DeCoster v. Waushara County Highway Department, No. 18-2387 (7th Cir. 2018)

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Justia Opinion Summary

Waushara County wanted to improve a rural highway. A dispute erupted about who owned land on which DeCoster had erected a fence. State court litigation settled for a $7,900 payment to DeCoster, who then sought more than $110,000 in attorneys’ fees and other expenses. The court of appeals affirmed an award of about $31,000, ruling that any outlay after the $7,900 offer was unreasonable. DeCoster then sued in federal court, seeking an award under 42 U.S.C. 4651–55, the Uniform Relocation Assistance and Real Property Acquisition Act, which conditions federal grants for highway projects on states’ providing assurance that they will compensate affected landowners for reasonable attorney, appraisal, and engineering fees. The district court ruled that the Act does not provide a private right of action. The Seventh Circuit affirmed, without deciding the merits. DeCoster had to present his claim in the state suit. Wisconsin employs the doctrine of claim preclusion under which all legal theories, pertaining to a single transaction, that could have been presented in the initial suit, are barred if not so presented. It does not matter whether the “transaction” is identified as the (arguable) taking of DeCoster’s land or his litigation expenses; the federal suit rests on a transaction that was before the state court. In addition, both Wis. Stat. 32.28 and the Act call for reimbursement of “reasonable” litigation expenses. Wisconsin’s judiciary determined that an award exceeding $31,561 would be unreasonable.

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In the United States Court of Appeals For the Seventh Circuit ____________________ No. 18-2387 RONALD DECOSTER, Plaintiff-Appellant, v. WAUSHARA COUNTY HIGHWAY DEPARTMENT and WAUSHARA COUNTY, WISCONSIN, Defendants-Appellees. ____________________ Appeal from the United States District Court for the Eastern District of Wisconsin. No. 17-C-1623 — William C. Griesbach, Chief Judge. ____________________ ARGUED NOVEMBER 6, 2018 — DECIDED NOVEMBER 15, 2018 ____________________ Before WOOD, Chief Judge, and EASTERBROOK and KANNE, Circuit Judges. EASTERBROOK, Circuit Judge. When Waushara County set out to improve a rural highway, a dispute erupted about who owned a tract of land on which Ronald DeCoster had erected a fence. The County maintained that it owned the land or at least had a transportation easement that required the fence’s removal; DeCoster insisted that the land was his 2 No. 18-2387 and refused to take down the fence. Litigation in state court was se]led for a $7,900 payment from the County to DeCoster—who then sought more than $110,000 in a]orneys’ fees and other expenses, relying on Wis. Stat. §32.28. The state judge awarded about $31,000, ruling that any outlay after the County o ered the $7,900 was unreasonable and improvident. The court of appeals a rmed. Waushara County v. DeCoster, 2015 WI App 37 ¶¶18–20. DeCoster then sued the County in federal court, seeking an award under 42 U.S.C. §§ 4651–55, part of the Uniform Relocation Assistance and Real Property Acquisition Act, which conditions federal grants for highway projects on states’ providing assurance that they will compensate a ected landowners for reasonable a]orney, appraisal, and engineering fees. The district court ruled that the Act does not provide a private right of action, 2018 U.S. Dist. LEXIS 90440 (W.D. Wis. May 30, 2018), and DeCoster led this appeal. We do not decide that question, because DeCoster had to present his claim in the state suit. The e ect of the state court’s decision depends on Wisconsin’s law. 28 U.S.C. §1738. Wisconsin employs the doctrine of claim preclusion (also known as res judicata or merger and bar) under which all legal theories, pertaining to a single transaction, that could have been presented in the initial suit, are barred if not so presented. See, e.g., Wisconsin Public Service Corp. v. Arby Construction, Inc., 2012 WI 87 ¶34. In other words, a plainti cannot seek a recovery with one legal theory in one suit, then present a di erent legal theory in a second suit. The initial decision extinguishes “all rights of the plainti to remedies against the defendant with respect to all or any part of the transaction, or series of con- No. 18-2387 3 nected transactions, out of which the action arose.” Restatement (Second) of Judgments §24(1) (1982). It does not ma]er whether we identify as the “transaction” the (arguable) taking of DeCoster’s land or his expenses during the litigation. In either event, the federal suit rests on a transaction that was before the state court. That’s not all. Like Wis. Stat. §32.28, the federal Act calls for the reimbursement of “reasonable” litigation expenses. See 42 U.S.C. §4654, applied to federally nanced state programs by §4655(a)(2). Wisconsin’s judiciary determined that an award exceeding $31,561 would not be reasonable. The resolution of that issue is conclusive whether or not the doctrine of claim preclusion applies. See In re Estate of Rille, 2007 WI 36 ¶¶37–38. Whether called issue preclusion or collateral estoppel, this doctrine applies to issues actually and necessarily decided in the rst suit even if the plainti advances new legal theories or demands new remedies. See Restatement (Second) of Judgments §27. Preclusion is an a rmative defense, see Fed. R. Civ. P. 8(c)(1), and was invoked by the County—though imperfectly. DeCoster asked the federal court to award him more money than the state judge had been willing to do. The County invoked preclusion as a defense, to the extent that DeCoster’s claim rested on state law, and the district judge agreed. 2018 U.S. Dist. LEXIS 90440 at *10–12. The County’s reference to preclusion, and the district court’s decision, were enough to alert DeCoster to the problem in seeking state-court litigation expenses in a second suit, so we do not see any obstacle to treating all of his current theories as barred by the state court’s judgment. The court that decides 4 No. 18-2387 the merits is the right forum to resolve requests for a]orneys’ fees and other expenses of litigation. AFFIRMED

Primary Holding

Having reached a state court settlement of his claim to land needed for highway improvements, property owner could not seek attorney fees under the federal the Uniform Relocation Assistance and Real Property Acquisition Act.

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