CIVIL PROCEDURE / RES JUDICATA

No. 2019-0236
April 14, 2020

Vacated and Remanded

 

  • Whether the trial court erred in applying the Federal (First Circuit) privity standard, rather than New Hampshire precedent, in dismissing plaintiff’s action at the motion to dismiss stage.

 

In a separate action, plaintiff received judgment of $5,000,000 against an individual and his corporation for defamation. At some point during the pendency of the defamation action, plaintiff sued defendant in a separate action alleging conspiracy to commit defamation and seeking enhanced compensatory damages. Defendant moved to dismiss the conspiracy suit, claiming that he was in privity with the other parties in the defamation suit.

The trial court, applying on the privity standard outlined by the First Circuit, found that privity did exist between the parties, but that res judicata did not yet apply because no final judgment had at that time been rendered in the defamation action. The judge stayed the conspiracy action pending a final judgment in the defamation action. After judgment entered in the defamation case, defendant here renewed his motion to dismiss based on privity and res judicata, which the trial court allowed. Plaintiff appealed.

The Court noted that under New Hampshire law, res judicata does not typically apply to non-parties in a case.  Plaintiffs are generally free to pursue their defendants all at once or one at a time until made whole. There is an exception, however, when the parties are in privity “based on a variety of preexisting substantive legal relationships” between the two that ensure that “the interests of the non-party were in fact represented and protected in the prior litigation.”  See Sleeper v. Hoban Family P’ship, 157 N.H. 530, 533-34 (2008).  The First Circuit rule, however, is more generous and allows res judicata to apply to “closely related” parties, not merely those in legal privity.  See Airframe Systems, Inc. v. Raytheon Co., 601 F.3d 9, 17-18 (1st Cir. 2010).

Additionally, the Court pointed out that previous decisions have rejected the idea that the relationship between co-conspirators alone is insufficient to establish privity for the purposes of res judicata; some other legal relationship must exist (such as succeeding owners of property).  See Aranson v. Schroeder, 140 N.H. 359, 369 (1995). The defendants did not identify any other relationship, other than as co-conspirators, that might have shown a qualifying legal relationship.

 

Divine, Millimet & Branch, Professional Association, of Manchester (Matthew R. Johnson and Devin K. Bolger on the brief, and Mr. Johnson orally), for the plaintiff.  Boyle | Shaughnessy Law PC, of Manchester (Peter L. Bosse and Jonathan P. Killeen on the brief, and Mr. Killeen orally), for the defendant.