E-Alert Case Updates

Substantive Change in Statutory Law and Foreign Policy Constitutes Good Cause to Bar Application of Res Judicata

Clodfelter v. Republic of Sudan
No: 11-2118 (Fourth Circuit Court of Appeals, June 20, 2013)
by Elisabeth R. Connell, Summer Associate
Semmes, Bowen & Semmes (www.semmes.com)

On June 20, 2013, the United States Court of Appeals for the Fourth Circuit reversed the judgment of the District Court and remanded this case to allow Plaintiffs to pursue their claims against Sudan under the Foreign Sovereign Immunities Act (‘FSIA’), 28 U.S.C. § 1605A. The Court of Appeals concluded that the plaintiffs’ prior judgment against Sudan under the Death on the High Seas Act (‘DOSHA’) did not act as res judicata, barring their newly asserted claims under the FSIA for three (3) reasons; the change in statutory law between the plaintiffs’ first and second complaints, the inapplicability of a core value of the res judicata doctrine, and the legislative intent behind the change in substantive law.

The suit arises from the bombing of the U.S.S. COLE, which occurred in October 2000, while the ship was docked in the Port of Aden in Yemen to refuel. The bombing, perpetrated by Al Qaeda operatives, who resided in and received support from Sudan, killed seventeen (17) Navy sailors and injured 42 others. The families of these victims comprise the class of Plaintiffs. Initially, Plaintiffs brought suit against the Republic of Sudan for claims of wrongful death under DOSHA, overcoming the immunity typically accorded a foreign country by invoking the exception under 28 U.S.C. § 1605(a)(7) for state sponsors of terrorism. At this time, that statute was interpreted as waiving foreign immunity, but not providing a cause of action. Cicippio-Puleo v. Islamic Republic of Iran, 353 F.3d 1024 (D.C. Cir. 2004). Sudan refused to participate in the merits of the case, and the court entered default judgment for wrongful death under DOSHA against Sudan, ordering compensatory damages of $7,956,344. In arriving at this judgment, the district court dismissed the plaintiff’s state law claims and Plaintiffs’ appealed that part of the ruling.

While that appeal was pending, Congress repealed 28 U.S.C. § 1605 and re-enacted the same to create a federal cause of action under the immunity-waiving provision via the National Defense Authorization Act for Fiscal Year 2008. This re-enacted statute also contained detailed provisions waiving res judicata and collateral estoppel defenses for pending and decided cases under § 1605 when certain procedures were followed to bring a “related action.” Plaintiffs chose not to utilize this procedure, and instead brought a new, separate claim under the newly enacted 28 U.S.C. § 1605A. The district court concluded that res judicata barred the new claims, applying the transactional test and determining that the two causes of action clearly arose from the same transaction.

On the issue of whether res judicata should bar plaintiffs’ new claims, the Court of Appeals disagreed with the District Court’s analysis and reversed their dismissal of Plaintiffs’ claims. First, the Court explained that the change in statutory law and the substantial foreign and domestic policy concerns at issue in cases brought under § 1605A justified an exception to the res judicata doctrine. Second, the court felt that a core value of the doctrine, “free[ing] people from the uncertain prospect of litigation,” would be ill served by barring the plaintiffs’ claims because Sudan, as a foreign state sponsor of terrorism, has little, if any, reliance interest or settled expectation with respect to prior civil actions litigated against it under § 1605(a)(7), especially when it continually refused to participate in the merits of litigation. Finally, the court focused on the congressional purpose for enacting the new § 1605A; to address the inability of victims of terrorism to bring suit, under federal law, against wrongdoers, especially the foreign states deemed responsible for perpetrating or supporting acts of terror. An interpretation of that statute which would prevent Plaintiffs from seeking compensation and effectively shields state sponsors of terrorism would undermine that congressional purpose. For these reasons, the Court held that res judicata would not bar Plaintiffs’ claims and remanded the case for further proceedings consistent with that opinion.