Federated Department Stores, Inc. v. Moitie
452 U.S. 394 (1981)

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U.S. Supreme Court

Federated Department Stores, Inc. v. Moitie, 452 U.S. 394 (1981)

Federated Department Stores, Inc. v. Moitie

No. 79-1517

Argued March 30, 1981

Decided June 15, 1981

452 U.S. 394


Seven private antitrust actions (including separate actions by each of the respondents) were brought by plaintiffs seeking to represent classes of retail purchasers against petitioners, owners of various department stores, for alleged price fixing. The actions were consolidated in Federal District Court, which dismissed them for failure to allege an "injury" to the plaintiffs' "business or property" within the meaning of the Clayton Act. Plaintiffs in five of the actions appealed, but respondents chose instead to refile their two actions in state court, making allegations similar to those made in the prior complaints. Petitioners removed these new actions to the District Court, which dismissed them under the doctrine of res judicata, and respondents appealed. Because of this Court's intervening decision in Reiter v. Sonotone Corp., 442 U. S. 330, the Court of Appeals thereafter reversed and remanded the five cases which had been initially decided with respondents' first actions, and later reversed the District Court's dismissal of respondents' subsequent actions. The Court of Appeals held that, because respondents' position was "closely interwoven" with that of the successfully appealing parties, the doctrine of res judicata must give way to "public policy" and "simple justice."

Held: Res judicata bars relitigation of the unappealed adverse judgments against respondents as to their federal law claims. The res judicata consequences of a final, unappealed judgment on the merits are not altered by the fact that the judgment may have been wrong or rested on a legal principle subsequently overruled in another case. There is no general equitable doctrine which countenances an exception to the finality of a party's failure to appeal merely because his rights are "closely interwoven" with those of another party who successfully appeals. Cf. Reed v. Allen, 286 U. S. 191. Nor is there any principle of law or equity which sanctions rejection of the salutary principle of res judicata on the basis of "simple justice" or "public policy."

"[The] doctrine of res judicata is not a mere matter of practice or procedure. . . . It is a rule of fundamental and substantial justice, 'of public policy and of private peace,' which should be cordially regarded

Page 452 U. S. 395

and enforced by the courts. . . ."

Hart Steel Co. v. Railroad Supply Co., 244 U. S. 294, 244 U. S. 299. Pp. 452 U. S. 398-402.

611 F.2d 1267, reversed and remanded.

REHNQUIST, J., delivered the opinion of the Court, in which BURGER, C.J., and STEWART, WHITE, POWELL, and STEVENS, JJ., joined. BLACKMUN, J., filed an opinion concurring in the judgment, in which MARSHALL, J., joined, post, p. 452 U. S. 402. BRENNAN, J., filed a dissenting opinion, post, p. 452 U. S. 404.

Primary Holding
There is no equitable exception or allowance made for exceptional circumstances when a party fails to appeal a final judgment within the proper time, even if its position in closely related to those of appealing parties.
The federal government sued Federated Department Stores, Inc. for violating Section 1 of the Sherman Antitrust Act. The complaint alleged that the department stores had fixed the retail price of women's clothing in their northern California locations. Private individuals brought related class actions on behalf of the stores' customers, seeking treble damages. Moitie I was a state-court action, and Brown I was a federal-court action, each of which closely paralleled the claims brought by the federal government, even though Moitie I was based exclusively on state law and Section 4 of the Clayton Act. The Moitie case, like the others, was dismissed because the plaintiff had not alleged an injury to business or property, as required by that law. While most of the class action plaintiffs appealed to the Ninth Circuit, the lawyer representing Moitie and Brown brought new actions in state court instead of using the appeals process.

Moitie II and Brown II raised claims similar to those in the earlier cases, even though they asserted that they were brought exclusively under state law. They were removed to federal court, at which point they were dismissed by the trial court judge because they arose from the same parties, the same conduct, and the same time period as Moitie I and Brown I. This meant that res judicata applied, in the view of the trial court, but the court of appeals ruled that Moitie and Brown could proceed with their cases because their fate was so closely connected to those of the appealing parties. It held that they could benefit from a reversal of the judgments in the other actions on appeal, even though they had not appealed on their own account.



  • William Hubbs Rehnquist (Author)
  • Warren Earl Burger
  • Potter Stewart
  • Byron Raymond White
  • Lewis Franklin Powell, Jr.
  • John Paul Stevens

Direct appellate review rather than a new cause of action is the appropriate way to challenge a judgment that is based on a faulty understanding of the law. The judgment may be voidable, but a collateral challenge through the appeals of other parties is not the way to correct it. The equitable exception applied by the appeals court does not have any basis in pre-existing doctrine, and the interests of finality urge against creating such an exception. Once a dispute has been resolved, all parties to it must be bound and prevented from restarting litigation. Res judicata thus applies to block the new cases.


  • Harry Andrew Blackmun (Author)
  • Thurgood Marshall

While it is possible that equities and public policy concerns will curtail the application of res judicata in some cases, this is not a situation in which an exception to the doctrine would arise. The parties are not as interdependent on each other as the claim suggests.


  • William Joseph Brennan, Jr. (Author)

Principles of federal court jurisdiction permit a claim to be relitigated under state law after a federal antitrust case on the same subject matter in is dismissed on the merits. This decision actually diverges from long-standing principles by abandoning that rule. Parties may see this decision as an incentive to bring federal and state causes of action separately so that they can obtain a separate review for each.

Case Commentary

This outcome unfolded in part because the Court was reluctant to give the individuals a windfall because of a reversal that was obtained by independent parties with no interest in their case. It also appeared that they had made the decision in an effort to avoid the appellate process.

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