On Appeal from the United States District Court for the District of New Jersey; D.C. Civil No. 88-02427.
Greenberg and Cowen, Circuit Judges, Buckwalter, District Judge.*fn*
This appeal concerns the propriety of the district court's dismissal of a complaint filed by Bernardsville Quarry, Inc. ("BQI"). BQI sued the Borough of Bernardsville (the "Borough") in federal court on May 31, 1988. In response to the Borough's motion, the district court dismissed BQI's federal action on August 13, 1990, because BQI had sued the Borough in a separate action based on the same underlying facts in the New Jersey Superior Court and lost. The district court concluded that under Migra v. Warren City School Dist. Bd. of Educ., 465 U.S. 75, 79 L. Ed. 2d 56, 104 S. Ct. 892 (1984), it was required to accord the same preclusive effect to the state adjudication as would the courts of New Jersey, in accordance with the federal full faith and credit statute, 28 U.S.C. § 1738.
The district court had jurisdiction under 28 U.S.C. §§ 1331 and 1343. Our jurisdiction is predicated on 28 U.S.C. § 1291. Because we agree that the district court was required to accord the same preclusive effect to the state adjudication as would the courts of New Jersey, and that under New Jersey law, BQI would be precluded from relitigating its claims against the Borough, we will affirm the dismissal of BQI's complaint.
In its federal complaint, BQI alleged that the Borough was depriving it of rights protected by the Fifth and Fourteenth Amendments in violation of the Constitution by refusing to grant BQI a Certificate of Occupancy and Use for a parcel of property which BQI hoped to exploit as a quarry to the greatest extent commercially practicable. BQI sought a declaratory judgment that a local ordinance which limited the use of BQI's quarry operations to a certain depth was unconstitutional. In addition, BQI sought damages under 42 U.S.C. § 1983.
BQI's federal complaint was the second prong of a two-prong attack against the Borough and the local ordinance which limited quarry operations to a specified depth. A few days before filing the federal suit, BQI filed a similar suit in the Superior Court of New Jersey. In state court, BQI sought relief similar to the relief requested in the federal suit based not only on federal and constitutional rights, but also on the added grounds that the restriction in quarry operations violated state law and a number of rights guaranteed by the state constitution.
In January 1989, the Borough filed a motion in the district court seeking an abstention, or in the alternative, a stay pending resolution of the state action. The district court denied the motion and ordered the parties to proceed with discovery. When the state action went to trial on April 18, 1989, however, the district court stayed the federal action pending resolution of the state case. Final judgment in the state action was entered on January 8, 1990. The Superior Court found that the ordinance limiting the depth of quarry operations was a valid exercise of police power and that the Borough was not liable under section 1983 for damages.
After the Superior Court entered its January 8, 1990 order, the Borough moved to dismiss the federal complaint. The district court granted the motion on August 13, 1990. In an Opinion and Order of Dismissal, the district court concluded that under Migra, 465 U.S. 75, 79 L. Ed. 2d 56, 10 S. Ct. 892, it was required to accord the same preclusive effect to the state adjudication as would the courts of New Jersey, in accordance with the federal full faith and credit statute, 28 U.S.C. § 1738, and that under New Jersey law, BQI would be precluded from relitigating its claims against the Borough. We agree.
Initially, we must determine what legal precepts control the disposition of this case. BQI, on the one hand, contends that we are dealing in this case with an England reservation and that the district court erred by applying the principles of Migra. See England v. Louisiana State Board of Medical Examiners, 375 U.S. 411, 11 L. Ed. 2d 440, 84 S. Ct. 461 (1964) (any party to a litigation may reserve his right under abstention doctrine to return to federal court to litigate the federal issues where the federal court has abstained pending resolution of a parallel state court action). The Borough, on the other hand, argues that Migra controls.
BQI's argument that this case involves an England reservation is flawed for two reasons. First, an England reservation only applies where the district court abstains. Here, the district court did not abstain. In fact, the district court expressly refused to abstain or stay its proceedings while the state proceedings moved forward on a parallel track. Second, a party is generally required to inform the state court that it intends to return to federal court for litigation of its federal claims, in the event that the state court rules against it. England, 375 U.S. at 421-22. Here, BQI failed to inform the state court that it wished to pursue its federal claims in federal court.*fn1 These two factors in addition to the record as a whole lead us inextricably to the conclusion that BQI unreservedly litigated its federal claims in state court and thereby elected to forego its right to return to federal court, so that even if ...