Robert Gallagher v. Richard Long

Plaintiffs Robert Gallagher and Betty Franklin appeal the district court’s dismissal pursuant to Federal Rule of Civil Procedure 12(b)(6) of their diversity action against Richard and Cynthia Long, the Long trust, and a related company. The complaint alleged that the Longs had breached a settlement agreement intended to resolve a longstanding dispute over the parties’ interest in a collection of celebrity memorabilia.

The underlying dispute was litigated in the courts of Delaware and resulted in a final judgment in favor of the Longs. This action was instituted while the Delaware litigation was still pending. There is no reason why the claims sought to be litigated here could not have been raised in the Delaware litigation, and for that reason the district court correctly dismissed the action as barred by res judicata. As our court has stated, res judicata means that “a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action.” Holcombe v. Hosmer, 477 F.3d 1094, 1097 (9th Cir.2007) (quoting Allen v. McCurry, 449 U.S. 90, 93 , 101 S.Ct. 411 , 66 L.Ed.2d 308 (1980)). The same…