Kimberly Lisboa, et al v. City of Cleveland Heights, et al

Filing

OPINION filed : we AFFIRM, decision not for publication. Julia Smith Gibbons, Circuit Judge; Jeffrey S. Sutton, Circuit Judge authoring, and Helene N. White, Circuit Judge.

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NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 14a0601n.06

FILED

Case No. 13-4196
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

KIMBERLY LISBOA, et al.,
Plaintiffs-Appellants,
v.
CITY OF CLEVELAND HEIGHTS, et al.,
Defendants-Appellees.

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Aug 06, 2014
DEBORAH S. HUNT, Clerk

ON APPEAL FROM THE UNITED
STATES DISTRICT COURT FOR
THE NORTHERN DISTRICT OF
OHIO

BEFORE: GIBBONS, SUTTON and WHITE, Circuit Judges.
SUTTON, Circuit Judge. Kimberly Lisboa and others owned a nightclub in Cleveland
Heights, Ohio. When the club generated noise, fights, and other disturbances in the community,
the City sued the owners in state court to stop the nuisance, and the owners sued to defend their
actions and to charge the City with acting improperly. The parties eventually entered a consent
decree that resolved the two lawsuits, that allowed the club to stay open for a while, and that
eventually required the owners to close the club. Not long after signing the consent decree, the
club owners filed this § 1983 action alleging due process and equal protection violations
surrounding the City’s public-nuisance action. The district court granted the City judgment on
the pleadings based on claim preclusion. We affirm.

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Case No. 13-4196
Lisboa, et al., v. City of Cleveland Heights, et al.
I.
In 2011, Lisboa and others opened a nightclub. MYXX, as they named the club, was
popular, perhaps too popular. About a year after the club opened, fights, noise problems, and
underage drinking prompted the City of Cleveland Heights to declare the place a public
nuisance. The City Council authorized the City Manager and Director of Law to take all
appropriate legal action to abate the nuisance. Three weeks later, in the early morning hours, a
crowd of drunken partiers poured out of the club onto the street. Calls to the police from
unhappy neighbors followed, and many officers were dispatched in response. The City was not
happy.
Fed up, the City sued the plaintiffs in Ohio state court, seeking an injunction to end the
nuisance once and for all. Lisboa beat the City to the punch, filing for an injunction of her own
earlier the same day in a separate action in state court. Among other things, Lisboa claimed that
the City enforced its ordinances in a racially discriminatory way and that the nuisance charge
was baseless. The parties settled the consolidated actions. They memorialized the settlement in
a court-approved consent decree, which allowed Lisboa to keep the club open for a little while
longer but eventually required her to close it for good. That, it seemed, was the end of that.
Less than two months later, however, Lisboa filed this § 1983 action in federal court.
She raised due process and equal protection claims that largely tracked the factual predicates of
her state court claims: insufficient evidence to brand MYXX a nuisance, procedural violations
of city law, and discriminatory enforcement targeting the club’s predominantly black patrons.
Invoking the consent decree, the City moved for judgment on the pleadings based on claim
preclusion. The district court agreed. It held that Lisboa’s constitutional claims were precluded
because she could have, and should have, pursued them in the state litigation.

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II.
We give fresh review to a district court’s grant of judgment on the pleadings under Civil
Rule 12(c). Vickers v. Fairfield Med. Ctr., 453 F.3d 757, 761 (6th Cir. 2006). As with review of
a Civil Rule 12(b)(6) motion, the question is whether the plaintiff’s complaint alleges sufficient
facts that state a plausible claim for relief. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Vickers,
453 F.3d at 761.
In federal court, state court judgments receive the same preclusive effect they would
receive in the issuing State’s courts. 28 U.S.C. § 1738; Marrese v. Am. Acad. of Orthopaedic
Surgeons, 470 U.S. 373, 380 (1985). That means we look to Ohio’s law of claim preclusion
(otherwise known as res judicata), which has four elements: “(1) a prior final, valid decision on
the merits by a court of competent jurisdiction; (2) a second action involving the same parties, or
their privies, as the first; (3) a second action raising claims that were or could have been litigated
in the first action; and (4) a second action arising out of the transaction or occurrence that was
the subject matter of the previous action.” Hapgood v. City of Warren, 127 F.3d 490, 493 (6th
Cir. 1997); see also Grava v. Parkman Twp., 653 N.E.2d 226, 229 (Ohio 1995). If all four
elements are met, claim preclusion bars the later lawsuit.
Lisboa does not dispute that consent judgments satisfy the first element, as well they do.
Horne v. Woolever, 163 N.E.2d 378, 382 (Ohio 1959); see also In re Gilbraith, 512 N.E.2d 956,
959 (Ohio 1987). She does not deny that the parties in both actions overlap. And she does not
claim that any obstacle prevented her from raising her federal claims when she filed the first
lawsuit.
What separates the parties is the fourth inquiry: Did the second action arise out of the
same “transaction or occurrence” as the first? Like the district court, we think it did. Two sets

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of claims meet this test if, in the language of the case law, they arise from a “common nucleus of
operative facts,” Grava, 653 N.E.2d at 229 (quotation omitted), or if, in the language of everyday
people, they are “logically related,” Rettig Enterprises, Inc. v. Koehler, 626 N.E.2d 99, 103
(Ohio 1994) (quotation omitted). However phrased, the test is met here. Compare the two
actions. In the first one, the parties sued each other over the City’s effort to abate the nuisance
caused by the fighting, underage drinking, and loud noise—the general disorderly conduct—
surrounding MYXX and over the allegedly discriminatory manner in which the City enforced its
laws. After the consent decree, Lisboa sued the City under § 1983 for its response to those same
disturbances: declaring the club a nuisance in violation of the City’s own procedures and
racially discriminatory enforcement of its laws. The pattern of disruptive activity behind both
suits is the same, and the alleged problem with the City’s response is the same. On this record,
both sets of claims arise from a shared “occurrence” or “common nucleus of operative facts.”
Lisboa persists that the facts relevant to her constitutional claims are sufficiently different
from those at issue in the City’s case to avoid preclusion. In the prior litigation, she submits, her
§ 1983 claims would have been permissive, rather than compulsory, counterclaims, and thus she
would have had no obligation to bring them then. Her argument, as an initial matter, overlooks
the reality that she filed her own lawsuit against the City in state court, making the premise of
this argument—a distinction between compulsory and permissive counterclaims—beside the
point.
Even if we ignore this reality, her argument still falls short.
argument, to be sure, is correct; yet the other is not.

One premise of this

Lisboa is right that permissive

counterclaims are not later precluded. But she is wrong to give the § 1983 claims this label.
What makes a counterclaim compulsory is also what triggers preclusion: that the claim arises

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Case No. 13-4196
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from the same “transaction or occurrence.” Id. at 102. Just so here, as we noted. Nor, contrary
to her suggestion, is a perfect overlap of the claims required to meet the test. “That they are not
precisely identical, or that the counterclaim embraces additional allegations does not matter.” Id.
at 103 (internal quotation marks and ellipsis omitted); see also Grava, 653 N.E.2d at 229
(holding that claims arise from the same transaction even if they “depend on different shadings
of the facts,” “emphasize different elements of the facts,” or trigger “different kinds of relief”).
Lisboa identifies no material differences between the two actions. As a result, the claims Lisboa
asserts now were compulsory counterclaims that should have been brought earlier. Having opted
to settle the first actions (hers and the City’s) through a consent judgment and having presumably
benefited from the give and take of settlement discussions (including being able to keep the club
open for a while longer), Lisboa had no right under Ohio law to sue the City again over the same
disputes.
For these reasons, we affirm.

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