Federated Department Stores, Inc. v. Moitie Case Brief Summary | Law Case Explained

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

Res judicata recognizes that litigation must end. Once a case reaches final judgment on the merits, the parties aren’t entitled to a do-over. In Federated Department Stores versus Moitie, a newly handed-down appellate decision reveals that the plaintiffs’ initial claims were dismissed due to an erroneous understanding of the law. The plaintiffs want a do-over. Will the Court allow an exception to res judicata based on fairness?

The federal government sued Federated Department Stores for antitrust violations. The government claimed that Federated violated the Sherman Act by price-fixing women’s clothing sold in California stores. In seven parallel private suits, retail purchasers including Marilyn Moitie and Floyd Brown sued Federated for price-fixing. The district court concluded that federal antitrust law didn’t recognize claims by retail purchasers and dismissed all seven of the private complaints.

Moitie and Brown opted not to appeal. Instead, they refiled in state court, purportedly relying on state law claims. Federated removed the refiled claims to federal court. The district court concluded that Moitie and Brown’s refiled claims involved the same parties, offenses, and time lines as their initial claims. As a result, res judicata required that the refiled claims be dismissed.

Meanwhile, the five other plaintiffs decided to appeal to the Ninth Circuit. While their appeal was pending, the Supreme Court decided Reiter versus Sonotone Corporation, which held that retail purchasers may sue for federal antitrust violations. As a result, the Ninth Circuit reversed and remanded the five claims. Based on Reiter, the five shoppers would get their day in court. Moitie and Brown, who, as you’ll recall, hadn’t appealed, didn’t benefit from the decision. Now they appealed the dismissal of their refiled claims.

The Ninth Circuit recognized that res judicata, if strictly applied, would bar the refiled claims, but it reasoned that fairness dictated making an exception. The Ninth Circuit reversed the district court’s dismissal of the refiled claims. The Supreme Court granted Federated’s petition for cert.




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