United States District Court, Western District of New York
February 22, 2001
WALTER A. SALERNO, PLAINTIFF,
LEICA INC., DEFENDANT.
The opinion of the court was delivered by: Curtin, District Judge.
Under the civil enforcement provision of the Employee
Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132,
plaintiff Walter Salerno ("Salerno") commenced this action to
collect severance benefits that he claims are owed to him by his
former employer, defendant Leica, Inc. ("Leica"). Leica argues
that Salerno's ERISA claims are barred by the doctrine
of res judicata and moves for dismissal under Rule 12(b)(6) of
the Federal Rules of Civil Procedure. Item 3.
Between 1987 and December 1997, Salerno was an executive in
the Buffalo offices of Leica's optical products division. Item
1, ¶¶ 4, 18. Salerno worked as a manager in the Buffalo Division
from 1986 until 1990. Id. ¶¶ 5, 7. In 1990, he was promoted to
the position of vice-president for the Buffalo Division. Id. ¶
7. Then, in April 1992, Leica named Salerno president of the
Buffalo Division. Id. ¶ 8.
In May 1996, Eric Poll, Leica's Corporate Director for Human
Relations, recommended that an outside consultant be retained to
work with Salerno on issues of management style. Id. ¶¶ 10-11.
In light of Poll's recommendations, Leica proposed a six-month
program of intensive supervision and evaluation for Salerno.
Id. ¶ 11. Salerno and two Leica representatives executed a
written agreement to formalize the terms of the six-month
program ("the Agreement"). The Agreement provided that at the
end of the six-month period Salerno either would continue to
work for Leica or Leica could opt to terminate Salerno's
employment. Id. ¶ 11. The Agreement further provided that if
Leica chose to terminate Salerno, Leica would grant him a
severance package commensurate with his experience, history, and
position with Leica. Id. ¶¶ 11-14 and Exh. A. In early December
1996, approximately five months into the six-month program,
Leica determined that Salerno was not making adequate progress
and decided to terminate his employment immediately. Id. ¶¶ 11,
17, and 18.
Salerno now claims that Leica violated the terms of the
Agreement by failing to provide him with adequate severance
benefits. Salerno states that Leica offered him a severance
package valued at $139,500, Item 7, p. 5, but insists that the
Agreement entitles him to a severance package worth just over
$287,000. See Item 1, ¶¶ 19-21. Salerno claims that Leica is
liable under ERISA for its failure to pay him his properly
calculated severance benefits.
The present action is the third of three lawsuits that Salerno
has commenced against Leica since his termination in December
I. The State Action
Salerno commenced his first action against Leica on March 24,
1997, in New York State Supreme Court, County of Erie (Salerno
v. Leica, Inc., Index No. 1997/2527) ("the State Action").
See Item 5, ¶ 4 and Exh. A. Salerno's complaint in the State
Action is substantially identical to his complaint in the
present action. Compare Item 1 with Item 5, Exh. A. In the
State Action, Salerno asserted various breach of contract claims
under State common law and also asserted a violation of the
State's Wage Payment Law. Id. Exh. A, pp. 4-7.*fn1 After
discovery was completed, Leica moved to dismiss Salerno's
complaint. In relevant part, Leica argued that Salerno's claim
for severance benefits was barred on the grounds of ERISA
preemption. Item 5, ¶ 6.*fn2 Justice
Thomas P. Flaherty heard oral argument on this aspect of Leica's
motion to dismiss on April 26, 1999. Item 8, Exh. D. At
argument, Justice Flaherty questioned Leica's counsel on the
issue of ERISA preemption and on the status of an ongoing
federal lawsuit involving the same parties:
THE COURT: . . . Is there an ERISA cause of action
alleged [in this action] —
MR. DOREN: No.
THE COURT: Is there in the federal action?
MR. DOREN: No.
THE COURT: There isn't.
MR. DOREN: No. The federal action alleges the same
commonality of facts but alleges that because of age
and national origin somehow he was offered less than
he was entitled to, but in nowhere does he allege it
[i.e., an ERISA claim] and that's what he should
have done and when it's combined.
THE COURT: Not in either jurisdiction.
MR. DOREN: Right.
THE COURT: No ERISA claim.
MR. DOREN: Not yet. That's why we're here.
Item 8, Exh. D, p. 6. Later in the argument, Mr. Doren went on
to state that:
an ERISA cause of action should have been brought
from day one and [Salerno] has the right to amend. We
ask that the complaint be dismissed, ERISA cause of
action can be brought, [we will] likely remove it to
Federal Court and we'll have one lawsuit. And
contrary to plaintiffs contention, we didn't have the
right to remove it. We certainly would, upon
amendment, and then we can proceed.
Item 8, Exh. D, pp. 18-19. By an order dated June 21, 1999,
Justice Flaherty granted Leica's motion and dismissed Salerno's
complaint. Item 5, Exh. C. As to the issue of severance
benefits, Justice Flaherty reasoned that the Agreement of June
1996 between Leica and Salerno — at least as it concerned a
severance package-constituted a "plan" under ERISA. Thus,
Justice Flaherty ruled that ERISA preemption barred Salerno from
asserting State law claims on the basis of Leica's alleged
breach of the Agreement. Item 5, Exh. C, pp. 3-4.
In dismissing the complaint, Justice Flaherty left the door
open for Salerno to pursue his severance benefit claims
elsewhere: "The Complaint is dismissed, in its entirety, and
without prejudice to Plaintiff proceeding as advised relative to
pleading an ERISA claim in the pending related federal
litigation between the parties." Item 5, Exh. C, p. 6. On May
10, 2000, the Fourth Department affirmed Justice Flaherty's
decision. Id. Exh. B. At oral argument, the court learned that
the State Court of Appeals recently denied Salerno's application
for leave to appeal.
II. The First Federal Action
Through different counsel, Salerno commenced a federal
employment discrimination lawsuit on December 11, 1997, here in
the Western District of New York (Salerno v. Leica, Inc.,
97-CV-973S(H) ("the First Federal Action")). Item 5, ¶ 10. In
that action, Salerno claimed that his termination and loss of
employment benefits were the result of age and national origin
discrimination. Item 5, Exh. E, pp. 4-6. As a result of this
alleged discrimination, Salerno claimed he had lost his job as
well as "future wages, bonuses and other employment
benefits. . . ." Item 5, Exh. E, ¶ 38.
Salerno made specific mention of severance benefits in his
factual allegations: "In connection with his termination,
plaintiff was denied a separation package
comparable to those of younger and/or European employees who
were terminated, including employees terminated for poor
performance." Item 5, Exh. E, ¶ 15. Thus, Salerno claimed that
his severance package was discriminatory in that it did not
measure up to other severance packages offered to similarly
situated Leica executives who were either younger than Salerno
or of a European national origin.
On February 26, 1999, Leica moved for summary judgment. On
July 7,1999, the Hon. William M. Skretny dismissed Salerno's
claims in a ruling read from the bench. Item 5, Exh. F. In the
ruling's recitation of facts, Judge Skretny acknowledged the
June 1996 Agreement and Salerno's severance benefits:
The agreement also contained a provision for
"alternative options for further development" or "a
severance package commensurate with [Salerno's]
level of contribution and position" if the program
Thereafter, Plaintiff claims he was offered a
severance package worth significantly less that [sic]
what he was entitled to under his agreement and based
on past practice.
Item 5, Exh. F, p. 6.
However, judgment was not entered in the First Federal Action
until August 6, 1999. See Item 69 of 97-CV-973S(Sc).
III. The Second Federal Action
Finally, Salerno commenced the present action against Leica on
July 10, 2000 ("the Second Federal Action"). Item 1. This action
is a continuation of the State Action, since plaintiff again
asserts a claim for unpaid severance benefits. In this action,
though, Salerno bases his claim on the civil enforcement
provisions of ERISA, 29 U.S.C. § 1132.
Leica argues that Salerno's present lawsuit is barred by the
doctrine of res judicata. Salerno responds first by contending
that the doctrine of judicial estoppel prevents Leica from
asserting the doctrine of res judicata. In the alternative,
Salerno disputes that Judge Skretny's disposition in the First
Federal Action has a preclusive effect on the present action.
Salerno maintains that action and this action are not
"transactionally related" because different evidence would be
needed to prove the different claims asserted in the two federal
I. Judicial Estoppel
"Judicial estoppel is designed to prevent a party who plays
fast and loose with the courts from gaining unfair advantage
through the deliberate adoption of inconsistent positions in
successive suits." Wight v. Bankamerica Corp., 219 F.3d 79, 89
(2d Cir. 2000) (citing Bates v. Long Island R.R.,
997 F.2d 1028, 1037-38 (2d Cir. 1993)).
A party invoking judicial estoppel must show
that: (1) his adversary advanced an inconsistent
factual position in a prior proceeding, and (2) the
prior inconsistent position was adopted by the
first court in some manner. There must be a true
inconsistency between the statements in the two
proceedings. If the statements can be reconciled
there is no occasion to apply an estoppel.
Id. at 90 (citation and quotation omitted).
In this case, Salerno argues that judicial estoppel arises
based on statements that Mr. Doren, Leica's counsel, made to
Justice Flaherty during oral argument in the State Action. See
Item 7, p. 9. However, Salerno fails to cite a case remotely on
point with the facts involved here. Instead, Salerno relies on
the logical force of his argument in attempting to
show why Leica should be estopped from asserting res judicata.
As to the first prong of the test, Salerno states that Mr.
Doren urged Justice Flaherty to dismiss Salerno's claims without
prejudice so that Salerno could then pursue his claims under
ERISA in federal court. Id. Salerno argues that Mr. Doren's
request for a dismissal without prejudice is directly contrary
to his present argument that Salerno's ERISA claims must be
barred by the doctrine of res judicata.
As to the second prong, Salerno points out that Justice
Flaherty clearly adopted Mr. Doren's idea that the severance
claims should be dismissed without prejudice and then asserted
in federal court. See Item 5, Exh. C, pp. 5-6. Salerno
contends that if Justice Flaherty had known that the First
Federal Action would be dismissed so soon after dismissal of the
State Action, then he never would have dismissed the State
Action without giving Salerno more time to file in federal
court. That is, Justice Flaherty dismissed the State Action on
June 21, 1999, without knowing that the First Federal Action
would be dismissed as of August 6, 1999.*fn3 Finally, Salerno
contends that contrary to Leica's argument, the "mere sixteen
days" between Justice Flaherty's opinion and Judge Skretny's
opinion did not provide him with a "fair opportunity" to
incorporate his ERISA claims in his action in this court. Item
7, p. 12. In sum, Salerno argues that this court should not
allow Leica to "use this serendipitous timing of events to cheat
[Salerno] out of his severance benefits." Id. at 12-13.
Salerno's arguments on judicial estoppel do not carry the day.
Through Mr. Doren, Leica did not take a position in the State
Action that was inconsistent with the res judicata argument it
now asserts. In making his statements to Justice Flaherty on
April 26, 1999, Mr. Doren essentially recognized two things: (i)
that Salerno had not yet asserted an ERISA claim in either the
State or the First Federal Action, see supra pp. 379-80
(citing Item 8, Exh. D, p. 6), and (ii) that Salerno would be
free to assert his ERISA claims in the First Federal Action,
see supra p. 380 (citing Item 8, Exh. D, pp. 18-19). These two
positions, even when taken together, are not contrary to Leica's
current argument that the First Federal Action, which was
dismissed on the merits, has a preclusive effect on the current
Moreover, there is no clear evidence that Justice Flaherty
"adopted" Mr. Doren's representations regarding the dismissal
without prejudice. Rather, Justice Flaherty dismissed Salerno's
claims for severance benefits on the basis of ERISA preemption,
not as a result of what Mr. Doren said at oral argument. See
Item 5, Exh. C. pp. 2-4. Moreover, the record does not indicate
that Leica is "play[ing] fast and loose with the courts . . .
through the deliberate adoption of inconsistent positions in
successive suits." Wight, 219 F.3d at 89. As a result, Leica
will not be judicially estopped from asserting the doctrine of
res judicata as a defense to Salerno's present action in my
II. Res Judicata
Leica insists that the First Federal Action precludes Salerno
from asserting his ERISA claims here in the Second Federal
Action. In Interoceanica Corp. v. Sound Pilots, Inc.,
107 F.3d 86 (2d Cir. 1997), the Second Circuit clearly set forth the
doctrine of res judicata.
Res judicata operates as "claim preclusion."
Generally, a judgment in an
action precludes the parties . . . from
relitigating issues that were or could have been
raised in that action. More specifically: the
doctrine of res judicata provides that when a final
judgment has been entered on the merits of a case,
it is a finality as to the claim or demand in
controversy, concluding parties and those in
privity with them, not only as to every matter
which was offered and received to sustain or defeat
the claim or demand, but as to any other admissible
matter which might have been offered for that
Id. at 90 (quotation and citation omitted) (internal
formatting omitted). In determining whether two different suits
arose from the same "cause of action," the Interoceanica court
It must first be determined that the second
suit involves the same "claim" — or "nucleus of
operative fact" — as the first suit. . . .
[W]hether the same transaction or connected series
of transactions is at issue, [and] whether the same
evidence is needed to support both claims. To
ascertain whether two actions spring from the same
"transaction" or "claim," we look to whether the
underlying facts are related in time, space,
origin, or motivation, whether they form a
convenient trial unit, and whether their treatment
as a unit conforms to the parties' expectations or
business understanding or usage.
Id. at 90. Thus, the court must "look to whether the
underlying facts" of the two cases "are related in time, space,
origin, or motivation, whether they [would have] form[ed] a
convenient trial unit, and whether their treatment as a unit
[would have] conform[ed] to the parties' expectations. . . ."
A comparison of the complaints from the two Federal Actions
reveals that Salerno asserted claims for severance benefits in
both actions and, as a result, that the two cases share a common
core of operative facts. The complaints in both Federal Actions
allege: (i) that Salerno worked for Leica from 1986 until 1996
in "several capacities of increasing responsibility" and met
with great success during his tenure, cf. Item 5, Exh. E, ¶¶
6-7 with Item 5, Exh. H, ¶¶ 4-9; (ii) that in June 1996,
Salerno and his supervisors executed a document in which they
formally agreed that he would enter into a six-month program of
intense supervision designed to improve Salerno's management
style, cf. Item 5, Exh. E, ¶¶ 10-11 with Item 5, Exh. H, ¶¶
10-12,14; (iii) that Salerno was nevertheless terminated in
early December 1996, Item 5, Exh. E, ¶¶ 12, 14 with Item 5,
Exh. H, ¶ 18; and (iv) that after Salerno was terminated, Leica
failed to provide him with an appropriate severance package,
cf. Item 5, Exh. E, ¶ 15 with Item 5, Exh. H, ¶¶ 11, 14,
Notwithstanding the substantial identity of the factual
allegations, Salerno contends that the two federal actions
involve different causes of actions or "transactions." Salerno
argues that the central question of fact in the First Federal
Action was whether discriminatory intent motivated Leica to
terminate him, Item 7, pp. 15-16, while the central inquiry in
this action will be whether Leica violated his rights under
ERISA by denying him a severance package to which he was
contractually entitled. Here, Salerno relies on the following
language from Interoceanica:
[T]he fact that both suits involved essentially
the same course of wrongful conduct is not
decisive; nor is it dispositive that the two
proceedings involved the same parties, similar or
overlapping facts, and similar legal issues. A
first judgment will generally have preclusive
effect only where the transaction or connected
series of transactions at issue in both suits is
the same, that is where the same evidence is needed
to support both
claims, and where the facts essential to the second
were present in the first.
Id. at 91 (citation and quotation omitted). Seizing on
Interoceanica's "same evidence" language, Salerno contends
that the evidence "needed to support" the discrimination claims
in the First Federal Action is entirely different from the
evidence that will be needed to support the severance claims
under ERISA here in the Second Federal Action. See Item 7, pp.
15-19. Salerno observes that the issue of discriminatory intent
will be irrelevant in this case since the question here is
whether Leica honored Salerno's contractual right to receive
Yet, Salerno fails to adequately address the fact that, in the
First Federal Action, he specifically alleged that Leica denied
him an adequate severance package. "In connection with his
termination, plaintiff was denied a separation package
comparable to those of younger and/or European employees who
were terminated, including employees terminated for poor
performance." Item 5, Exh. E, ¶ 15. Further, Salerno's demand
for relief in the First Federal Action included a claim for
unspecified "employment benefits." Item 5, Exh. E, ¶ 38. This
demand for unspecified employment benefits, when viewed together
with Salerno's specific allegation regarding severance benefits,
demonstrates that the First Federal Action involved both a claim
for discriminatory discharge and a claim for discriminatory
denial of severance benefits.
Put another way, in establishing a prima facie claim for
discriminatory denial of severance benefits in the First Federal
Action, Salerno would have had to show, among other things: (i)
that he suffered an adverse employment action; and (ii) that the
circumstances surrounding the adverse action created a
reasonable inference of discriminatory intent. See, e.g.,
Chambers v. TRM Copy Ctrs. Corp., 43 F.3d 29,37 (2d Cir. 1994).
In order to prove an adverse employment action, Salerno alleged
that Leica offered him a severance package of a lesser value
than those that were offered to similarly situated European
employees or to similarly situated employees who were not in
Salerno's protected age group. In other words, the adverse
action was that Leica did not offer him what he was truly owed
in terms of severance benefits. Similarly, the gravamen of
Salerno's present complaint is that Leica has violated ERISA by
refusing to grant him a severance package that pays him what he
is owed. In this way, the First and Second Federal Actions share
a substantially identical set of underlying facts. It might even
be said that Salerno would only have had to prove "half as much"
in this case as he would have had to prove in the First Federal
Thus, the underlying facts of the First and Second Federal
Actions constitute a connected series of transactions. That is,
the underlying facts of the two Federal Actions are related in
time, space, and origin and would have formed a logical and
convenient trial unit. As a result, res judicata applies, and
the First Federal Action acts as a bar to the present one.
The few cases that are directly on point confirm the court's
analysis. In King v. Union Oil Co. of California, 117 F.3d 443
(10th Cir. 1997), the Tenth Circuit found that res judicata
applied in a case substantially similar to the present one. In
King, the plaintiff was terminated by his employer in
September 1992 as a part of a reduction in force. Id. at 443.
In September 1993, plaintiff commenced an action in federal
court alleging that discriminatory intent had motivated his
termination. Id. A jury returned a verdict in the employer's
favor in May 1994. In September 1994, the plaintiff commenced a
second action against his former employer, in which he
claimed entitlement to severance benefits under ERISA. Id.
After the district court held that res judicata did not bar
the second action, the Tenth Circuit reversed and held that res
judicata barred the plaintiffs second action. Id. at 447. The
King court employed the same commonsense "transaction"
analysis that the Second Circuit sets forth in Interoceanica
and, more recently, in Waldman v. Village of Kiryas Joel,
207 F.3d 105 (2d Cir. 2000). Cf. Interoceanica, 107 F.3d at 88,
and Waldman, 207 F.3d at 108, with King, 117 F.3d at 445
(setting forth substantially similar tests and endorsing
language in Restatement (Second of Judgments § 24)). Thus,
both the facts and law in King were substantially similar to
those that this court faces here.
Salerno insists that King is not on point because unlike the
plaintiff in King, Salerno "commenced the State Action to
collect his severance benefits before [he ever filed the First]
Federal Action involving discrimination [claims]." Item 7, p.
21. Salerno's attempt to distinguish King in this way is
unpersuasive. The State Action is irrelevant to the court's res
judicata analysis and does not represent a material distinction
between this case and King. King is compelling authority
because, like the present case, it involved a plaintiff who
commenced one federal action in which he alleged employment
discrimination, and later commenced a Second Federal Action in
which he alleged ERISA claims.*fn4
Salerno implies that he should be excused from his failure to
incorporate the severance claims into the First Federal Action
because there were just sixteen days between the State Court's
dismissal and Judge Skretny's dismissal of the First Federal
Action and, with the intervening July 4 holiday, a mere ten
business days in which he could have amended his federal
complaint. See Item 7, p. 12. Yet, it was conceded at oral
argument that there were far more than sixteen calendar days
between dismissal of the State Action and the First Federal
Action. While Judge Skretny issued a ruling from the bench on
July 7, 1999, the judgment was not ultimately entered until
August 6, 1999. See Item 69 of 97-CV-973S(Sc). Thus, there
were approximately forty-six (46) days between dismissal of the
State Action and the First Federal Action. There is no
explanation for why counsel did not, within those 46 days, move
Judge Skretny's court to reopen the First Federal Action by
granting leave to incorporate the ERISA theory of relief.
Indeed, plaintiffs counsel was able to file a notice appeal of
Justice Flaherty's decision by June 30, 1999. See Item 10,
Furthermore, Leica's answer in the State Action, filed in
September 1997, put Salerno on notice that his State Action
severance claims might be subject to ERISA preemption. Item 5,
Exh. B, p. 7. Similarly, Leica's motion papers, which were filed
prior to oral argument on April 26, 1999, notified Salerno that
ERISA preemption would be an issue. Then, at oral argument held
before Justice Flaherty, Salerno's attorney heard the court
inquire repeatedly as to whether any claims had yet been
asserted under ERISA. Item 8, Exh. D, p. 6. Thus, Salerno's
claim that he had only ten business days in which to
amend his complaint in the First Federal Action is not entirely
accurate. Moreover, there was nothing to prevent plaintiffs
counsel from petitioning Judge Skretny's court for relief from
the judgment that had been entered in the First Federal Action
pursuant to Rule 60(b) of the Federal Rules of Civil Procedure.
Furthermore, in Woods v. Dunlop Tire Corp., 972 F.2d 36 (2d
Cir. 1992), the plaintiff alleged that her employer had
terminated her employment on the basis of race and gender. She
first filed an EEOC complaint regarding her termination, but
soon thereafter commenced an action in the Western District of
New York alleging that her termination was a violation of
section 301 of the Labor Management Relations Act ("LMRA"). The
Hon. John T. Elfvin granted summary judgment in defendant's
favor on the LMRA claims. At about that same time, the EEOC
issued a right-to-sue letter. Having received the right-to-sue
letter, plaintiff filed a second action in the Western District
and this time based the action on Title VII. Id. at 37-38.
Noting that the "identity of facts surrounding the occurrence
. . . constitutes the cause of action, not the legal theory upon
which [plaintiff] chose to frame her complaint," id. at 39,
the court of appeals held that plaintiffs Title VII action was
barred by res judicata. Id. at 40-41.
Woods is admittedly distinct from the present action, in
that the plaintiff there based both of her actions on a
termination. Still, Woods resembles this case in that Salerno
made his severance benefits an issue in both the First and
Second Federal Actions; even if the severance claim was not the
focus of the First Federal Action. Moreover, Woods' statement
of the law is instructive. The Woods court reasoned that res
judicata should apply where the same set of facts would support
the claims in both actions.
In opposing Leica's motion, Salerno relies primarily on
Spearman v. General Motors Corp., 880 F. Supp. 617 (S.D.Ind.
1994), and Herrmann v. Cencom Cable Associates, Inc.,
999 F.2d 223 (7th Cir. 1993). Neither of these cases enables Salerno to
evade the application of res judicata. In Spearman, the
court found that res judicata did not bar the second suit,
reasoning: "The more difficult question is whether Spearman
could have litigated his ERISA claims in the previous
suit. . . . Because it is unclear whether Spearman's ERISA claim
could have been brought earlier, we deny GM's motion for summary
judgment based on res judicata." 880 F. Supp. at 620. In this
case, it is clear that Salerno could have asserted his ERISA
claim in the context of the First Federal Action, since he
alleged in the complaint there that Leica had discriminated
against him by refusing to offer him proper severance benefits.
Salerno also relies on the Seventh Circuit's decision in
Herrmann, 999 F.2d 223. Herrmann involved two successive
actions by an employee against her former employer. In the first
suit, the plaintiff brought a claim under ERISA's continuation
of medical benefits provision ("COBRA"), 29 U.S.C. § 1161-68,
and then in the second action, she brought a claim for gender
discrimination under Title VII, 42 U.S.C. § 2000e to 2000e-17.
Id. at 224. The court held that because the plaintiffs claims
were based on entirely different "factual allegations" and had
little or no "factual overlap," id. at 226-27, the claims were
not sufficiently related for purposes of res judicata:
In the present case, . . . only one fact on
which the two claims are based is the same — that
the plaintiff was terminated. The other facts on
which the Title VII claim is based concern the
conduct of the defendant leading up to the
plaintiffs discharge, while the other facts on
which the COBRA claim is based concern the
processing of her request for continued benefits
after she was discharged.
Id. at 227. Unlike Herrmann, the plaintiff in this case did
not first sue on a termination claim and later sue on a
factually unrelated denial of post-termination employee benefits
(e.g., COBRA benefits). Rather, in both the First and Second
Federal Actions, Salerno claimed that Leica had denied him a
proper severance package. Unlike Herrmann, there is a
substantial factual overlap between the two claims at issue
III. Equitable Considerations
"By its nature, claim preclusion is an equitable doctrine,
designed to promote fairness to the victor, judicial efficiency
and conservation of public and private resources." Ramsden v.
AgriBank, FCB, 63 F. Supp.2d 958, 964 (W.D.Wis. 1999), vacated
on other grounds 214 F.3d 865 (7th Cir. 2000). It has been held
that res judicata will not apply where its "application would
. . . result in manifest injustice." Tipler v. duPont,
443 F.2d 125, 128 (6th Cir. 1971) (citation omitted). The court
recognizes that there is a degree of flexibility to the doctrine
of res judicata and that courts should pay heed to basic
principles of equity when applying it. Yet, application of res
judicata in this case — while it is unfortunate — does not give
rise to a "manifest injustice." As the court has discussed
supra, Salerno had several options in the First Federal
Action, both before and after that case was dismissed. First,
Salerno could have incorporated the claim for severance benefits
into the First Federal Action long before the filing of
dispositive motions. Next, Salerno could have moved the court to
consider the severance benefit claim before judgment was entered
in early August 1999, and then later had the opportunity to
petition the court under Rule 60. The fact that the doctrine of
res judicata is flexible and rooted in equity does not mean
that the court may avoid its application simply because of its
own view of the fairness or equity of doing so in a particular
case. "[The] doctrine of res judicata is not a mere matter of
practice or procedure inherited from a more technical time than
ours. It is a rule of fundamental and substantial justice, `of
public policy and of private peace,' which should be cordially
regarded and enforced by the courts. . . ." Hart Steel Co. v.
Railroad Supply Co., 244 U.S. 294, 299, 37 S.Ct. 506, 61 L.Ed.
1148 (1917). For these reasons, the court rejects Salerno's
attempt to invoke equity.
In both the First and Second Federal Actions, Salerno asserted
claims for wrongly denied severance benefits. In the First
Federal Action, Salerno claimed that Leica deprived him of his
full severance benefits on a discriminatory basis. Here, in the
Second Federal Action, Salerno simply claims that Leica has
deprived him of his full severance benefits. The substantial
identity of these two claims for severance benefits reveals a
substantial factual overlap between the two federal actions.
Thus, res judicata bars Salerno's present claims, and Leica's
motion to dismiss (Item 3) is granted. This matter is dismissed,
and the Clerk is directed to enter judgment in favor of