[00:00:00] Speaker 02: All right, just one case this morning, and it is 24-1163, Mark B. versus U.S. [00:00:06] Speaker 02: Bank. [00:00:08] Speaker 02: Counseling may proceed. [00:00:25] Speaker 01: Great. [00:00:26] Speaker 01: Good morning, your honors, and may it please the court. [00:00:29] Speaker 01: My name is Ingram Wilkinson, appearing on behalf of plaintiff appellant Darren Markley. [00:00:35] Speaker 01: To reach affirmance in this case, this court must do two things. [00:00:38] Speaker 01: The first is, contrary to the law of the circuit and the Supreme Court, conclude that a dismissal without prejudice is a final judgment on the merits, and two, endorse the district court's violation of the party presentation principle. [00:00:51] Speaker 01: Because both are improper, reversal is required. [00:00:55] Speaker 01: I'd like to momentarily address or briefly address the party presentation issue. [00:00:59] Speaker 01: As your honors know, it's a very well-settled principle that courts, including district courts, are bound to address the arguments that the parties put before them. [00:01:09] Speaker 01: In this case, in its dismissal briefing, U.S. [00:01:12] Speaker 01: Bank simply argued that Mr. Markley's wrongful termination claim was barred as a matter of claim preclusion. [00:01:19] Speaker 04: The district court... Is party presentation [00:01:22] Speaker 04: requirement like a jurisdictional requirement or is it something that the courts don't have to follow if they feel equity doesn't require it? [00:01:34] Speaker 01: It is not, Your Honor, a jurisdictional requirement. [00:01:37] Speaker 01: However, the Supreme Court has made clear that failure to abide by the principle does constitute an abuse of discretion. [00:01:44] Speaker 01: And in this instance, there's too great a mismatch between what US Bank argued and the district court's decision to go beyond that argument and say that, particularly, the failure to allege diversity jurisdictional allegations more closely aligned with the factual circumstances in the First Circuit's decision in Marr or [00:02:03] Speaker 01: And because the district court essentially took that extra step, sort of went beyond, created too great a delta between what US Bank argued and what itself did, that is precisely the abuse of discretion that would require reversal. [00:02:17] Speaker 01: How are you distinguished in the First Circuit case? [00:02:19] Speaker 01: Yes, Your Honor. [00:02:20] Speaker 01: And so I think that actually leads into the main issue put before this Court on Appeal, which is whether a dismissal without prejudice constitutes a final judgment on the merits. [00:02:30] Speaker 01: The First Circuit, first in Kale, subsequently in Marr, reached the conclusion that a plaintiff's failure to allege diversity jurisdiction and first federal action then gave rise to the application of claim preclusion and that plaintiff's efforts to assert a state law claim in a subsequent action. [00:02:47] Speaker 04: And I think you're going to address First Circuit, which is the one Judge Timkovich asked about, and I think that's appropriate. [00:02:56] Speaker 04: But you've also got the baggage of the Seventh Circuit and DICTA in the Sixth Circuit and a Colorado Court of Appeals case. [00:03:04] Speaker 04: So there's other baggage with you, but let's focus on the first, because that kind of [00:03:09] Speaker 04: and set the dialogue for other circuits. [00:03:11] Speaker 01: I'm happy to proceed in that fashion, Your Honor. [00:03:13] Speaker 01: And so I think that there are two ways of thinking about this case, and the first of which is sort of inaugurated or put in motion by KLMR. [00:03:22] Speaker 01: As Your Honor just pointed out, other circuits followed suit, I think, in distinguishable ways or ways that do not make their holdings controlling in this case. [00:03:31] Speaker 01: There's that way of thinking about things. [00:03:33] Speaker 01: There's the more foundational way in which other circuits are numerously in accord in determining that a dismissal without prejudice cannot constitute a final judgment on the merits for claim preclusion purposes. [00:03:46] Speaker 01: This court in Velazquez and Montesantos said, and I quote, a dismissal for lack of jurisdiction does not have broad res judicata effect. [00:03:55] Speaker 01: This, again, is citing Montesantos, and this is entirely consistent with the Supreme Court's current decision. [00:04:00] Speaker 01: But let me pause for there a minute. [00:04:02] Speaker 04: It doesn't say a dismissal of the claimant issue. [00:04:08] Speaker 04: It says the dismissal of the case, doesn't it? [00:04:12] Speaker 04: Or the cause of action. [00:04:14] Speaker 04: Or to quote Lennox's 10th Circuit case, a final judgment on the merits. [00:04:24] Speaker 04: We do have a final judgment on the merits, not on the claim at issue. [00:04:29] Speaker 04: But when I've been reading the final judgment requirement, it seems to talk about the merits of the earlier case. [00:04:35] Speaker 04: That is, that there's not going to be anything coming back on that case as Casper goes to haunt us in the future is done, rather than was this particular issue resolved finally. [00:04:47] Speaker 01: What do you think about that? [00:04:49] Speaker 01: I have two points in response, Your Honor. [00:04:51] Speaker 01: The first of which is your question evokes or puts the question of this appeal in the context of finality for 1291 purposes. [00:04:59] Speaker 01: Cases that have addressed finality in that context have done so on entirely different bases and, even if we accept their reasoning, do not give rise to facts analogous sufficient to Mr. Markley's case that warrant the application of claim [00:05:13] Speaker 01: filtered through the principle of finality in the 1291 context, or finality in the context of claim preclusion. [00:05:19] Speaker 01: If you look at cases from the circuit like Clinton v. Security Benefits, the Barone case that the appellant or appellee cites, those are cases in which the district court took an additional step. [00:05:31] Speaker 01: So for instance, in Clinton, there was a dismissal of not only the complaint, but also the failure to grant, or rather the decision to deny plaintiffs the ability to amend their complaint. [00:05:41] Speaker 01: Your Honor's question secondly evokes a principle more specifically in the claim preclusion context which is what can constitute finality when there is a final judgment on, for instance, one federal claim. [00:05:53] Speaker 01: Courts that have addressed this issue have said that [00:05:56] Speaker 01: finality in that context or that type of judgment only rises to a final judgment in the claim preclusion context if there is something that demonstrates an intent to completely dismiss the underlying or adjunctive state law claim as well. [00:06:12] Speaker 01: This is where we get into territory. [00:06:14] Speaker 01: What's your best case on that particular proposition? [00:06:17] Speaker 01: We can look at Willie, Your Honor, or Winnie. [00:06:20] Speaker 01: That's a first circuit case. [00:06:22] Speaker 01: You can look at cases like Papera from the third circuit as well. [00:06:27] Speaker 01: The third circuit in the Papera case is actually quite instructive by saying, on the merits, or the on the merits requirement is better understood in terms of its functional equivalent, whether a dismissal is with prejudice. [00:06:40] Speaker 01: Other cases from the circuit similarly show, again, I would take the court to cases that deal with finality in the 1291 context, not for their controlling features, but for their ability to teach why this is not a final judgment on the merits, because in this case, the district court and Mr. Markley's first federal action only addressed the federal claim on the merits. [00:07:01] Speaker 01: Its dismissal of the state law claim was without prejudice. [00:07:05] Speaker 01: This is not merely reflected in the dismissal or summary judgment order itself, but also in the final judgment. [00:07:12] Speaker 02: Mr. Wilkinson, did you know that there was diversity jurisdiction when you filed the case and just decided not to plead it? [00:07:25] Speaker 01: So, Your Honor, I think that the question is whether there was diversity jurisdiction about which the district court was made aware in the first federal action. [00:07:34] Speaker 02: No, I said, was your client aware that there was diversity jurisdiction? [00:07:38] Speaker 01: I believe, Your Honor, that even if our client was aware, that's not controlling for this court's final judgment analysis. [00:07:45] Speaker 01: Because as cases as recently as the Supreme Court's decision in Royal Canaan teach, where there is a dismissal of a federal claim, the [00:07:54] Speaker 01: State law claim must automatically be dismissed. [00:07:58] Speaker 02: I don't think you answered my question. [00:08:00] Speaker 02: Let me ask it differently. [00:08:01] Speaker 02: At the time the district court dismissed your state law claims without prejudice, did you know there was diversity jurisdiction? [00:08:11] Speaker 01: I believe that there was sufficient information in the civil complaint sheet that could have indicated that, but I believe, Your Honor, there was an outstanding question about U.S. [00:08:22] Speaker 01: banks domicile for purposes of diversity. [00:08:26] Speaker 02: Okay, I appreciate that. [00:08:29] Speaker 02: Let me mix it up a little bit. [00:08:31] Speaker 02: What if you had voluntarily dismissed your state law claims before the time that the federal court had granted [00:08:41] Speaker 02: granted summary judgment in the bank's favor on the federal question. [00:08:47] Speaker 02: Could you refile those state claims that you had voluntarily dismissed in state court? [00:08:52] Speaker 02: Yes, Your Honor. [00:08:53] Speaker 01: That's consistent with Rule 41, which makes clear that a dismissal without prejudice on a voluntary basis can be refiled before the time that summary judgment is occurred. [00:09:03] Speaker 02: Why wouldn't that violate the [00:09:05] Speaker 02: rule of claim preclusion that if you have a common core of operative facts, they all have to be pled in the same cause of action. [00:09:13] Speaker 01: Because, Your Honor, I believe that the sort of nucleus of fact requirement is distinguishable legally from the final judgment on the merits requirement. [00:09:21] Speaker 01: And Your Honor's hypothetical, we're not dealing with a circumstance where there was an adjudication on the federal claim with an adjudication based on its jurisdictional bases for the state law claim. [00:09:32] Speaker 02: Could you have added, in that case when you refiled in state court, could you have added other federal claims? [00:09:38] Speaker 01: It would depend on the nature of those federal claims, Your Honor. [00:09:41] Speaker 01: And so there's a world one can imagine where I'm not necessarily saying this is the case for this appeal. [00:09:47] Speaker 02: Even a federal claim that's based on the wrongful termination facts? [00:09:50] Speaker 01: I think what that analysis would require, Your Honor, is a close study of the allegations underpinning the state law claim or the federal claims at issue. [00:09:59] Speaker 01: And to turn back to a more foundational point regarding diversity allegations, Mr. Markley behaved consistent with what the federal rules demand in every action at issue in this case. [00:10:11] Speaker 01: both his first federal action and his second federal action, or second state action that was removed to federal court. [00:10:17] Speaker 01: Mr. Markley, in his first action, pleaded federal questioned jurisdiction under 1331. [00:10:22] Speaker 01: He pleaded supplemental jurisdiction under 1367. [00:10:25] Speaker 01: And there is no indication in any case that this is an insufficient basis for him to have had his claims heard. [00:10:31] Speaker 01: And that, having satisfied that, [00:10:34] Speaker 01: The district court, as it was required to do, dismissed the wrongful termination claim without prejudice upon having dismissed the federal claim on its merits. [00:10:44] Speaker 01: And so I think that, given Mr. Markley behaved himself, complied with every federal rule in his first federal action, and the district court, consistent with the requirements to which it must adhere, dismissed the state law claim on purely jurisdictional basis. [00:11:00] Speaker 04: What does without prejudice mean? [00:11:02] Speaker 04: in the district court's point of view when, in fact, there was clear prejudice according to the other side, the APOLE's position? [00:11:13] Speaker 01: There are two ways of getting to that answer, Your Honor. [00:11:15] Speaker 01: The first of which is consistent with cases like Paparis and the Willie case from the First Circuit is to study what we can reasonably infer in terms of a district court's intent from what it is that we have available. [00:11:27] Speaker 01: And so if you look at the summary judgment order, we have a dismissal without prejudice. [00:11:31] Speaker 01: And the final judgment, we have no mention of Mr. Markley's state law claim. [00:11:35] Speaker 01: There's a world in which the district court may have said, I've reached the merits of this claim. [00:11:39] Speaker 01: It's dismissed with prejudice. [00:11:41] Speaker 01: And that would look different, but we don't live in that world. [00:11:45] Speaker 01: We live in a world where the district court and Mr. Markley's first federal action did what it was mandated to do, dismissed the state law claim on jurisdictional bases, and the DC circuit, [00:11:56] Speaker 01: The Third Circuit, the Fifth Circuit, the Eleventh Circuit, the Supreme Court, and this circuit have all held that a dismissal without prejudice cannot constitute a final judgment on the merits. [00:12:07] Speaker 01: I'm happy to provide language from other circuits that read this. [00:12:09] Speaker 00: Well, counsel, your time is elapsing. [00:12:13] Speaker 00: And I just want to ask you, in anticipation of what your opposing counsel is going to say, that under principles of preclusion, you get one bite at the apple. [00:12:23] Speaker 00: One. [00:12:24] Speaker 00: And it was on you to amend your complaint and allege diversity jurisdiction. [00:12:33] Speaker 00: So just related to your point that you did everything you could, you didn't do that. [00:12:41] Speaker 00: So could you just respond to that argument? [00:12:44] Speaker 01: Of course, Your Honor. [00:12:44] Speaker 01: And then, if possible, I'd like to save the remaining time following that. [00:12:48] Speaker 01: I'll give you some time. [00:12:49] Speaker 01: Thank you. [00:12:50] Speaker 01: I think that the question of whether [00:12:52] Speaker 01: we or Mr. Markley was prohibited from taking a second bite of the apple, proceeds from the premise that there would have been some determination in the first federal action that would have made the second action a second bite. [00:13:06] Speaker 01: There is no such circumstance procedurally or factually here, which implicates those questions of equity, much less that makes them resolve. [00:13:13] Speaker 00: Well, how about the fact that you have to bring everything you can bring? [00:13:18] Speaker 01: Your Honor, I believe that Mr. Markley did bring everything that he needed to bring or that he saw as pertinent to his claim. [00:13:25] Speaker 01: The issue of whether someone brings claims in an action is analytically different from the question of how those cases are treated by a district court and whether that treatment gives rise to a final judgment on the merits. [00:13:37] Speaker 01: So not only was Mr. Markley in full compliance with 1331 and 1367, which encourages and states it's entirely appropriate to file a claim on the state basis under supplemental jurisdiction in federal court. [00:13:49] Speaker 01: But at that point, the analysis turns to asking how the district court treated those claims. [00:13:55] Speaker 01: There's a world where the district court said, I'm going to reach the merits, or consistent with the Fifth Circuit said, now I'm going to [00:14:00] Speaker 01: issue in order to show cause as to why can retain diversity jurisdiction or should. [00:14:05] Speaker 01: And as the Fifth Circuit has made clear, had that happened, Mr. Markley failed to respond. [00:14:10] Speaker 01: We might be in a world where I'd have a more difficult time answering your Honor's question, but because nothing of the sort happened, [00:14:15] Speaker 01: And the final judgment makes no interest or statement about the dismissal with prejudice of the state law claim, much less the summary judgment order, which says it's dismissed without prejudice. [00:14:25] Speaker 01: This question that Your Honor poses isn't one that governs, because Mr. Markley complied with every rule of federal procedure and statute. [00:14:31] Speaker 02: Let me add this twist. [00:14:32] Speaker 02: What if in Markley 2, so you refile a state court, it gets removed on diversity grounds. [00:14:39] Speaker 02: You really don't want to be in federal court. [00:14:40] Speaker 02: You've already got hammered once on your federal claim. [00:14:43] Speaker 02: You really want to be in state court. [00:14:45] Speaker 02: So to defeat diversity, you amend your complaint and add a non-diverse party, forcing the district court, presumably, to dismiss. [00:14:57] Speaker 02: Can you refile your claims in state court? [00:15:03] Speaker 01: So I believe the answer to your honor's question is one that is governed or is helped better understood by the Dozer case. [00:15:10] Speaker 01: And in that case, the question of whether [00:15:12] Speaker 01: There is any kind of claim preclusion issue attendant to jurisdictional issues requires an analysis or adjudication of those underlying jurisdictional issues. [00:15:21] Speaker 01: So I think Dozer is instructive because I think it closely mirrors the question your honor is posing, which is, for instance, what happens when a plaintiff is kicked out of court without sort of an adjudication on the merits, but where a district court says the amount of controversy is too low. [00:15:36] Speaker 01: A plaintiff cannot then file the same claim and conjure up $400,000 in punitive damages. [00:15:42] Speaker 01: That's what Dozer says. [00:15:43] Speaker 01: That's not what Mr. Markley did. [00:15:44] Speaker 01: And I'd like to close with a quote from Dozer, which is that, the issue litigated was whether the claim exceeded the jurisdictional minimum. [00:15:51] Speaker 01: Dismissal without prejudice was appropriate to make it clear appellant was not precluded by claim preclusion from having his claims heard on the merits in state court. [00:16:00] Speaker 01: There is an analytical difference between whether there's a jurisdictional determination that could come into significance or importance in your honor's hypothetical and the circumstance here where there was, for instance, no jurisdictional determination. [00:16:12] Speaker 01: I apologize. [00:16:13] Speaker 01: I'm well over my time. [00:16:14] Speaker 01: I'm happy to take the court's remaining questions. [00:16:16] Speaker 01: Thank you, Counselor. [00:16:16] Speaker 01: I'll give you some time for rebuttal. [00:16:19] Speaker 01: Thank you. [00:16:19] Speaker 02: Let's hear from the bank. [00:16:28] Speaker 03: Good morning, Your Honors. [00:16:30] Speaker 04: I was going to ask the other attorney, but he ran out of time. [00:16:34] Speaker 04: Tell me what court dozer came out of. [00:16:39] Speaker 03: Yes, Your Honor, I can do that. [00:16:44] Speaker 02: Mr. Wilkinson, if you know? [00:16:46] Speaker 02: It's the PC circuit. [00:16:47] Speaker 04: PC circuit. [00:16:48] Speaker 04: OK, thanks. [00:16:48] Speaker 03: OK. [00:16:51] Speaker 03: And unlike the DeLal case, which came out of the Colorado Court of Appeals with the exact fact pattern cited by Judge Timkovich, [00:16:57] Speaker 03: and said, no, you can't refile that claim. [00:17:01] Speaker 03: Your Honor, and may it please the court counsel, the issue presented by this case is whether. [00:17:07] Speaker 02: Could you introduce yourself? [00:17:08] Speaker 03: Oh, I'm sorry. [00:17:08] Speaker 03: My name is Marco Merkinich, and I'm from Butler Mendelson on behalf of US Bank. [00:17:13] Speaker 03: I apologize for ending up off schedule a little bit. [00:17:17] Speaker 03: It's not your fault. [00:17:17] Speaker 03: It's our fault. [00:17:18] Speaker 03: It's not a fault question. [00:17:19] Speaker 03: I appreciate it. [00:17:21] Speaker 03: The issue presented by this case is whether, by choosing not to plead diversity jurisdiction in his first lawsuit, [00:17:28] Speaker 03: challenging his termination from employment, Mr. Markley is able to proceed through discovery and motion practice for a second time, more than seven years after he last worked for U.S. [00:17:39] Speaker 03: Bank. [00:17:40] Speaker 03: The answer to that question we submit is no, based on well-established authority, the well-reasoned opinion of the trial court. [00:17:48] Speaker 03: And frankly, Your Honor, nor can other plaintiffs create a future loophole for themselves by pleading federal question jurisdiction [00:17:57] Speaker 03: supplemental jurisdiction over state law claims and leaving out diversity jurisdiction just in case. [00:18:04] Speaker 03: And by the way, the ruling of the trial court here was not like a dismissal without prejudice. [00:18:09] Speaker 03: It was a dismissal with prejudice of the federal claims based on a ruling that they did not have merit and the plaintiff had not established the key elements of his claim. [00:18:20] Speaker 04: But that prejudice stemmed from this principle of law about not [00:18:25] Speaker 04: You can't split your causes of action. [00:18:27] Speaker 04: It doesn't result from any language of the court. [00:18:32] Speaker 03: No, Your Honor. [00:18:32] Speaker 03: And frankly, the Kale opinion dealt directly with that and referred to the language as supererogatory when Judge Skinner used it in the trial court level in that case. [00:18:44] Speaker 03: And it completely said, no, let's look at all three elements of what's required for the merger and bar doctrines to apply here. [00:18:51] Speaker 03: The same parties, no doubt. [00:18:54] Speaker 03: But the element that the appellant tries to gloss over is whether it's the same claim. [00:18:59] Speaker 03: And it is the same claim. [00:19:00] Speaker 03: The law is unequivocal on that. [00:19:02] Speaker 03: These all involve termination from employment for the same reasons. [00:19:07] Speaker 03: They even involve the same issues. [00:19:08] Speaker 03: If you look at the complaints, they're the same. [00:19:10] Speaker 02: They're different claims. [00:19:11] Speaker 02: I mean, you got claim one, claim two, claim three. [00:19:14] Speaker 02: I mean, there's maybe the same conduct underlying, but they're different claims. [00:19:17] Speaker 03: They're different legal theories for the same operative set of facts. [00:19:21] Speaker 04: There's different conduct, too. [00:19:23] Speaker 04: One of them is complaining about one kind of conduct, and the other is complaining about another kind of conduct, both occurring in the termination of employment, but really different conduct. [00:19:35] Speaker 03: They're complaining that he was unfairly terminated for two different legal reasons, but it's based on the same facts. [00:19:41] Speaker 04: The complaint allegation is factually... It has common facts to it, I'll give you that, but I don't agree with you that it's based on the same facts. [00:19:49] Speaker 03: And the requirement that he establish causation for the whistleblower claim is in fact precluded on a claim basis, I mean an issue basis, [00:19:59] Speaker 03: Judge Bremer did not reach that issue, but we think that would be an additional reason to affirm the trial court here. [00:20:07] Speaker 02: I believe... What makes it a final judgment on the merits? [00:20:10] Speaker 02: You know, we have a dismissal without prejudice. [00:20:13] Speaker 02: You know, facially, intuitively, that looks unfinal and not on the merits. [00:20:18] Speaker 03: Your Honor, first of all, there are two questions embedded there, and it's kind of for what purpose? [00:20:23] Speaker 03: Because it's clearly a final judgment on the merits because judgment was entered, it was appealed, [00:20:27] Speaker 03: There was no relief sought from the trial court to clarify the judgment. [00:20:31] Speaker 03: There was no appeal made of the dismissal of the state law claims. [00:20:35] Speaker 03: So there's no denial that it was a final judgment. [00:20:38] Speaker 03: The question was, is it a final judgment as to the state law claims? [00:20:42] Speaker 03: And we recognize that's an element of a race judicata defense, a merger and bar based defense to a second lawsuit. [00:20:51] Speaker 03: And the answer to that question is because [00:20:55] Speaker 03: The plaintiff in this case had the ability and knew that there was diversity of citizenship based on the civil action cover sheet, chose not to plead it. [00:21:04] Speaker 03: When he received the dismissal, he chose not to seek clarification from the trial court, which he could have done. [00:21:12] Speaker 03: under Rule 60, nor did he seek an appeal of that dismissal of the state law claims. [00:21:18] Speaker 03: So it really is saying, and this is not a plaintiff on a preliminary motion to dismiss basis who said, I haven't had anyone hear me. [00:21:26] Speaker 03: There was two years of discovery and action before this trial court ruling. [00:21:30] Speaker 04: You know what I'm really confused about in this case is the importance or lack of importance of what the plaintiff knew. [00:21:40] Speaker 04: Is that a determining factor here? [00:21:46] Speaker 04: The citizenship of a national bank is a little different than normal citizenship requirements. [00:21:55] Speaker 04: And what if he said, I'm a lawyer that has a practice in some other narrow area normally. [00:22:02] Speaker 04: I have no idea about unique situations. [00:22:06] Speaker 04: Would we treat that differently? [00:22:08] Speaker 04: Would we say that that's a different? [00:22:11] Speaker 04: I mean, this would be astonishing if jurisdiction depended upon the secret subjective knowledge of a lawyer. [00:22:18] Speaker 04: And yet you and the briefs keep talking about how important it is what they knew and didn't know. [00:22:23] Speaker 03: No, Your Honor, we're really trying to focus on that as a supplemental fact. [00:22:27] Speaker 03: The fact of the matter is there was diversity jurisdiction. [00:22:31] Speaker 03: This case right here is before the court based on diversity jurisdiction involving the same parties. [00:22:36] Speaker 03: And so the fact that the plaintiff was aware of it just goes to show [00:22:40] Speaker 03: the absence of any unfairness to the plaintiff in enforcing the rule. [00:22:44] Speaker 04: Are you suggesting this case could be decided differently based upon unfairness? [00:22:48] Speaker 04: As far as I was taught in procedure class, jurisdiction's pretty much as devoid of emotional content as you can come up with. [00:22:59] Speaker 03: Your Honor, it is devoid of emotional content, and we don't think it's critical to the finding or the argument we're making that the plaintiff was aware [00:23:08] Speaker 03: The fact that he was aware sort of responds to some of the arguments that were made both at the trial court and in the opening brief that touched on those issues. [00:23:17] Speaker 03: So to the extent it was overemphasized, the point is there was diversity jurisdiction. [00:23:21] Speaker 03: That's enough. [00:23:23] Speaker 02: Another way to look at it is the bank surely knew there was diversity. [00:23:26] Speaker 02: There may be a plaintiff out there that doesn't know citizenship, but the defendant in this case knew there was complete diversity. [00:23:35] Speaker 02: and was available out there, you immediately removed your markedly two. [00:23:42] Speaker 02: But since you knew that there was complete diversity, another way to look at it is, well, if you wanted to protect yourself from a sneaky plaintiff who's going to go back over to state court and try to get a better forum there, you could have asked the district court to reconsider the dismissal without prejudice. [00:24:05] Speaker 02: asserting that, wait a minute, there's complete diversity, rule on the merits of the state law claims. [00:24:11] Speaker 02: If that were denied, you could have come up to the circuit with your, along with the federal claim that came up anyway. [00:24:17] Speaker 02: Well, if you look at it that way, the defendant's in complete control of his fate also. [00:24:22] Speaker 03: Your honor, there is no such burden on the defendant. [00:24:25] Speaker 03: We viewed the ruling from the trial court as conclusive definitive on all claims because of the way race judicata and the rules against claim splitting work. [00:24:35] Speaker 03: There was no reason to do that. [00:24:37] Speaker 03: We defended the appeal. [00:24:39] Speaker 03: The underlying ruling was affirmed and there was nothing more to do. [00:24:43] Speaker 04: So your point on that was we had one problem before us and that was a federal case. [00:24:48] Speaker 04: The federal case is done. [00:24:50] Speaker 04: We'll never face federal problems again on that. [00:24:52] Speaker 04: And so our job here is complete. [00:24:55] Speaker 03: Right. [00:24:55] Speaker 03: There's a final judgment dismissing all claims that were or could have been brought in this matter. [00:25:02] Speaker 02: Maybe I'm asking a policy question. [00:25:05] Speaker 02: You're saying that the plaintiff should have appealed the dismissal without prejudice to protect themselves. [00:25:11] Speaker 02: Another way to look at it is the defendant has the duty to appeal to protect himself from state court refiling. [00:25:19] Speaker 03: Your Honor, that would be an unusual rule to require the prevailing party to appeal to double lock down their win. [00:25:26] Speaker 03: I think with all respect, as a defendant, we're properly a respondent here. [00:25:32] Speaker 03: But as Judge Skinner said, the First Circuit said in Kale, [00:25:37] Speaker 03: Use of the phrase without prejudice was supererogatory because the dismissal of pendant claims on jurisdictional grounds is always without prejudice. [00:25:45] Speaker 03: Thus, the phrase without prejudice added nothing to what transpired in any event. [00:25:49] Speaker 03: The phrase could not have constituted an express reservation of Cale's right to maintain the state law claim and a second action in federal court. [00:25:57] Speaker 04: In fact, did the court even have authority to do that? [00:25:59] Speaker 04: Would the court have had authority to say, I'm going to allow you to hereby split your claims and bring another claim? [00:26:09] Speaker 03: I don't believe the court could have allowed that, especially because diversity jurisdiction existed. [00:26:14] Speaker 03: And if the court were aware of that and had focused on that, no. [00:26:18] Speaker 03: I think about it this way, too, Your Honors. [00:26:21] Speaker 03: If this first claim had been brought only as a federal claim without a state whistleblower claim appended, [00:26:27] Speaker 03: And the same ruling issued from Judge Moore and came up to the distinguished panel that affirmed that ruling. [00:26:35] Speaker 03: There's no doubt that a second lawsuit brought alleging the state law claims would have been barred by race judicata. [00:26:43] Speaker 03: If the first claim had been brought with dependent state law claims and also alleged diversity jurisdiction, Judge Moore would have had to address it. [00:26:52] Speaker 03: It would have been addressed. [00:26:53] Speaker 03: The rules of finality and against claim splitting would have been followed. [00:26:57] Speaker 03: So the only way we end up in this predicament is if the plaintiff does not allege and assert diversity jurisdiction in the first case. [00:27:06] Speaker 03: Because otherwise, it's either decided by Judge Moore on the merits directly as a standalone claim, [00:27:13] Speaker 03: Or it's barred by the doctrines of race judicata, as all the cases we've cited here attest. [00:27:20] Speaker 03: So the only way we end up here is if the plaintiff does not present diversity jurisdiction. [00:27:26] Speaker 03: And I respect what the judge said, Judge Epel said, because if the plaintiff didn't know that, we had years, more than a year of discovery here. [00:27:35] Speaker 03: That could have been learned and was learned to the extent it needed to be learned, and could have been fixed. [00:27:41] Speaker 03: It wasn't. [00:27:42] Speaker 03: Nor was that claim appealed. [00:27:45] Speaker 03: There's nothing that said. [00:27:46] Speaker 04: This goes back to that earlier line of questioning. [00:27:50] Speaker 04: If that was not known or could have easily been known, would this result be different? [00:27:58] Speaker 04: I mean, if, for example, it was really a genuine uncertainty in the law where the principal place of business of US Bank was. [00:28:07] Speaker 04: I mean, they had two equal offices and they [00:28:09] Speaker 04: and their incorporation papers were confusing or had been amended or something, and you couldn't know, would the outcome have been different? [00:28:16] Speaker 03: I don't believe so, Your Honor, no, because the burden is on the plaintiff to make all of the claims that exist at the time that they bring their claim. [00:28:25] Speaker 03: If they later learn that they might have another cause of action while the case is pending, they can go to the court and ask for permission to add that claim unless it's within the period that can do it as of right. [00:28:36] Speaker 03: But if something happens after that case ends and a final judgment has been entered and it's even been affirmed on appeal, you can't go back and say I now learned a new fact and I can try over again. [00:28:47] Speaker 03: And that's true whether it's something that relates to the cause of action or whether it relates to jurisdictional facts. [00:28:54] Speaker 03: And the burden on the plaintiff is to plead all actions in the first case, both those that relate to the claims themselves, all possible claims, and all possible jurisdictional facts. [00:29:06] Speaker 03: And the law that we've cited from the First Circuit, the Seventh Circuit, the Colorado Court of Appeals all say that. [00:29:12] Speaker 04: And your proposition would be that that is just an absolute burden on a lawyer. [00:29:17] Speaker 04: And it doesn't depend on that lawyer's subjective views. [00:29:21] Speaker 04: It's just a plain old burden on them. [00:29:23] Speaker 03: That's correct, Your Honor. [00:29:24] Speaker 03: And I think that we make choices in life. [00:29:27] Speaker 03: And for lawyers and law students, we like to keep our options open. [00:29:30] Speaker 03: But the merger and bar doctrines, including race judicata, collateral estoppel, [00:29:36] Speaker 03: claim splitting, law of the case, are all intended to bring finality in one place so we don't end up living bleak house for the rest of our days. [00:29:45] Speaker 03: We need finality. [00:29:47] Speaker 03: We want efficiency. [00:29:49] Speaker 03: It doesn't only affect the parties. [00:29:51] Speaker 03: It affects the public that has to provide the forum. [00:29:54] Speaker 03: It affects the judiciary where you're spending judicial resources multiple times. [00:29:59] Speaker 03: And beyond that, [00:30:00] Speaker 03: It creates a delay that is just unacceptable. [00:30:03] Speaker 03: Right now, if Mr. Markley last worked for US Bank in 2018, by the time this case comes to rest, if it's sent back to trial, we're talking about 10 to 12 years later that witnesses are going to be expected to testify. [00:30:17] Speaker 03: There are great policy reasons that the common law has always recognized the need to avoid claim splitting, keep things together, [00:30:27] Speaker 02: Proceed in this way one case one claim one action What was the time between the dismissal of the markly one and the refiling and state court? [00:30:39] Speaker 02: Well your honor the appeal intervenes so the markly one was did he file the state claims markly two before the appeal was resolved no appeal [00:30:49] Speaker 02: No. [00:30:49] Speaker 02: So after that? [00:30:50] Speaker 03: After that, they were filed. [00:30:52] Speaker 03: And we're not claiming that was untimely. [00:30:53] Speaker 03: That's not part of our argument. [00:30:55] Speaker 02: No, I know you're not. [00:30:56] Speaker 02: But I'm just trying to get a... If it's Bleak House, I kind of want to know the timeline. [00:31:01] Speaker 03: Yes. [00:31:01] Speaker 03: I mean, it's the John Dice of employment law. [00:31:07] Speaker 03: Go ahead and wrap up. [00:31:09] Speaker 03: I will, Your Honor. [00:31:09] Speaker 03: Thank you. [00:31:10] Speaker 03: Mr. Markley had a full and fair chance to develop his case, present it to a judge. [00:31:16] Speaker 03: The judge looked at that case on that record, made a decision, [00:31:19] Speaker 03: And we haven't emphasized the collateral estoppel piece, but basically decided those issues that needed to be decided, dismissed it, routinely said there's no jurisdiction over these supplemental claims, so I'll dismiss them under well-established federal and Colorado law. [00:31:34] Speaker 03: That means this case is over. [00:31:36] Speaker 03: So the refiling in state court of the same claim to do it one more time is something that is not allowed. [00:31:43] Speaker 02: And in fact that we've been... Although to some extent the district court was wrong about the [00:31:47] Speaker 02: lack of federal jurisdiction, although he wasn't alerted to the fact of diversity, you know, diversity did in fact exist. [00:31:57] Speaker 03: Right, Your Honor, and that's where we say the plaintiff had multiple chances to get this right, both before filing the first claim, during the pendency of that action, after the initial ruling was made and there was a decision not to file a Rule 60 motion to clarify or revise or correct judgment, or on appeal. [00:32:15] Speaker 03: None of those steps were taken. [00:32:17] Speaker 03: At some point, we have to make our decisions and live with the consequences. [00:32:21] Speaker 03: That's what race judicata means. [00:32:22] Speaker 03: And on the other issues that have been discussed, we submit on our briefs and we thank you very much. [00:32:27] Speaker 02: Yeah, thank you, Council. [00:32:28] Speaker 02: Paul, could you give them two minutes for rebuttal? [00:32:40] Speaker 01: Yes. [00:32:40] Speaker 01: Thank you, Your Honors. [00:32:41] Speaker 01: I'd like to make two primary points, and we can drill down on them if we need to. [00:32:44] Speaker 01: The first of which is that US bank clouds this appeal with questions of equity. [00:32:49] Speaker 01: It would be inequitable to hold a plaintiff to the dismissal of this claim when he met at every turn his jurisdictional burdens in federal court and state court and following the removal of this case to federal court in this current action. [00:33:03] Speaker 01: all questions of equity resolve in Mr. Markley's favor, and there's nothing in 1367 or 1331 that demands punishing someone for complying with them. [00:33:12] Speaker 01: 1367 is on the books, it permits Mr. Markley to do precisely what he did, and the idea that compliance with that can somehow give rise to the dismissal of a claim as a matter of claim preclusion enjoys no support in any case. [00:33:24] Speaker 01: The facial procedural similarities of the First Circuit, the Colorado Court of Appeals, and the Seventh Circuit do not control here because they neglect [00:33:33] Speaker 01: foundational claim-proclusion principles and take as their basis for their holdings facial and superficial procedural similarities. [00:33:42] Speaker 00: A case that does... So I don't want to take your time, but so you think those cases are wrongly decided or you think they're distinguishable? [00:33:49] Speaker 01: Both, Your Honor, and I think the primary basis on which they are distinguishable is that they fail to contend with cases from the Supreme Court like Cooter and other circuits that say that a dismissal without prejudice is not a final judgment on the merits. [00:34:03] Speaker 01: Some of those cases reached other merits determinations. [00:34:06] Speaker 01: That's not what happened here. [00:34:07] Speaker 01: If you read the final judgment on its face, in conjunction with the summary judgment order, there is point blank a dismissal without prejudice, and that cannot constitute a final judgment on the merits for claim preclusion purposes. [00:34:18] Speaker 01: In 19 seconds, I'd like to say the U.S. [00:34:20] Speaker 01: Bank also evoked questions of issue preclusion. [00:34:23] Speaker 01: This court cannot read such questions as we've outlined in our brief, but moreover, this court has never taken an all-or-nothing approach to issue preclusion. [00:34:31] Speaker 01: If you read cases like Harris, you analyze them claim by claim, fact by fact, and moreover, the factual questions underpinning – may I finish my thought, Your Honors? [00:34:40] Speaker 01: Please. [00:34:40] Speaker 01: The factual questions underpinning the federal claim are [00:34:43] Speaker 01: totally different from those underpinning the state law claims. [00:34:46] Speaker 01: In one, you'd conduct discovery on pretext for status. [00:34:49] Speaker 01: On the other, you'd conduct discovery on the question of protected conduct. [00:34:53] Speaker 01: And there is an insufficient overlap in those cases analytically and factually to demand issue preclusions application. [00:35:00] Speaker 01: My time is up. [00:35:01] Speaker 01: I welcome other questions. [00:35:02] Speaker 02: Thank you, counsel. [00:35:03] Speaker 02: We appreciate your time. [00:35:04] Speaker 02: Thanks for your flexibility. [00:35:06] Speaker 02: Very interesting and difficult case. [00:35:08] Speaker 02: Your excuse on the case shall be submitted, and the court is in recess until further notice.