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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. DeNardo v. Barrans (11/29/2002) sp-5647

DeNardo v. Barrans (11/29/2002) sp-5647

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     publication  in  the  Pacific  Reporter.   Readers  are
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DANIEL DENARDO,               )
                              )    Supreme Court No. S-10292
               Appellant,          )
                              )    Superior Court No.
          v.                  )    3AN-99-7673 CI
ALASKA COMMISSION ON          )    [No. 5647 - November 29, 2002]
               Appellees.          )

          Appeal  from the Superior Court of the  State
          of Alaska, Third Judicial District, Stephanie
          E. Joannides, Judge.

          Appearances:    Daniel   DeNardo,   pro   se,
          Anchorage.    Kevin   M.   Saxby,   Assistant
          Attorney  General, Anchorage,  and  Bruce  M.
          Botelho,   Attorney  General,   Juneau,   for
          Appellees  Barrans, Williams,  Begich,  Byrd,
          Alaska  Student Loan Corp., Alaska Commission
          on   Postsecondary   Education,   Love,   and

          Before:    Fabe,  Chief  Justice,   Matthews,
          Eastaugh, Bryner, and Carpeneti, Justices.

          BRYNER, Justice.


          Daniel  DeNardo  filed  a  superior  court  action  for

damages  arising  out of his allegedly wrongful termination  from

state employment.  The  superior court dismissed his case, ruling

that  it was barred under the doctrine of res judicata by a prior

judgment  on a nearly identical federal claim, which the  federal

court had dismissed with prejudice under Federal Civil Rule 41(b)

as  a  result  of  DeNardos  willful refusal  to  comply  with  a

calendaring  order.  The primary question on  appeal  is  whether

claim-preclusive  effect  attaches  to  the  federal   dismissal.

Because  we conclude that federal law requires us to give  claim-

preclusive  effect to a punitive dismissal entered on the  merits

by  a  federal  court  under Rule 41(b), we affirm  the  superior

courts judgment.


          After   being  fired  as  an  auditor  for  the  Alaska

Commission  on Postsecondary Education, Daniel DeNardo  filed  an

action  for damages in the United States District Court  for  the

District  of  Alaska against nine state employees, claiming  that

various  actions  they had taken against him in  the  course  and

scope  of  their employment resulted in his wrongful  termination

and  deprived  him  of his constitutional rights.   The  district

court  entered a summary judgment order dismissing with prejudice

DeNardos claims against all defendants except Diane Barrans,  his

supervisor.1   Several days before trial on  the  claims  against

Barrans,  DeNardo  asked for a continuance for  medical  reasons.

When  the  court denied his request and directed him  to  proceed

with trial on the date scheduled, DeNardo stated that he did  not

intend  to  appear as directed.  In response, the district  court

dismissed DeNardos case for failure to abide by the orders of the

court, specifying that the dismissal would be with prejudice.2

          DeNardo then filed a nearly identical complaint in  the

Alaska superior court, naming as additional defendants two  state

agencies,  the  Alaska Commission on Postsecondary Education  and

the  Alaska Student Loan Corporation.3  The defendants moved  for

summary judgment, arguing that DeNardos claims were barred by res

judicata.   Superior Court Judge Stephanie E.  Joannides  granted

the motion, ruling that DeNardos complaint raised claims that the

          federal court had already resolved.  DeNardo appeals.


          In  challenging  the superior courts  summary  judgment

order,  DeNardo emphasizes that the doctrine of res judicata  can

apply  only when a previous judgment has resolved the same  claim

on  the  merits.4   He  argues that the federal  district  courts

judgment  dismissing his prior complaint does not  qualify  as  a

judgment  on  the merits because the dismissal was entered  under

Federal   Civil  Rule  41(b).5   Although  this  rule   expressly

specifies  that a dismissal under its provisions operates  as  an

adjudication upon the merits unless the court specifically states

otherwise  in its dismissal order, DeNardo nonetheless cites  the

United   States   Supreme  Courts  recent  decision   in   Semtek

International,  Inc. v. Lockheed Martin Corp.6  as  holding  that

Rule  41(b) dismissals do not qualify as judgments on the  merits

under the doctrine of res judicata.

          But  DeNardos argument is unpersuasive.  Preliminarily,

we  note  that DeNardos federal claims against all the defendants

other  than  Barrans  were dismissed with  prejudice  by  summary

judgment  for  failure  to establish a prima  facie  case.   This

dismissal was unrelated to the subsequent Rule 41(b) dismissal of

DeNardos  claims against Barrans; and because an order dismissing

a  claim  for failure to establish a prima facie case necessarily

passes  on the substance of that claim, the federal courts  order

dismissing  DeNardos  case  against  all  defendants  other  than

Barrans  qualified  as a judgment on the merits  triggering   res

judicatas   preclusive  effect.7   The  federal  courts   summary

judgment  order thus barred DeNardo from relitigating his  claims

against  all individual defendants other than Barrans, regardless

of  whether  the  subsequent  Rule  41(b)  dismissal  had  claim-

preclusive effect.

          As  to  the  federal  claims against Barrans,  DeNardos

argument  based on Semtek is unpersuasive because it misconstrues

the decision and overstates Semteks significance in determining a

          punitive dismissals preclusive effect.  Although DeNardo insists

that  Semtek stands for the proposition that dismissals  pursuant

to  [FRCP  41(b)] are not on the merits and have  never  had  res

judicata effect, its holding is considerably narrower.

          In  construing  Rule  41(b)s default  provision,  which

specifies that a dismissal under the rules terms operates  as  an

adjudication  upon  the  merits unless  the  order  of  dismissal

specifies  otherwise,  Semtek  began  by  observing  that   [t]he

original  connotation  of  an  on the  merits  adjudication   the

connotation   traditionally  used  to   determine   a   judgments

preclusive effect  is one that actually pass[es] directly on  the

substance of [a particular] claim before the court.8  But  Semtek

held  that  the  rules use of the phrase has a narrower  meaning:

[T]he   effect  of  the  adjudication  upon  the  merits  default

provision  of Rule 41(b) . . . is simply that, unlike a dismissal

without  prejudice,  the  dismissal in the  present  case  barred

refiling of the same claim in the [same court].9

          Having adopted this interpretation, however, Semtek did

not go on to conclude  as DeNardo insists it did  that Rule 41(b)

dismissals can never have preclusive effect as judgments  on  the

merits  in  the  traditional sense.   Instead, Semtek  recognized

that Rule 41(b) simply does not address the issue.  Noting that a

judgment  upon  the  merits under Rule  41(b)  is  undoubtedly  a

necessary  condition, but it is not a sufficient one, for  claim-

preclusive effect in other courts,10 the Court in Semtek found it

necessary  to  search elsewhere to determine  the  issue:  Having

concluded that the claim-preclusive effect . . . [of the  federal

judgment at issue] is dictated neither by Dupasseur v. Rochereau,

as   petitioner  contends,  nor  by  Rule  41(b),  as  respondent

contends, we turn to consideration of what determines the issue.11

          After  considering  this issue, Semtek  concluded  that

federal  common  law  determines a federal dismissals  preclusive

effect in both federal-question and diversity cases.12  Regarding

federal-question dismissals, the Court in Semtek emphasized  that

          no federal textual provision addresses the claim-preclusive

effect  of  a federal-court judgment in a federal-question  case,

yet  we  have  long held that States cannot give those  judgments

merely  whatever effect they would give their own judgments,  but

must accord them the effect that this Court prescribes.13

          To  determine the claim-preclusive effect of a punitive

dismissal under Rule 41(b), then, Semtek requires us to look  for

an  answer  in federal common law, not Rule 41(b).   And  federal

case  law  provides  a  clear answer, holding  that,  unless  the

dismissing court otherwise specifies, a Rule 41(b) dismissal  for

failure  to  comply with a court order is on the  merits  in  the

traditional sense and must be given preclusive effect:

          All  of  the  dismissals enumerated  in  Rule
          41(b)  which operate as adjudications on  the
          merits    failure   of   the   plaintiff   to
          prosecute,  or to comply with  the  Rules  of
          Civil  Procedure, or to comply with an  order
          of  the Court, or to present evidence showing
          a  right  to the relief on the facts and  the
          law    primarily involve situations in  which
          the defendant must incur the inconvenience of
          preparing to meet the merits because there is
          no  initial bar to the Courts reaching  them.
          It  is therefore logical that a dismissal  on
          one of these grounds should, unless the Court
          otherwise   specifies,   bar   a   subsequent
          Wright,  Miller  &  Cooper  amplifies  this  reasoning,

describing the unique characteristics of penalty dismissals  that

justify giving them a preclusive effect:

          Rule 41(b) provides that unless the court  in
          its  order  for dismissal otherwise provides,
          dismissals  for  failure  to  prosecute,   to
          comply  with  the civil rules, or  to  comply
          with  any  order  of  court  operate  as   an
          adjudication on the merits.  The  purpose  of
          this  provision  is  to  establish  a  strong
          sanction  to  enforce compliance with  proper
          procedure.  Quite apart from Rule 41(b), this
          purpose  of itself would suggest that penalty
          dismissals  often  should preclude  a  second
          action on the same claim.[15]
          And  Semtek itself makes the same point.  The  specific

          question at issue in Semtek was the preclusive effect of a

federal  judgment that dismissed a diversity claim on statute-of-

limitations grounds under Rule 41(b).16  Applying its  common-law

power to decide the issue, the Court fashioned a federal rule for

diversity  cases  that  ordinarily would incorporate  the  claim-

preclusion law of the state whose substantive law is at  issue.17

But  the Court took pains to warn that it might deviate from this

rule  if  the state law at issue refused to give claim-preclusive

effect to a punitive dismissal:

          This federal reference to state law will  not
          obtain, of course, in situations in which the
          state   law  is  incompatible  with   federal
          interests.   If, for example, state  law  did
          not   accord   claim-preclusive   effect   to
          dismissals for willful violation of discovery
          orders,  federal  courts  interest   in   the
          integrity   of  their  own  processes   might
          justify a contrary federal rule.[18]
          In  summary, then, Semtek requires us to determine  the

preclusive  effect of DeNardos Rule 41(b) dismissal by  referring

to federal common law.  Because federal cases unequivocally treat

a  punitive dismissal like DeNardos  a judgment that terminates a

case  for  failing to follow court orders  as a judgment  on  the

merits that has claim-preclusive effect, we hold that the federal-

court judgment dismissing DeNardos claim against Barrans had  the

effect of precluding his subsequent state action against Barrans,

which asserted the same claim.

          So far, our decision precludes DeNardo from pursing his

state claims only against the individual defendants that he named

in  his  superior court complaint.19  We  have not yet considered

his  state  claims  against  newly  named  agencies,  the  Alaska

Commission on Postsecondary Education and the Alaska Student Loan

Corporation.   DeNardo asserts that, because federal  law  barred

him from naming these agencies as defendants in his federal-court

action,  the superior court erred in concluding that res judicata

precluded him from suing them in state court.

          Yet   res  judicata  can  bind  parties  who  did   not

          participate in the prior action: the doctrine holds that a

properly  entered judgment should be conclusive upon the  parties

and those in privity with them.20  Because the commission and the

corporation  are governmental entities, not individuals,  and  so

could  not act except through their officers and employees, their

liability  could only be established vicariously,  through  proof

that  their  officers  and employees (the  individual  defendants

named  in  DeNardos complaint) acted wrongfully.21   Under  these

circumstances, privity arises between the agency defendants,  who

had   not   been  sued  in  federal  court,  and  the  individual

defendants, all of whom were sued for actions taken in the course

of their employment,  because their relationship is such that one

of them is vicariously responsible for the conduct of the other.22

It  follows  that, by precluding DeNardos individual  claims,  we

also must preclude his agency claims.


          We  therefore  AFFIRM the superior courts  judgment  of


     1     The  Ninth Circuit Court of Appeals summarily affirmed
the  dismissal  in  DeNardo v. Barrans, 230 F.3d 1366  (9th  Cir.
2000) (unpublished table decision), cert. dismissed, 531 U.S. 989

     2     The  Ninth Circuit Court of Appeals summarily affirmed
the dismissal in DeNardo v. Barrans, 238 F.3d 428 (9th Cir. 2000)
(unpublished  table  opinion), cert.  dismissed,  531  U.S.  1006

     3     Several of the defendants named in the state complaint
are  different  from  those named in the federal  complaint,  but
those  differences  are irrelevant.  Three  of  the  newly  named
defendants,  Burton Research, Sharon Burton,  and  Karla  Burton,
were  never  served with process and did not participate  in  the
superior court proceedings.  The remaining newly named defendants
are   either   successors  of  previously  named  defendants   or
additional  commission  members not  alleged  to  have  committed
specific wrongful acts.

     4    For example, we recently stated:

          The doctrine of res judicata provides that  a
          judgment  in  a  prior  action  will  bar   a
          subsequent  action if the prior judgment  was
          (1)  a final judgment on the merits, (2) from
          a  court of competent jurisdiction, (3) in  a
          dispute  between the same parties  (or  their
          privies) about the same cause of action.
Sengupta  v.  Univ. of Alaska, 21 P.3d 1240, 1251 (Alaska  2001),
cert. denied, 122 S. Ct. 1081 (2002) (mem.).

     5     Federal  Rule  of Civil Procedure 41(b)  provides,  in
relevant part:

               Involuntary Dismissal:  Effect  Thereof.
          For failure of the plaintiff to prosecute  or
          to  comply with these rules or any  order  of
          court, a defendant may move for dismissal  of
          an   action  or  of  any  claim  against  the
          defendant.  Unless the court in its order for
          dismissal  otherwise specifies,  a  dismissal
          under this subdivision and any dismissal  not
          provided  for  in  this rule,  other  than  a
          dismissal  for  lack  of  jurisdiction,   for
          improper  venue,  or for failure  to  join  a
          party   under   Rule  19,  operates   as   an
          adjudication upon the merits.
     6    531 U.S. 497 (2001).

     7     See id. at 501-02 ([A]n on the merits adjudication  is
one  that  actually  pass[es] directly on  the  substance  of  [a
particular]   claim  before  the  court.)  (quoting   Restatement
(Second)   of   Judgments    19  cmt.   a   (1982)   [hereinafter

     8    Id. (quoting Restatement  19 cmt. a).

     9    Id. at 506.

     10    Id.

     11    Id.

     12    Id. at 507-08.

     13    Id. at 507 (citations omitted).

     14    Costello v. United States, 365 U.S. 265, 286-87 (1961).

     15    18A Charles Alan Wright, Arthur R. Miller, & Edward H.
Cooper, Federal Practice and Procedure   4440 (2d ed. 2002);  see
also  Restatement  19 cmt. e (adopting a rule of  preclusion  for
failure to prosecute, to obey an order of court, or to appear).

     16    See Semtek, 531 U.S. at 499.

     17    See id. at 508.

     18    Id. at 509.

     19    We include in this category individual defendants newly
named  in  DeNardos  state claim by virtue  of  their  status  as
successors  of  previously named defendants,  since  these  newly
named  individuals  are essentially placeholders  for  previously
named  defendants; we similarly include commission members  newly
added  in  the state action, since these defendants  were  simply
added  in their capacity as board members representing the  newly
named agency defendants and are not alleged to have committed any
specific wrongful acts.

     20     Pennington  v. Snow, 471 P.2d 370, 374 (Alaska  1970)
(quoting State v. Baker, 393 P.2d 893, 897 (Alaska 1964)).

     21     See City of North Pole v. Zabek, 934 P.2d 1292,  1300
(Alaska  1997) (For vicarious liability to attach, some  sort  of
underlying  liability must be established for which the  employer
can be held liable.).

     22     See  Restatement  51.  We follow the  Restatement  of
Judgments in determining whether privity exists for res  judicata
purposes.   See,  e.g.,  Alaska Foods,  Inc.  v.  Nichiro  Gyogyo
Kaisha, Ltd., 768 P.2d 117, 121 (Alaska 1989).