                 United States Court of Appeals
                             For the Eighth Circuit
                         ___________________________

                                 No. 18-2849
                         ___________________________

                              United States of America

                         lllllllllllllllllllllPlaintiff - Appellee

                                            v.

                                      Susan Bala

                       lllllllllllllllllllllDefendant - Appellant
                                       ____________

                     Appeal from United States District Court
                      for the District of North Dakota - Fargo
                                    ____________

                            Submitted: October 18, 2019
                              Filed: February 4, 2020
                                  ____________

Before LOKEN, SHEPHERD, and STRAS, Circuit Judges.
                          ____________

LOKEN, Circuit Judge.

      In United States v. Bala, we reversed federal gambling and money laundering
convictions of Racing Services, Inc. (“RSI”), and its president and sole shareholder,
Susan Bala, because “the government failed to prove any of the offenses charged.”
489 F.3d 334, 343 (8th Cir. 2007). RSI and Bala petitioned for a certificate of
innocence, the statutory prerequisite to an action in the Court of Federal Claims
seeking damages from the government for wrongful imprisonment. See 28 U.S.C. §§
1495, 2513. In United States v. Racing Services, Inc., we affirmed the district court’s
denial of the petition, concluding that “RSI and Bala were not truly innocent of state
criminal gaming law violations.” 580 F.3d 710, 712 (8th Cir. 2009). We refer the
reader to those opinions for the complex facts that arose out of RSI’s parimutuel
account wagering operation in Fargo, North Dakota. Nine years after filing her first
petition, Bala filed a second petition for a certificate of innocence. The district court1
denied the petition as barred by the doctrine of res judicata and on the merits.
Reviewing de novo, we agree the second petition is barred by res judicata and
therefore affirm. See Yankton Sioux Tribe v. U.S. Dep’t of Heath & Human Servs.,
533 F.3d 634, 639 (8th Cir. 2008) (standard of review).

       The United States Court of Federal Claims has jurisdiction over “any claim for
damages by any person unjustly convicted of an offense against the United States and
imprisoned.” 28 U.S.C. § 1495. To recover on that claim, the petitioner must submit
to the Court of Federal Claims a certificate of innocence obtained from the court of
conviction under 28 U.S.C. § 2513. To obtain a certificate of innocence, petitioner
Bala must prove, not only that her conviction was reversed or set aside on the ground
that she was not guilty of the offenses, but also that she “did not commit any of the
acts charged or [her] acts, deeds, or omissions in connection with such charge
constituted no offense against the United States, or any State, Territory or the District
of Columbia, and [s]he did not by misconduct or neglect cause or bring about [her]
own prosecution.” § 2513(a)(2). “This statute, first enacted in 1938, compensates
only the truly innocent, making it necessary to separate from the group of persons
whose convictions have been reversed, those few who are in fact innocent of any
offense whatever.” Racing Servs., 580 F.3d at 712 (quotation omitted).



      1
       The Honorable Daniel L. Hovland, United States District Judge for the District
of North Dakota.

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       “Under res judicata, 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.” Allen v. McCurry, 449 U.S. 90, 94 (1980). A suit is barred by res
judicata (the more modern term is claim preclusion) when five elements are satisfied:

      (1) the first suit resulted in a final judgment on the merits; (2) the first
      suit was based on proper jurisdiction; (3) both suits involve the same
      parties (or those in privity with them); (4) both suits are based upon the
      same claims or causes of action; and (5) the party against whom res
      judicata is asserted must have had a full and fair opportunity to litigate
      the matter in the proceeding that is to be given preclusive effect.

Rutherford v. Kessel, 560 F.3d 874, 877 (8th Cir. 2009) (quotation and alterations
omitted). On appeal, Bala argues that her second petition for a certificate of
innocence is not barred by res judicata for two distinct reasons: (1) res judicata does
not apply to a successive petition for a certificate of innocence because it is an
“ancillary proceeding,” like a motion for the return of seized property under Rule
41(g) of the Federal Rules of Criminal Procedure; and (2) because her second petition
falls within the “changed circumstances” exception to the res judicata bar.

       (1) Although a petition for a certificate of innocence is a separate civil
proceeding and not part of the original criminal case, it has been called an ancillary
“civil proceeding within the closed criminal case” and likened to a Rule 41(g) motion.
Abu-Shawish v. United States, 898 F.3d 726, 736 (7th Cir. 2018). But Bala’s
assertion that successive Rule 41(g) motions are permitted without regard to res
judicata principles does not withstand close scrutiny. Damages cannot be recovered
in a Rule 41(g) motion; relief is limited to the return of property the government is
wrongfully possessing. See United States v. Hall, 269 F.3d 940, 942-43 (8th Cir.
2001), cert. denied, 536 U.S. 942 (2002). Therefore, it is consistent with preclusion
principles that denial of a Rule 41(g) motion “could not be given res judicata effect”
in a subsequent civil action seeking damages. Stuart v. Rech, 603 F.3d 409, 411 (7th

                                          -3-
Cir. 2010). On the other hand, res judicata does bar successive Rule 41(g) motions
for return of the same property. United States v. Thompson, 703 F. App’x 455 (8th
Cir. 2017) (unpublished).

       More importantly, any superficial similarity between a certificate of innocence
petition and a Rule 41(g) motion has no bearing on the claim preclusion issue before
us. A critical element of res judicata is that “both suits are based upon the same
claims.” Rutherford, 560 F.3d at 877. To obtain damages from the government for
wrongful imprisonment, a person must file a “claim” in the Court of Federal Claims.
28 U.S.C. § 1495. The “claim” may not succeed unless the claimant obtains a
certificate of innocence from the court of conviction under section 2513. Congress
bifurcated this damage action in two courts for obvious jurisdictional reasons. But
substantively, denial of a certificate of innocence by the court of conviction is a final
judgment on the merits which forecloses (denies) a damage claim in the Court of
Federal Claims. Thus, the doctrine of res judicata applies to a civil action seeking
a second certificate of innocence.

       (2) Alternatively, Bala argues that her successive petition for a certificate of
innocence falls within a “changed circumstances” exception to the res judicata bar.
She argues that two subsequent events created changed circumstances that preclude
application of res judicata to bar her successive petition: First, after her first petition
for a certificate of innocence was filed, the district court granted writs of error coram
nobis in favor of Bala’s co-defendants, rejecting and withdrawing pleas of guilty and
vacating and expunging their convictions “as if [they] had been reversed by the
Eighth Circuit Court of Appeals on direct appeal.” Second, after her first petition was
denied, we upheld the district court’s decision that “[t]axes the state collected from
RSI on account wagering before [2007] were unauthorized under North Dakota law
and must be repaid to the bankruptcy estate.” In re Racing Servs., Inc., 779 F.3d 498,
505 (8th Cir. 2015).



                                           -4-
       We have never recognized a general “exception” to the res judicata bar based
on “changed circumstances.”2 We do follow the general rule “that claim preclusion
does not apply to claims that did not arise until after the first suit was filed.” Baker
Grp. v. Burlington N. & Santa Fe Ry., 228 F.3d 883, 886 (8th Cir. 2000); see
generally Howard v. City of Coos Bay, 871 F.3d 1032, 1039-40 (9th Cir. 2017)
(collecting cases). That rule is not an “exception” to res judicata, and it does not
apply here -- Bala’s second petition seeks the same certificate of innocence that she
was previously denied.

       When the second claim did not arise after the first, as in this case, we have
adopted the position of Section 24 of the Restatement (Second) of Judgments: “a
claim is barred by res judicata if it arises out of the same nucleus of operative facts
as the prior claim.” Lane v. Peterson, 899 F.2d 737, 742 (8th Cir. 1990). The
pertinent question is whether the second claim is based on subsequent legal or factual
events that produce a different nucleus of operative facts, not whether those events
inspire new legal theories of recovery or provide additional evidence supporting the
previously rejected claim. See id. at 743-44 and authorities cited.

        Applying this test, the changed circumstances on which Bala relies do not
avoid the res judicata bar. The writs of error coram nobis were not even “changed
circumstances” -- they were granted months before Bala’s first petition was denied
by the district court, and Bala specifically cited the writs as evidence supporting the
first petition in her brief to this court appealing denial of that petition. Racing Servs.,
No. 08-3287, Brief of Appellant at 3-4, 16-18. As for our decision affirming tax
refunds in RSI’s bankruptcy proceeding, that ruling provided nothing more than an

       2
        This is a different question than whether a petitioner who is denied a
certificate of innocence may obtain relief from that judgment under Fed. R. Civ. P.
60(b) based on newly discovered evidence or other extraordinary circumstances. See
Holmes v. United States, 898 F.3d 785, 791-92 (8th Cir. 2018). Bala never sought
Rule 60(b) relief in the many years after her first petition was denied.

                                           -5-
additional issue that Bala could have raised but failed to raise in her first petition --
that she “did not commit any of the acts charged” -- or evidence that arguably
supported the issue she did raise -- that her acts “constituted no offense against the
United States, or any State.” 28 U.S.C. § 2513(a)(2). Unlike collateral estoppel
(issue preclusion), which precludes only issues of fact or law “actually litigated and
necessarily decided” in the prior action, Liberty Mutual Ins. Co. v. FAG Bearings
Corp., 335 F.3d 752, 760 (8th Cir. 2003), res judicata bars both what was raised and
what could have been raised in the previous action. See Lane, 899 F.2d at 744; Saud
v. Bank of N.Y., 929 F.2d 916, 920 (2d Cir. 1991).

       Having concluded that Bala’s second petition for a certificate of innocence is
barred by the doctrine of res judicata, we need not consider the district court’s
alternative ground. We affirm the judgment of the district court and deny Bala’s
Motion for Reclassification of Case for Oral Argument.
                      ______________________________




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