Ninth Circuit Says Union President Can’t Split Claims


A panel of the Ninth Circuit Court of Appeals affirmed the district court's dismissal of labor law claims because they were barred by the doctrine of claim-splitting. The appeals arose from two overlapping suits challenging a national union's imposition of a trusteeship over one of its local unions.

Removed Union President Files Two Lawsuits

Local 1637, an affiliate of ATU, is a union in Las Vegas, Nevada that represents coach operators and mechanics. After getting a number of complaints from its union members about alleged financial malfeasance by the Local's President, Jose Mendoza, the ATU imposed a temporary trusteeship over Local 1637 in April 2017.

The letter from ATU International President that informed Local 1637 of the temporary trusteeship cited a variety of alleged "issues severely impacting the effective administration and functioning of Local 1637." Chief among these was the allegation that Mendoza had been overpaid in terms of his salary and vacation pay. The letter also said that, by operation of the ATU's Constitution and General Laws ("CGL"), this "imposition of the trusteeship automatically suspends all officers and executive board members of the local union from office." ATU International Vice President James Lindsay was designated as the trustee of Local 1637.

This trusteeship removed Mendoza and the other Local 1637 executive board members from office.

In September 2017, Mendoza filed a single-plaintiff action ("Mendoza I") against ATU and several of its officers, and in May 2018, while that action was still pending, he filed a second, multi-plaintiff action ("Mendoza II") in which he and a majority of the other former executive board members of Local 1637 asserted related claims against ATU, the same ATU officers, and several other defendants.

The district court dismissed all claims against ATU and its officers in Mendoza II, finding that they were barred by the doctrine of claim-splitting. The plaintiff appealed.

The Court of Appeals Agrees that Second Suit Barred

Circuit Judge Daniel P. Collins wrote in his opinion for the U.S. Court of Appeals, Ninth Circuit, that plaintiffs generally have no right to maintain two separate actions involving the same subject matter at the same time in the same court and against the same defendant. To determine when improper claim-splitting is present, Judge Collins explained that the court is to use the test for claim preclusion. Under the federal claim-preclusion principles that apply in these federal-question-based suits, the bar of claim-splitting is applicable if the second suit involves:

  • The same causes of action as the first; and
  • The same parties or their privies.

Judge Collins went further to state that whether two suits involve the same causes of action turns, at least in federal question cases, on the application of the Restatement of Judgments' same-transaction test. That requires the court to consider four factors:

  1. Whether rights or interests established in the prior judgment would be destroyed or impaired by prosecution of the second action;
  2. Whether substantially the same evidence is presented in both actions;
  3. Whether the two suits involve infringement of the same right; and
  4. Whether the two suits arise out of the same transactional nucleus of facts.

Judge Collins found that each of these factors confirmed that Mendoza I and Mendoza II involved the same causes of action.

Whether the Two Suits Arise Out of the Same Transactional Nucleus of Facts

Judge Collins of the Ninth Circuit explained that the most important factor is whether the two suits arise out of the same transactional nucleus of facts, which was obviously true here: the core of both suits is that, based on its findings concerning Mendoza's extensive malfeasance, ATU was able to place Local 1637 into receivership and to oust its then-existing board. And given that overlap, Judge Collins said that it was equally obvious that the two suits involve "infringement of the same right"; that litigation of the suits would involve "substantially the same evidence"; and that continued litigation of a second suit could impair any "rights or interests" that might be established in a judgment in the first.

The fact that Mendoza II involved somewhat different legal theories and a somewhat broader range of related conduct and damages didn’t change the underlying fundamental identity of the suits under the Restatement's four-part same-transaction test, the judge said.

Whether the Two Cases Involve the Same Parties or Their Privies

The more difficult question concerned whether the two cases involved the same parties or their privies. Judge Collins wrote that ordinarily, a different set of parties—such as the additional Plaintiffs in Mendoza II—would be entitled to bring their own suit concerning the very same events that were the subject of an existing suit by a different plaintiff. But the Supreme Court has held that a nonparty to a first action may nonetheless be subject to claim preclusion—and therefore also to the bar against claim-splitting—when, among other things, that nonparty was adequately represented by someone with the same interests who was a party to the first suit.

Here, the district court correctly held that the Executive Board plaintiffs were adequately represented by Mendoza in Mendoza I.

A nonparty is adequately represented in a prior suit when, at a minimum: (1) the interests of the nonparty and her representative are aligned; and (2) either the party understood herself to be acting in a representative capacity or the original court took care to protect the interests of the nonparty. Plus, adequate representation sometimes requires (3) notice of the original suit to the persons alleged to have been represented. Judge Collins said that all three of these requirements were satisfied in this case.

As a result, the Ninth Circuit agreed with the district court that Mendoza viewed himself as acting in a representative capacity in Mendoza I and that he was an adequate representative of the Executive Board Plaintiffs in that suit. The district court therefore properly dismissed the duplicative claims against the ATU Defendants in Mendoza II. The district court’s decision was affirmed. Mendoza v. Amalgamated Transit Union Int'l (U.S. Court of Appeals, Ninth Circuit, 4/7/22).

Bottom Line

Plaintiffs generally have no right to maintain two separate actions involving the same subject matter at the same time in the same court and against the same defendant. To determine if the bar of claim-splitting is applicable, a court will determine whether the second suit involves (i) the same causes of action as the first; and (ii) the same parties or their privies.

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