Opinion Recap: Taylor v. Sturgell
Below, Stanford student Menaka Kalaskar recaps Thursday’s decision in Taylor v. Sturgell.
On Thursday, June 12, the Supreme Court unanimously disapproved of the doctrine of "virtual representation" in its opinion in Taylor v. Sturgell, and more clearly defined its previous decisions on non-party claim preclusion. It held that the current record did not bind Taylor, a non-party to a previous case filed by "close associate" Greg Herrick, to the judgment in Herrick's Freedom of Information Act (FOIA) case. The Court vacated and remanded the case to the lower courts for them to determine whether Taylor is litigating as Herrick's agent, and thus should be barred from moving forward with his case.
Taylor v. Sturgell centered on a pair of FOIA requests seeking identical information. Greg Herrick, the owner of a vintage F-45 airplane, made a FOIA request to retrieve F-45 specifications from the Federal Aviation Administration (FAA). Herrick planned to use the detailed airplane plans to restore his aircraft. The FAA denied his request, however, and prevailed in the subsequent litigation on the ground that the requested documents fell under a statutory trade secret exemption. Less than a month after the final decision in Herrick's case, Taylor "“ a friend of Herrick's and a member of the same vintage aircraft association "“ filed an identical FOIA request with the FAA. . The FAA did not respond to Taylor's request, prompting him to file a complaint based on the FAA's constructive denial of his FOIA request. The U.S. District Court for the District of Columbia held that Taylor's suit was barred by "virtual representation," whereby a non-party may be bound to the judgment in a previous case if certain factors are met. The D.C. Circuit agreed on appeal, but fashioned a new five-factor virtual representation test that broke from similar tests in sister circuits.
Writing for the Court, Justice Ginsburg reviewed the history of Herrick's and Taylor's suits before jumping into Court precedent on the issue of non-party claim preclusion. While acknowledging that the Court had never addressed virtual representation doctrine, she emphasized that the Court had developed "well-established precedent" regarding non-party preclusion. Moreover, she noted, "[t]he application of claim and issue preclusion to nonparties . . . runs up against the "deep-rooted historic tradition that everyone should have his own day in court.'" The general rule against non-party preclusion, she continued, does have some exceptions, which she distilled down to six categories. First, "[a] person who agrees to be bound" by a judgment will be bound according to the terms of the agreement. Second, a variety of pre-existing "substantive legal relationship[s]" between a non-party and party, such as bailee and bailor, or assignee and assignor, can legitimately bind a non-party to a judgment. Third, a non-party may be precluded from bringing her own claim when she was "adequately represented by someone with the same interests" who served as a party to a previous suit. Justice Ginsburg identified class action suits and suits brought by trustees, guardians, and other fiduciaries, as proper examples of adequate representation. Fourth, a non-party who "assume[s] control" over a case may be bound by the judgment in that case. Fifth, a party may not relitigate an issue by using a proxy "“ a scenario that would include a non-party bringing suit as an agent for the previous party. Sixth, special statutory schemes may prohibit repetitive litigation by non-parties if the scheme is consistent with due process.
Virtual representation, argued Justice Ginsburg, represents a unique exception to the ban on non-party claim preclusion that reaches far beyond the six exceptions delineated in the Court's opinions. In Richards v. Jefferson County, the Supreme Court reversed an Alabama Supreme Court decision that barred a group of taxpayers from challenging a tax that had been upheld in a prior suit involving different taxpayers. The Court held that claim preclusion violated due process in that case because there was a lack of either special procedures to ensure protection of nonparty interests or an understanding "that the first suit was brought in a representative capacity." Justice Ginsburg emphasized that one of those two factors must be present for non-party representation to be adequate. The D.C. Circuit's definition strayed impermissibly from this core Richards holding by explicitly disregarding the two factors and focusing instead on Herrick's strong incentive to litigate and Taylor's use of Herrick's lawyer as evidence of adequate representation.
Justice Ginsburg acknowledged that Fairchild Corporation and the FAA did not argue that virtual representation doctrine fit within any of the six exceptions. Instead, the defendants had urged the Court to "abandon the attempt to delineate discrete grounds" by allowing courts to spearhead their own fact-driven and equitable inquiries into claim preclusion. Justice Ginsburg rejected this "diffuse balancing" test for three reasons. First, prior Court decisions "emphasize the fundamental nature of the general rule that a litigant is not bound by a judgment to which she was not a party," and existing caselaw recognized only a handful of exceptions. The "amorphous balancing test" advocated by defendants would not serve this constrained preclusion approach well. Second, the meaning of adequate representation must include 1) an aligning of interests between the party and non-party, and 2) either an understanding that the party is acting as a representative for the non-party or, alternatively, court protection of the non-party's interests. The Court also noted, without deciding, that adequate representation may require notice of the suit to the non-party before binding him to the judgment. Third, an equitable case-by-case inquiry would likely create more problems than it would solve, as it could lead to protracted discovery battles and would not provide clear guidance to judges faced with difficult preclusion questions. Thus, the original purpose of preclusion doctrine as a relief from burdensome relitigation would be frustrated.
Justice Ginsburg moved next to the FAA's claim that non-party preclusion should be treated more expansively under public-law litigation. She refuted the notion that FOIA litigation is properly deemed public law, however, by noting that FOIA documents are made available only to the individual requester. FOIA is replete with references to individual plaintiff relief, rather than a "decree" directed towards public benefit. Congress did not see fit to limit the number of judicial proceedings under FOIA, the Court noted, and it would not be wise for the Court to do so by applying common law principles to the statute.
The Court dismissed the defendants' argument that limitless numbers of plaintiffs would be able to litigate vexatious FOIA claims if not restricted. Stare decisis allows courts to dismiss cases, and the "human tendency to not waste money" will ensure that repetitive cases would come to a halt. The Court noted that vexatious FOIA suits did not appear to be a problem in circuits that do not employ the virtual representation doctrine.
The Court concluded by emphasizing that non-party preclusion questions should be decided under the six categories outlined in the case. Applying each doctrine to Taylor's case, the Court found that only the fifth category could conceivably apply: a non-party may not relitigate a claim as the agent of a party bound by prior litigation. Thus, it remanded to the courts below to determine whether Taylor was Herrick's "undisclosed agen[t]." If the courts below find that Taylor is Herrick's agent, then nonparty claim preclusion will apply. The Court declined to define the required showing for nonparty agency, but admonished courts to be "cautious about finding preclusion." Principles of agency law suggest that nonparty preclusion is appropriate only where the agent's conduct is controlled by the party to the prior suit.
Last, the Court rejected Fairchild's burden-shifting scheme requiring Taylor to prove that he is not Herrick's agent. Claim preclusion is an affirmative defense, and as such, must be pleaded and proved by the defendant.