Franceschi v. Franchise Tax Board

Plaintiff’s unsuccessful federal 1983 suit against the Franchise Tax Board for publishing plaintiff’s name as one of the top 500 tax debtors barred later state law suit against the FTB for that same act.  Plaintiff sued the FTB in federal court, alleging a 1983 claim based on the FTB’s publishing his name on its list of top 500 tax debtors (which causes other administrative agencies to revoke business or professional licenses).  Plaintiff alleged no state law claims in the federal suit, which was dismissed on the pleadings.  Held, the federal judgment bars this later state court suit on state claims arising from the same publication of plaintiff’s name on the top 500 list.  If the federal court had clearly lacked jurisdiction over plaintiff’s state law claims, its dismissal would not have operated as res judicata, but lack of jurisdiction was not clear.  Under 28 USC 1367, a federal court could have exercised supplemental jurisdiction over plaintiff’s state law claims including his mandate petition, and it might well have done so here, had plaintiff raised his state law claims in his federal suit, since with the exception of an easily resolved privacy claim, his state law claims mirrored his federal ones.  The trial court did not abuse its discretion in sanctioning plaintiff under R&T Code 19714 for having brought the state court action since any reasonable attorney would have seen it was improper to split a single cause of action, filing only federal law theories in federal court and later pursuing state law theories on the same cause of action in state court.

California Court of Appeal, Second District, Division 1 (Johnson, J.); July 8, 2016; 2016 WL 3676157

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