Second Circuit affirms dismissal of lawsuit against Greenberg Freeman client DDDDC, Inc.

The United States Court of Appeals for the Second Circuit has affirmed the dismissal of a lawsuit brought by WD Music Products, Inc. against Greenberg Freeman clients DDDDC, Inc. and its principal owner based on the doctrine of res judicata.

As previously reported (December 29, 2011), WD Music first sued DDDDC and its principal owner in Suffolk County Supreme Court in 2007, but failed to cooperate in discovery, which led the court to strike WD Music’s complaint and dismiss the action.  WD Music responded by commencing a new action in the same court against the same parties involving the same claims.  The court again dismissed WD Music’s complaint, this time based on the doctrine of res judicata, which precludes a party from asserting claims that were or could have been raised in a prior action.  No appeal was taken in either case.

WD Music then commenced a third lawsuit in the United States District Court for the Eastern District of New York against DDDDC and its principal owner, which asserted essentially the same claims raised in the prior two lawsuits.  Chief Judge Carol B. Amon held that the state court’s dismissal of the second action under the doctrine of res judicata was binding on the district court under the Full Faith and Credit Act, and dismissed the federal court action on the same ground.

The Court of Appeals for the Second Circuit affirmed in a unanimous decision “for substantially the same reasons stated by the district court.”  The Court held that if “WD Music believed that either of the state court decisions was incorrect, its remedy was to appeal” to the state appellate court, not commence a new action in federal court.

The appeal was briefed and argued by Michael A. Freeman.