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Clodfelter v. Republic of Sudan, No. 11-2118

Decided: June 20, 2013

The Fourth Circuit, holding that the doctrine of res judicata did not bar the Plaintiffs from pursing their claims under the Foreign Sovereign Immunities Act (the “FSIA”), reversed and remanded the decision of District Court for the Eastern District of Virginia.

In 2004, following the October 12, 2000 bombing of the U.S.S. Cole, carried out by Al Qaeda operatives, the families of the victims (the “Plaintiffs”) filed suit against the Republic of Sudan (“Sudan”) under the Death on the High Seas Act (“DOHSA”). In Rux v. Republic of Sudan, the district court found Sudan liable and ordered it to pay damages. Thereafter, Congress passed the National Defense Authorization Act for Fiscal Year 2008 (the “NDAA”). Most relevant to this appeal was NDAA § 1083. Section 1083(a) enacted a private cause of action under 28 U.S.C. § 1605A for certain torts committed by foreign states. Additionally, with respect to pending or decided cases, Section 1083(c) details the circumstances where retroactive application of the newly enacted private cause of action is appropriate. In 2010, the Plaintiffs, joined by four others not party to the 2004 Rux complaint, commenced a new action against Sudan invoking Section 1605A’s private cause of action. Concluding that the doctrine of res judicata precluded the Plaintiffs’ claims, the district court found that there was “no question” that this case arose out of the same transaction as that at issue in Rux and therefore denied the Plaintiffs’ motion for default judgment. Plaintiffs appealed.

On appeal, the Fourth Circuit first addressed the Plaintiffs’ contention that the district court mistakenly applied the limitations period under NDAA § 1083(c). Noting that the various provisions of Section 1083(c) govern how to apply Section 1605A retroactively to pending and previous actions, the court agreed with the Plaintiffs, holding that Section 1083(c) was inapplicable because the Plaintiffs filed this new action directly under Section 1605A. Next, the court turned to consider the res judicata doctrine. First, considering whether the district court erred in considering res judicata sua sponte, the court found that the case presented a “special circumstance,” consistent with Supreme Court precedent; therefore, the district court did not abuse its discretion by considering res judicata sua sponte. Finally, the court considered the district court’s application of the res judicata doctrine. Recognizing that the application of res judicata turns on the existence of three factors, one of which is an identity of the cause of action in both the earlier and the later suit, the Fourth Circuit held that the Plaintiffs’ claims under Section 1605A were not barred. In so holding, the court cited three independent reasons for its conclusion that the earlier and later suits did not share the same identity: (1) the change in statutory law along with substantial public policy concerns at issue in terrorism cases brought under Section 1605A justify an exception; (2) one of the “core values” of the res judicata doctrine—freeing people from the uncertain prospect of litigation—would be ill served in this case by barring the Plaintiffs’ claims, particularly where Sudan failed to appear in the terrorism action filed against it; and (3) applying the res judicata doctrine to claims brought under Section 1605A would effectively shield state sponsors of terrorism and would undermine the congressional purpose for enacting Section 1605A in the first place. Accordingly, the court reversed and remanded to the district court for further proceedings.

Full Opinion

-W. Ryan Nichols