Civil pro wonks, get ready: we all know that under the Full Faith and Credit Clause, states are required to give the judgments of another state the same respect that those judgments would receive in the courts of the other state. That principle remains the same whether the judgment is issued by a state court, or a federal court exercising diversity jurisdiction. The Supremacy Clause also reinforces the notion that a state court must respect and enforce a federal court's judgment, and can't simply blow it off.
But what does a litigant do when she claims that a state court isn't giving full faith and credit to an earlier federal court judgment that she claims settled a dispute? Is her remedy limited to an appeal to a state appeals court and ultimately the U.S Supreme Court by way of certiorari review? Or can she bring an original jurisdiction action in a state trial court asserting that the earlier state court decision violated the Full Faith and Credit Clause, and was a judicial taking of her vested contract rights (as settled by the earlier federal court judgment)?
That's the issue presented by a recently-filed cert petition in which the beneficiaries of a royalty agreement assert that the Missouri state courts are not giving respect (i.e., preclusive effect -- res judicata to us old-timers) to an earlier federal district court judgment, subsequently affirmed by the Sixth Circuit. The petitioners assert the federal court judgment conclusively resolved whether they are entitled to certain royalty payments from two very large coal companies, but that after the federal courts rendered a decision in petitioners' favor and against the coal companies, the coal companies ran back to their home turf of Missouri and obtained contrary rulings from a state court, which in the process of serving up some home cookin' wrongfully ignored the earlier federal judgment. Although the petitioners appealed the judgment up through the Missouri courts, they didn't seek cert review in the U.S. Supreme Court.
Instead, they filed an original jurisdiction complaint in Missouri state courts, setting out claims under the Full Faith and Credit Clause and the Takings Clauses of the Missouri and U.S. Constitutions. The Missouri trial court and the Court of Appeals rejected petitioners' claims on the basis that it was too late, and the petitioners had an obligation to have raised their full faith and credit and takings claims at the earliest opportunity (in other words, in the first round of Missouri state court litigation). But, they argued, our claims didn't arise until the Missouri trial court conclusively ignored the Full Faith and Credit Clause and entered judgment against us. Thus, we couldn't raise those arguments on our first appeal because we hadn't litigated them (and appellate review is limited to issues raised and preserved below).
After the Missouri Supreme Court declined discretionary review, the petitioners filed the current cert petition. Here's the Questions Presented:
Under two royalty agreements executed in 1954, Petitioners are to be paid royalties on coal mined by Peabody Coal Company (“Peabody”), its successors and assigns after December 1, 1954 from lands located in three designated boundaries in Kentucky. In 1999, the Sixth Circuit affirmed a Kentucky federal court judgment which rejected Peabody’s claim that the two royalty agreements are invalid, and which confirmed the validity and enforceability of the two agreements. In subsequent litigation between Petitioners, Peabody, and its assignee, however, the Missouri Court of Appeals affirmed a judgment which ignored and contradicted the Kentucky federal court judgment, and which instead held that the two royalty agreements are partially invalid, and are not enforceable in accordance with their express terms. The Petitioners then filed suit against the State of Missouri, seeking a judgment declaring that the Missouri state court judgments were in violation of the Full Faith and Credit Clause, and should be vacated, and that the Missouri judgments constituted a “judicial taking” of Petitioners’ established property rights, in violation of the Fifth Amendment. The Missouri Court of Appeals refused to address the merits of Petitioners’ constitutional claims, based upon a nonexistent Missouri rule of procedure that Petitioners had waived their constitutional claims by not pursuing them in the earlier Missouri litigation. The questions presented are:1. Does the Full Faith and Credit Clause of the United States Constitution require the Missouri courts to give res judicata effect to a valid Kentucky federal court judgment confirming the validity of two royalty agreements, and to vacate the later Missouri judgments which directly contradict the Kentucky judgment regarding the validity of those agreements?2. Did the Missouri Court of Appeals violate the Fifth Amendment’s “Takings Clause” by eliminating Petitioners’ established property rights under two royalty agreements in direct contradiction to the unambiguous terms of those agreements?
Fascinating stuff. Stay tuned.