Marrese v. American Academy of Orthopaedic Surgeons
470 U.S. 373 (1985)
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Rule of Law:
Under the full faith and credit statute, 28 U.S.C. § 1738, a federal court must refer to the preclusion law of the state in which a judgment was rendered to determine the judgment's preclusive effect on a subsequent federal claim, even if that claim falls within the exclusive jurisdiction of the federal courts.
Facts:
- Dr. R. Anthony Marrese and Dr. Michael R. Treister, both board-certified orthopaedic surgeons, applied for membership in the American Academy of Orthopaedic Surgeons (Academy).
- The Academy denied both doctors' applications without providing a hearing or a statement of reasons for the denials.
- In 1976, Dr. Treister filed a lawsuit against the Academy in an Illinois state court, alleging the denial violated his associational rights under Illinois common law.
- Dr. Marrese subsequently filed a separate, similar lawsuit against the Academy in Illinois state court.
- Neither surgeon's state court complaint included a claim for violation of state antitrust law.
- After the conclusion of their state court actions, the surgeons filed a new lawsuit against the Academy in federal court based on the same membership denials, this time alleging federal antitrust violations.
Procedural Posture:
- Dr. Treister and Dr. Marrese separately sued the American Academy of Orthopaedic Surgeons in the Circuit Court of Cook County, Illinois, a state trial court.
- The Illinois Appellate Court, an intermediate appellate court, affirmed the dismissal of Dr. Treister's complaint for failure to state a cause of action, and the Illinois Supreme Court, the state's highest court, denied leave to appeal.
- Following the state court rulings, Marrese and Treister jointly filed a new suit in the U.S. District Court for the Northern District of Illinois, alleging federal antitrust violations.
- The Academy moved to dismiss the federal suit on claim preclusion grounds, but the District Court denied the motion.
- The U.S. Court of Appeals for the Seventh Circuit, sitting en banc, reversed the District Court, holding that claim preclusion barred the federal antitrust action.
- The U.S. Supreme Court granted certiorari to decide the claim preclusion issue.
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Issue:
Must a federal court apply the rendering state's preclusion law to determine the effect of a prior state court judgment on a subsequent federal antitrust claim, or may it apply a federal rule of claim preclusion?
Opinions:
Majority - Justice O'Connor
Yes, a federal court must apply the rendering state's preclusion law. The full faith and credit statute, 28 U.S.C. § 1738, directs federal courts to give state court judgments the same preclusive effect they would have in the courts of the rendering state. This principle is not altered by the fact that the subsequent federal claim, such as one under the Sherman Act, is within the exclusive jurisdiction of the federal courts. A federal court is not free to give a state court judgment greater preclusive effect than the state itself would. Therefore, the analysis must begin with Illinois preclusion law. If Illinois law would not bar the claim—as is common when the first court lacked subject matter jurisdiction over the claim—then the federal action may proceed, and no inquiry into a federal exception to § 1738 is necessary.
Concurring - Chief Justice Burger
Yes, the court must first look to state law, but the majority fails to address what happens if that law is indeterminate. Chief Justice Burger agreed with the judgment that the lower court must first analyze Illinois preclusion law. However, he argued that if state law is silent or ambiguous on the preclusive effect of a state judgment on an exclusive federal claim, a federal court should be able to formulate a federal rule to resolve the matter. He suggested a federal rule could be based on whether the plaintiff had a 'full and fair opportunity' to litigate the claim in state court, such as when a state provides a cause of action that is materially identical to the exclusive federal claim.
Analysis:
This decision solidifies the principle of comity embodied in 28 U.S.C. § 1738, establishing a clear procedural framework for preclusion analysis involving exclusive federal jurisdiction claims. By mandating that federal courts first look to state law, the Court prevents the creation of a special federal common law of preclusion for antitrust cases and reinforces that states define the scope of their own judgments. This ruling places the initial burden on the federal district court to become an expert in the rendering state's preclusion doctrines. It also clarifies that an exception to § 1738 is a secondary question, considered only if state law is found to be preclusive in the first instance.
