The Minnesota Attorney General settled a civil claim with tobacco companies that the companies had violated state consumer protection laws. Later, several Minnesota consumers brought a claim in state court alleging the State’s failure to pay these plaintiffs a portion of the proceeds from the earlier settlement was an inverse condemnation of their property, raising both state and federal takings claims.
The Minnesota Court of Appeals concluded these claims were time barred, and held there was no taking, and the Minnesota Supreme Court denied discretionary review. Next, some of the same consumers filed a federal § 1983 claim in U.S. District Court, asserting a federal takings claim. The District Court dismissed, concluding this was the same claim which the plaintiff had raised, and lost, in Minnesota courts.
In Foster v. Minnesota, No. 17-1177 (Apr. 20, 2018), the Eighth Circuit affirmed. Applying the Full Faith and Credit statute (28 U.S.C. § 1738), which requires a federal court to give the same preclusive effect to a state court judgment as a state court would, the court held that the claims in the federal civil rights lawsuit were the same as the earlier raised (and time-barred) state court claims. The court rejected the plaintiffs’ argument that the two claims did not arise at the same time, and thus the federal claim should be allowed to proceed:
Foster argues that applying res judicata to bar her federal claim based on the prior Harne litigation violates the rule that “[c]laims are not considered the same cause of action if the right to assert the second claim did not arise at the same time as the right to assert the first claim.” Mach v. Wells Concrete Prods. Co., 866 N.W.2d 921, 925 (Minn. 2015) (quotation omitted). We disagree. Foster argues her Fifth Amendment claim did not arise until she was denied just compensation in Harne because “a property owner has not suffered a violation of the [Fifth Amendment’s]Just Compensation Clause until the owner has unsuccessfully attempted to obtain just compensation through the procedures provided by the State for obtaining such compensation.” Williamson Cty. Reg’l Planning Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172, 195 (1985); see Dakota, Minn. & E. R.R. v. South Dakota, 362 F.3d 512, 520 (8th Cir. 2004). However, the alleged taking occurred when the State entered into the Settlement Agreement in 1998. The state law inverse condemnation claim arose at that time, and Williamson County did not preclude Foster from also challenging the constitutionality of that taking under the Fifth Amendment in state court.
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When a property owner has unsuccessfully asserted a Fifth Amendment takings claim in state court, as Foster did in the Harne litigation, her later assertion of the same claim in federal court is precluded under Minnesota law.
Slip op. at 4-5.
Foster v. Minnesota, No. 17-1177 (8th Cir. Apr. 20, 2018)