Case: 17-10952     Document: 00514792392        Page: 1    Date Filed: 01/11/2019




          IN THE UNITED STATES COURT OF APPEALS
                   FOR THE FIFTH CIRCUIT


                                    No. 17-10952                   United States Court of Appeals
                                                                            Fifth Circuit

                                                                          FILED
                                                                   January 11, 2019
PETRINA L. THOMPSON,
                                                                     Lyle W. Cayce
             Plaintiff–Appellant,                                         Clerk


v.

DALLAS CITY ATTORNEY’S OFFICE,

             Defendant–Appellee.


                 Appeal from the United States District Court
                      for the Northern District of Texas


Before JOLLY, ELROD, and WILLETT, Circuit Judges.
DON R. WILLETT, Circuit Judge:
      On the surface, this workplace-discrimination appeal augurs a clash
between our rule of orderliness and rules of res judicata. Specifically, are we
bound by a 1981 panel decision (that would allow the suit) 1 or by other
preclusion precedent (that would bar it)? 2
      There is no clash. Our decision in Henson v. Columbus Bank & Trust Co.
(letting a plaintiff litigate in federal court a claim previously dismissed in state
court) is not binding—not now and not the day it issued—as it contravened
preexisting full faith and credit precedent. 3 The rule of orderliness may be



      1 Henson v. Columbus Bank & Trust Co., 

(5th Cir. 1981).
      2 See, e.g., Kremer v. Chem. Const. Corp., 

(1982).
      3 See, e.g., Allen v. McCurry, 

(1980).
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                                       No. 17-10952
“binding as the law of the Medes and Persians which altereth not,” 4 but the
United States Supreme Court, being supreme, makes all things mutable, even
“our Holy Rule.” 5
       Orderliness as a judicial goal commands adherence to Supreme Court
precedent—particularly precedent about orderliness—not to circuit decisions
disregarding that precedent. Henson was a one-off that was swiftly cast off.
Indeed, the High Court months later reaffirmed its binding res judicata rule,
one we have followed consistently ever since, paying Henson no mind.
       Admittedly, identifying when a panel decision has morphed from
nominally narrowed to no-doubt-about-it negated can be vexing at times. But
not this time. Henson was never good law, and no precedent, neither the
Supreme Court’s nor ours, has ever treated it as such.
       All to say, on-point res judicata precedent bars this suit. We AFFIRM.
                                              I
       Thompson, formerly a lawyer in the Dallas City Attorney’s Office, claims
she suffered workplace harassment, retaliation, and discrimination because of
her race, color, sex, or age. She sued in both state court (raising only state
claims) and federal court (raising only federal claims). Both suits arose from
the same operative facts.
       While her federal suit was pending, the state court ruled that her state
suit was time-barred. So the City argued that this limitations dismissal in
state court was res judicata in federal court. The district court agreed and
dismissed, ruling that Texas preclusion law barred Thompson’s federal suit.
       On appeal, Thompson presents two arguments—both unavailing:




       4 Steve D. Thompson Trucking, Inc. v. Dorsey Trailers, Inc., 

, 820 (5th Cir.
1989) (Brown, J., dissenting) (referencing Daniel 6:12).
       5 

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                                     No. 17-10952
      1. The district court incorrectly gave res judicata effect to the
         state-court judgment because it was not a judgment on the
         merits. 6

      2. The district court denied her due process because the City did
         not assert res judicata in its original motion to dismiss. (The res
         judicata argument appeared for the first time in the City’s reply
         brief.)
                                         II
       We first dispose of Thompson’s res judicata argument.
                                            A
          Thompson argues that because the state court’s summary judgment was
based on limitations, it was not a final judgment on the merits. Citing our 1981
Henson decision, Thompson says the state-court dismissal lacks preclusive
effect.
          Henson considered whether a federal district court was correct that res
judicata barred the plaintiff’s claims after a Georgia state court determined
that related claims were time-barred. 7 The panel held that “a state-court
dismissal on the basis of the statute of limitations bars only the state-court
remedy and is not an adjudication on the merits,” adding, “res judicata does
not operate as a bar to [plaintiff’s] litigation of the claim in federal court.” 8 Put
simply, Henson declined to give a Georgia state court decision the res judicata
effect that Georgia courts would give it. Indeed, the panel did not discuss
Georgia res judicata law at all. 9
      Henson is factually analogous but legally anomalous. From the get-go,
Henson was at odds with pre-Henson Supreme Court precedent; it is at odds



      6  Thompson does not argue that the state-court judgment failed to meet any other res
judicata requirements.
       7 See 

–25.
       8 

       9 See 

                                            3
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                                       No. 17-10952
with post-Henson Supreme Court precedent; and it is at odds with nearly four
decades of Fifth Circuit precedent.
                                              1
       Let’s start with why Henson was misguided from the outset. According
to the Full Faith and Credit Act, one of Congress’s first acts, “judicial
proceedings . . . shall have the 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.” 10 The Supreme Court put it plainly in Allen v. McCurry, which predates
Henson:
       [T]hough the federal courts may look to the common law or to the
       policies supporting res judicata and collateral estoppel in assessing
       the preclusive effect of decisions of other federal courts, Congress
       has specifically required all federal courts to give preclusive effect
       to state-court judgments whenever the courts of the State from
       which the judgments emerged would do so . . . . 11

       McCurry resolved an unsettled question in this circuit: Does the
preclusive effect of state-court judgments hinge on federal law or state law? 12
Answer: state law. Federal courts must step into the shoes of state courts and
afford preclusive effect where state courts would do so. 13
       Oddly, Henson never discusses McCurry. 14 More oddly, Henson never
even acknowledges McCurry. It would be one thing had Henson attempted to
explain (however implausibly) why McCurry was inapt. But instead of



       10  28 U.S.C. § 1738.
       

(internal citations omitted).
        12 Compare Am. Mannex Corp. v. Rozands, 

(5th Cir. 1972), with Pye v.

Dep’t of Transp. of the State of Ga., 

(5th Cir. 1975); see also Gresham Park Cmty.
Org., 

, 1241 n.42 (5th Cir. 1981) (describing McCurry as resolving the conflict
in this court’s case law).
        13 See 

–105.
        14 See 

–25.

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                                       No. 17-10952
distinguishing McCurry, the panel disregarded it, declining to give preclusive
effect to the Georgia state court’s decision. 15
       Under our rule of orderliness, we may not overrule a prior panel decision
absent an intervening change in the law, such as a statutory amendment or a
decision from either the Supreme Court or our en banc court. And generally,
we think of this Supreme Court or en banc authority as coming after the
questionable panel decision. But this is not necessarily so. We have previously
declined to follow a panel decision that couldn’t be squared with prior Supreme
Court precedent. 16 As Henson turns a blind eye to McCurry, Henson’s holding
is irreconcilable, and thus inoperative, and has been since it was decided. We
are bound to apply McCurry and our cases that abide McCurry, not Henson. 17
                                              2
       Even assuming Henson retained marginal viability when it issued in
1981, any lingering force was quickly, and unquestionably, sapped. Just ten
months after Henson, the Supreme Court in Kremer v. Chemical Construction
Corp. reaffirmed McCurry’s res judicata rule: “It has long been established that
[the Full Faith and Credit Act] does not allow federal courts to employ their
own rules of res judicata in determining the effect of state judgments. Rather,
it . . . commands a federal court to accept the rules chosen by the State from




       15  

e.g., Wilson v. Taylor, 

, 1034–35 (5th Cir. 1981). In Wilson, we
faced a situation like this one, where a panel decision was inconsistent with earlier Supreme
Court precedent. We concluded that, because the panel decision was issued after the Supreme
Court decision, the panel’s conflicting language was inoperative. The binding authority was
the earlier Supreme Court decision, not the later panel decision that tracked circuit authority
pre-dating the Supreme Court decision.
        17 To be clear, a panel’s interpretation of a Supreme Court decision is binding on a

subsequent panel even if the later panel disagrees with the earlier panel’s interpretation.
See, e.g., United States v. Traxler, 

, 489 (5th Cir. 2014). We apply McCurry and
not Henson because Henson made no claim, nor plausibly could have, that it was interpreting
McCurry.
                                              5
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                                       No. 17-10952
which the judgment is taken.” 18 Henson and Kremer are irreconcilable. The
latter spurned the former, and the estrangement is not mere tension, but
rejection.
       Moreover, our circuit has not treated Henson as good res judicata law for
a generation. In the 38 years since Henson, we have repeatedly considered the
res judicata effect due state court decisions. In each case, we followed the Full
Faith and Credit Act, giving preclusive effect to state court decisions when that
state would do so. In fact, just one year after Henson, we decided two preclusion
cases—Rollins v. Dwyer 19 (issued one month before Kremer) and E. D. Systems
Corp. v. Southwestern Bell Telephone Co. 20 (issued three months after
Kremer)—that both employed the Supreme Court’s Full Faith and Credit
approach, not Henson’s out-of-step approach. Thompson urges us to heed our
precedent, but our precedent pays no heed to Henson.
       Tellingly, not one of our post-Kremer decisions on the res judicata effect
of state-court judgments follows Henson. A “Citing References” check on
Westlaw brings up only four Fifth Circuit cases that postdate Kremer. One of
them, Dorsey Trailers, dealt with the preclusive effect one federal court ought
to afford another federal court’s grant of summary judgment. 21 The second,
Manges, discusses Henson’s attorney-fee issue, not res judicata. 22 Another,
Riviere, cites Henson once, and not for anything preclusion-related but for a
Truth in Lending Act issue. 23 Finally, Transource International only mentions
Henson offhandedly in the final footnote, explaining that a state-law claim’s


       

–82.
       19 

(5th Cir. 1982).
       20 

(5th Cir. 1982).
       21 Dorsey 

(“Henson is distinguishable . . . [and] Shoup is the

better course to follow.”).
       22 Atl. Richfield Co. v. Manges, 

, 87 n.1 (5th Cir. 1983) (noting defendants

cite Henson, but to no avail).
       23 Riviere v. Banner Chevrolet, Inc., 

, 462 (5th Cir. 1999).

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                                        No. 17-10952
time-barred status is a factor to be weighed when determining whether to
exercise pendent jurisdiction. 24 This exhausts Henson’s post-Kremer “Citing
References” and reveals no decisions that follow Henson’s one-off preclusion
rule.
        Nearly a dozen cases spanning a dozen years confirm that Henson’s
reasoning and result have been discarded, not just discounted. 25 Not one of



        24Transource Int’l, Inc. v. Trinity Indus., Inc., 

, 290 n.25 (5th Cir. 1984).
        25 Sims v. City of Madisonville, 

, 644 (5th Cir. 2018) (“A federal court
must give to a state-court judgment the same preclusive effect as would be given that
judgment under the law of the State in which the judgment was rendered.” (quoting Migra
v. Warren City Sch. Dist. Bd. of Educ., 

, 81 (1984))); Norris v. Hearst Tr., 

, 460–61 (5th Cir. 2007) (“[T]he preclusive effect of prior state court proceedings on federal
proceedings is determined by the treatment those state court proceedings would receive in
the courts of the state—here, Texas—in which those prior proceedings were held.”); Procter
& Gamble Co. v. Amway Corp., 

, 500 (5th Cir. 2004) (citing Jones v. Sheehan,
Young & Culp, P.C., 

(5th Cir. 1996) and In re Hansler, 

(5th Cir.
1993) as authoritative guides to the res judicata effect of a state court decision); Ellis v. Amex
Life Ins. Co., 

, 938 (5th Cir. 2000) (recognizing and following the rule from Hogue
and Hansler “deal[ing] with the preclusive effect of a Texas state court judgment”); 

(“When a federal court is asked to give res judicata effect to a state court
judgment, the federal court must determine the preclusiveness of that state court judgment
under the res judicata principles of the state from which the judgment originates.” (citing
Prod. Supply Co. v. Fry Steel Inc., 

, 78 (5th Cir. 1996) and 

)); Prod. Supply 

(“A federal court asked to give res judicata effect to a
state court judgment must apply the res judicata principles of the law of the state whose
decision is set up as a bar to further litigation.” (quoting E. D. Sys. 

));
In re Besing, 

, 1494 (5th Cir. 1993) (“[U]nder the Full Faith and Credit Act, 28
U.S.C. § 1738, federal courts must give the Texas judgment the same preclusive effect it
would have in a Texas court.”); 

(“This court must give the Texas state
court judgment the same preclusive effect that another Texas court would give it.”); In re
Brady, Tex. Mun. Gas Corp., 

, 217 (5th Cir. 1991) (“Section 1738 directs this
federal court to give the Texas judgment the same effect as it would have in a Texas court.”);
McWilliams v. McWilliams, 

, 1402 (5th Cir. 1986) (“Under the full faith and
credit clause of the Constitution and 28 U.S.C. § 1738, a federal court must give to a state
court the same preclusive effect that a court of the state in which the judgment was rendered
would give it.” (citing 

)); see also Wilder Corp. of Del. v. Rural Cmty.
Ins. Servs., 494 F. App’x 487, 489 (5th Cir. 2012) (“When asked to give preclusive effect to
state court judgments, federal courts turn to the preclusion principles of the state whose
decision is invoked as a bar to further litigation.” (citing Prod. Supply 

));
Lange v. City of Batesville, 160 F. App’x 348, 351–52 (5th Cir. 2005) (“[W]e must accord
preclusive effect to the [Mississippi] court’s final judgment if the law of issue preclusion in
Mississippi entitles the judgment to such effect in that state’s courts.”).
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                                         No. 17-10952
them so much as mentions Henson vis-à-vis preclusion because Henson was a
nonprecedential outlier. 26
       We disagree with Thompson that our rule of orderliness obliges us to
esteem Henson over contrary Supreme Court precedent such as McCurry and
Kremer (not to mention our post-Henson cases that dutifully track binding
precedent). Orderliness, rightly understood, compels deference, not defiance.
And disregarding on-point precedent in favor of an aberrational decision
flouting that precedent is the antithesis of orderliness. Such a higgledy-
piggledy approach undermines, rather than underscores, the Rule of Law’s
foremost virtues: clarity, certainty, and consistency.
                                                 B
       Texas res judicata doctrine requires three things: (1) that the prior final
judgment is on the merits; (2) that the parties in the two actions are the same;
and (3) that the second action is based on claims that were raised—or could
have been raised—in the first action. 27 Only the first element is seriously




       26   This too merits mention: Henson’s holding was anchored in section 49, comment (a)
of the RESTATEMENT OF JUDGMENTS (AM. LAW INST. 1942), which then provided that a
limitations-based dismissal in one state doesn’t bar the same cause of action in another state
with a more generous limitations period. First, and notably, the Henson court did not analyze
whether Georgia state law would give preclusive effect to the state-court judgment. Second,
unlike the situation mentioned in the Restatement comment, today’s case is not about
duplicative actions in state courts of different states. It’s about the preclusive effect of a state-
court judgment in federal court. Third, the relied-on comment from the 1942 Restatement
was revised in the Second Restatement published in 1982, one year after Henson. The
updated Restatement, unlike the 1942 version quoted in Henson, now reads, “Increasingly
. . . judgments not passing directly on the substance of the claim have come to operate as a
bar” for res judicata purposes. RESTATEMENT (SECOND) OF JUDGMENTS § 19 cmt. A (AM. LAW
INST. 1982). Pertinently, comment G adds that summary judgment for the defendant
generally bars another action by the plaintiff on the same claim. 

(“The rule stated
in this Section is applicable to a case in which it is determined before trial that there is no
genuine dispute with respect to any material fact and that, as a matter of law, the defendant
is entitled to judgment.”).
         27 

.

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                                        No. 17-10952
disputed here: whether the state court’s dismissal on limitations grounds was,
under Texas law, a prior final decision on the merits. It was.
        We held unequivocally in Hogue v. Royse City that a Texas state court’s
grant of summary judgment counts as a “final judgment” and carries the same
preclusive effect in federal court that Texas state courts would afford it. 28
Relatedly, we held in Hansler that “a take-nothing judgment based on
limitations is a final judgment on the merits under Texas law.” 29 That remains
black-letter law in the Lone Star State. 30 Consequently, res judicata bars
Thompson’s federal claims.
                                               C
       “For most Americans, Lady Justice lives in the halls of state courts.” 31
Day by day, American justice is dispensed—overwhelmingly—in state, not
federal, judiciaries. 32 As Justice Scalia remarked, state law (and state courts)



       28  Hogue v. Royse City, Tex., 

, 1254, 1256 (5th Cir. 1991) (“The state
court rendered a final judgment adverse to Hogue on this cause of action, and we must give
effect to that judgment. . . . We conclude that a Texas court would find Hogue’s federal suit
to be barred under the doctrine of res judicata.”). Hogue never mentions Henson.
        

.
        30 See, e.g., Igal v. Brightstar Info. Tech. Grp., Inc., 

, 90 (Tex. 2008) (“A

court’s dismissal of a claim because of a failure to file within the statute of limitations is
accorded preclusive effect.”), superseded on other grounds by statute, TEX. LAB. CODE
§ 61.051(c), as recognized in Prairie View A & M Univ. v. Chatha, 

, 518 (Tex.
2012) (noting that the Payday Law’s 180-day time limit for filing an administrative complaint
is mandatory but not jurisdictional).
        31 John Schwartz, Critics Say Budget Cuts for Courts Risk Rights, N.Y. TIMES (Nov.

26, 2011), https://nyti.ms/2E0XUw7 (quoting former Colorado Supreme Court Justice
Rebecca Love Kourlis).
        32 For a fascinating discussion of the importance of state courts, I commend my

colleague’s superb article on the subject. Jennifer W. Elrod, Don’t Mess with Texas Judges:
In Praise of the State Judiciary, 37 HARV. J.L. & PUB. POL’Y 629 (2013). As Judge Elrod notes,
many Founding-era luminaries preferred state service to a seat on the United States
Supreme Court. John Jay, the first Chief Justice of the United States, stepped down to
become Governor of New York (which also paid 2.5 times more). John Rutledge left the
Supreme Court after two years to become South Carolina’s Chief Justice. William Cushing,
the first justice to administer a presidential oath and the last to wear a full wig, finished
second to Sam Adams for Massachusetts Governor.
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                                     No. 17-10952
matter far more to citizens’ everyday lives: “If you ask which court is of the
greatest importance to an American citizen, it is not my court.” 33 When Justice
Brandeis memorably depicted states as laboratories of democracy, 34 he was
speaking of policymaking (and in dissent). But it’s an apt metaphor for judging
too. Our Nation boasts not one Constitution but 51, meaning American
constitutionalism concerns far more than what began in Philadelphia 232
years ago. 35
      The Constitution’s Full Faith and Credit Clause zealously guards states’
sovereignty, guaranteeing that “[f]ull faith and credit shall be given” to the
“judicial proceedings of every . . . state.” 36 So too Congress’s Full Faith and
Credit Act, 37 which implements the Clause. The Supreme Court in McCurry
was unsubtle: “Congress has specifically required all federal courts to give
preclusive effect to state-court judgments whenever the courts of the State
from which the judgments emerged would do so.” 38
      Henson flouted McCurry the instant it issued 38 years ago. And Henson
was thwacked by Kremer in the Supreme Court’s very next term. In the 37
years since, our unbroken post-Kremer precedent rightly pays Henson no heed.
Instead, our res judicata cases follow—unswervingly—Kremer’s § 1738-
honoring rule, giving “the same preclusive effect to state court judgments that
those judgments would be given” in that state. 39 We do so again today.




      33   See Justice Scalia Honors U.S. Constitution, GEO. WASH. TODAY (Sept. 18, 2013),
https://gwtoday.gwu.edu/justice-scalia-honors-us-constitution.
        34 See New State Ice Co. v. Liebmann, 

, 310 (1932).
        35 See generally JEFFREY S. SUTTON, 51 IMPERFECT SOLUTIONS: STATES AND THE

MAKING OF AMERICAN CONSTITUTIONAL LAW (2018).
        36 U.S. CONST. art. IV, § 1.
        37 28 U.S.C. § 1738.
        38 

.
        39 

.

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                                       No. 17-10952
                                              III
       This leaves Thompson’s due process argument—that the City raised its
res judicata argument too late, in its reply brief rather than in its original
motion to dismiss. We disagree. The City raised it then because the state-court
judgment was handed down after the City had filed its motion to dismiss. Not
only that, Thompson responded to the City’s res judicata argument in her
motion for leave to amend.
       The district court did not violate Thompson’s due process rights. Our
precedent on this point is as clear as our precedent on res judicata: A district
court does not abuse its discretion when it considers an argument raised for
the first time in a reply brief so long as it gives the “non-movant an adequate
opportunity to respond prior to a ruling.” 40 Here, the district court gave
Thompson ample opportunity to respond—and she availed herself of that
opportunity.
                                              IV
       The district court was right to dismiss Thompson’s suit on res judicata
grounds. And doing so did not violate her due process rights, our rule of
orderliness, or anything else.
       We AFFIRM.




       40  Vais Arms, Inc. v. Vais, 

, 292 (5th Cir. 2004) (quoting Sw. Bell Tel. Co.
v. City of El Paso, 

, 545 (5th Cir. 2003)).
                                              11