Ronald DeCoster v. Waushara County Highway Department and Waushara County, Wisconsin

When Waushara County set out to improve a rural highway, a dispute erupted about

who owned a tract of land on which Ronald DeCoster had

erected a fence. The County maintained that it owned the

land or at least had a transportation easement that required

the fence’s removal; DeCoster insisted that the land was his

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and refused to take down the fence. Litigation in state court

was se]led for a $7,900 payment from the County to De-

Coster—who then sought more than $110,000 in a]orneys’

fees and other expenses, relying on Wis. Stat. §32.28. The

state judge awarded about $31,000, ruling that any outlay

after the County offered the $7,900 was unreasonable and

improvident. The court of appeals affirmed. Waushara County

v. DeCoster, 2015 WI App 37 ¶¶18–20.

DeCoster then sued the County in federal court, seeking

an award under 42 U.S.C. §§ 4651–55, part of the Uniform

Relocation Assistance and Real Property Acquisition Act,

which conditions federal grants for highway projects on

states’ providing assurance that they will compensate affected

landowners for reasonable a]orney, appraisal, and engineering

fees. The district court ruled that the Act does not

provide a private right of action, 2018 U.S. Dist. LEXIS 90440

(W.D. Wis. May 30, 2018), and DeCoster filed this appeal. We

do not decide that question, because DeCoster had to present

his claim in the state suit.

The effect of the state court’s decision depends on Wisconsin’s

law. 28 U.S.C. §1738. Wisconsin employs the doctrine

of claim preclusion (also known as res judicata or merger

and bar) under which all legal theories, pertaining to a

single transaction, that could have been presented in the initial

suit, are barred if not so presented. See, e.g., Wisconsin

Public Service Corp. v. Arby Construction, Inc., 2012 WI 87 ¶34.

In other words, a plaintiff cannot seek a recovery with one

legal theory in one suit, then present a different legal theory

in a second suit. The initial decision extinguishes “all rights

of the plaintiff to remedies against the defendant with respect

to all or any part of the transaction, or series of conNo.

18-2387 3

nected transactions, out of which the action arose.” Restatement

(Second) of Judgments §24(1) (1982). It does not ma]er

whether we identify as the “transaction” the (arguable) taking

of DeCoster’s land or his expenses during the litigation.

In either event, the federal suit rests on a transaction that

was before the state court.

That’s not all. Like Wis. Stat. §32.28, the federal Act calls

for the reimbursement of “reasonable” litigation expenses.

See 42 U.S.C. §4654, applied to federally financed state programs

by §4655(a)(2). Wisconsin’s judiciary determined that

an award exceeding $31,561 would not be reasonable. The

resolution of that issue is conclusive whether or not the doctrine

of claim preclusion applies. See In re Estate of Rille, 2007

WI 36 ¶¶37–38. Whether called issue preclusion or collateral

estoppel, this doctrine applies to issues actually and necessarily

decided in the first suit even if the plaintiff advances

new legal theories or demands new remedies. See Restatement

(Second) of Judgments §27.

Preclusion is an affirmative defense, see Fed. R. Civ. P.

8(c)(1), and was invoked by the County—though imperfectly.

DeCoster asked the federal court to award him more

money than the state judge had been willing to do. The

County invoked preclusion as a defense, to the extent that

DeCoster’s claim rested on state law, and the district judge

agreed. 2018 U.S. Dist. LEXIS 90440 at *10–12. The County’s

reference to preclusion, and the district court’s decision,

were enough to alert DeCoster to the problem in seeking

state-court litigation expenses in a second suit, so we do not

see any obstacle to treating all of his current theories as

barred by the state court’s judgment. The court that decides

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the merits is the right forum to resolve requests for a]orneys’

fees and other expenses of litigation.

AFFIRMED