# Appendix — Nash County Board of Education v. Biltmore Co. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385007_2173%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1981 - **Citation:** 454 U.S. 878 ## Text peed. Oflice-Supreme Court, U.S, 80-1994 FILLED IN THE | MAY 19 1981 SUPREME COURT OF THE UNITED STATEG ““S**ANO.8 & Stevs OCTOBER TERM, 1980 . No, THE NASH COUNTY BOARD OF EDUCATION, PETITIONERS versus THE BILTMORE COMPANY; BORDEN, INC. ; COBLE DAIRY PRODUCTS COOPERATIVE, INC. ; PET, INC,; AND FLAV-O-RICH, INC., R ITSELF AND AS SUCCESSOR IN INTEREST OF UNITED DAIRIES, INC., RESPONDENTS Appendix to Petition for a Writ of Certiorari to the United States Court of Appeals for the Fourth Circuit Hamrick & Hamrick J. Nat Hamrick, Esq Counsel for Petitioner P. O. Box 470 Rutherfordton North Carolina 28139 IN THE SUPREME COURT OF THE UNITED STATES OCTOBER TERM, 1980 No, THE NASH COUNTY BOARD OF EDUCATION, PETITIONERS versus THE BILTMORE COMPANY; BORDEN, INC. ; COBLE DAIRY PRODUCTS COOPERATIVE, INC.; PET, INC.; AND FLAV-O-RICH, INC., FOR ITSELF AND AS SUCCESSOR IN INTEREST OF UNITED DAIRIES, INC., RESPONDENTS Appendix to Petition for a Writ of Certiorari to the United States Court of Appeals for the Fourth Circuit Hamrick & Hamrick J. Nat Hamrick, Esq Counsel for Petitioner P. O. Box 470 Rutherfordton North Carolina 28139 TABLE OF CONTENTS Opinion of United States District Court for Eastern District of North Carolina . ‘ Opinion of United States Court of Appeals for the Fourth Circuit . Complaint in State of North Carolina, ex rel. James H. Carson, Jr., Attorney General, Plaintiff, vs. Biltmore Dairy Farms, et al, Defendants . Consent Judgment in State of North Carolina, ex. rel., James H. Carson, Jr., Attorney General, General Plaintiff, vs. The Biltmore Company, et al . Amended Complaint The Nash County Board of Education, Plaintiff, vs. The Biltmore Company, et al . Benoy Deposition . ma Carolina General —— tf : — Sita adi. ae erties : i Ne ee eg a es ee i he Tanne « « oe 15 U.S.C. l 15 U.S.C. 2 oe 15 U.S.C. 18 . Amendment V Constitution of the United States Page 41 85 96 .105 . 118 . 120 class was certified. -26- Nash County's principal assertion in support of its position that, for purposes of res judicata, it is not the "same party" as the Attorney General rests on the premises that public school boards are not "State . agencies or other organized activities of the State which receive support in whole or in part from the State," see N.C. Gen. Stat. § 114-2, and therefore that the Attorney General lacked the requisite authority to act on the school board's behalf. Nash County offers various arguments in this regard premised on statutory as well as case law interpretations, which, unfortunately for it, are unpersuasive. The Court notes at this juncture that it is largely irrelevant that the Attorney General brought his suit as a class action. That no class was certifed would assume relevance here only if the Court were to find that the Attor- ney General did not have the authority to act for the school boards. In that event, Nash County, or any other school board, could bring this action unimpeded by res judicata, subject -27- of course to any applicable restrictions of collateral estoppel. Because the Court's judgment is that the Attorney General and Nash County are the "same party,'’ however, the purported class action status of the state case is immaterial to the instant inquiry. Public school boards in North Carolina operate pursuant to the provisions of North Carolina General Statute § 115-27: The board of education of each county in the State shall be a body corporate by the name and style of rhe County Board of Education," and the board of education of each city administrative school unit in the State shall be a body corporate by the name and style of ''The . City Board of Education." The several boards of education, both county and city, shall hold ail school property and be capable of purchasing and holding real and personal property, of building and repairing schoolhouses, of selling and transferring the same for school purposes, and of prosecuting and defending suits for or against the corporation. (Emphasis added). Nash County contends that, because it is a "body corporate .. . capable of ... pro- secuting . .. suits," it is separated from the state sufficiently to prevent its falling within -28- the legal responsibilities of the Attorney General. In support of this contention, Nash County directs the Court's attention to North Carolina General Statute § 115-31, which pro- vides that a county "board of education shall institute all actions, suits, or proceedings . . for the recovery .. . of all money . which may be due to . . . the schools." Perhaps the most persuasive argument for Nash County's position is grounded upon North Car-lina General Statute § 147-17, which for- bids the retention of counsel (other than the Attorney General) by state agencies, departments, or other organized activities of the state supported partially or wholly by the state, without the approval of the Governor. This section also restates that portion of § 114-2 that provides that the Attorney General shall represent these entities, but it allows him to withdraw such representation when it is "impracticable." Nash County correctly submits that § 147- 17 prevents any of the listed governmental =29- entities, except in special circumstances, from hiring a lawyer and suing on its own behalf. From this premise Nash County con- cludes that, because §§ 115-27 and 115-31 authorize a school board to sue on its own behalf, the legislature therefore never intended that the language "State departments, agencies, . or other organized activities of the State" include local school boards insofar as such inclusion would allow the Attorney General to represent and bind the school boards in legal actions. This conclusion assumes that the legisla- ture could not have contemplated, indeed must have rejected, the notion that school boards could retain local counsel while at the same time remain within the general representational authority of the Attorney General. In the Court's view, herein lies the major infirmity of Nash County's position, for it can point to no authority that establishes conclusively that either the legislature intended or the state supreme court has interpreted these provisions -30- to preclude such joint representation. In the absence of such authority, principles of. judicial restraint as well as considerations of federal-state comity require that the Court read these provisions narrowly and give effect to the Attorney General's broad common law authority. In its brief submitted subsequent to the oral argument, Nash County directs the Court's attention to three decisions of the Supreme Court of North Carolina that it asserts to be dispositive of the "same parties" issue. In Branch v. Board of Education, 233 N.C. 623, 65 S.E. 2d 124 (1951), the North Carolina Supreme Court held that, absent certain special circumstances, a taxpayer could not sue the county school board to enjoin an allegedly unlawful expenditure of school funds and to compel a reallocation of those funds. In so holding, the Court noted that: [T]he right to sue for the protection or recovery of the school funds of a particular school administrative unit belongs by necessary implication to the governing body of that unit .. . Indeed, @31~ a relevant statute confers upon the county board of education in explicit terms the power to sue for the preser- vation and recovery of the money or property of the county administrative unit. Id. at 625, 65 S.E.2d at 126. Nash County's reliance on this language is misplaced, for the court held only that the school board, not the taxpayers, could sue to recover school funds. The Attorney General's authority indeed was not even an issue in the case. Nowhere did the court suggest, and only a dangerously expansive reading of Branch would support, the inference that the school board's authority to sue operates to cut back the Attorney General's statutory and common law authority to sue in the state's interest. The two other cases cited to the Court both involve the applicability of North Caro- lina's Tort Claims Act to local school boards. See Clary v. Alexander County Board of Educa- tiou, 285 N.C. 188, 203 S.E.2d 820 (1974); Turner v. Gastonia City Board of Education, 250 N.C. 456, 109 S.E.2d 211 (1959). These decisions hold that, for purposes of -32- vulnerability to suit under the Tort Claims Act, local school boards are not "state agencies", the sovereign immunity of which the Tort Claims Act has waived. Nash County con- cludes that school boards are therefore not "state agencies" for any purpose. Once again, the plaintiff assumes too much. Limitations of sovereign immunity, such as that effected by state tort claims acts, because they operate to derogate the common law, must be construed narrowly. The Court accord- ingly is unmoved by Nash County's analogy to the North Carolina Tcert Claims Act and the two cases cited. Indeed, the more persuasive argument to be made by analogy to the Tort Claims Act is that, because the North Carolina Supreme Court finds schools to be within the protective cover of sovereign immunity, such school boards are necessarily imbued with sufficient characteristics of the "state" to bring them within the reach of the Attorney General's authority under North Carolina General Statute § 114-2. =$3- The decisions of various federal courts cupport, as a general matter, the Court's specific interpretation of North Carolina law in this regard. Far and away the most compre- hensive examination of a state Attorney General's authority to represent individual organs of the state is Florida ex rel. Shevin v. Exxon Corp., 526 F.2d 266 (5th Cir. 1976), Cert denied, 425 U.S. 930 (1977). In Shevin the Attorney General of Florida brought a federal antitrust suit against seventeen major oil companies on behalf of the state's various departments, agencies, and political subdivisions. Id. at 267. The defendants asserted that the Attorney General lacked the requisite authority to prosecute such an action absent the explicit approval of these state entities. In addition to the general remarks quoted earlier herein regarding the broad common law authority of a state Attorney General, the United States Court of Appeals for the Fifth Circuit noted that the "individual government instrumentalities involved have something to gain from this suit, -34- and nothing to lose but their causes of action (by way or res judicata or collateral estoppel) ." Id. at 273; accord, Alabama v. Blue Bird Body Company, 71 F.R.D. 183 (M.D. Ala. 1976); Illi- nois v. Brunswick Corp., 32 F.R.D. 453 (N.D. Iii. i963). Like the Attorney General of Florida, the North Carolina Attorney General enjoys broad common law authority. Moreover, because of the absence of any explicit curtailments of this authority by the legislature or the state supreme court, the Court concludes that, by virtue of the Attorney General's participation in the prior state court antitrust action, Nash County was a "party" in that action for pur- poses of res judicata. III. Final Judgment on the Merits. The third component of res judicata is that the prior decision must have been re- solved by a final judgment on the merits. There is no doubt that a consent judgment constitutes such a final resolution. 1B Moore's Federal Practice, 40.409[5], at -35- 1026 (2d ed. 1974). Nash County offers two reasons why the consent judgment in the prior state action should not be held binding on it for purposes of this litigation. First, Nash County points to the letter sent out to the school boards by the Attorney General, following entry of the consent decree, in which the Attorney General notified the school superintendents and food service directors of the consent decree. That letter additionally informed them that the settlement "in no way proscrib[ed] actions by individual school systems to recover monetary . damages for overcharges" by the dairy companies. In this respect, the Attorney General was, in the Court's view, simnly mistaken. The terms of the consent decree are expli- cit. The state that "all matters in contro- versy arising out of this action have been agreed upon and settled in a manner satisfac- tory both to the Plaintiff, State of North Carolina, and to the aforementioned Defendants." Additionally, the terms were specific to the -36- effect that "the parties desire to resolve and settle all claims and matters in contro- versy in order to avoid the expense of pro- tracted litigation." The federal rule regard- ing interpretation of consent decrees is found in United States v. Armour & Co., 402 U.S. 673, 681-82 (1971): Consent decrees are entered into by parties to a case after careful nego- tiation has produced agreement on precise terms. The parties waive their right to litigate the issues involved in the case and thus save themselves the time, expense, and inevitable risk of litigation . . For these reasons, the scope of a consent decree must be discerned within its four corners. Because the Court has concluded that Nash County was a party to the prior state action, it is bound by the terms of the decree. Any subsequent assertions to the contra by the Attorney General cannot be given effect to the extent that they contradict the plain language of the decree. Nash County's second argument is simi- larly unpersuasive. It points to the North Carolina Supreme Court's decision in Town of -37- Bath v. Norman, 226 N.C. 502, 39 S.E.2d 363 (1946), in which the court vacated a consent judgment entered into by the town's private attorney without the express authorization from the town board. Nash County asserts that, because it never agreed to the consent decree entered into by the Attorney General, it cannot be held to the terms thereof. This argument must fail for, as the Court has previously pointed out, the Attorney General was the legitimate statutory and common law representa- tive of all the local school boards. Because the Attorney General acted pursuant to this broad, unencumbered authority, he did not require explicit consent from the constituent school boards in order to bind them to the terms of the decree. In sum, the Court finds that Nash County may not maintain this action further. To the extent that it is dissatisfied with the reso- lution of the state's action brought by the Attorney General, this result may seem harsh, nevertheless, it is the price this county must -38- pay as a creation and financial dependent of the state. An appropriate order will issue. S/Robert R. Merhige United States District Judge Dated 11/27/78 FOOTNOTE 1. North Carolina law is not unequivocally clear on this issue. Neither side has cited, nor has the Court in its research found, any decision by the North Carolina Supreme Court idspositive of the issue. The Court notes, therefore, that this case probably would be suitable for certification to the North Caro- lina Supreme Court for an interpretation of the scope of the Attorney General's authority to represent local school boards. See Lehman Brothers v. Schein, 416 U.S. 386, 389-92 (1974). Unfortunately, North Carolina does not have such a certification procedure. =39~ The Court also notes that, because this is not a diversity action, the res judicata issues are not dependent solely on North Carolina law. For reasons of comity as well as convenience, however, the Court has borrowed heavily from the state source of law. -40- UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 79-1123 The Nash County Board of Education, Appellant, ~versus- Tne Biltmore Company; Borden Inc. ; Coble Dairy Products Cooperative, Inc,; Pet Inc,; Pine State Co,; Kraft, Inc. and Flav-o-rich, Inc.; for itself and as Successor in Interest of United Dairies, Inc., Appellees. Appeal from the United States District Court for the Eastern District of North Carolina, at Raleigh. Robert R. Merhige, Jr., District Jtidge for the Easter District of Virginia, sitting by designation. Argued: March 4, 1980. Decided: January 12, 1981 Before RUSSELL AND HALL, Circuit Judges, and CHARLES H. HADEN, II, United States District Judge for the Northern District of West Virginia, sitting by designation. J. Wat Hamrick (Hamrick & Hamrick; William L. Thorp, Thorp, Anderson & Slifkin; I. T. Valentine, Jr., Valentine, Adams and Lamar on brief) for Appellant; St. John Barrett (William S. Glading, John F. Sherlock, III, Bamett, Alagia & Carey; Jerry W. Amos, Brooks, Pierce, McLendon, Humphrey & Leonard on brief) for Flav-o-rich, Inc.;Fred D. Tumage (Cleary, Gottlieb, -4i- Steen & Hamilton; Robert H. Dusenb, Wrignt T. Dixon, Jr., Bailey, Dixon, Wooten, McDonald & Fountain on brief) for Pet, Inc.; ao Hendon & Carson; Joseph R. Gladden, Jr., King & Spalding on brief) for Biltmore Company; (John W. Murchison, Jr., W. T. Covington, Jr., , , Lobdell & Hickman; Glenn S. Dennis on brief) for Borden, Inc.; (Joseph L. Leonard, Leonard & Snyder; J. Melville ton, Jr. Broughton, Wilkins, Ross & Crampton on brief) for Coble Dairy Products Cooperative, Inc.; (Henry A. Mitchell, Jr., Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan on brief) for Pine State Creamery Co.; (John R. Jordan, Jordan, Morris & Hoke; David L. Aufderstrasse, Chadwell, Kayser, Ruggles, McGee & Hastings; Theodore L. Banks on brief) for Kraft, Inc.; Jean A. Benoy, Deputy Attomey General (Rufus L. Edmisten, Attomey General of North ree eee Oe ee -42- RUSSELL, CIRCUIT JUDGE: This is an appeal by the plaintiff- appellant The Nash County (N.C) Board of Education, from a grant of summary Judgment in favor of the defendants in an antitrust suit by the Plaintiff-appellant against nine dairy companies operating in North a a The basis of the district court's ruling was that, under the principles of res judicata, the plaintiff Board was precluded from main- taining the action by reason of a judgment entered in an earlier state antitrust action filed by the Attorney General of North Carolina ageinst the same defendents as are defendants in this action. The facts on appeal are not in dispute. Following a two year investigation, the Attorney General of North Carolina filed suit 1 Nash County Bd. of Ed. v. Biltmore Co., 464 F.Supp. 1027 (F.D.N.C. 1978) ~43 - in the Superior Court of Wake County, North Carolina, against the nine dairy companies, alleging certain state statutory authorizations for his representation of the claims. He identified the parties he asserted the right to represent as "each public school system in this state which received tax revenue directly or indirectly from the State of North Carolina for the conduct of educational training and programs, which purchases fluid milk to be resold, or given gratuitously, to members of the student body while in registered attendance at school." The complaint charged that the "defendants have, at various times since February, 1970, joined in agreements, combinations, and conspiracy in restraint of trade in the sale of milk products to the public school systems of North Carolina, which conspiracy and combinations have been in continuous operation since that time to the present date." It further alleged that such conspiracy had the effect that [p]rice competition in the sale of fluid milk to the public school systems in North Carolina has been restrained and eliminated" and "[p]rices paid for fluid milk purchased by the public school systems in North Carolina have been at unreasonably high, artificial and non-competitive prices." This conspiracy was violative, according to the Attorney General's complaint, of the North Carolina antitrust laws, which, in the event of a violation, authorized the recovery of treble damages. N.C. Gen. Stat. 475-16 (1975). The prayer of the complaint sought both injunctive relief and treble damages. Though the complaint included a request for class certification, no class was ever certified and the case was settled with a consent decree entered by the presiding state judge and endorsed by all parties to the litigation. Shortly after the consent judgment, the plaintiff Board instituted the present suit on October 23, 1975 in the United States district court. On its complaint, the plaintiff -45- identified the subject of its action as the purchase of "fluid milk, cottage cheese and ice cream from one or all of the defendants since February 1, 1970." It brought the action in its own name as one of the North Carolina school districts purchasing such products and sought to represent the class of all such school districts. It alleged the same conspiracy as had the Attorney General in his earlier state suit. The only differences between this action and the earlier action were (1) that this suit was based on the federal antitrust act and (2) the plaintiff in this later suit sought only treble damages but no injunctive relief. After discovery, the defendants in this later suit moved for summary judgment on the ground of res judicata. ‘the district court granted the motion, ruling that the consent decree in the earlier suit barred the action brought by the Board. The Board has appealed, presenting as the sole issue whether the decree in the state action barred under the doctrine of res judicata abe this federal suit. We affirm. I The doctrine of res judicata,which provides that "a judgment on the merits in a prior suit bars a second suit involving the same parties or their privies based on the same cause of Pr is not a technical rule but a rule of "fundamental and substantial justice, ‘of public policy and private peach,' which should be cordially regarded and enforced by the courts to the end that rights once established by the judgment of a court of competent jurisdiction shall be recognized by those who are bound by it in every way, en the judgment is entitled to respect." It is more than a 2 Montana v, United States, 440 U. S. 147, 153 (1979). See also Parklane Hosie Co. v. Shore ,439 U. 5. 322, 326, n. 5 T1979}~ Brown v. Felsen, 422 U. S. 127, 131 (1979). 3 Hart Steel Co. v. Railroad Supply Co., 244 U.S.294, 299 (1917). -47 - judicially created doctrine of repose; it is a rule mandated by the full faith and credit clause of the Constitution. Article 4 ¥ 1, and its implementing statute, 28 U.S.C. { 1738, and should be applied accordingly. As applied, the essential elements of the doctrine are generally stated to be (1) a final judgment on the merits in an earlier suit, (2) an identity of the cause of action in both the earlier and the later suit, and (3) an identity of parties or their privies in the two suits. We shall consider in that order these essential requisites for the application of the doctrine in this case. 4 American Surety Co. v. Baldwin, 287 U.S. 156, 166-6 (1932), Witchellw National Broad- casting Company. , 553 F. 2d TS, 277 (2nd Cir. 1977); Developments in the Law- Section 1983 and Federalism, 36 Harv. L. Rev. 1133, 1334 (1977); Currie, Res Judicata: The Neglected Defense. 45 U.Chi.L.Rev. 317, 326 Professor Currie said: "But federal respect for state court judgments is not, as is occasionally argued, a matter of judicial grace. It is the command of (Continued on next page) -48- II The plaintiff argues at the outset that a consent decree of judgment such as that entered by the North Carolina court in the earlier action will not support the requirement of a final judgment under either res judicata or collateral estoppel. The district court found otherwise and we agree. As Judge Soper said in Rector v. Suncrest Lumber Co., 52 F.2d 946, 948 (4th Cir. 1931), a consent judgment "is as conclusive and final as to any matter determined as one rendered in invitum after contest and trial (citing authorities]. And such a judgment cannot be 4 (Continued) Congress in section 1738 of Title 28: 'The... judicial proceedings of any court of any ... State, Territory, or Possession ... shall have t>2 same full faith and credit in every court within the United States and its Territories and Possessions as they have by law or usage in the courts of such State, Territory or Possession from which they are taken.' "Every court within the United States,’ as one would expect, has been construed to include federal courts." -49- impeached collaterally in another proceeding." To the same effect are Safe Flight Instrument Corp. v. United Control Corp., 576 F.2d 1340, 1344 (9th Cir. 1978); Wallace Clark & Co., Inc. v. Acheson Industries, Inc., 532 F.2d 846, 849 (2d Cir.), cert. denied, 425 U.S. 976, reh. denied, 427 U.S. 908 (1976); Seigel v. National Periodical Publishers, Inc., 508 F. 2d 909, 913 (2d Cir. 1974) ("... a consent judgment does have res judicata effect ...'); Belvit Culligan Soft Water Service, Inc. v. — Culligan, Inc., 274 F.2d 29, 35 (7th Cir. 1959); Urbino v. Puerto Rico Ry. Light & Power Co., 164 F.2d 12, 15 (lst Cir. 1947); Steyer v. Westvaco Corp., 450 F.Supp. 384, 397 (D.Md. 1978); William v. Codd, 459 F.Supp. 804, 811-12 (S.D.N.Y. 1978); Vulcan, Inc. v. Fordees Corp., 450 F.Supp. 36, 41-42 (N.D.Ohio 1978); Hemphill v. Hemphill, 398 F.Supp. 1134, 1136-37 (N.D.Ga. 1975); Brunswick Corporation v. Chrysler Corporation, 287 F.Supp. 776, 777 (E.D.Wis. 1968); United States v. Radio Corporation of America, -50- 46 F.Supp. 654, 655m (D.Del. 1942), appeal dis., 318 U.S. 796 (antitrust consent decree). Of course, as Judge Maris pointed out in Radio Corporation, supra, consent decrees "may be set aside for lack of actual consent to the decrees, as entered, for fraud in their pro- curement, or for lack of federal jurisdiction." 46 F Supp. at 656 It was because of a "lack of > In United States v. Radio Corporation, 46 F. Supp. at 655, Judge Maris put it: "A consent decree, although based upon an - oy of the parties rather than a finding facts by the court, is not a mere authenti- cation or eo of that agreement. It is a judicial act (United States v. Swift & Co. 286 US 106, 115, 52 S.Ct. 460, 76 L.Ed. 959) and, therefore, involves a determination by the chancellor that it is equitable and in the public interest." We have assumed that this issue of the res judicata effect of a consent judgment in this context would be a matter of federal law. There is authority that, in diversity actions, the issue is one controlled by local state law, see Graves v. Associated Transport, Inc., 344 F. 2d 894, 896 (4th Cir. 1965), Bee this would not alter the result here, since North Carolina law gives res judicata affect to consent judgments. Simpson v. er, 258 N.C. 390, 397, 128 S.E. 2d B73, B48 T1563) ; ; McRory v. McRory, 228 N.C. 714, 719, 47 S.E. 2d , aL (1948). -51- actual consent" by the party of interest that the consent decree was invalidated in West v. Bank of Commerce & Trusts, 167 F.2d 664 (4th Cir. 1948). There is, however, no contention in this case that the judgment was procured by fraud or with lack of "consent" by the Attorney General, who was the party plaintiff in the state action. We have accordingly no difficulty in concluding, as did the district court, that the consent judgment in the state court constituted for res judicata purposes, a final judgment on the merits. © pe a The second requirement for res judicata is identity of causes of action. Unfortunately, SsSee, also, Annotation: Consent Judgment as Res Judicata, 97 L.Ed. 1188 at LI91-92 eLEDE "As a general proposition, it is well settled that a valid judgment or decree entered by agreement or consent operates as res judicata to the same extent as a judgment or decree entered after answer and contest, and is binding and conclusive upon the parties, and those in privity with them." -52= the authorities do not provide any precise uniform definition of "cause of action" in connection with the application of res judicata. A "much broader" definition of "cause of action" in connection with the doctrine of res judicata has developed under modern authorities, Williamn- son v. Columbia Gas & Electric Corp., 186 F 2d 464, 469 (3d Cir. 1950), cert. denied, 341 U.S. 921 (1951). Under this modern rule, the term, "cause of action," has been given varied appli- cation, depending largely on the facts in each case. Thus, in some cases, it has depended for its application on whether the facts in the two cases are the same ; ’ in other cases, on whether 7This was the test e loyed in The Haytian Republic, 154 U.S. 118, 125 (1894), (* ¥ ¥ whether the evidence necessary to prove one cause, of action would establish the other"), and accords with the one expressed in Williamson v. Columbia Gas & Electric Corp., supra. 186 F. 2d at 469-70, which held there was Yaencity when the same operative facts were present even though there were different theories of recovery. See, also, McNellis v. First Federal Savings & Loan Assn., 364 F. 2d 251, 255 (2d Cir. 1966). 8 the same primary right is asserted. See Note, Res Judicata: Exclusive Federal Juris- diction and the Effect of Prior State-Court Determinations, 53 Va. L. Rev. 1360, 1361 (1967); lb Moore's Federal Practice, § 0.410[1] at 1154 (3d ed. 1974). But, irrespective of which test is applied and however broad or narrow the definition, it is manifest that there is identity of causes of action between the action begun by the Attorney General in the state court and that instituted by the plaintiff in the federal court. Both suits deal with the same subject-matter, i.e., the purchase of fluid milk and milk products solely by the various school districts of North Carolina. They involve no other purchases. The two suits allege the same 8the authorities supporting this view are illustrated by Baltimore S.S. Co. v. Phillips, 274 U.S. 316, 321 (1927); see also, Norman Tobacco & Candy Col v. Gillette Safety Razor * Oi, ° ’ t z=. the same alleged breach of duty"). wrongful act, the same illegal price-fixing conspiracy, the same operative facts in support of such conspiracy. The state and federal statutes upon which the two actions are based are indentical in language except in the require- ment of the federal statute, but not of the state statute, of a showing of interstate com- merce. In both cases, the evidence will be identical and the damages recoverable and the relief available the same. Under established precedent, the identity of two actions, as intimately tied together as these two, will not be destroyed in the res judicata context simply because the two suits are based on different statutes. This was clearly held in Williamson, supra, where one suit was under the Clayton Act and the other under the Sherman Act. Nor will the rule be any different because a state statute is the authority for one action and a federal statute for the other, when the two statutes afford the same right or interdict the same wrong, Mitchell v. National Broadcasting Co., 553 F.2d 265 (2d Circ. 1977).2 In the cited case, a final state court judgment under a state civil rights statute was held to be res judicata of a later federal court action under § 1981, 42 U.S.C., involving the same parties. 553 F.2d at 266-8. This is equally so when the state action is one at common law and the later federal action is under a federal statute or statutes (§ 1983 and § 1985). This was expressly ruled in Davis v. Towe, 379 F.Supp. 536, 538 (E.D. Va. 1974), aff'd. without opinion, 526 F. 2d 588 9Note, State Agencies, State Courts, Res Judicata, and Section 1981: Mitchell v. National Broadcasting co., 553 F.2d 205 (2d Cir. 1977), 10 Conn. ie 967 (1978); Note, Employment Discrimination-State Judicial Procedure Fore- closes Federa me nder 3. Uy : Mitchell v. NBC, 31 utgers L.Rev. 9). While these commentators look with a some- what jaundiced eye on this and recent related decisions from the same circuit, they recognize that the decision is expressive of a more liberal attitude toward a plea of res judicata and collateral estoppel, prompted as it is by the multiplication of repetitive actions in state and federal courts and by an understandable desire on the part of the courts to checkmate a growing practice of forum shopping. wthe (1975). It has, also, been held that the same rule will apply even though the subsequent fed- eral action is one over which federal courts have exclusive jurisdiction, provided, again of course, the state and federal actions in- volve the same "operative facts" and the same basic "delict" or wrong. Williamson v. Colum- bia Gas & Electric Co., 186 F.2d at 467; Con- nelly v. Balkwill, 174 F.Supp. 49, 60 (N.D. Ohio 1959), aff'd., 279 F.2d 685 (1960) ;1° Kaufman v. Shoenberg, 154 F.Supp. 64, 67-8 (D. Del. 1954). Both Connelly and Kaufman involved state actions in fraud which were urged as res judicata against a federal action charging the same fraud as violative of the L0tis decision is discussed and its result approved by Professor Moore in 1B, Moore's Federal Practice, § .410[2], n. 38 at 1182-3 (1974 ed.). See Note, The Effect of Prior Nonfederal Proceedings on Exclusive Federal Jurisdiction Over Section put) 2 the Securities Exchange Act o U L.Rev. 9360, 944-5 TIS FL) Securities and Exchange Act, which gave exclu- sive jurisdiction to federal courts over any action thereunder. In both cases, the plea of res judicata was upheld. In Williamson it was held that an antitrust judgment barred on res judicata grounds a later conspiracy suit. These cases merely illustrate what was said in Astron Industrial Associates, Inc., v. Chrysler Motors Corp., 405 F. 2d 958, 961 (5th Cir. 1968) that, " in regard to the identity of the two lawsuits, it is the substance of the actions that must be com- pared and not their form." And this rule has been applied where the earlier state action was under a state antitrust statute and the latter under the federal antitrust act, which is this case. The earliest case to confront the problem whether a prior state action under a state antitrust statute barred under the doctrine of res judicata a later federal antitrust suit .was Straus v. American Publishers' Assn., 201 F. 306, 310, (2d Cir. 1912), appeal dis. 255 U.S. 716. In sustaining the bar, the Court in that case said: "The fact that the judgment in the state court depended upon the state statute, which is not within the jurisdiction of the state court, makes no differerce The plaintiffs, having the option to go to either court, chose the state court and their claim, having been there adjudicated, cannot be presented ll the second time to any other court." In Englehardt v. Bell & Howell Co., 327 F 2d 30 (8th Cir. 1964), the situation was identical with that presented by the facts me Sherman Act itself does not pre- scribe exclusive federal jurisdiction but exclusive jurisdiction has been read into the Act by judicial decisions. See Note, Exclusive Jurisdiction of the Federal Courts in Private Civil Actions, 70 Harv.L Rev 509, Bi6-—e—n 135 (1957): ¥The legislative history of the Sherman Act indicates that exclusive jurisdiction was not intended Although Congress felt that treble damages constituted a penalty and, as such, were unenforceable in the state courts, it was apparently intended that the injured parties should be allowed to sue in those courts for compensatory damages (citing the legislative references. ) The conception that the state courts could not constitutionally award treble damages seems to have been erroneous even at the time the Sherman Act was passed, see Claflin zw. Houseman, 93 U.S. 130, 137 (1976) (dictum) and clearly is not the law today in view of Testa v. Katt, 330 U.S. 386 (1947) * * * " of this case The plaintiff had filed a prior action in the state court under the state anti- trust statute. The case was voluntarily dis- missed by the plaintiff, after its removal to the federal court for diversity. That dismis- sal was held to bar the later federal action under the Sherman Act on principles of res judicata. The only difference between Engle- hardt and this case is the removal of the state action to the federal court This difference is, however, unimportant; the important fact is that the action dismissed was the action on the state statute, not the federal statute, ard it was that dismissal which barred the maintenance of the subsequent federal Sherman Act action, In short, the Court held expressly that the action on the state statute was the same as the action under the Sherman Act and that a voluntary dismissal of that earlier action on the state statute constituted a bar to the maintenace of the later Sherman Act action on the same facts. In Woods Exploration & Producing Co., Inc. v. Aluminum Company of America, 438 F. 2d 1286 (5th Cir. 1971), cert. denied 404 U. S. 1047, the Court considered two suits, ome under the Texas antitrust statute and the other under the federal antitrust statute. It followed Englehardt and held that the two actions constituted merely "alternative grounds of recovery for the same causes of action" and that "the principle of res judicata enforceable by injunction, would thus preclude relitigation in the state court following this federal judgment if the state and federal courts involve substantially the same wrongs measured by similar standards of liability so that recovery in the federal suit will have com- pensated plaintiffs for the total harm suffered." Id. at 1314-15. The court found that the two suits asserted "the same wrong," albeit on like statutes of two separate jurisdictions, and granted injunctive relief on the grounds of res judicata against the further maintenance of the state suit as to those parts of the federal judgment which were not reversed. It is true that there are federal anti- trust cases which have denied res judicata effect to judgments entered in state actions under a state antitrust suit where the state statute did not authorize recovery of treble damages. The rationale of these cases was well stated by the Court in Hayes v. Solomon, 597 F.2d 959, 984 (5th Cir. 1979). "The principle of res judicata which prohibits splitting a cause of action applies only to claims 'then capable of recovery' in the first action (citing an authority.) In this case, the first forum, the Texas state court, could not provide the relief sought in the second -61- forum, federal antitrust damages i.e., treble damages . We hold, therefore, that this case was not barred by the splitting prohibition." To the same effect is Cream Top Creamery v. Dean Milk Co., 383 F.2d 358, 363 (6th Cir. 1967.) In this suit, however, under the state statute, modeled as it is after the federal statute and offering the same right to re- cover treble damages as the federal statute, there is not the ground for denying res judi- cata effect to the state court judgment stated in Hayes and Cream Top for denying res judicata effect in this case to the earlier state court judgment. The plaintiff, though, contends that Lyons v. Westinghouse Electric Corp., 222 F.2d 184 (2d Cir.) veh. denied, 222 F.2d 195, cert. denied, 350 U.S. 825 (1955) which over- ruled Straus, supra, is conclusive against res judicata application in this case. It should be noted at the outset that Lyons -did not involve a plea of res judicata proper but of collateral estoppel. It is, however, proper to assume that the same rule generally would apply with reference to both pleas since collateral estoppal is generally regarded as merely a "branch" or "other prong" of res judicata. The issue in Lyons grew out of a motion to stay a federal action under the Sherman Act because of a judgment on appeal in ~62- a state action between the same parties. The state action had been a suit on a con- signment contract account. In that action the defendant had asserted by way of a defense the invalidity of the consignment contract on antitrust grounds. The state court, in its judgment, found against the antitrust plea and awarded judgment to Westinghouse. Lyons, the defendant in the state action,). then filed his antitrust action ir the federal court. Westinghouse sought a stay of the federal action pending disposition of the appeal of the state judgment. ‘the district court granted the stay but, on appeal, the Circuit Court vacated the stay, concluding that the state court judgment would not bar on collateral estoppel grounds the federal suit. in reach- ing tnat conclusion, tne court conceded tnat, absent antivrust exclusivity, collateral es- toppel would apply to "the whole nexus of facts" constituting the antitrust causes of action, thereby "ending the jurisdiction of the district court." 222 F.2d at 188 and 189. Thus, it said that "the grant to the district courts of exclusive jurisdiction over the action for treble damages should be taken to imply an immunity of their decisions from any prejudgment eisewhere; at least on occa- sions, like those at bar, where the punitive estoppel includes the whole nexus of facts that make up a wrong. The remedy provided is not solely civil; two thirds of the re- covery is not remedial and inevitably pre- supposes a punitive purpose." 222 F.2d at 189. Lyons, however, "has received a mixed response from legal commentators (citing authorities), and a number of courts have refused to folléw it," New York State Team- sters Pension & Retirement Fund v. Pension Benefit Guaranty Corp., 591 F.2d 953, 956~7 (D.C. Cir. 1979); in fact, the author of Developments in the Law--Section 1983 and Federalism, 90 Harv.L.Rev. 1133, 1135, n. 20, states that "most later decisions have not fellowed the Lyons result, see, e.g. Azalea Drive-in Theatre, Inc. v. Hanft, 540 MSE Ae EER RT EERE, | mame F.2d 713 (4th Cir. 1976) * * *," This unfavorable response can only be taken as ae To the same effect is the Note, Collateral Esto 1 of State Court Judg- ment in Feder 8, al. sent _in Federal intTtra tou Se author States that "for patent cases, Rule 10b cases, . . . both of which are within exclusive federal jurisdiction and argu- ably, for limitation of liability proceed- ings (were it not for the stipulation ex- acted from the state court claimant), the prior findings of state courts will be con- Clusive in subsequent federal proceedings, notwithstanding the grant of exclusive subject matter jurisdiction" to the federal court in such cases. an expression of dissatisfaction with the reasoning behind the decision in Lyons. We look now to that reasoning. The reasoning of the Court in Lyons rests on two grounds. The first was the ex- clusivity of the federal remedy under the Sherman Act; the second was the unavailability in the state action of the treble damage re- covery, which the Court regarded as a "crucial" and essential part of the feceral right of action. In developing his first reason arising out of the exclusivity of the federal remedy, Judge Hand in Lyons ‘seemed to concede that collateral estoppel based on a single fact determination in the state action, if not decisive of the whole issue of federal anti- trust violation, was a permissible plea in a later federal antitrust suit between the same parties. But if the plea of collateral estop- pel in such a case extended to what Judge Hand called "the whole nexus of facts that make up the wrong" (i.e., the antitrust violation), its recognition would operate in similar fashion to strict res judicata and operate to "end the jurisdiction of the district court" thus frustrating the exclusivity of federal jurisdiction. It was this latter situation that Judge Hand in Lyons found -65- invalid, Unquestionably, there is a certain logic in Judge Hand's reasoning. When the plea of collateral estoppel based on a prior state action between the parties embraces all the constituent elements of the federal antitrust Claim, its acceptance does in effect defeat any exclusive right in the federal court to decide independently the federal antitrust action. The result is in reality no different than had a plea of res judicata been accepted in its effect on the principle of federal exclusivity. But, contrary to Judge Hand's opinion in Lyons, later decisions, as well as decisions prior to Lyons including one from the United States Supreme Court which Judge Hand unsuccessfully sought to distinguish, have not found the result objectionable. Thus, as the author of the Note in 53 Va.L.Rev., supra, at 1369 said that, "In several cases following Lyons “13 The Court sought to distinguish Becher v. Contoure Laboratories, Inc., 279 eclaring erroneously ‘nat the collateral estoppel upheld in that case applied only to "one of the constituent facts that together made up the claim," not to "the whole nexus of facts." 14 Actually, the Supreme Court in Becher v. Contoure Laboratories Inc., 279 U.S. at 9 ready done exactly that Judge (Continued on next page.) -66- tederal courts, considering the effect cf a state-court judgment on a later claim within exclusive jurisdiction of the federal courts, have largely ignored the importance that Judge Hand attached to the maintenance of unfettered exclusive federal jurisdiction." And tne Court in new York State Teamsters, supre, uv y5/ made tne sume point, observing in that connection that our own case of Azalea was one of the cases which had not followed Lyons on this point. For a recent example of a like application of collateral estoppel, see, 14 (Continued) Hand had found invalid in Lyons - It held that issues involving patent law, over which federal courts have express exclusive juris- diction, as decided in a prior state action between the parties should receive finality through collateral estoppel, even though the effect was to foreclose federal determir.ation of exclusive federal claims. 279 U.S. et 390- 2. Judge Hand recognized the applicability of Becher and sought to distinguish it but, ss hoy “ices, a elle ag Deve lopments- ection 9 -L.Rev. a 35, n. 20, puts it, "It is questionable whetner Judge Hand distinguished Becher v. Contoure Laboratories, 279 U.S. 388 (1920) -whefe the Supreme Court held that a state court judg- ment that a patent holder held a patent as a constructive trust for another precluded a federal suit for patent infringement within the exelusive. federal jurisdiction, 28 U.S.C. 1338 (1970). " -67- McNally v. Esmark, 427 F. Supp. 1211, at 1218- 22 ( N.D. I11.- 1977).'? If the second federal action, which is within exclusive federal jurisdiction, can thus be barred by collateral estoppel based on a decision in a prior state action, without violating the rvle of exclu- sivity of federal jurisdiction, there can be no logical reason for not holding that/such action can be barred by res judicata where there is identity of causes of action between the parties, and this is exactly what the court did in Straus, Englehardt and Woods, supra. Judge Hand's second reason is more per- suasive; and it seems to have been the main thrust of his opinion. It is the same reason as that stated and applied by the Court in TS in this case, which was under the Securities Act where there is an express provi- sion for federal exclusivity of remedy as dis- tinguished from a judicially created exclu- sivity as under the Sherman Act, the Court refused to apply res judicata but applies collateral estoppel in the very way Judge Hand in Lyons said the Court, in recognition of the exclusivity of federal jurisdiction, could not do: It dismissed the federal antitrust action as barred by collateral estoppel, which worked the same result as a plea of res judicata. For a discussion of McNally, see Einhorn & Gray, The Preclusive Effect oF State Court Determinations in Federal Actions under the Securities & Exchange Act o 9 ournal orp. Ww ° Hayes and Cream Top, supra. In Lyons, the remedy in the state court was found to be different from that available in the federal court because only in the federal court could a recovery of treble damages be had. Assuming that res judicata requires that the same right 01 recovery be available in both suits, this would be a second reason for Judge Hand's con- clusion. But this point is unimportant here and raises no bar to the application of res judicata in this case, ior the North Carolina statute again is identicai in the plaintiff's right of recovery under the Sherman Act, if successful: It can secure treble damages on the same terms under both statutes. There is another ground raised in Lyons but dismissed by Judge Hand for giving col- lateral estoppel effect to the state court action in this case. It would, if upheld, be equally a ground for granting res judicata effect to a state judgment in a prior identical state suit, if the ground is deemed sound. The rationale for this ground begins with the fact that the plaintiff in Lyons had been the defendant in the state contract suit. Had he filed the state action as plaintiff, the situa- tion would be different, even though Judge Hand in Lyons, by way of a dictum thought differently, because, as Professor Moore, in his comment on -69- Connelly, referred to in note 10, supra, has argued, the plaintiff, by choosing to file the state actior on the same cause of action, had voluntarily waived the benefits, if any, of a federal forum and both res judicata and col- lateral estoppel should be available to bar a subsequent federal action on that same cause of action, even though the federal action was within the exclusive jurisdiction of a federal court. This result--at least, so far as col- lateral estoppel is concerned--was approved by the author of the Note in 53 Va. L. Rev., cited supra, at 1383: "When this choice-of-forum is present, it is difficult to justify providing im- munity from estoppel effect on the ground that a litigant has the privilege to litigate under federal procedure--he has, in effect, waived any such privilege by Pe a state court for the first suit. Indeed, the good sense of this conclusion is so great that the writer of the Note, The Collater- al Estoppel Effect of Prior State Court Findings in Cases within Exclusive Federal Jurisdiction, 91 Harv.L.Rev. 1281, 1290, who is sympathetic to the Lyons view and who is critical of our decision in Azalea Drive-In Theatre, concedes: "In certain cases, the equities between the parties are so one-sided that the application of traditional collateral estoppel rules is warranted, Such a case arises when a losing state =70@ plaintiff, who originally had a choice of bringing suit in either state or federal court, subsequently brings a federal claim based on the same trans- action as the earlier state suit." Certainly, this case fits the equities which support the waiver doctrine as presented by Professor Moore. The plaintiff in the state case was the privy of the plaintiff in this later federal suit. 1° The right to recover for an alleged conspiracy to fix prices of fluid milk sold to North Carolina school districts and paid for with funds, in whole or in part, advanced the school districts by the State of North Carolina was first submitted to the North Carolina courts by the plaintiff's privy under a state statute which was for all prac- tical purposes in this connection an exact duplicate of the federal statute. Having brought the suit originally in the state court through its privy, the plaintiff cannot, after judgment in the state court, seek another "bite at the cherry" by filing a like action in federal court. It has, as Professor Moore suggests, voluntarily waived its right to maintain the second suit and res judicata and collateral estoppel snould be and are available to bar this second suit, wnen the TOpoy the discussior o: ‘tie status of the two plaiytiffs i» the state a d federal actios, see Section IV, set forth later. -71 goods within certain territorial limits within the State, with the intention of preventing competition in selling or to fix the price or prevent competition in buying such goods within these limits. (7) Except as may be otherwise pro- vided by Article 10 of Chapter 66, entitled "Fair Trade," while engaged in buying or selling any goods in this State to make, enter into, execute or carry out any contract, obligation or agreement of any kind by which the parties thereto or any two or more of them bind themselves not to sell or dispose of any goods or any article of trade, use or consumption, below a common standard figure, or fixed value, or establish or settle the price of such goods between them, or between themselves and others, at a fixed or graduated figure, so as directly -or indirectly to preclude a free and unre- stricted competition among themselves, or -125- any purchasers or consumers in the sale of such goods. (c) Nothing herein shall be construed to make it illegal for an agent to represent more than one principal, but this provision shall not be deemed to authorize two or more principals to employ a common agent for the purpose of suppressing competition or preventing the lowering of prices. (d) This section does not make it illegal for a person to sell his business and good- will to a competitor, and agree in writing not to enter business in competition with the purchaser in a limited territory if such agreement does not violate the principles of the common law against trusts and does not otherwise violate the provisions of this Chapter. -126- § 75-14. Action to obtain mandatory order. If it shall become necessary to do so, the Attorney General may prosecute civil actions in the name of the State on relation of the Attorney General to obtain a mandatory order, including (but not limited to) perma- nent or temporary injunctions and temporary restraining orders, to carry out the provi- sions of this Chapter, and the venue shall be in any county as selected by the Attorney General. § 75-15. Actions prosecuted by Attorney General. It shall be the duty of the Attorney General, upon his ascertaining that the laws have been violated by any trust or public service corporation, so as to render it liable to prosecution in a civil action, to prosecute such action in the name of the State, or any officer or department thereof, as provided by law, or in the name of the -127- State on relation of the Attorney General, and to prosecute all officers or agents or employees of such corporations, whenever in his opinion the interests of the public require it. § 75-16. Civil action by person injured; treble damages. If any person shall be injured or the business of any person, firm or corporation shall be broken up, destroyed or injured by reason of any act or thing done by any other person, firm or corporation in violation of the provisions of this Chapter, such person, firm or corporation in violation of the provisions of this Chapter, such person, firm or corporation so injured shall have a right of action on account of such injury done, and if damages are assessed in such case judgment shall be rendered in favor of the plaintiff and against the defendant for treble the amount fixed by the verdict. -128- § 1. Trusts, etc., in restraint of trade illegal; exception of resale price agreements; penalty | Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be iloegal: Provided, That nothing contained in sections 1 to 7 of this title shall render illegal, contracts or agreements prescribing minimum prices for the resale of a commodity which bears, or the label or container of which bears, the trade- mark, brand, or name of the producer or distributor of such commodity and which is in free and open competition with commodities of the same general class produced or dis- tributed by others, when contracts or agree- ments of that description are lawful as applied to intrastate transactions, under any statute, law, or public policy now or -129- hereafter in effect in any State, Territory, or the District of Columbia in which such resale is to be made, or to which the commoc dity is to be transported for such resale, and the making of such contracts or agree- ments shall not be an unfair method of com- petition under section 45 of this title: Provided further, That the preceding proviso shall not make lawful any contract or agree- ment, providing for the establishment or maintenance of minimum resale prices on any commodity herein involved, between manufac- turers, or between producers, or between wholesalers, or between brokers, or between factors, or between retailers, or between persons, firms, or corporations in compe- tition with each other. Every person who shall make any contract or engage in any combination or conspiracy declared by sec- tions 1 to 7 of this title to be illegal shall be deemed guilty of a misdemeanor, and, on -130- conviction thereof, shall be punished by fine not exceeding fifty thousand dollars, or by imprisonmmet not exceeding one year, or by both said punishments, in the dis- cretion of the court. § 2. Monopolizing trade a misdemeanor; penalty Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to mono- polize any part of the trade or commerce among the several States, or with foreign nations, shall be deemd guilty of a misde- meanor, and, on conviction thereof, shall be punished by fine not exceeding fifty thousand dollars, or by imprisonment not exceeding one year, or by both said punish- ments, in the discretion of the court. § 15. Suits by persons injured; amount of recovery. Any person who shall be injured in his -131- business or property by reason of anything forbidden in the antitrust laws may sue therefor in any district court of the United States in the district in which the defendant resides or is found or has an agent, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney's fee. AMENDMENTS Amendment V. No person shall be held to answer for a capital or otherwise infamous crime, unless on a presentment or indictment of a grand jury, except in cases arising in the land or naval forces, or in the militia , when in actual service in time of war or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall -132- be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use without just com- pensation. Amendment XIV § 1. All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside. No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws. -133- Rule 23. Class actions. (a) Representation. --If persons con- stituting a class are so numerous as to make it impractable to bring them all before the court, such of them, one or more, as will fairly insure the adequate repre- sentation of all may, on behalf of all, sue or be sued. (b) Secondary action by shareholders.- In an action brought to enforce a secon- dary right on the part of one or more share- holders or members of a corporation or an unincorporated association because the corporation or association refuses to enforce rights which may properly be as- serted by it, the complaint shall be verified by oath. (c) Dismissal or compromise.--A class action shall not be dismissed or compromised without the approval of the judge. In an action under this rule, -134- notice of a proposed dismissal or compromise shall be given to all members of the class in such manner as the judge directs. -135- --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385007_2173%3A2. Public record. Not legal advice.