Marrese v. American Academy of Orthopaedic Surgeons

PETITIONER: Marrese
RESPONDENT: American Academy of Orthopaedic Surgeons
LOCATION: Los Angeles International Airport

DOCKET NO.: 83-1452
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: United States Court of Appeals for the Seventh Circuit

CITATION: 470 US 373 (1985)
ARGUED: Dec 04, 1984
DECIDED: Mar 04, 1985

ADVOCATES:
Charles W. Murdock - on behalf of Illinois, et al., as amicus curiae in support of petitioners
D. Kendall Griffith - on behalf of respondent
Michael T. Sawyier - on behalf of petitioners

Facts of the case

Question

Media for Marrese v. American Academy of Orthopaedic Surgeons

Audio Transcription for Oral Argument - December 04, 1984 in Marrese v. American Academy of Orthopaedic Surgeons

Warren E. Burger:

Thank you gentlemen the case is submitted, we will hear arguments next in Marrese against American Academy of Orthopedic Surgeons.

Mr. Murdock, you may proceed whenever you are ready.

Charles W. Murdock:

Thank you.

Mr. Chief Justice, may it please the Court, the facts, briefly stated, are these.

Dr. Treister filed suit in state court to compel respondents to grant him a fair hearing on his application for membership.

The Illinois appellate court in a case of first impression held that under certain circumstances Illinois courts can inquire into membership practices of a voluntary organization, but these circumstances are limited to the situation in which the membership in the organization is a matter of economic necessity.

Accordingly, the Illinois appellate court dismissed the complaint.

No evidentiary hearings were ever held.

Petitioner then filed suit in federal court under Section 1 of the Sherman Act.

The Seventh Circuit in a five-to-four en banc decision held that the federal suit was barred on the basis of claim preclusion.

The position of the state can be summarized as follows.

The preclusive effect, if any, of a prior state judgment on a subsequent exclusively federal cause of action should be limited to issue preclusion.

The decision of the Seventh Circuit, standing as it does on claim preclusion, is unsound from a policy standpoint, unworkable and unnecessary from a practical standpoint, and unsupportable from a legal standpoint.

William H. Rehnquist:

Mr. Murdock, in your amicus brief on behalf of the State of Illinois, you say,

"The Attorneys General are greatly interested in the correct application of the laws of the United States. "

Is there any more particularized concern that you as Attorney General of Illinois have in this case?

Charles W. Murdock:

Actually, we are more concerned about the effect that this case will have on enforcement proceedings.

In effect, it establishes a rule that when you have both a state claim and an exclusively federal claim, the federal claim must be brought in the first instance in federal court, and then under pendant jurisdiction the state claims must be appended to it or else under claim preclusion arising out of the federal proceeding they will be lost and could not be brought in a state proceeding.

So, the net effect of this is that any time you have both a state claim and an arguably colorable exclusively federal claim, the state claim can never from a practical effect be determined in state court.

Byron R. White:

It will just drive all plaintiffs to federal court.

Charles W. Murdock:

That's right, and that is why from a policy standpoint you are going to increase the work load of the federal court.

William H. Rehnquist:

So your concern isn't just that the state is a potential antitrust plaintiff.

You do have a kind of a broader picture than that.

Charles W. Murdock:

Yes.

Byron R. White:

I suppose you would like to be able to have your own state courts enforce your own state antitrust act.

Charles W. Murdock:

Well, not only our antitrust act, Your Honor, but the decision, we believe, also is unworkable because it assumes that when you bring... when you file your first suit, you know what you have, and that simply is not the case.

If I can use an example derived from the Fifth Circuit's decision in Hayes versus Solomon, the lessor, when he files his state court proceeding, may realize that he has a breach of lease case, but it is not until discovery and investigation that he may realize that the breach of lease is part of a broader scheme that also gives rise to a federal antitrust claim.

Now, under the Seventh Circuit's decision, arguably the federal claim is then barred because you started the state proceeding.

If it proceeds to judgment, it will then bar the subsequent federal proceeding.

What happens here is that, in the example that I have just illustrated, plus we have found often from our own experience that what starts out as a consumer fraud case, for example, may turn into a securities case, or an antitrust case, or civil RICO case, and what happens is, the state's claim, the state suit is properly brought in state court.