This case presents for decision the question whether a 1970 Texas divorce decree awarding appellee a portion of her husband's military retirement payments survives the recent Supreme Court decision in McCarty v. McCarty, --- U.S. ----, 101 S. Ct. 2728, 69 L. Ed. 2d 589 (1981). On the basis of this Court's opinion in Erspan v. Badgett, 647 F.2d 550 (5th Cir. 1981), reh. en banc denied with opinion, 659 F.2d 26 (5th Cir. 1981), we are obligated to affirm the trial court's decision that the prior judgment was res judicata as to Andrew Wilson.

Barbara Wilson brought this diversity suit in the United States District Court for the Middle District of Louisiana to enforce a 1970 decree of the 98th Judicial District Court of Travis County, Texas, which awarded her $226.25 per month from her husband's military retirement pay. Andrew Wilson, although represented by counsel at the prior hearing, never appealed that decision. His retirement payments became due in 1971, but Barbara never received any money.

Barbara urged that the federal court, sitting in diversity, has the same obligation as a Louisiana state court to give full faith and credit to the Texas state court decree. After a bench trial, the District Judge agreed and ordered Andrew to pay Barbara $24,435 in arrearages for the period from September 1971 to August 1980 and future payments of $226.25 per month beginning September 1980. Andrew appealed.

Federal law, 28 U.S.C. § 1738,1 requires that state judgments be given "the same full faith and credit in every court within the United States ... as they have by law or usage in the courts of such state ... from which they are taken." See Allen v. McCurry, 449 U.S. 90, 101 S. Ct. 411, 66 L. Ed. 2d 308 (1980) (res judicata applies in 42 U.S.C. § 1983 actions); Gresham Park Community Organization v. Howell, 652 F.2d 1227, 1241 n.42 (5th Cir. 1981) (Georgia court injunction). Thus if Texas courts would enforce the decree, the District Court must do so as well.

Under the principles of res judicata, a final judgment on the merits in an action precludes the parties from relitigating issues that were or could have been raised in that action. The Texas state court decision, which Andrew never appealed, constituted such a final judgment. Since Andrew could have appealed or raised the points he now makes in that proceeding, res judicata acts as a bar in this suit.

Andrew does not challenge the 1970 decision but argues that McCarty v. McCarty, --- U.S. ----, 101 S. Ct. 2728, 69 L. Ed. 2d 589 (1981), which squarely held that military retirement benefits are not divisible in state court decrees as community property, negates the application of res judicata. Whatever the merits of that claim, it is foreclosed by this Court's decision (Erspan II) rehearing en banc denied, Erspan v. Badgett, 659 F.2d 26 (5th Cir. 1981).2 Erspan II holds that where a court has entered a final divorce decree apportioning military retirement benefits among husband and wife, McCarty does not overcome the res judicata effect of the prior decision. The Court relied on Federated Department Stores, Inc. v. Moitie, --- U.S. ----, 101 S. Ct. 2424, 2427, 69 L. Ed. 2d 103, 108 (1981), where the Supreme Court stated, "the res judicata consequences of a final, unappealed judgment on the merits (are not) altered by the fact that the judgment may have been wrong or rested on a legal principle subsequently overruled in another case." Reasoning that the Supreme Court in McCarty would have explicitly so stated if it "intended to invalidate, or otherwise render unenforceable, prior valid and subsisting state court judgments," 659 F.2d at 28, the Court declined to do so on its own in the absence of a Texas state court decision granting McCarty preclusive effect even as to final decisions.

As we are absolutely bound by Erspan II, we likewise defer to an obvious if unexpressed implication of that decision. Although henceforth Texas divorce courts, aware that they cannot divide military retirement benefits as community property, can fashion an equitable distribution of other community property so as to strike a rough balance, denial of res judicata effect where the property division is final would result in a windfall for the retired spouse.3 In the good company of the late and much missed Judge Ainsworth of this Court,4 we believe that Erspan II necessarily applies equally to future payments where, as here, a court some years before has entered a final judgment dividing marital property. The Travis County court's final, unappealed decision does not lose its binding effect as to the future payments by Andrew to Barbara.

AFFIRMED.