Markley v. U.S. Bank National Association

142 F.4th 732
Court of Appeals for the Tenth Circuit·Decided June 24, 2025·No. 24-1163·Published·Cited by 2 cases

Opinion

FILED

United States Court of Appeals PUBLISH Tenth Circuit

UNITED STATES COURT OF APPEALS June 24, 2025 Christopher M. Wolpert

FOR THE TENTH CIRCUIT Clerk of Court

DARREN MARKLEY, Plaintiff - Appellant, v. No. 24-1163

U.S. BANK NATIONAL ASSOCIATION, d/b/a US Bank,

Defendant - Appellee.

Appeal from the United States District Court for the District of Colorado (D.C. No. 1:23-CV-01422-PAB-SBP)

Engram Wilkinson, Ogborn Mihm LLP, Denver, Colorado (Madeline Collison, Benezra & Culver, Denver, Colorado, with him on the briefs) for Plaintiff-Appellant.

Marko J. Mrkonich (Carolyn Theis and Kelsey A. VanOverloop with him on the brief), Littler Mendelson, P.C., Denver, Colorado, for Defendant-Appellee.

Before TYMKOVICH, EBEL, and EID, Circuit Judges.

TYMKOVICH, Circuit Judge.

Claim preclusion bars the litigation of a claim that could have been raised and resolved in a prior lawsuit. The doctrine serves many important functions, including ensuring judicial efficiency, fairness, and finality. Litigants must bring all claims

stemming from the same set of facts in one lawsuit, or face preclusion and forfeit those claims forever.

In this case, Darren Markley sued his employer, US Bank, in federal court, asserting a federal claim for age discrimination and a state law claim for wrongful termination. The district court resolved the federal claim in the employer’s favor but declined to exercise supplemental jurisdiction over the state law claim. That claim was dismissed without prejudice.

Because US Bank was an out-of-state corporation, Markley could have resolved the state law claim in his federal action if he had asserted diversity jurisdiction. But he did not do so. Instead, he took his state law claim to state court, which led US Bank to remove the case back to federal court based on diversity jurisdiction. US Bank then moved to dismiss based on claim preclusion.

The district court granted the motion. According to the district court, Markley could have pursued his state law claim in the prior lawsuit by asserting diversity jurisdiction, and his failure to do so meant he was precluded from bringing the claim in a new case.

We AFFIRM. If a party could have litigated a claim in a prior lawsuit by asserting diversity jurisdiction but fails to do so, that claim is precluded if the prior lawsuit arose from the same operative facts and reached a final judgment on the merits.

I. Background

In 2019, Darren Markley sued his former employer, US Bank, in federal court after he was fired (Markley I). He asserted a claim under the Age Discrimination in Employment Act and a wrongful termination claim in violation of public policy under Colorado law. In the civil cover sheet of his complaint, he asserted federal question jurisdiction but indicated that diversity jurisdiction existed, noting he was a “Citizen of This State” (i.e., Colorado), and US Bank was “Incorporated and [had its] Principal Place of Business in Another State.” Supp. App. 28. Still, he did not assert diversity jurisdiction in the body of his complaint. Rather, he asserted federal question jurisdiction over the age discrimination claim, and supplemental jurisdiction over the wrongful termination claim. 1 Id. at 19, ¶¶ 6–7.

The district court granted summary judgment for US Bank on the age discrimination claim and declined to exercise supplemental jurisdiction over the wrongful termination claim. The latter was dismissed without prejudice. The district court then entered a “Final Judgment.” Supp. App. 63. The case was “closed.” Id.

Markley appealed the federal age discrimination claim to the Tenth Circuit.

Notably, he did not appeal the dismissal of the wrongful termination claim, even though he could have done so. He also did not ask the district court to reconsider its

1 District courts have supplemental jurisdiction “over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.” 28 U.S.C. § 1367(a). Supplemental jurisdiction is discretionary, and absent a viable federal claim, courts may choose not to resolve pendant state law claims.

dismissal of the state law claim and resolve it under diversity jurisdiction, even though he could have done so. Instead, after the Tenth Circuit affirmed the district court’s resolution of the age discrimination claim, see Markley v. U.S. Bank Nat’l Ass’n, 59 F.4th 1072 (10th Cir. 2023), and issued a mandate, Markley chose to take his remaining state law claim and file a new case in state court—the Denver District Court (Markley II).

But Markley’s new case did not stay in state court for long. Asserting diversity jurisdiction, US Bank removed the case back to federal court. US Bank then moved to dismiss on several grounds, including claim preclusion. According to US Bank, Markley was precluded from relitigating his wrongful termination claim since it arose from the same transaction as his federal claim, and Markley I’s final judgment on the federal claim foreclosed his state law claim from moving forward in a new case.

The district court agreed. Relying largely on a First Circuit case, Maher v.

GSI Lumonics, Inc., 433 F.3d 123 (1st Cir. 2005), the court found that claim preclusion barred Markley from asserting his wrongful termination claim because he could have pursued that claim in the first federal suit if he had asserted diversity jurisdiction. He did not do so, and the district court concluded that he may not get a second chance to litigate that claim in a new case. Although the district court in Markley I did not address the merits of the wrongful termination claim, the district court held that Markley’s failure to assert diversity jurisdiction meant claim preclusion barred the case from moving forward.

II. Discussion

Markley argues the district court erred by applying claim preclusion, since the dismissal of his state law claim in Markley I was not a final judgment on the merits. We disagree. As we explain below, Markley I resulted in a final judgment on the merits, and the district court correctly found that claim preclusion applied.

A. Legal Framework The doctrine of claim preclusion, also known as res judicata, “prevent[s] a party from relitigating a legal claim that was or could have been the subject of a previously issued final judgment.” MACTEC, Inc. v. Gorelick, 427 F.3d 821, 831 (10th Cir. 2005). The principle behind claim preclusion is simple: “a party who once has had a chance to litigate a claim before an appropriate tribunal usually ought not have another chance to do so.” Lenox MacLaren Surgical Corp. v. Medtronic, Inc., 847 F.3d 1221, 1239 (10th Cir. 2017) (citation omitted). The doctrine serves many functions, including ensuring “finality, judicial economy, preventing repetitive litigation and forum-shopping, and the interest in bringing litigation to an end.” Plotner v. AT & T Corp., 224 F.3d 1161, 1168 (10th Cir. 2000) (internal quotation marks and citation omitted). Thus, to avoid claim preclusion and violating the related bar on claim-splitting, the plaintiff must “join all claims together that [he] has against the defendant” and “explore all the facts, develop all the theories, and demand all the remedies in the first suit.” Stone v. Dep’t of Aviation, 453 F.3d 1271, 1278–79 (10th Cir. 2006).

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Markley v. U.S. Bank National Association, 142 F.4th 732 (10th Cir. 2025).

142 F.4th 732 (Markley v. U.S. Bank National Association) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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