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. If all four elements are met, claim preclusion bars the later lawsuit.
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 a § 1983 action alleging due process and equal protection violations surrounding the City's public-nuisance action. The trial court granted the city judgment on the pleadings.
Was it proper to grant the City judgment on the pleadings?
The Court held that the district court properly granted the city judgment on the pleadings because the claims the nightclub owner asserted in the instant § 1983 action were compulsory counterclaims that should have been brought in the owner's earlier state action, and having opted to settle that action through a consent judgment and having presumably benefited from the give and take of settlement discussions, the owner had no right under Ohio law to sue the city again over the same disputes.