether the plaintiff presents new evidence or different legal theories.
Facts:
- In late 1978, Isaac Manego applied to the Orleans Board of Selectmen for entertainment and liquor licenses to build a disco.
- The proposed disco was located near an ice skating rink owned by the Cape Cod Five Cents Savings Bank (the Bank).
- David Willard served simultaneously as a vice-president of the Bank, general manager of the rink, and president of the Orleans Board of Trade.
- The Bank, through Willard, expressed concerns about an establishment serving liquor being in close proximity to a facility patronized by children.
- In January 1979, the Orleans Board of Trade, at Willard's prompting, voted to oppose Manego's license application.
- At a public hearing, Willard announced the Board of Trade's opposition, and the Board of Selectmen subsequently denied Manego's applications for both liquor and amusement licenses in February 1979.
- After the denials, the rink, under new ownership, was granted an entertainment license which included new activities like ballroom dancing and roller skating.
- The Bank also filed, and later withdrew, a state court suit challenging a building permit that had been issued to Manego.
Procedural Posture:
- Isaac Manego first sued the Orleans Board of Selectmen in Massachusetts state superior court, seeking to compel the issuance of licenses (Manego I); the suit was dismissed.
- Manego then filed a second lawsuit in federal district court against the Board of Selectmen, the Bank, and Willard, alleging a racially motivated conspiracy in violation of federal civil rights statutes (Manego II).
- The district court in Manego II granted summary judgment to the defendants, which the U.S. Court of Appeals for the First Circuit affirmed, finding no evidence of a racial conspiracy.
- Manego filed this third lawsuit in federal district court against the Bank, Willard, and the Orleans Board of Trade, alleging an antitrust conspiracy in violation of the Sherman Act (Manego III).
- The district court granted summary judgment for the Bank and Willard on the basis of res judicata, and for the Board of Trade on the basis of the Noerr-Pennington doctrine.
- Manego (appellant) appealed the district court's grant of summary judgment to the U.S. Court of Appeals for the First Circuit.
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Issue:
Does the doctrine of res judicata bar a plaintiff's antitrust claim when a prior suit, based on a civil rights conspiracy theory, arose from the same core set of operative facts, namely the defendants' actions to prevent the plaintiff from obtaining business licenses?
Opinions:
Majority - Bownes, Circuit Judge
Yes. The doctrine of res judicata bars the plaintiff's antitrust claim because it arises from the same transaction as his prior civil rights claim. This court formally adopts the 'transactional' approach from the Restatement (Second) of Judgments § 24, which defines a claim to include all rights of the plaintiff against the defendant with respect to the transaction out of which the action arose. Both of Manego's lawsuits were based on the same series of events: the defendants' actions to prevent him from obtaining licenses for his disco. The fact that the second suit alleges a different motive (anti-competitive animus) from the first suit (racial animus) does not create a new transaction. Because the underlying factual basis is the same, Manego was required to bring all possible legal theories and allege all possible motives in his first action. His failure to do so precludes him from raising them in a new lawsuit.
Analysis:
This case is significant for formally establishing the 'transactional' approach to res judicata (claim preclusion) as the law of the First Circuit. This decision broadens the scope of preclusion, requiring plaintiffs to consolidate all legal theories and claims arising from a single core of operative facts into one lawsuit. It prevents piecemeal litigation by barring subsequent suits based on the same underlying events, even if the plaintiff alleges different motives or legal wrongs. This places a greater burden on plaintiffs to conduct thorough discovery and plead all possible claims at the outset, promoting judicial efficiency at the cost of some plaintiff flexibility.
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