B. An Exception to Claim Preclusion
Plaintiffs claim their case falls into an exception to the usual rules of claim preclusion, although they fail to articulate the precise nature of that exception. Their argument rests on two premises, one that they have stated in their opposition papers and one that is implicit in their argument: (1) their federal claims did not mature until they first brought a state inverse condemnation proceeding; and (2) therefore they should be able to bring their federal claims in a federal district court once those claims ripen (presumably even if they litigated those very claims in the state proceeding). Plaintiffs' argument raises an interesting legal question: Should the usual principles of claim preclusion apply where a plaintiff claiming an unconstitutional taking must file in state court to seek state-law inverse condemnation remedies before his federal constitutional claim ripens?
1. Plaintiffs Do Not Have Access to a Federal Forum of First Instance
Plaintiffs argue that under Williamson County Regional Planning Comm'n v. Hamilton Bank, 473 U.S. 172, 87 L. Ed. 2d 126, 105 S. Ct. 3108 (1985), they must follow proper state procedures for inverse condemnation before their federal constitutional takings claim can ripen. In Williamson the Court held that the plaintiffs could not maintain a federal takings action until they first followed the existing state procedures for seeking compensation. Id. at 194-96. The Court reasoned that Tennessee's allegedly unconstitutional act was not complete -- and hence actionable -- until it deprived property owners of due process of law, and a post-deprivation inverse condemnation proceeding is sufficient to satisfy due process requirements. Id. at 195. In Williamson the state had a statutory inverse condemnation procedure for property owners to follow to claim compensation. However, the First Circuit has held that compensation clause claims are premature prior to state court action even where state law provides only a sketchy common-law inverse condemnation procedure. Culebras Enters. Corp. v. Rivera Rios, 813 F.2d 506, 512-16 (1st Cir. 1987).
New Jersey's inverse condemnation procedures are not codified although they find their origin in the state's eminent domain statute, N.J. Stat. Ann. §§ 20:3-1 to -50 (Supp. 1988). Under state common law, there exists an appropriate procedure when a governmental entity with eminent domain power has taken property but has not given compensation. See In re Jersey Central Power & Light Co., 166 N.J. Super. 540, 544, 400 A.2d 128 (App. Div. 1979). Such an action is based on an alleged violation of state and federal constitutional just compensation guarantees. Id. The proceeding is essentially a mandamus action to compel the government entity involved to initiate condemnation procedures. Id. "At issue in such a proceeding is whether the actions of the entity vested with condemning power in its impact on the owner's land constitutes a taking thereof." Id. Because New Jersey allows plaintiffs such a post-deprivation remedy, they had to invoke the mandamus procedure before filing an action in federal court.
Because a plaintiff first must go to a New Jersey court of general jurisdiction to invoke state compensation procedures, that court must pass on the question of whether there was a taking under state (and perhaps federal) law. Under New Jersey claim preclusion principles, the state court's finding on the plaintiff's claim would prevent it from bringing a second action on the grounds that it should have joined such a claim with its state mandamus action. See Melikian v. Corradetti, 791 F.2d 274, 279-80 (3d Cir. 1986) (applying New Jersey law); Joan Ryno, Inc. v. First Nat'l Bank, 208 N.J. Super. 562, 569-70, 506 A.2d 762 (App. Div. 1986); see also N.J. Ct. R. 4:27-1(b) (1988). The rule effectively prevents a plaintiff from ever filing a constitutional takings action in a federal district court and would allow the plaintiff a federal forum only in the United States Supreme Court. If such a plaintiff files first in federal court, the court will dismiss the federal claim as premature; however, if the plaintiff files first in state court, New Jersey's entire-controversy doctrine requires the plaintiff to assert all related claims, including its federal constitutional claims. See Paulucci v. City of Duluth, 826 F.2d 780 (8th Cir. 1987) (claim preclusion applies to bar federal takings action based on state court's inverse condemnation proceeding); Moore v. City of Costa Mesa, 678 F. Supp. 1448, 1450-51 (C.D. Cal. 1987) (same); Mitchell v. Mills County, 673 F. Supp. 332, 336 (S.D. Iowa 1987) ("plaintiffs should not litigate their action in state court for the sole purpose of showing that state remedies are inadequate, but should play to win"), aff'd, 847 F.2d 486 (8th Cir. 1988). But see Norco Constr., Inc. v. King County, 801 F.2d 1143, 1146-47 (9th Cir. 1986) (federal damages action not barred under Washington law by earlier state mandamus proceeding in which plaintiff could not have recovered all damages sought in its federal lawsuit).
2. New Jersey Claim Preclusion Rules Provide No Exception In this Instance
In every case in which a federal court seeks an exception to claim preclusion principles it must first look for that exception in state law. Marrese v. American Academy of Orthopaedic Surgeons, 470 U.S. 373, 384, 84 L. Ed. 2d 274, 105 S. Ct. 1327 (1985); Migra v. Warren City School Dist. Bd. of Educ., 465 U.S. 75, 83, 79 L. Ed. 2d 56, 104 S. Ct. 892 (1984). Unlike the situation in Marrese, there are no circumstances that could arise between two state court proceedings that create a problem like that presently before the court. The compelling reason for an exception from the preclusion principle in this case arises from the unique relationship between the state and federal court systems. Finding that the plaintiffs have not established an exception to claim preclusion could have the effect of preventing other plaintiffs from ever bringing a federal takings claim in a federal district court. No New Jersey court has faced an application of claim preclusion in a situation even remotely similar. Moreover, it would be improper for this court to fashion a "New Jersey" rule creating an exception in this case; such a rule would in effect be a federal common-law exception and would be inappropriate except in the circumstances discussed in the following section.
3. Federal Law May Require An Exception
As a result of the Supreme Court's recent pronouncements on the full faith and credit statute, 28 U.S.C. § 1738 (1982), "to avoid the application of state preclusion law, a federal court must find a violation of the due process clause or clear evidence of an intent by Congress expressly or impliedly to repeal [that] statute." Burbank, Interjurisdictional Preclusion, Full Faith and Credit and Federal Common Law: A General Approach, 71 CornellL. Rev. 733, 797-98 (1986). Common sense indicates that a plaintiff who must file a state court action as a prerequisite to a federal constitutional action should, after the state court decision ripens his constitutional claim, be able to choose between a state or federal forum. However, to reach this result a court would have to find either that due process requires it or that the federal question jurisdiction statute, 28 U.S.C. § 1331 (1982), the civil rights statute, 42 U.S.C. § 1983 (1982), or some other statute impliedly repeals the full faith and credit statute as it applies in this situation.
The Supreme Court has made it clear that section 1983 does not operate to repeal the full faith and credit statute to allow a plaintiff to get a federal district court determination of her federal claims if she initially chooses a state forum. Migra v. Warren City School Dist. Bd. of Educ., 465 U.S. 75, 83, 79 L. Ed. 2d 56, 104 S. Ct. 892 (1984). Nonetheless, that section could arguably limit section 1738's operation to the extent that it prevents civil rights plaintiffs from choosing between state and federal forums. Similarly, the federal question jurisdiction statute arguably limits section 1738's operation where not so limiting it would foreclose a litigant from a choosing a federal forum. In addition, the due process clause arguably prevents state law from interfering with a plaintiff's choice between a state or federal forum where either court would have jurisdiction.
In an analogous situation, the Supreme Court has explained that "'the right of a party plaintiff to choose a Federal court where there is a choice cannot be properly denied.'" England v. Louisiana State Bd. of Medical Examiners, 375 U.S. 411, 11 L. Ed. 2d 440, 84 S. Ct. 461 (1964) (quoting Willcox v. Consolidated Gas Co., 212 U.S. 19, 40, 53 L. Ed. 382, 29 S. Ct. 192 (1909)). In England plaintiffs filed a lawsuit in federal court alleging state and federal causes of action. The district court abstained, stayed the action, and directed the plaintiffs to pursue their state-law claims in state court. The plaintiffs raised all their claims, both state and federal, in the state court system. The Court held that claim preclusion could not apply where a plaintiff in such a situation specifically reserves his federal claims for decision on return to federal court.
Because England arose in the abstention context it remains good law despite the Supreme Court's recent narrow reading of section 1738. See Migra, 465 U.S. at 85 n.7; see also Kovats v. Rutgers, 749 F.2d 1041, 1046-47 (3d Cir. 1984). Where a plaintiff first invokes a federal court's jurisdiction and then brings his state-law questions to state court while specifically reserving his federal questions for federal adjudication, the state court never has the entire controversy in front of it. Consequently, section 1738 is not fully implicated and the federal court can ignore a state rule requiring a party to bring all of its claims relating to a single controversy. Although a plaintiff in state court for the sole purpose of ripening its federal constitutional claim should be able to escape that state's claim preclusion rules under the logic of England, present Supreme Court caselaw makes such a result difficult to reach.
Had the plaintiffs limited their Cape May County action to the question of whether that court should order the government defendants to conduct condemnation proceedings, the question of whether they had to raise their federal claims there would be squarely before the court. However, as discussed in the following section, even if the court were to find that claim preclusion should not apply where a plaintiff brings a mandamus action, plaintiffs' federal lawsuit is still precluded by direct estoppel because their federal claims were actually litigated and determined. The proper way for the plaintiffs to challenge application of New Jersey claim p reclusion rules to their situation would have been to have sought mandamus from the Superior Court while specifically withholding or reserving any questions of federal law for a later federal court action. Because the court need not determine whether it can fashion an exception to claim preclusion in this case, it will leave the question of whether the due process clause, section 1331, or section 1983 limits the full faith and credit statute for another day or another court.
C. Issue Preclusion
New Jersey law recognizes that "where a judgment of a court of competent jurisdiction directly determines a right, question or fact put in issue, such judgment estops the parties or their privies from thereafter relitigating the same issue in a subsequent proceeding between them, regardless of its nature or form." Washington Township v. Gould, 39 N.J. 527, 533, 189 A.2d 697 (1963); accord Plainfield v. Public Serv. Elec. & Gas Co., 82 N.J. 245, 257-58, 412 A.2d 759 (1980). Where issue preclusion operates to prevent relitigation of an issue that a prior court previously passed upon even though that court's judgment does not precluded a second action on the same claim, the doctrine is called direct estoppel. 18 C. Wright, supra, § 4418. To apply issue preclusion a court must find that (1) the issue was actually litigated and determined by the prior court; (2) the prior court's judgment was valid and final; (3) the determination was essential to the prior court's judgment; and (4) the parties in the subsequent action are the same as those in the prior one. Plainfield, 82 N.J. at 258 (citing Restatement (Second) of Judgments § 68 (Tent. Draft No. 4, 1977)).
All of the elements necessary for this court to apply issue preclusion to the federal questions litigated in the Cape May County action exist in this case. The Superior Court heard argument on and issued a written opinion regarding the three federal questions currently pending in this court. As discussed above, the Superior Court's judgment was valid and final. There is no dispute that the questions Judge Callinan decided were necessary to the Superior Court's judgment. Finally, as discussed above, the parties in the two actions are identical.
There is no state-law exception to issue preclusion applicable in this instance. In addition, although a federally created exception might properly apply where claim preclusion prevents a party from coming to federal court because she should have litigated her federal claim in the state mandamus proceeding but did not, such an exception would not be appropriate where a party actually litigated the federal issues in state court. The reason for such an exception is that the plaintiff would lose her chance to choose between a state or federal forum. Where the plaintiff has already litigated her federal claims in state court, she has made her choice.
Plaintiffs might have argued that New Jersey's entire-controversy doctrine compelled them to bring all their claims in the Cape May action and therefore the court should create an exception to issue preclusion as well, at least in their case. See England v. Louisiana State Bd. of Medical Examiners, 375 U.S. 411, 422-23, 11 L. Ed. 2d 440, 84 S. Ct. 461 (1964) (prospectively requiring reservation of federal question for adjudication on return to federal court but in that case allowing plaintiffs to relitigate federal claims). However, such an argument would not be compelling. First, plaintiffs might have recognized that the principles of England could apply by analogy to their situation, and they could have attempted an England-like reservation of their federal questions. Second, if plaintiffs were aware that New Jersey law provides no appropriate exception to claim and issue preclusion, they might have sought a declaratory judgment from this court before proceeding with their state court action. Finally, the equities in this case do not justify creating a special exception for these plaintiffs.
Plaintiffs' Cape May County action was not simply an attempt to secure procedural due process. Rather, plaintiffs brought and fully litigated all their state and constitutional claims. They made no attempt to preserve their federal claims for a federal court; instead, they argued them before Judge Callinan and lost. The court therefore must apply direct estoppel and reject the plaintiff's claims because the issues that they raise have already been litigated and determined. See Doerinkel v. Hillsborough Township, 835 F.2d 1052 (3d Cir. 1987) (applying claim and issue preclusion to bar federal court constitutional takings action after plaintiff was unsuccessful in state court action); Tancrel v. Mayor & Council, 583 F. Supp. 1548 (D.N.J. 1984) (same); see also Griffin v. State of Rhode Island, 760 F.2d 359 (1st Cir.) (applying "res judicata" to bar federal takings action following state condemnation proceeding and subsequent state court actions), cert. denied, 474 U.S. 845, 88 L. Ed. 2d 111, 106 S. Ct. 134 (1985).
The court must dismiss plaintiffs' complaint on the ground that, whether or not there is an applicable federal-law exception to issue preclusion, they made no attempt to preserve their federal issues for this court to decide. The plaintiffs have already litigated to judgment their federal-law claims in the Cape May County action and therefore they may not relitigate in this court the issues that those claims raise.
An appropriate order will be entered.
This matter having come before the court on defendant's motion to dismiss on res judicata grounds or, in the alternative, for summary judgment on the merits; and
The court having considered the submissions of the parties; and
For the reasons set forth in the court's opinion filed on this date;
IT IS on this 3rd day of October, 1988, hereby
ORDERED that defendant's motion to dismiss on res judicata grounds is GRANTED and the complaint is DISMISSED.
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