United States v. Munsingwear, Inc.

Supreme Court of United States
340 U.S. 36 (1950)

ELI5:

Rule of Law:

A judgment retains its preclusive (res judicata) effect even if the losing party is prevented from obtaining appellate review due to mootness, unless that party follows the established procedure of moving to have the appellate court vacate the underlying judgment.

Facts:

The United States government enforced a regulation that fixed the maximum price for certain commodities.
Munsingwear, Inc. sold commodities that the United States alleged were priced in violation of this regulation.
The United States filed a lawsuit against Munsingwear seeking both an injunction to stop the alleged overpricing and treble damages (a monetary penalty).
By agreement, the claim for treble damages was put on hold pending the resolution of the injunction claim.
While the case was proceeding through the appellate system, the government decontrolled the commodity involved, meaning the price-fixing regulation no longer applied to it.

Procedural Posture:

The United States sued Munsingwear in U.S. District Court seeking an injunction and treble damages.
The District Court ruled in favor of Munsingwear on the injunction claim and dismissed the complaint.
The United States, as appellant, appealed the dismissal to the U.S. Court of Appeals.
While the appeal was pending, Munsingwear, as appellee, moved to dismiss the appeal as moot. The Court of Appeals granted the motion.
Munsingwear then filed a motion in the District Court to dismiss the pending treble damage actions on the ground of res judicata.
The District Court granted the motion, dismissing the damage claims.
The United States appealed that dismissal to the Court of Appeals, which affirmed the District Court's decision.
The United States then sought and was granted a writ of certiorari from the U.S. Supreme Court.

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Issue:

Does a trial court judgment have res judicata effect in a subsequent action between the same parties when an appeal from that judgment was dismissed as moot, and the appellant failed to move to vacate the judgment?

Opinions:

Majority - Mr. Justice Douglas

Yes. A final, unreversed judgment from a court of competent jurisdiction has preclusive effect under the doctrine of res judicata, even when an appeal is dismissed for mootness, if the appealing party fails to avail itself of the proper remedy to nullify that judgment's effect. The core principle of res judicata is to bring litigation to an end and promote certainty. While the United States was prevented from obtaining appellate review because the case became moot, this did not automatically negate the preclusive effect of the District Court's judgment. The established practice for an appellate court in a federal civil case that becomes moot is to reverse or vacate the judgment below and remand with a direction to dismiss. This procedure, known as Munsingwear vacatur, clears the path for future relitigation by eliminating a judgment that became unreviewable by happenstance. The United States failed to make a motion to vacate; instead, it acquiesced in the simple dismissal of its appeal. By 'sleeping on its rights,' the government forfeited the opportunity to erase the adverse judgment, which therefore remains binding and bars its subsequent actions for damages.

Dissenting - Mr. Justice Black

No. Justice Black expressed the opinion that res judicata should not be applied under the circumstances of this case, without providing further written reasoning.

Analysis:

This case establishes the important procedural doctrine now known as 'Munsingwear vacatur.' It places the affirmative burden on the party whose appeal becomes moot to move to vacate the adverse judgment below in order to prevent its preclusive effect. The decision reinforces the strong judicial policy favoring the finality of judgments (res judicata) over a party's unexercised right to appeal. The ruling dictates that mootness alone does not erase a judgment; a party must take a specific procedural step to protect itself from the future consequences of an unreviewable decision.

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