Hatch v. Boulder Town Council
| Decision Date | 19 December 2006 |
| Docket Number | No. 04-4124.,04-4124. |
| Citation | 471 F.3d 1142 |
| Parties | Julian HATCH, doing business as Freedom From Religion; Lynne Mitchell, doing business as Match, Plaintiffs-Appellants, v. BOULDER TOWN COUNCIL; Boulder Planning Commission, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Budge W. Call, Salt Lake City, Utah, for Plaintiffs-Appellants.
Craig T. Wentz of Christensen & Jensen, P.C., Salt Lake City, Utah, for Defendants-Appellees.
Before TYMKOVICH, PORFILIO, and BALDOCK, Circuit Judges.
Plaintiffs Julian Dean Hatch and Lynn Mitchell are residents of and property owners in the town of Boulder, Utah. They filed this civil rights complaint against defendants in January 2001, alleging a plethora of constitutional violations concerning zoning, permitting and road maintenance issues. The district court concluded that most of plaintiffs' claims were barred by res judicata (claim preclusion) based on prior suits filed in the federal district and Utah state courts. The court further concluded that plaintiffs' remaining claims should be dismissed for various other reasons, including lack of ripeness, conclusory allegations, and failure to state a claim under 42 U.S.C. § 1983. Plaintiffs now appeal from the court's order denying their motion for summary judgment and granting the defendants' cross motion for summary judgment.1
Faced with a thirty-eight page, verified first amended complaint containing sixty-nine separate paragraphs of factual allegations, the district court attempted to unravel the knot by essentially dividing plaintiffs' lengthy factual allegations into two pieces. First, it determined that the doctrine of claim preclusion barred all of plaintiffs' claims that were based on facts that arose prior to final judgment in the former actions. Second, it determined that the remaining claims, which arose after final judgment in the prior actions, could be resolved on the merits. Unfortunately, this method of applying claim preclusion created certain problems we cannot resolve on appeal. We must therefore reverse the disposition of some of plaintiffs' claims, and remand them for further consideration.2
Our four-part analysis begins by describing the issues litigated in the two prior actions. We then set out the applicable Utah and federal law of claim preclusion. Next, we apply that law to the claims asserted in plaintiffs' current complaint. Finally, we review the district court's analysis of the claims it found were not precluded by the prior actions.
In 1996, Hatch filed a 42 U.S.C. § 1983 civil rights suit in Utah federal district court against Boulder, its mayor, town clerk, and members of its town council. His complaint charged, among other things, that in June 1995, Boulder enacted a business license ordinance without complying with Utah's Open and Public Meetings Act, and that his business, "Freedom from Religion" (FFR), which had been engaged in selling beer prior to the enactment of this ordinance, should have been allowed to continue selling food and beer.
Hatch further alleged that the Town Council passed a second ordinance restricting the sale of alcoholic beverages that limited to two the number of new class A liquor licenses that could be issued. Hatch contended that the Town Council failed to comply with the Open and Public Meetings Act when it passed this ordinance. He also contended that on July 31, 1995, the Town Clerk approved beer license applications on behalf of other businesses, but not FFR.
On August 10, 1995, the Town Council met and imposed a requirement on FFR that it obtain approval from the Department of Agriculture and the Health Department before selling food from its premises. Hatch contended that this requirement was essentially a pretext to run him out of business. Eventually, on September 22, 1995, the Council issued FFR a business license, authorizing it to conduct "Retail sales of food and camping supplies." Aplee. Supp.App., Vol. I at S-199. Hatch contended that the unjustified delay in issuing him a business license, and the limited nature of the license ultimately issued, deprived FFR of "its constitutionally protected property right to maintain its business, which includes the right to sell beer." Id. at S-200.
Apparently, Hatch later added a claim that Boulder violated his due process rights by interfering with his business sign.3 Hatch's claims proceeded to jury trial.4 On April 14, 1999, a jury entered a special verdict, finding that the Town had failed to give Hatch due process in connection with his retail business, his camping business, and his business of selling beer. It rejected his claim, however, that the Town had violated due process in connection with the maintenance of his sign. The jury awarded Hatch a total of $86,000 in actual damages for these alleged violations. It does not appear that either party appealed from this verdict.
Hatch and Mitchell were petitioners in a "Petition for Review of Decision on Conditional Use Permits and Request for Injunctive Relief," filed in Utah state court against Boulder and its Town Planning Commission in 1999. They requested judicial review of the conditional use permits the Boulder Town Planning Commission granted on February 10, 1999, to their neighbors and adjacent land owners, Sam Stout and Rhea Thompson, for their construction business. They complained that the permits had been granted in an arbitrary, capricious, and illegal manner, including the Commission's failure to adopt an official map setting forth commercial districts and a plan for future development.
The state district court determined that Boulder's zoning ordinance was not arbitrary, capricious, or illegal, that the commercial designations in the ordinance were legal and not ambiguous, and that the Town had properly awarded the challenged conditional use permits. Hatch and Mitchell appealed to the Utah Court of Appeals, which reversed the district court on the validity of the zoning ordinance, finding that the Town had failed to present any evidence that a proper zoning map had accompanied the text of the zoning ordinance when it was presented to the public and to the Town Council for approval. Hatch v. Boulder Town Council, 21 P.3d 245, 248 (Utah Ct.App.2001).5 In light of this holding, it found plaintiffs' remaining claims moot. Id. at 249.
Before discussing the specific elements of Utah and federal law of claim preclusion, we narrow our focus to the key issue in this case. Although plaintiffs attack the district court's claim preclusion analysis on a number of points, we perceive the key issue to be whether plaintiffs' current complaint represents an impermissible attempt to split their claims. Stone v. Dep't of Aviation, 453 F.3d 1271, 1278 (10th Cir. 2006) ().
The Restatement (Second) of Judgments § 24 (1982) enunciates the general rule concerning "claim splitting":
(1) When a valid and final judgment rendered in an action extinguishes the plaintiff's claim pursuant to the rules of merger or bar . . . the claim extinguished includes all rights of the plaintiff to remedies against the defendant with respect to all or any part of the transaction, or series of connected transactions, out of which the action arose.
(2) What factual grouping constitutes a "transaction", and what groupings constitute a "series", are to be determined pragmatically, giving weight to such considerations as whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a unit conforms to the parties' expectations or business understanding or usage.
(emphasis added).
The question for us, then, is whether the facts that form the basis of plaintiffs' current claims (the 2002 amended complaint) are part of the same "transaction" they asserted in the previous actions. This question is determined by the manner in which the facts constituting the transaction are grouped. As will be demonstrated, the district court grouped all facts arising prior to the final judgments in the previous actions as a single transaction.
In the case of a state court judgment, the state law where the judgment was entered (here, Utah) applies. See 28 U.S.C. § 1738 (); Fox v. Maulding, 112 F.3d 453, 456 (10th Cir.1997) () (quotation omitted). In the case of the § 1983 suit, federal law of preclusion applies. Yapp v. Excel Corp., 186 F.3d 1222, 1226 (10th Cir.1999).
Under Utah law:
In order for claim preclusion to bar a subsequent cause of action, a plaintiff must satisfy three requirements:
First, both cases must involve the same parties or their privies. Second, the claim that is alleged to be barred must have been presented in the first suit or must be one that could and should have been raised in the first action. Third, the first suit must have resulted in a final judgment on the merits.... All three elements must be present for claim preclusion to apply.
Macris & Assocs., Inc. v. Neways, Inc., 16 P.3d 1214, 1219 (Utah 2000).
It is uncontested that both plaintiffs were parties to the 1999 Utah action. This element of claim preclusion analysis is therefore satisfied.
Plaintiffs advance three reasons why their claims in this action either could not or should not have been...
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