Headwaters Inc. v. U.S. Forest Service

• Decision Date: 23 February 2005
• Docket Number: No. 01-35898.,01-35898.
• Citation: 399 F.3d 1047
• Parties: HEADWATERS INC., an Oregon nonprofit corporation; Forest Conservation Council, Plaintiffs-Appellants, v. U.S. FOREST SERVICE, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

399 F.3d 1047

HEADWATERS INC., an Oregon nonprofit corporation; Forest Conservation Council, Plaintiffs-Appellants, v. U.S. FOREST SERVICE, Defendant-Appellee.

No. 01-35898.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted July 10, 2003.

Filed February 23, 2005.

COPYRIGHT MATERIAL OMITTED

Lori J. Cooper, Williams, OR, for the appellants.

Todd S. Aagaard, Attorney, United States Department of Justice, Washington, DC, for the appellee.

Appeal from the United States District Court for the District of Oregon; Michael R. Hogan, Chief District Judge, Presiding. D.C. No. CV-01-03056-HO.

Before ALFRED T. GOODWIN, PROCTER HUG, JR., and MARSHA S. BERZON, Circuit Judges.

Opinion by Judge BERZON; Concurrence by Judge GOODWIN.

ORDER

The Opinion filed on September 8, 2004, and published at 382 F.3d 1025 (9th Cir.2004), is withdrawn and superceded by the opinion filed concurrently herewith.

With the filing of the new opinion, appellants' pending petition for rehearing en banc is DENIED as moot, without prejudice to refiling a subsequent petition for rehearing and/or rehearing en banc. See 9th Cir. G.O. 5.3(a).

OPINION

BERZON, Circuit Judge:

The district court held, sua sponte, that two environmental organizations who have never litigated the validity of several timber sales are precluded from doing so because counsel for other organizations, a year earlier, signed a dismissal with prejudice of a similar suit. We have in this nation a "`deep-rooted historic tradition that everyone should have his own day in court,'" and presume, consequently, that "`[a] judgment or decree among parties to a lawsuit resolves issues as among them, but it does not conclude the rights of strangers to those proceedings.'" Richards v. Jefferson County, 517 U.S. 793, 798, 116 S.Ct. 1761, 135 L.Ed.2d 76 (1996) (quoting Martin v. Wilks, 490 U.S. 755, 762, 109 S.Ct. 2180, 104 L.Ed.2d 835 (1989)). While there are narrow exceptions to this principle, usually denominated by the term "privity," the district court here applied the privity doctrine without establishing, among other prerequisites, that the present plaintiffs were adequately represented in the prior suit, and without giving plaintiffs an opportunity to demonstrate that they were not. We reverse, and remand for consideration of the preclusion question after full adversary airing and a development of an appropriate record.

I. Background

On May 13, 1999, six environmental groups and two individuals ¹

("American Lands plaintiffs") filed suit against the Forest Service challenging various timber sales, including the Beaver-Newt and Silver Fork timber sales. American Lands Alliance v. Williams, No. 99-697-AA (D.Or.1999). The plaintiffs filed an amended complaint on October 26, 1999, which advanced nine claims for relief under the National Forest Management Act (NFMA), 16 U.S.C. §§ 1600-1687, the National Environmental Policy Act (NEPA), 42 U.S.C. §§ 4321-4370, and the Administrative Procedures Act (APA), 5 U.S.C. §§ 701-706, challenging nineteen United States Forest Service logging programs in the Willamette, Mt. Hood, Rogue River, and Siskiyou National Forests. The complaint sought declaratory and injunctive relief requiring the Forest Service to complete an environmental impact statement under NEPA and otherwise to comply with NFMA, NEPA, and APA procedural requirements before implementing the logging plans. Both the Beaver-Newt and Silver Fork areas are located within the Rogue River National Forest in southwestern Oregon.

On December 13, 1999, before any developments in the case apart from the filing of a scheduling order and an amended complaint — before, that is, any litigation on the merits — and, as far as the record shows, without receiving any concessions from the defendants, the American Lands plaintiffs stipulated to a dismissal of their complaint with prejudice. On January 19, 2000, District Judge Ann Aiken issued the dismissal. The American Lands complaint was not denominated a class action, and there is no indication that Judge Aiken reviewed the fairness of the stipulation as it affected third parties.

More than one year later, on February 21, 2001, one of the American Lands plaintiffs, the Klamath-Siskiyou Wildlands Center ("Wildlands Center"), represented by a new attorney, filed a new complaint regarding the Beaver-Newt and Silver Fork timber sales, seeking declaratory and injunctive relief under NFMA and NEPA. Klamath-Siskiyou Wildlands Center v. United States Forest Serv., No. 01-3018-HO (D.Or.2001). The Forest Service moved for judgment on the pleadings based upon res judicata, because of the Wildlands Center's participation in the American Lands suit. In response, on June 1, 2001, the Wildlands Center filed a motion for relief from the judgment, conceding that res judicata would bar the lawsuit but arguing that the court should grant relief from the American Lands judgment pursuant to Federal Rule of Civil Procedure 60(b). The Wildlands Center's motion alleged that the attorney in the American Lands suit did not have authority to enter into the settlement agreement. On July 2, 2001, Judge Michael Hogan granted the Forest Service's motion for judgment on the pleadings in Klamath-Siskiyou and dismissed the action without prejudice. The Wildlands Center did not appeal that judgment.

The present record is silent as to when the plaintiffs here ("Headwaters") ² learned of the American Lands and Klamath-Siskiyou litigation. On July 5, 2001, three days after Judge Hogan dismissed the Wildlands Center's lawsuit, Headwaters instigated suit in the same district court in which the American Lands and Klamath-Siskiyou suits had been filed, using the same lawyer and a similar complaint as in Klamath-Siskiyou (but not as in American Lands). The current complaint challenges the Beaver-Newt and Silver Fork timber sales, the same two sales challenged by the Wildlands Center in Klamath-Siskiyou; alleges, differently than did the American Lands complaint, the plaintiffs' interest in and use of the forests; and relates its claims to particular endangered species, which the American Lands complaint did not do. On July 26, 2001, Judge Hogan, to whom the present case was also assigned, dismissed the Headwaters complaint sua sponte under the res judicata doctrine. Headwaters, Inc. v. United States Forest Serv., 159 F.Supp.2d 1253, 1258 (D.Or.2001). He neither held a hearing nor received any briefing on either the merits of the case or the applicability of res judicata.³ Id. Headwaters appeals.

A district court's judgment based upon res judicata is a mixed question of law and fact in which legal issues predominate. Accordingly, we review the district court's order de novo. See Gregory v. Widnall, 153 F.3d 1071, 1074 (9th Cir.1998); United States v. Geophysical Corp., 732 F.2d 693, 697 (9th Cir.1984).

II. Discussion

"The doctrine of res judicata provides that a final judgment on the merits bars further claims by parties or their privies based on the same cause of action," and "is central to the purpose for which civil courts have been established, the conclusive resolution of disputes within their jurisdiction." In re Schimmels, 127 F.3d 875, 881 (9th Cir.1997) (internal quotation marks omitted). The elements necessary to establish res judicata are: "(1) an identity of claims, (2) a final judgment on the merits, and (3) privity between parties." Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg'l Planning Agency, 322 F.3d 1064, 1077 (9th Cir.2003) (quotation marks and citation omitted); W. Radio Servs. Co. v. Glickman, 123 F.3d 1189, 1192 (9th Cir.1997). We shall discuss each element in turn, but, as we shall explain, the central issue is whether, as required to find privity, Headwaters was adequately represented in the earlier litigation.

A. Identity of Claims

In determining whether a present dispute concerns the same claims as did prior litigation, the Ninth Circuit considers:

(1) [W]hether rights or interests established in the prior judgment would be destroyed or impaired by prosecution of the second action; (2) whether substantially the same evidence is presented in the two actions; (3) whether the two suits involve infringement of the same right; and (4) whether the two suits arise out of the same transactional nucleus of facts. The last of these criteria is the most important.

Costantini v. Trans World Airlines, 681 F.2d 1199, 1201-02 (9th Cir.1982) (internal citation omitted).

Headwaters' complaint alleges an infringement of the same right and arises out of the same nucleus of facts present in both the American Lands and Klamath-Siskiyou litigation. The complaint in this case challenges the timber sales on the grounds that the Forest Service violated NEPA, NFMA, and the APA. All three of these claims were present in the prior suits. Further, the Beaver-Newt and Silver Fork timber sales are part of the underlying "nucleus of facts" that forms the basis for all three of these suits. Accordingly, an identity of claims exists.

B. Final Judgment on the Merits

The district court in American Lands entered a final judgment when it dismissed the action with prejudice pursuant to the stipulated dismissal. We have held that a stipulated dismissal of an action with prejudice in a federal district court generally constitutes a final judgment on the merits and precludes a party from reasserting the same claims in a subsequent action in the same court. See Concha v. London, 62 F.3d 1493, 1507-08 (9th Cir.1995).⁴

C. Privity

1. General principles

"`Privity' ... is a legal conclusion `designating a person so identified in interest with a party to former litigation that he represents precisely the same right in respect to the subject matter involved.'" Schimmels, 127 F.3d at 881 (quoting Southwest Airlines Co. v. Tex. Int'l Airlines, Inc., 546 F.2d 84, 94 (5th Cir.1977)). Privity, traditionally, arose from a limited number of legal relationships in which two parties...