The following is an opinion of the U.S. District Court for the District of New Hampshire. Federal district court cases are not binding on the New Hampshire Supreme Court but do interpret New Hampshire law.
This case explores the legal doctrine of “res judicata,” a Latin term meaning “the thing has already been decided.” This doctrine bars relitigation of the same cause of action between the same parties where there is a prior judgment. For it to apply, three elements must be met: (1) the parties must be the same or in privity with one another; (2) the claims must arise from the same set of facts in both cases; and (3) a final judgment on the merits must have been rendered in the first action. Of interest in this case, res judicata bars not only relitigation of the original claims, but also prevents the parties from raising any other claims in a later action that could have been raised as affirmative defenses in the first action.
In this case, the Town had filed the original action with the Superior Court requesting fines and an injunction to prevent the property owners from continuing alleged land use violations. That action was ultimately resolved when the Town and the property owners entered a stipulation (settlement agreement) that was approved by the Superior Court. The property owners then brought a new action in the Federal District Court alleging that the Town’s enforcement actions violated, among other things, the property owners’ state and federal Constitutional rights.
The District Court dismissed the property owners’ claims, finding all three elements of res judicata were met. The parties were identical. The claims in the second case arose out of the same set of facts as the original enforcement action, including the property owners’ actions on their land and the Town’s response to it. More importantly, the property owners could have raised their claims of selective enforcement and denial of equal protection in the first action as defenses against the Town’s enforcement action, but did not do so. Finally, New Hampshire law has long held that a settlement agreement, approved by a court, has the same res judicata effect as a final judgment reached through the usual course of litigation. Because the language of the stipulation in this case indicated that it was intended to be a final resolution of all matters that could have been litigated in the enforcement action, the Court considered it a final judgment on the merits.
This decision illustrates that when a municipality enters a consent agreement, a stipulation or similar settlement agreement that is approved by a court to settle an action, it may work to bar future claims against the municipality by the same parties relating to the same set of facts.