BAEC Bulletin - May/June 2023

40 | May/June 2023 | BAEC Bulletin this was the relators’ third amended complaint, and an earlier motion to dismiss raised similar—if not identical—arguments regarding the insufficiency of the relators’ claims, the Court dismissed the complaint without leave to amend. Res Judicata In Stensrud v. Rochester Genesee Regional Transportation Authority, 19-cv-6753-EAW (April 14, 2023), plaintiffs sought monetary damages under 42 U.S.C. § 1983 and New York state law because defendant had taken by eminent domain certain property owned by plaintiffs. Prior to commencing the lawsuit, plaintiffs first had sought additional compensation for the taking in New York State court. Following a bench trial and an award of less compensation than originally sought, plaintiffs appealed the award contending that the state trial court issued an adverse evidentiary ruling that deprived them of a full and fair opportunity to litigate the matter of just compensation. That appeal, however, was not successful and defendant eventually satisfied the state court judgment in its entirety. In the subsequent federal lawsuit, defendant moved for summary judgment on grounds that plaintiffs’ claim was barred by the doctrine of res judicata as a result of the state court’s decision and judgment. The Court agreed, granted the motion, and dismissed the federal claim, because the claims asserted in the instant lawsuit arose out of the same transaction as the claim resolved by the state trial court’s decision and judgment. The same two parties had litigated the taking of the same property and thus the subsequent lawsuit was barred by claim preclusion under New York law. That the state court had refused to consider a particular valuation theory in reaching its determination of what constituted just compensation for the taking of the property was not a valid grounds to evade the preclusive effect of prior judgment. The doctrine of res judicata does not depend on whether the prior judgment was free from error. According to the Court, res judicata is specifically designed to avoid instances where plaintiffs seek a second bite at the apple based on their disagreement with the state trial court’s determination. Instead, the remedy for an erroneous legal ruling is the appellate process and not a second lawsuit in a different court. Nonmutual Offensive Collateral Estoppel In McTyere v. Apple, Inc., 21-cv-01133-LJV (Mar. 21, 2023), plaintiffs commenced a putative class action alleging defendant made false representations when it sold them digital content and later removed their access to that same digital content. Defendant moved to dismiss on the grounds that its representations were not misleading and because plaintiffs had not adequately

alleged they were injured by the misrepresentations. Plaintiffs opposed the motion on multiple grounds, including that defendant was precluded from raising the arguments in its motion to dismiss based on “nonmutual offensive collateral estoppel.” More specifically, plaintiffs argued that, because a District Court in California decided that similar claims brought by different plaintiffs against the same defendant were sufficient to withstand a motion to dismiss, collateral estoppel should bar dismissal of plaintiffs’ claims in this action. After recognizing that the doctrine of nonmutual offensive collateral estoppel precludes a defendant from relitigating an issue the defendant previously litigated and lost to another plaintiff, the Court noted that the issues must be identical, and they are not if the second action involves application of a different legal standard, even though the factual setting of the suits may be the same. The Court then found that, although the claims in both cases relate to defendant’s representations, the two cases involve claims arising under completely different state laws, rendering nonmutual offensive collateral estoppel inapplicable. The Court, however, denied the motion in any event, holding that reasonable consumers might have been misled by defendant’s conduct, and that plaintiffs adequately alleged an injury sufficient to state a claim. Non-Party Subpoenas In Brennan et. al. v. Mylan Inc. et. al., 22-mc-6015- FPG (March 10, 2023), two non-party witnesses filed motions for an order quashing deposition subpoenas under Rule 45(d)(3)(A)(iv) and for a protective order from further efforts at discovery under Rule 26(c)(1). Rule 45 provides that a subpoena recipient may move to quash a subpoena if compliance would subject them to an “undue burden.” Whether an undue burden exists depends on the relevance of the discovery sought, the parties’ need for the information, the breadth of the request, and the burden imposed. The Court found that defendants, who had served the subpoenas, were seeking relevant and needed testimony that was sufficiently narrow in breadth and scope, the two non-party witnesses were undisputedly knowledgeable and the best source of the information sought, and the witnesses did not allege the discovery would cause any expense or inconvenience. Movants, therefore, had not met their “...the allegations were merely conclusory, hypothetical statements regarding a purportedly fraudulent scheme, and failed to allege actual instances where the scheme occurred...”

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