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Johnson v. Lou Fusz Automotive Network, Inc.

United States District Court, E.D. Missouri, Eastern Division

October 27, 2017

LISA JOHNSON, Plaintiff,
v.
LOU FUSZ AUTOMOTIVE NETWORK, INC., Defendant.

          MEMORANDUM AND ORDER

          AUDREY FLEISSIG, UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on the motion (ECF No. 10) of Defendant Lou Fusz Automotive Network (“Lou Fusz”) to dismiss Plaintiff Lisa Johnson's complaint on res judicata grounds. For the following reasons, the Court will deny the motion.

         BACKGROUND

         Johnson worked at Lou Fusz full time until January 24, 2013, when she was discharged. Johnson alleges that Lou Fusz discharged her to avoid the costs of providing health insurance coverage for her minor son, who suffers from an incurable medical condition.

         On October 9, 2013, Johnson filed a lawsuit against Lou Fusz in Missouri state court asserting an employment discrimination claim under the Missouri Human Rights Act (“MHRA”) and a claim for unpaid overtime under the Missouri Minimum Wage Law. In her MHRA claim, Johnson alleged that Lou Fusz discriminated against her because of her association with her disabled son. Johnson specifically alleged that her discharge was motivated by Lou Fusz's desire to avoid exposure to health care expenses resulting from Johnson's son's medical condition. In her overtime claim, Johnson alleged that she routinely worked in excess of 40 hours per work week and that Lou Fusz had a policy of manipulating Johnson's timesheet to avoid paying her overtime.

         On October 8, 2014, Lou Fusz removed the state court lawsuit to this Court, arguing that the MHRA claim was completely preempted by the Employee Retirement Income Security Act (“ERISA”) and, thus, properly removable under the Court's federal-question jurisdiction, and that the Court could exercise supplemental jurisdiction over the state-law overtime claim. Johnson moved to remand, arguing that the removal was untimely and that, in any event, the MHRA claim was not preempted. Another judge of this Court agreed that the removal was untimely, and on December 22, 2014, remanded the case to the state court without considering the Lou Fusz's preemption argument.

         Upon remand, the state court, on Lou Fusz's motion, dismissed the MHRA claim with prejudice for lack of subject matter jurisdiction, on the ground that the claim was completely preempted by ERISA. The state court later granted Lou Fusz's motion for summary judgment on the overtime claim. The Missouri Court of Appeals affirmed both rulings on February 28, 2017, but it modified the dismissal of the MHRA claim to be “without prejudice, ” as “there ha[d] been no ruling on the merits of [Johnson's discrimination] claim.” ECF No. 11-1 at 363. The appellate court added that “nothing about the dismissal prevent[ed] Johnson from filing the ERISA claim in the appropriate forum, a federal district court.” ECF No. 11-1 at 363. Johnson appealed the decision to the Missouri Supreme Court, which declined review on June 27, 2017.

         On July 3, 2017, Johnson filed suit in this Court under Section 502(a)(3) of ERISA, again alleging that Lou Fusz unlawfully discharged her to avoid the costs of providing health insurance coverage for her son. Johnson alleges that her discharge violates Section 510 of ERISA, which prohibits discrimination against an ERISA plan participant “for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan.” 29 U.S.C. § 1140.

         Lou Fusz has moved to dismiss the complaint as barred by res judicata. Lou Fusz argues that all of the elements of res judicata are met here in that the first lawsuit resulted in a final judgment on the merits and was based on proper jurisdiction, and both suits involve the same parties and same claims or causes of action.

         In response, Johnson argues that the dismissal of her MHRA claim without prejudice for lack of subject-matter jurisdiction in the first suit was neither a final judgment on the merits, nor a judgment based on proper jurisdiction. Moreover, Johnson notes that the state court would not have had jurisdiction over her ERISA claim, as that claim is subject to the exclusive jurisdiction of the federal courts. Finally, Johnson argues that the two suits were not based on the same claims or causes of action, as the first suit also contained an overtime claim.

         In reply, Lou Fusz argues that, although the MHRA claim was dismissed without prejudice, the first suit resulted in a final judgment on the merits on the overtime claim, which is sufficient to trigger res judicata. Lou Fusz also argues that the first suit was based on proper jurisdiction because the state court had jurisdiction to enter summary judgment on the overtime claim, and although the state court lacked jurisdiction over the MHRA claim (and the ERISA claim), a plaintiff cannot avoid res judicata by choosing to file suit in a court of limited jurisdiction. In particular, Lou Fusz notes that Johnson could have consented to the removal of the first suit to federal court and amended her complaint to assert her ERISA claim. Finally, Lou Fusz argues that the two suits are based on the same cause of action because both relate to Johnson's employment.

         DISCUSSION

         The defense of res judicata “may be raised in a motion to dismiss when the identity of the two actions can be determined from the face of the petition itself, ” including “public records and materials embraced by the complaint and materials attached to the complaint.” C.H. Robinson Worldwide, Inc. v. Lobrano, 695 F.3d 758, 763-64 (8th Cir. 2012) (internal citations omitted). In considering a motion to dismiss based on res judicata, the Court must “accept the non-moving party's factual allegations as true and construe all reasonable inferences in favor of the nonmovant.” Schaefer v. Putnam, 827 F.3d 766, 769 (8th Cir. 2016) (citation omitted).

         “The law of the forum that rendered the first judgment controls the res judicata analysis.” Id. (citation omitted). “It is now settled . . . that a federal court must give to a state-court judgment the same preclusive effect as would be given that judgment under the law of the State in which the judgment was ...


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