Amal Gustafson v. U.S. Bank

MEMORANDUM

Amal Gustafson appeals the district court’s dismissal of this action as claim-precluded by the judgment in an earlier case, Gustafson v. SunTrust Mortgage, Inc., No. 2:13-cv-01502 (C.D.Cal. July 12, 2013) (“Gustafson I ”). We have jurisdiction under 28 U.S.C. § 1291 and we reverse.

The district court concluded that the judgment in Gustafson I operated as claim preclusion because the two suits “ar[o]se from the same ‘transactional nucleus of facts’ ” because they “relate[d] to the same subject note, subject deed of trust, and subject property.” See Costantini v. Trans World Airlines, 681 F.2d 1199, 1201 (9th Cir.1982). Contrary to the district court’s analysis, however, we apply state law, not federal law, to determine the effect of the prior dismissal in this diversity case. Semtek Int’l Inc. v. Lockheed Martin Cow, 531 U.S. 497, 508-09 , 121 S.Ct. 1021 , 149 L.Ed.2d 32 (2001). Under California preclusion law, the question is not whether the two suits “arise out of the same transactional nucleus of facts,” but whether the plaintiff seeks to vindicate the same “primary right” in both suits. Boeken v. Philip Morris USA, Inc., 48 Cal.4th 788, 797 , 108 Cal.Rptr.3d 806 ,…