What are the facts?
Orthopaedic surgeons, including Dr. Marrese, sought membership in the American Academy of Orthopaedic Surgeons (AAOS), a private professional association. They alleged that AAOS's refusal to admit them restricted their professional opportunities and had anticompetitive effects, because hospital credentialing and professional advancement often considered AAOS membership. The plaintiffs first filed suit in Illinois state court asserting state-law theories challenging AAOS's membership practices (they could not assert federal Sherman Act claims there because federal antitrust claims fall within the exclusive jurisdiction of the federal courts). The Illinois courts dismissed the state action with prejudice, concluding the plaintiffs had no viable cause of action under state law; appellate review in the state system ended unsuccessfully for the plaintiffs. The surgeons then brought a new suit in federal district court alleging violations of the Sherman Act. The district court dismissed the federal action on res judicata (claim preclusion) grounds based on the prior Illinois judgment. On appeal, the Seventh Circuit, sitting en banc, reversed, holding that because the federal antitrust claims were within the exclusive jurisdiction of the federal courts, the prior state judgment could not have claim-preclusive effect over the federal suit. The United States Supreme Court granted certiorari.
What is the legal issue?
Must a federal court, under 28 U.S.C. § 1738, apply the rendering state's preclusion law to determine whether a prior state-court judgment bars a subsequent federal antitrust action falling within the exclusive jurisdiction of the federal courts, and, if so, is there a general exception to § 1738 for such exclusively federal claims?
What rule applies?
Under 28 U.S.C. § 1738, federal courts must give state-court judgments the same full faith and credit that the rendering state's courts would give them. Therefore, the preclusive effect of a state judgment in a subsequent federal action is determined by the law of the state that rendered the judgment. If, under that state's preclusion principles, the later federal claim would be barred, the federal court must then ask whether the federal statute creating the cause of action expressly or impliedly creates an exception to § 1738. Exclusive federal jurisdiction, standing alone, does not itself create a blanket exception to § 1738.
What did the court hold?
The Court vacated the Seventh Circuit's judgment and remanded. The court of appeals erred in adopting a categorical rule that a state-court judgment cannot have claim-preclusive effect over a subsequent federal action that falls within the exclusive jurisdiction of the federal courts. Instead, the federal court must first look to the rendering state's law of preclusion and then consider whether the federal statute at issue overrides § 1738. No general antitrust exception to § 1738 was recognized.
What is the reasoning?
1) Full faith and credit governs: Section 1738 codifies the Constitution's Full Faith and Credit Clause and requires federal courts to accord state judgments the same preclusive force they would receive in the courts of that state. Precedents such as Kremer v. Chemical Construction Corp. and Migra v. Warren City School District confirm that state law supplies the preclusion rules in federal court when the prior judgment is from a state tribunal. 2) Two-step framework: The Court set out a two-step analysis. First, determine whether the claim would be barred under the rendering state's preclusion law, including that state's treatment of claims that could not have been raised previously due to jurisdictional limits. Many states follow a rule that claim preclusion does not bar a subsequent action if the plaintiff could not have brought the claim in the first action; others may apply broader or different preclusion principles. That is a question of state law. Second, only if state law would preclude the claim should the federal court ask whether the federal statute at issue creates an express or implied exception to § 1738. 3) No per se exception for exclusive federal jurisdiction: The Seventh Circuit's categorical approach was rejected. The fact that federal antitrust claims lie in the exclusive jurisdiction of federal courts does not, by itself, constitute an exception to § 1738. Congress's decision to channel federal antitrust claims to federal courts says nothing about the preclusive effect of state judgments unless there is an express or implied repeal of § 1738, which the Court refused to presume. Implied repeals are disfavored and require clear inconsistency between statutes; mere exclusive jurisdiction is not enough. 4) Remand required: Because the court of appeals did not conduct the requisite state-law analysis under Illinois preclusion principles—and did not then consider whether the federal antitrust laws displace § 1738 in this context—the Supreme Court vacated and remanded for application of the correct methodology.
Why is this case significant?
Marrese is the leading case on how federal courts assess the preclusive effect of prior state-court judgments when the later claim is within exclusive federal jurisdiction. It instructs courts to: (1) apply the rendering state's law of preclusion; and (2) only if that law would bar the claim, determine whether the federal statute creates an exception to § 1738. The case underscores that exclusive federal jurisdiction does not automatically shield plaintiffs from claim preclusion and that litigation strategy in state court can have decisive consequences for later federal suits. It is frequently taught with Kremer and Migra to illustrate full faith and credit, claim preclusion, and the limits of federal common law in preclusion doctrine.
Does exclusive federal jurisdiction over a claim prevent a prior state-court judgment from having claim-preclusive effect?
No. Marrese rejects any per se rule. A federal court must first apply the rendering state's preclusion law to see if the later claim would be barred. Only if state law would bar the claim does the court ask whether the federal statute (e.g., the antitrust laws) creates an exception to 28 U.S.C. § 1738. Exclusive jurisdiction alone does not create that exception.
What is the two-step Marrese framework?
Step one: Determine, under the rendering state's law, whether the prior state judgment would preclude the later claim (including that state's treatment of claims that could not have been raised earlier due to jurisdictional limits). Step two: If state law would bar the claim, decide whether the federal statute creating the cause of action expressly or impliedly overrides § 1738. Only a clear expression or necessary implication can displace § 1738.
How does Marrese relate to Kremer and Migra?
Kremer and Migra held that § 1738 requires federal courts to give state judgments the same preclusive effect they would have in state court. Marrese builds on these cases, clarifying that the same principle applies even when the later federal claim is within exclusive federal jurisdiction. It rejects crafting federal common-law preclusion rules that bypass state law in such settings.
If state law would not preclude the later federal claim because it could not have been brought in state court, what happens?
If, under the rendering state's preclusion doctrine, claims that could not have been asserted previously (due to jurisdictional limits) are not barred, then the federal action may proceed; there is no need to reach step two. Marrese places that determination squarely in the hands of state law, not a federal per se rule.
Does Marrese create an antitrust-specific exception to § 1738?
No. The Court did not recognize a general antitrust exception. On remand, courts must decide whether state preclusion law would bar the federal antitrust claim and, if so, whether the antitrust statutes demonstrate an express or implied repeal of § 1738. The Supreme Court emphasized that implied repeals are disfavored and exclusive jurisdiction, by itself, is insufficient.