Denturist Assoc. of Montana v. State Dept. of Labor & Industry

Denturist Assoc. of Montana v. State Dept. of Labor & Industry, 2016 MT 119 (May 24, 2016) (Rice, J.) (5-0, aff’d & rev’d)

Issue: Whether the district court erred in concluding Brisendine’s claims were barred by res judicata.

Short Answer: No, as to Counts II and III, but yes as to Count I.

Affirmed in part and reversed in part

Facts: The Denturist Association of Montana, on behalf of denturist Carl Brisendine, filed suit against the Board of Dentistry, challenging the validity of A.R.M. 24.138.2302(1)(j) (Rule J). the parties have been in dispute since 1991 in a series of cases. Brisendine’s complaint alleged three counts: discriminatory restraint of trade (Count I), and conflict with various statutes (Counts II and III).

Procedural Posture & Holding: Brisendine moved for summary judgment on Count II, and the Board moved for summary judgment on all counts. The district court held all three of Brisendine’s claims were barred by res judicata, citing Wiser I and Wiser II. Brisendine appeals, and the Supreme Court affirms in part and reverses in part.

Reasoning: Under claim preclusion, or res judicata, a judgment on the merits in a prior suit bars a second suit involving the same parties or their privies based on the same cause of action.  Issue preclusion, or collateral estoppel, bars the same parties or their privies from relitigating issues in a second suit that is based upon a different cause of action. The Wiser I plaintiffs were every denturist in Montana. The Wiser II plaintiffs were a smaller group of denturists, but the Court saw no distinction in their capacity to challenge the Board’s promulgation of Rule J as individuals rather than as representatives of a group, and barred the Wiser II claims on res judicata grounds.

With respect to Count I, Brisendine argues he has no privity with the Wiser I or Wiser II plaintiffs, and that Count I is an altogether different claim than those brought in either of those cases. With respect to Counts Ii and III, Brisendine argues that he has no privity with the Wiser I  and II plaintiffs, conceding the other elements are met. The Board contends that privity exists between the Wiser I and II plaintiffs and Brisendine because their interests are so closely aligned that the Wiser I and II plaintiffs were virtual representatives of Brisendine. The Court holds that privity exists, but that Count I represents a different cause of action with a new issue.

Privity alleviates due process concerns otherwise present in claim or issue preclusion against a nonparty to the prior proceeding. The Wiser I plaintiffs included every denturist in Montana, and brought their suit “on behalf of the profession of denturitry.” Wiser II, ¶ 18. Although Brisendine was not a denturist at the time of the earlier litigation, his interests are closely, if not exactly, aligned with the Wiser I and II denturists who made the same challenge that Brisendine now makes to Rule J.

The Court affirms summary judgment for the Board on Counts II and III, but reverses as to Count I, as it presents a different issue.