23-765 Stensrud v. Rochester Genesee Reg’l Transp. Auth.

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

SUMMARY ORDER RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING TO A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 10th day of May, two thousand twenty-four.

PRESENT:

DENNIS JACOBS, ROBERT D. SACK, RICHARD J. SULLIVAN, Circuit Judges. ____________________________________

JOHN R. STENSRUD, MARIA B. STENSRUD,

Plaintiffs-Appellants,

v. No. 23-765

ROCHESTER GENESEE REGIONAL TRANSPORTATION AUTHORITY,

Defendant-Appellee. _______________________________________________ For Plaintiffs-Appellants: JOHN T. REFERMAT, Refermat & Daniel PLLC, Rochester, NY.

For Defendant-Appellee: TIMOTHY N. MCMAHON (Suzanne M. Messer, on the brief), Bond, Schoeneck & King, PLLC, Syracuse, NY.

Appeal from a judgment of the United States District Court for the Western

District of New York (Elizabeth A. Wolford, Chief Judge).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,

ADJUDGED, AND DECREED that the April 17, 2023 judgment of the district

court is AFFIRMED.

John and Maria Stensrud appeal from the district court’s grant of summary

judgment in favor of Rochester Genesee Regional Transportation Authority

(“RGRTA”) on their claims brought under

and New York law

alleging that RGRTA took their property without just compensation, in violation

of the Fifth and Fourteenth Amendments of the U.S. Constitution, and the

constitution and laws of New York. We assume the parties’ familiarity with the

underlying facts, procedural history, and issues on appeal, to which we refer only

as necessary to resolve this case.

In August 2015, RGRTA used its eminent-domain authority to take a

multifamily residential property (the “Property”) from the Stensruds to make way

2 for a planned expansion of RGRTA’s office campus in Rochester, New York.

After this taking, the Stensruds brought a claim in state court seeking damages in

the amount of $1,386,257 in addition to other “consequential damages.” J. App’x

at 996. While the Stensruds’ state-court claim was pending, the Supreme Court

decided Knick v. Township of Scott, Pennsylvania,

(2019), which

overruled its prior holding in Williamson County Regional Planning Commission v.

Hamilton Bank of Johnson City,

(1985), that “a property owner whose

property has been taken by a local government has not suffered a violation of his

Fifth Amendment rights – and thus cannot bring a federal takings claim in federal

court – until a state court has denied his claim for just compensation under state

law.” Knick,

(describing holding in Williamson County). With

Williamson County no longer a bar, the Stensruds brought this action in federal

court, asserting claims similar to the ones they had brought in state court. The

Stensruds did not discontinue the state-court action, purportedly because they

were unable to do so unilaterally and because RGRTA would not agree to a

“mutual discontinuance.” Stensrud Br. at 16.

While the federal case was pending, the state court held a bench trial and

entered judgment awarding the Stensruds $509,000 plus accrued interest of nine

3 percent for the taking of the Property. In light of the state court’s judgment, the

district court granted summary judgment to RGRTA on the ground that all of the

Stensruds’ claims in their federal action were barred by res judicata. This appeal

followed.

We review de novo a district court’s grant of summary judgment, including

its “application of the principles of res judicata.” Legnani v. Alitalia Linee Aeree

Italiane, S.p.A.,

(2d Cir. 2005). “Federal courts are required to

give preclusive effect to state-court judgments whenever the courts of the state

from which the judgments emerged would do so.” Exxon Mobil Corp. v. Healey,

(2d Cir. 2022) (alterations and internal quotation marks omitted);

see

(Full Faith and Credit Act). This requirement applies equally

in takings actions brought under section 1983 like the Stensruds’. See San Remo

Hotel, L.P. v. City & County of San Francisco,

, 343–44, 347–48 (2005);

Allen v. McCurry,

, 96–105 (1980). Accordingly, we apply New York

law to determine the preclusive effect of the state-court judgment in the Stensruds’

prior action.

Under New York law, res judicata (also known as claim preclusion) “bars

successive litigation based upon the same transaction or series of connected

4 transactions” if (1) “there is a judgment on the merits rendered by a court of

competent jurisdiction,” and (2) “the party against whom the doctrine is invoked

was a party to the previous action.” People ex rel. Spitzer v. Applied Card Sys., Inc.,

(2008) (internal quotation marks omitted). “New York

employs a transactional approach to claim preclusion, under which the claim

preclusion rule extends beyond attempts to relitigate identical claims to all other

claims arising out of the same transaction or series of transactions.” Simmons v. Trans

Express Inc.,

(2d Cir. 2021) (alterations and internal quotation

marks omitted). Under this approach, “once a claim is brought to a final

conclusion, all other claims arising out of the same transaction or series of

transactions are barred, even if based upon different theories or if seeking a

different remedy.” Josey v. Goord,

, 389–90 (2007) (internal quotation

marks omitted). Applying these principles, the district court concluded that the

Stensruds’ federal-court claims were barred by res judicata, since there was “no

dispute that the claims asserted in the [federal] action ar[o]se out of the same

transaction or series of transactions as the claim resolved by the state trial court’s

decision and judgment – namely, the taking of the Property by RGRTA in August

of 2015.” Sp. App’x at 7.

5 On appeal, the Stensruds argue that the district court erred for two principal

reasons. First, they contend that res judicata does not apply because the state court

“did not have the power to award the full measure of relief sought in the later

litigation” due to a New York regulation that apparently precluded use of the

Stensruds’ preferred real-estate-valuation methodology. Stensrud Br. at 22

(quoting Burgos v. Hopkins,

(2d Cir. 1994)); see id. at 14, 23.

Second, the Stensruds argue that res judicata does not – or should not – apply

because, after the Supreme Court’s holding in Knick v. Township of Scott, they were

not required to bring their claim in state court at all. We are not persuaded by

either argument.

For starters, Burgos is inapposite. In that case, we held that a previously

litigated state habeas action did not bar a subsequent damages action under

section 1983, since “a New York State court determining a petition for habeas relief

does not have the authority to award damages.” Burgos,

. Here,

by contrast, the New York court clearly had authority to award damages to the

Stensruds on their takings claim – and it did. To the extent the Stensruds think

the state court’s damages award was erroneous, their remedy lies in direct appeal

to a higher state court and, eventually, petition for review to the United States

6 Supreme Court. Nothing in Burgos gives state-court litigants who are dissatisfied

with their damages awards the right to a do-over in federal district court.

The Stensruds’ second argument, that the Supreme Court’s decision in Knick

allows their federal-court action to proceed, is equally unavailing. In Knick, the

Supreme Court overruled the state-court exhaustion requirement that Williamson

County had effectively established, holding instead that a property owner

asserting a Takings Clause claim need not seek just compensation in state court

before bringing his claim in federal court. Knick,

. But as we have

previously explained, when a plaintiff has in fact brought his claims in state court

and litigated those claims to a judgment, the district court is “required by federal

law to apply collateral estoppel” – and res judicata – “to issues decided in those

proceedings,” notwithstanding Knick. Morabito v. New York,

, 468

(2d Cir. 2020); see San Remo Hotel,

;

. We are not

alone in reaching this conclusion. See Tejas Motel, L.L.C. v. City of Mesquite ex rel.

Bd. of Adjustment,

(5th Cir. 2023) (“[N]othing in Knick nullifies

long-settled principles of res judicata.”); Ocean Palm Golf Club P’ship v. City of Flagler

Beach,

, 371 (11th Cir. 2021) (“The Knick Court did not overrule or

7 otherwise modify its precedent in San Remo.”). The Stensruds’ attempts to

distinguish these cases are unpersuasive.

“One can sympathize with [the Stensruds’] procedural plight,” Tejas Motel,

L.L.C.,

, but once the state court’s judgment issued, their claims in

this case were barred by res judicata as defined under New York law. See San

Remo Hotel,

. The district court therefore did not err in granting

summary judgment to the defendants.

We have considered Plaintiffs’ remaining arguments and find them to be

without merit. Accordingly, we AFFIRM the judgment of the district court.

FOR THE COURT: Catherine O’Hagan Wolfe, Clerk of Court

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