James J. Dozier v. Ford Motor Company

702 F.2d 1189, 227 U.S. App. D.C. 1, 1983 U.S. App. LEXIS 29562

• Court: Court of Appeals for the D.C. Circuit
• Decided: March 18, 1983
• Docket: 18-3026
• Status: Published

Opinions

SCALIA, Circuit Judge:

On this appeal we must decide the res judicata effect of a prior dismissal for lack of subject matter jurisdiction.

The appellant’s earlier suit against the present defendant and one of its franchised dealers, brought in the United States District Court for the Eastern District of Virginia and based in part upon the diversity of citizenship provisions of 28 U.S.C. § 1332 (1976),¹ was dismissed for lack of the requisite statutory amount in controversy and for absence of complete diversity of citizenship. Dozier v. Ford Motor Co., No. 80-0958-A (E.D.Va. Dec. 12, 1980) (“Dozier I”). As specifically stated in the Fourth Circuit’s affirmance, the suit sought “$7,000 compensatory and $1,000,000 in punitive damages for alleged breach of express and implied warranties pertaining to an automobile manufactured by Ford.” Dozier v. Ford Motor Co., 661 F.2d 920, unpublished op. at 2 (4th Cir.1981) (per curiam) (“Dozier I Appeal”). Appellant’s request for rehearing in the Fourth Circuit alleged that the amount of actual damages was $13,900; nevertheless rehearing was denied. Appellant then filed the present suit in the United States District Court for the District of Columbia, complaining of the same transaction and alleging $16,400 in actual and $1,000,000 in punitive damages. Holding that the doctrine of res judicata precluded relitigation of whether appellant’s claim placed more than $10,000 in controversy, as required by 28 U.S.C. § 1332 (1976), the district court dismissed the suit. Dozier v. Ford Motor Co., No. 81-2102 (D.D.C. Feb. 23, 1982). We affirm.

To give proper res judicata effect to the judgment rendered in the Eastern District of Virginia, it is necessary to determine precisely what the judgment decided. In conducting that inquiry, we must assume that the court rendering the judgment acted in accordance with governing law; otherwise, we would in effect be permitting collateral attack. The cardinal rule governing the Eastern District’s dismissal for insufficient amount in controversy (and the Fourth Circuit’s affirmance) is expressed in the leading case as follows:

It must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify dismissal.... [I]f, from the face of the pleadings, it is apparent, to a legal certainty, that the plaintiff cannot recover the amount claimed, or if, from the proofs, the court is satisfied to a like certainty that the plaintiff never was entitled to recover that amount, and that his claim was therefore colorable for the purpose of conferring jurisdiction, the suit will be dismissed.

[T]he plaintiff ... knows or should know whether his claim is within the statutory requirement as to amount. His good faith in choosing the federal forum is open to challenge not only by resort to the face of his complaint, but by the facts disclosed at trial, and if- from either source it is clear that his claim never could have amounted to the sum necessary to give jurisdiction there is no injustice in dismissing the suit. Indeed, this is the court’s duty ....

St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 289-90, 58 S.Ct. 586, 590-91, 82 L.Ed. 845 (1938) (footnotes omitted and emphases added) (cited with approval in Weinberger v. Wiesenfeld, 420 U.S. 636, 642 n. 10, 95 S.Ct. 1225, 1230 n. 10, 43 L.Ed.2d 514 (1975)). Thus, the Eastern District of Virginia, affirmed on appeal by the Fourth Circuit, must have decided “to a legal certainty” (from the face of the complaint, given that the case did not proceed to trial) that neither punitive nor actual damages could be recovered in an amount exceeding the statutory threshold in § 1332.² See, e.g., Wiggins v. North American Equitable Life Assurance Co., 644 F.2d 1014 (4th Cir.1981); Givens v. W.T. Grant Co., 457 F.2d 612 (2d Cir.), vacated and remanded on other grounds, 409 U.S. 56, 93 S.Ct. 451, 34 L.Ed.2d 266 (1972). Because the doctrine of res judicata applies to dismissal for lack of jurisdiction as well as for other grounds, that determination bars the present suit in federal district court, at least to the extent appellant seeks to base jurisdiction on § 1332. American Surety Co. v. Baldwin, 287 U.S. 156, 53 S.Ct. 98, 77 L.Ed. 231 (1932) (Brandeis, J.); Aeree v. Air Line Pilots Ass’n, 390 F.2d 199 (5th Cir.), cert. denied, 393 U.S. 852, 89 S.Ct. 88, 21 L.Ed.2d 122 (1968).

The Eastern District and the Fourth Circuit considered the $1,000,000 punitive damage claim inadequate to satisfy the amount-in-controversy requirement because it was clear that on the facts alleged the governing state law would not allow punitive damages. Appellant’s principal attack, however, is upon the actual damage aspect of the matter. He suggests that the prior courts did not make the determination necessary to bar the present suit because they did not inquire into whether he could in good faith have alleged greater actual damages. But St. Paul Mercury requires no such inquiry; it explicitly permits the “legal certainty” determination to be based upon the face of the complaint. See also Horton v. Liberty Mutual Insurance Co., 367 U.S. 348, 353, 81 S.Ct. 1570, 1573, 6 L.Ed.2d 890 (1961) (citing St. Paul Mercury) (“The general federal rule has long been to decide what the amount in controversy is from the complaint itself . .. ”). The averment of damages, like the other averments of a complaint, is an allegation of fact. There was no more need to probe beneath that allegation, to determine whether Dozier’s actual damages might in good faith be claimed to be higher, than there was to probe beneath the allegations of acts producing the damage, to determine whether they might in good faith be recast to sustain a claim for punitive damages. Simply stated, where jurisdiction is at issue a plaintiff is held to his own representations regarding damages just as regarding everything else; and “[i]f he fails to make the necessary allegations he has no standing.” McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 785, 80 L.Ed. 1135 (1936).³ See LeBlanc v. Spector, 378 F.Supp. 301, 307 (D.Conn.1973), where, in dismissing a $10,000 claim, the court did not feel constrained to inquire into whether the facts might have justified a claim reaching the $10,001 jurisdictional minimum.

Appellant portrays his inadequate damage claim in the earlier suit as a mere pleading deficiency which falls within the “curable defect” exception to the res judicata effect of jurisdictional dismissals. It does not qualify. The “curable defect” exception applies where a “precondition requisite” to the court’s proceeding with the original suit was not alleged or proven, and is supplied in the second suit — for example, the Government’s filing of an affidavit of good cause in a denaturalization proceeding, Costello v. United States, 365 U.S. 265, 284-88, 81 S.Ct. 534, 544-46, 5 L.Ed.2d 551 (1961), proper service of process, Martin v. Dep’t of Mental Hygiene, 588 F.2d 371, 373 n. 3 (2d Cir.1978), or residency adequate to invoke diversity jurisdiction, see Napper v. Anderson, 500 F.2d 634, 637 (5th Cir.1974), cert. denied, 423 U.S. 837, 96 S.Ct. 65, 46 L.Ed.2d 56 (1975). What all these cases have in common is that the jurisdictional deficiency could be remedied by occurrences subsequent to the original dismissal. The deficiency pertained to a fact (filing of affidavit, service of process or present residence) separate and apart from the past and completed transactions that constituted the cause of action. It may be desirable (though not unquestionably so) to give a plaintiff multiple chances to comply with these post-transactional requirements;⁴ but it is quite another matter to permit him to change his sworn recitation of past facts.⁵ Some very old cases suggest that any “defect in pleading” may be remedied. For example in Smith v. McNeal, 109 U.S. 426, 431, 3 S.Ct. 319, 321, 27 L.Ed. 986 (1883), the Supreme Court held that dismissal for failure to allege the jurisdictional prerequisite of disputed title was no bar to a subsequent suit which remedied that “defect in pleading.” We regard such cases as superseded, expressing a rule that made sense only in a system where liberal amendment of pleading was not permitted.⁶ (Smith v. McNeai has not been cited by the Supreme Court in the century since its issuance.)⁷

The appropriateness of dismissing this suit is confirmed by the fact that even if appellant’s revision of his damage claim had been attempted through amendment of the pleadings before judgment in the original suit, it should probably not have been allowed. As was said in another case dismissing a claim because the damage alleged fell short of the jurisdictional amount:

Plaintiff is, of course, entitled to leave to amend his complaint. But when an initial prayer proves defective at conferring jurisdiction, and the complaint is amended so as to raise the prayer above the jurisdictional amount, the plaintiff may find that he has provided the court with the objective evidence of a colorable claim necessary to dismiss an action seeking highly speculative damages despite the jurisdictionally liberal presumption in favor of the plaintiff’s good faith. Absent some showing of “[a] change of circumstances or developing injuries to explain the inflation of the claim which alone [gives] color of federal jurisdiction,” ... amendment of a claim after a finding of jurisdictional inadequacy provides “independent evidence ... tending to show that the claim [has] been inflated solely to exceed the jurisdictional threshold.”

LeBIanc v. Spector, supra, 378 F.Supp. at 307-08 (citations omitted). See also Fritz v. Warner-Lambert Pharmaceutical Co., 349 F.Supp. 1250 (E.D.N.Y.1972); Brown v. Bodak, 188 F.Supp. 532 (S.D.N.Y.1960). Plaintiff evidently declined to expose himself to that risk before the original district court. If the doctrine of res judicata is to achieve its intended purposes he must be barred here.⁸

Two factors peculiar to the present case might alter the effect of the judgment based upon the inadequate pleading. First, it might be argued that because the earlier courts found, in addition to insufficient jurisdictional amount, lack of diversity between the parties, the former is an alternative holding and, as such, is not entitled to res judicata effect. The cases and commentators are divided on this issue⁹ — and understandably so, since a real dilemma is presented. A rule declining to accord res judicata effect to an alternate ground must of course apply to both grounds, which would mean that a case which is doubly inadequate can be refiled whereas a case inadequate in only one respect cannot. On the other hand, a rule which gives res judi-cata effect to both grounds leaves the losing party who concedes the adequacy of one no appellate remedy for the patent invalidity of the other except a frivolous appeal. We need not reach that more general question in the present case,¹⁰ since here the losing party did pursue an appeal, which was explicitly rejected on both grounds. Dozier I Appeal at 2. We hold that in such circumstances the dismissal on each ground is res judicata in a subsequent suit.

The second factor peculiar to the present case is that the Fourth Circuit judgment was expressly entered “without prejudice.” The usual meaning of this phrase, however, is “without prejudice as to the substantive cause of action ... [but] with prejudice on the issue ... ‘which was litigated in the prior action.’ ” In re Kauffman Mutual Fund Actions, 479 F.2d 257, 267 (1st Cir.), cert. denied, 414 U.S. 857, 94 S.Ct. 161, 38 L.Ed.2d 107 (1973) (quoting Restatement of Judgments § 49, comment b, at 195 (1942)). The issue litigated here, as we have discussed, was whether the present claim exceeded the jurisdictional minimum. Dismissal “without prejudice” was appropriate, of course, to make it clear that appellant was not to be precluded by the doctrine of res judicata from having his claim heard on the merits in state court. In the days when pleadings were not liberally amendable, it might have made sense to interpret the phrase “without prejudice” to mean that the court was only determining the adequacy of the particular pleadings, and not the adequacy of the facts (whether pertaining to jurisdiction or the merits) to which the pleadings were directed. But such an interpretation today is fanciful, since it assumes, in the context of this case, that the Eastern District of Virginia and the Fourth Circuit went through the trouble they did to make the plaintiff refile instead of amending his complaint. See note 6, supra.

We may comment upon the fact that appellant has been a pro se litigant in all these proceedings — both in the District Court and Court of Appeals in the Fourth Circuit, and before the District Court and Court of Appeals here. At least where a litigant is seeking a monetary award, we do not believe pro se status necessarily justifies special consideration. See, e.g., Mazique v. Mazique, 356 F.2d 801 (D.C.Cir.) (per curiam), cert. denied, 384 U.S. 981, 86 S.Ct. 1882, 16 L.Ed.2d 691 (1966). While such a pro se litigant must of course be given fair and equal treatment, he cannot generally be permitted to shift the burden of litigating his case to the courts, nor to avoid the risks of failure that attend his decision to forgo expert assistance. The present appellant is, in any event, a particularly poor candidate for special treatment. Though not a member of this bar, he claimed under oath and in response to question from the Eastern District judge that he is a member of the bar of the State of Maryland, and has practiced law for some 31 years, representations upon which the court relied. Transcript of Proceedings, Dozier I at 6; see also, Answer to Defendant Ford’s Motion to Dismiss, id. at 3. Moreover, appellant was fully aware both that jurisdiction would lie under § 1332 only if the amount in controversy exceeded $10,000, and that if the court found punitive damages unavailable, his suit was subject to dismissal because his claim for actual damages was below the threshold amount. See Answer to Defendant Ford’s Motion to Dismiss, Dozier I at 1; Brief for Appellant, Dozier I Appeal, at 3 (offer to amend complaint to allege more than $10,000 actual damages).

The dissent believes that our approach does not display sufficient solicitude for “incompetent litigants.” Dissent at 1199. We think that concern is misplaced when the jurisdictional question turns upon an issue no more sophisticated and a fact no more likely to be misstated to the plaintiff’s detriment than the amount of damages. Even when the noncurable defect is more arcane, however, solicitude for the possibly incompetent must be balanced against solicitude for the possibly harassed. Where allegations of pleadings concerning past facts are concerned, the system has struck the proper equipoise, we think, by extending itself to assist the incompetent at the first trial (through pleading rules that are nontechnical and permit easy amendment), and by saying “enough” at the second. The dissent apparently acknowledges the need to say “enough” at some point (see the last footnote to the opinion) but provides no principled basis for determining when. We prefer a rule of law, and have applied what we believe to be the established and fair one.

The scope of the disagreement between our opinion and the dissent should not be exaggerated. We are in accord that the doctrine of res judicata has application “to questions of jurisdiction as well as to other issues,” American Surety Co. v. Baldwin, 287 U.S. 156, 166, 53 S.Ct. 98, 101, 77 L.Ed. 231 (1932) (Brandeis, J.); that it ordinarily precludes subsequent challenge to a finding that jurisdiction does exist, see, e.g., Durfee v. Duke, 375 U.S. 106, 116, 84 S.Ct. 242, 247, 11 L.Ed.2d 186 (1963); and that it precludes subsequent challenge to a finding of non-jurisdiction — even on an alternate ground (so long as that ground has been considered on appeal) — unless the doctrine of “curable pleading defects” applies. It is on the operation of the latter doctrine that we part ways.

The defendant in this case has already undergone the expense of litigation in two district courts and two courts of appeals. We decline to prolong the contest in the federal courts by allowing the plaintiff simply to change his mind as to the damages he has suffered.

Affirmed.

1 . Federal question claims were also asserted but rejected. No such claims are made in the present case.

2 . It is noteworthy — though not at all necessary to the decision — that the Fourth Circuit specifically cited the St. Paul Mercury case. Dozier I Appeal at 2-3.

3 . This approach does not omit the “painstaking examination of the record of the prior action” required by the authorities that the dissent relies upon. See Dissent at 1199, citing 18 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure: Jurisdiction § 4420, at 185 (1981). We have not accepted the jurisdictional dismissal without further inquiry, but have scrutinized the district court record to determine the reason — and, as will be seen below, have even scrutinized the record on appeal to determine that the relevant reason was reviewed at that stage. Properly described, what the dissent demands is not merely an examination of the record (to determine that the issue of amount in controversy was decided), but rather the application of what seems to us an unprecedented and undesirable rule that amount in controversy cannot be decided on the face of the complaint if the decision is to have res judicata effect.

4 . Even then, proper application of res judicata should require some demonstration that the plaintiff is relying upon a new fact or occurrence, and not merely relying upon those that existed at the time of the first dismissal. Apparently, however, not all courts would insist upon this. See, e.g., Mann v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 488 F.2d 75 (5th Cir.1973) (suit previously dismissed for failure to allege diversity permitted to be refiled without inquiry into change of resident status).

5 . Generally speaking, the law regards the injury inflicted by a wrongful act as a past fact, complete at the time suit lies, even though latent effects of that injury manifest themselves only in the future.

Typically, even when the injury caused by an actionable wrong extends into the future and will be felt beyond the date of judgment, the damages awarded by the judgment are nevertheless supposed to embody the money equivalent of the entire injury. Accordingly, if a plaintiff who has recovered a judgment against a defendant in a certain amount becomes dissatisfied with his recovery and commences a second action to obtain increased damages, the court will hold him precluded; his claim has been merged in the judgment and may not be split.... It is immaterial that in trying the first action he was not in possession of enough information about the damages, past or prospective, or that the damages turned out in fact to be unexpectedly large and in excess of the judgment.

i}; ;fc * * # *

A brings an action against B for conversion of a derrick, and obtains judgment for the value of the derrick. Thereafter he brings a new action to recover the loss of profits from a valuable contract which he was unable to perform because of the conversion of the derrick. The prior judgment merges the claim and precludes the action.

Restatement (Second) of Judgments § 25 comment c, at 211-12 (1982). A different rule could conceivably be adopted with regard to •jurisdictional dismissals, so that newly discovered injury would suffice to overcome that bar. Such a rule would logically have to be applied, however, even when the original court has conducted the sort of sua sponte mini-trial regarding actual damages that the dissent considers needful to preclude later suit. Its effect, therefore, would be a frequent and unavoidable impairment of the finality of jurisdictional dismissals. We know of no case suggesting such a distinction.

6 . Cf. IB J. Moore & T. Currier, Moore’s Federal Practice ¶ 0.409[1], at 1006 (2d ed. 1982) (“In modern procedural systems where leave to amend is freely granted ... the rule [that dismissal for failure to state a cause of action should not bar a subsequent complaint that supplies the necessary additional facts] is both unneeded and unsound.”)

While rejecting our basis for separating “curable” from “noncurable” defects, the dissent proposes none of its own. We are left to wonder, therefore, why the dissent expresses such confidence that “clear[ly], there is nothing to be cured in Dozier’s allegation of punitive damages.” Dissent at 6. The addition of a newly pleaded fact might convert the warranty action into an action for fraud or deceit, for which punitive damages would be allowed. Our analysis, of course, would not permit this.

7 . The dissent asserts that our holding on the “curable defect” point contradicts the Fifth Circuit’s decision in Mann, discussed at note 4, supra. We think not. Mann involved a defect that was curable according to our rule. We differ with that court concerning an issue not presented here — namely, whether in addition to being curable, the defect must be shown to have been cured by a new occurrence, rather than through a revision of pleadings with no post-dismissal change in the underlying facts. We agree with the dissent that our approach (requiring the showing) makes more sense— but that represents our estimation of the appropriate trade-off between the prevention of harassing litigation and ease of judicial application. We do not agree that an approach dispensing with the showing would be irrational— and that Mann must therefore be presumed to be applying an entirely different test.

8 . Even absent considerations of res judicata, it is questionable whether plaintiff would be able to survive a motion to dismiss in the district court here on the ground that his damage claim has been inflated for the sole purpose of conferring federal jurisdiction. See Arnold v. Troccoli, 344 F.2d 842 (2d Cir.1965), in which a state-court action seeking $6,000 in damages was discontinued and refiled in federal court with a $15,000 ad damnum. In affirming a dismissal “grounded on the solid fact that suit had originally been brought for only $6,000 and there was no showing of change of circumstances or developing injuries to explain the inflation of the claim,” 344 F.2d at 846, the Second Circuit said that “[t]he purpose of Congress in excluding from federal courts claims which do not exceed $10,000 will be largely thwarted if the district courts fail to act as the district court did here.” 344 F.2d at 845.

9 . Compare 1B J. Moore & T. Currier, supra note 4, ¶ 0.443[5], at 3921; In Re Westgate-California Corp., 642 F.2d 1174, 1176-77 (9th Cir.1981); Winters v. Lavine, 574 F.2d 46, 67 (2d Cir.1978), with 18 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure: Jurisdiction § 4421 (1981); Restatement (Second) of Judgments § 27 comments i, o (1982); Hicks v. Quaker Oats Co., 662 F.2d 1158, 1168-70 (5th Cir.1981); American Tel. & Tel. Co. v. FCC, 602 F.2d 401, 410 n. 48 (D.C.Cir.1979); Halpern v. Schwartz, 426 F.2d 102 (2d Cir. 1970).

10 . Nor did we in Stebbins v. Keystone Insurance Co., 481 F.2d 501 (D.C.Cir.1973), though that case is sometimes cited as supporting the position that an alternate holding has no res judicata effect, see American Tel. & Tel. Co., supra note 9. Stebbins held that where one of the alternative grounds involves a curable-defect that is later cured collateral estoppel does not bar relitigation of issues supporting either ground. This might be regarded as merely an exception from the general rule of binding effect for alternate holdings — an exception that is reasonable because, as the court explained, the ease of remedying the curable defect makes it more likely that the refusal to take an appeal in the first case was not an acknowledgment of the validity of both grounds. See 481 F.2d at 508.