Breaker v. Bemidji State Univ.

899 N.W.2d 515

Martin T. BREAKER, Appellant,

v.BEMIDJI STATE UNIVERSITY, et al., Respondents.

A16-1606

Court of Appeals of Minnesota.

Filed June 12, 2017

Gregg M. Corwin, Joshua M. Erspamer, Gregg M. Corwin & Associate Law Office, P.C., St. Louis Park, Minnesota (for appellant).

Lori Swanson, Attorney General, Janine Kimble, Assistant Attorney General, St. Paul, Minnesota (for respondents)

Considered and decided by Bratvold, Presiding Judge; Kirk, Judge; and Toussaint, Judge.^*

OPINION

BRATVOLD, Judge

Appellant challenges the district court's dismissal of his claims against respondent, a state university and his former employer. In 2011, appellant sued respondent in tort, citing USERRA violations. USERRA requires state employers to promptly reemploy employees upon completion of military service, prohibits discrimination against employees based on their military status, and provides for exclusive state jurisdiction over private damages claims against state employers. 38 U.S.C. §§ 4301(a)(1)–(3), 4323(b)(2) (2016). The district court dismissed appellant's first lawsuit, and this court affirmed. Breaker v. Bd. of Trs., Minn. State Colls. & Univs. ( Breaker I ), No. A11-2286, 2012 WL 2874038 (Minn. App. July 16, 2012), review denied (Minn. Sept. 25, 2012). In April 2012, while the Breaker I appeal was pending, the Minnesota Legislature enacted a new law that permitted plaintiffs to bring civil actions against the state for USERRA violations. 2012 Minn. Laws ch. 192, § 1, at 1 (codified at Minn. Stat. § 1.05, subd. 5 ).

In this case, appellant sued respondent for violating USERRA based on the same factual circumstances supporting his tort claim in Breaker I . Appellant argues the district court erred when it applied res judicata because he did not receive a full and fair opportunity to litigate his USERRA claims in Breaker I . More specifically, appellant asserts that his USERRA claims would have been barred in Breaker I because sovereign immunity precluded USERRA claims until legislative changes were made in 2012, which occurred after Breaker I was dismissed. We conclude that the district court erred and, therefore, reverse and remand for additional proceedings.

FACTS

Between 1997 and 2005, appellant Martin Breaker was a faculty member at respondent Bemidji State University (BSU),¹ working as an assistant professor and program coordinator in the business department. In 2005, the U.S. Army Reserve called Breaker into active military duty. In 2008, Breaker notified BSU that he intended to return to work. According to the complaint, BSU informed Breaker that his prior positions had been eliminated and offered him a temporary fixed-term teaching position. Breaker declined because the position was "at a lesser rate of pay, status, seniority, opportunity, and in a different location than the one that [he] held prior to his military service."

In 2011, Breaker, proceeding as a self-represented litigant, sued BSU, the State of Minnesota, Minnesota State Colleges and Universities, and several individual defendants in state court, claiming intentional infliction of emotional distress. See Breaker I , 2012 WL 2874038. The complaint alleged that the defendants engaged in extreme and outrageous conduct by failing to rehire Breaker in a position similar to that which he held before deployment. Id. at *1. Although the complaint alleged USERRA violations, Breaker did not seek relief under USERRA. Id.

The defendants moved for judgment on the pleadings, asserting that the complaint failed to plead a legally sufficient claim. Id. On October 20, 2011, the district court granted the motion, and this court affirmed on July 16, 2012, reasoning that Breaker's complaint did not sufficiently allege extreme and outrageous conduct by the defendants. Id. at *2.

In April 2012, the Minnesota Legislature passed a law waiving state sovereign immunity from USERRA claims. 2012 Minn. Laws ch. 192, § 1, at 1. In February 2016, Breaker sued BSU and asserted two USERRA claims.² The complaint alleged that BSU failed to rehire him into a "position of like seniority, status and pay" in violation of 38 U.S.C. § 4312 – 13 (2016), and took adverse employment action against him on the basis of his military status in violation of 38 U.S.C. § 4311 (2016).

BSU moved to dismiss the complaint with prejudice, arguing that res judicata barred Breaker's USERRA claims. The district court determined "that nothing prevented [Breaker] from bringing his USERRA claims" in Breaker I . The district court therefore concluded that res judicata barred Breaker's claims and dismissed the complaint. Breaker appeals.

ISSUE

Did the district court err in determining that res judicata barred Breaker's USERRA claims because he had a full and fair opportunity to litigate in Breaker I , which was dismissed before the state waived its sovereign immunity from USERRA claims?

ANALYSIS

I. Res judicata requires that the estopped party had a full and fair opportunity to litigate in the earlier action.

Appellate courts review the application of res judicata de novo. Mach v. Wells Concrete Prods. Co. , 866 N.W.2d 921, 925 (Minn. 2015). Res judicata, also referred to as "claim preclusion" and "merger and bar," seeks to avoid "wasteful litigation" so "that a party may not be twice vexed for the same cause." Wilson v. Comm'r of Revenue , 619 N.W.2d 194, 198 (Minn. 2000) (quotation omitted). Res judicata bars a subsequent claim if: "(1) the earlier claim involved the same set of factual circumstances; (2) the earlier claim involved the same parties or their privies; (3) there was a final judgment on the merits; and (4) the estopped party had a full and fair opportunity to litigate the matter." Rucker v. Schmidt , 794 N.W.2d 114, 117 (Minn. 2011).³ "Res judicata applies equally to claims actually litigated and to claims that could have been litigated in the earlier action." Brown-Wilbert, Inc. v. Copeland Buhl & Co. , P.L.L.P. , 732 N.W.2d 209, 220 (Minn. 2007).

Res judicata "should not be applied rigidly in contravention of public policy." Schober v. Comm'r of Revenue , 853 N.W.2d 102, 111 (Minn. 2013). Rather, it is an equitable doctrine that is "applied in light of the facts of each individual case." R.W. v. T.F. , 528 N.W.2d 869, 872 n.3 (Minn. 1995). Courts are less likely to apply res judicata if doing so would "work an injustice" on the party against whom the doctrine is urged. Hauschildt v. Beckingham , 686 N.W.2d 829, 837 (Minn. 2004).⁴

This appeal only concerns the fourth res judicata element—whether Breaker had a full and fair opportunity to litigate his USERRA claims in Breaker I .⁵ The fourth res judicata element "focuses on whether there were significant procedural limitations in the prior proceeding, whether the party had the incentive to litigate fully the issue, or whether effective litigation was limited by the nature or relationship of the parties." State v. Joseph , 636 N.W.2d 322, 329 (Minn. 2001) (quotation omitted). For example, res judicata does not apply when a party is prevented in the first action from bringing the claim raised in the second action. Wilson , 619 N.W.2d at 198–99 (reversing tax court's application of res judicata to bar appellant's constitutional claim because tax court's limited jurisdiction did not extend to constitutional claims); see also Smith v. Johnson , 779 F.3d 867, 870 (8th Cir. 2015) (holding res judicata inapplicable where administrative agency lacked jurisdiction over claim in first action); Restatement (Second) of Judgments § 26(1)(c) & cmt. c (1982) (stating res judicata does not apply if plaintiff was unable to bring claims in first action due to "formal barriers" or restrictions on the court's "authority to entertain multiple theories").

The issue here is whether Breaker's civil action against his state employer for violations of USERRA would have been barred in Breaker I . Breaker argues that BSU, as an arm of the state, was protected by sovereign immunity from USERRA claims. BSU responds that, at the time Breaker I was dismissed, no binding Minnesota precedent recognized state sovereign immunity from USERRA claims, and USERRA expressly permitted suits against state employers in state courts. The district court agreed with BSU. Thus, we must determine whether sovereign immunity barred BSU's liability from USERRA claims when Breaker I was dismissed. If yes, then res judicata would not apply.

II. Sovereign immunity would have barred Breaker's USERRA claims against his state employer in Breaker I .

We review issues of sovereign immunity de novo. Nichols v. State , 858 N.W.2d 773, 775 (Minn. 2015). Sovereign immunity "precludes litigation against the state unless the state has consented to suit."⁶ Id. Sovereign immunity extends to "arms" of the state, including Minnesota state colleges and universities. Treleven v. Univ. of Minn. , 73 F.3d 816, 819 (8th Cir. 1996) ; accord Raygor , 620 N.W.2d at 683. Sovereign immunity "serves to protect the fiscal stability of government." Nichols , 858 N.W.2d at 775. Minnesota has retained its sovereign immunity for statutory liability unless "the statute demonstrates the Legislature's express intent to allow suit against the State." Id. at 776. The legislature demonstrates its express intent to waive sovereign immunity under state statute if the state is either: (a) named in the statute, or (b) "the words of the act are so plain, clear, and unmistakable as to leave no doubt as to the intention of the legislature." Minn. Stat. § 645.27 (2016).

When a state is sued by its own citizens for damages under a federal act, sovereign immunity bars relief. Alden v. Maine , 527 U.S. 706, 747, 119 S.Ct. 2240, 2263, 144 L.Ed.2d 636(1999).⁷ A state may consent to be sued under a federal act. See Coleman v. Court of Appeals of Md. , 566 U.S. 30, 35, 132 S.Ct. 1327, 1333, 182 L.Ed.2d 296 (2012) ("A foundational premise of the federal system is that States, as sovereigns, are immune from suits for damages, save as they elect to waive that...