                                                                                                                           Opinions of the United
2008 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


8-14-2008

RegScan Inc v. Brewer
Precedential or Non-Precedential: Non-Precedential

Docket No. 07-2082




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Recommended Citation
"RegScan Inc v. Brewer" (2008). 2008 Decisions. Paper 655.
http://digitalcommons.law.villanova.edu/thirdcircuit_2008/655


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                                                              NOT PRECEDENTIAL

                      UNITED STATES COURT OF APPEALS
                           FOR THE THIRD CIRCUIT
                                _____________

                                   No. 07-2082
                                  _____________

                                 REGSCAN, INC.,

                                          Appellant

                                          v.

                     DEAN MARK BREWER; KEVIN SPENCE;
                       BRUCE REGAN; GARY TABBERT;
                         CITATION PUBLISHING, INC.
                                __________

                   On Appeal from the United States District Court
                      for the Eastern District of Pennsylvania
                                   (No. 04-6043)
                           Honorable Michael M. Baylson
                                   ___________

                              Argued: March 24, 2008
                                  ___________

                Before: McKee, Rendell and Tashima,* Circuit Judges,

                              (Filed: August 14, 2008)
                                    ___________

Daniel F. Schranghamer, Esq. (ARGUED)
Allen E. Ertel & Associates
800 West Fourth Street
Williamsport, PA 17701


      *
       Honorable A. Wallace Tashima, Senior Judge of the United States Court of
Appeals for the Ninth Circuit, sitting by designation.
       Counsel for Appellant Regscan Inc.

Jason P. Gosselin, Esq. (ARGUED)
Michael J. Miller
Drinker, Biddle & Reath
18th & Cherry Streets
One Logan Square
Philadelphia, PA 19103
       Counsel for Appellees

                                       ___________

                                        OPINION
                                       ___________


McKee, Circuit Judge:

       RegScan appeals the district court’s grant of summary judgment in favor of

defendants on claims RegScan brought under the Racketeer Influenced and Corrupt

Organizations Act (“RICO”). For the reasons that follow, we will affirm.

                                             I.

       We review the district court’s grant of summary judgment de novo. Petruzzi’s

IGA Supermarkets v. Darling-Delaware Co., 998 F.2d 1224, 1230 (3d Cir. 1993). When

an appellant argues that an order granting summary judgment was premature, we review

the refusal to delay action for an abuse of discretion. Pastore v. Bell Tel. Co., 24 F.3d

508, 510 (3d Cir. 1994).

       The application of res judicata is governed here by Pennsylvania law. See, e.g.,

Allegheny Int’l v. Allegheny Ludlum Steel Corp., 40 F.3d 1416, 1429 (3d Cir. 1994).


                                             -2-
Under Pennsylvania law, “a final valid judgment upon the merits by a court of competent

jurisdiction bars any future suit between the same parties or their privy on the same cause

of action.” Dempsey v. Cessna Aircraft Co., 653 A.2d 679, 680-82 (Pa. Super. 1995).

“Invocation of the doctrine of res judicata (claim preclusion) requires that both the

former and latter suits possess the following common elements: (1) identity in the thing

sued upon; (2) identity in the cause of action; (3) identity of persons and parties to the

action; and (4) identity of the capacity of the parties suing or being sued.” Matternas v.

Stehman, 642 A.2d 1120, 1123 (Pa. Super. 1994) (citation omitted).

                                             II.

       Inasmuch as we write primarily for the parties who are familiar with this case, we

need not reiterate the factual or procedural background except insofar as may be helpful

to our brief discussion.

       RegScan argues that the state court’s denial of the motion to amend was not a

judgment on the merits because it consisted of a one sentence order. However, as noted

by the district court and the Defendants, the state court sanctioned the Plaintiff for

bringing the motion to amend. In its opinion granting sanctions, the state court explained

that RegScan’s RICO claims were “not warranted by existing law” nor was there “any

nonfrivolous argument for the extension or modification of existing law.” This can only

be read as a decision that an amendment to the complaint would be futile - and under the

law of most jurisdictions - that is a judgment on the merits. See ITT v. Intelnet, 366 F.3d



                                             -3-
205, 211-212 (3d Cir. 2004) (looking to statements made by state court at motions

hearing to determine whether denial of motion to amend was a resolution on the merits).

We therefore reject RegScan’s attempt to define the state court decision as procedural

rather than substantive.

       RegScan next argues that the district court incorrectly concluded that there was an

“identity of the capacity of the parties” between the Pennsylvania and federal suits. It

does not challenge the court’s ruling on the other three res judicata prongs. RegScan

claims that it is suing the individual defendants in their individual capacities, and not as

officers, directors, and/or employees of Citation. An examination of the proposed

amendment to the state court complaint and the federal complaint shows that all of the

alleged actions of the defendants were undertaken as representatives and agents of

Citation. Thus, the district court correctly concluded that the fourth prong of

Pennsylvania’s res judicata doctrine has been met.

                                             III.

       Finally, we conclude that it was not an abuse of discretion for the district court to

rule on the Defendants’ summary judgment motion without allowing further discovery.

In Bradley v. United States, we held that “in all but the most exceptional cases, failure to

comply with Rule 56(f) is fatal to a claim of insufficient discovery on appeal.” 299 F.3d

197, 207 (3d. Cir. 2002) (citation omitted). It is undisputed that RegScan failed to submit

a Rule 56(f) affidavit prior to the district court’s decision. We find no exceptional



                                             -4-
circumstances on this record that would excuse that failure.

                                           IV.

      For the foregoing reasons, we will affirm the judgement of the district court.




                                           -5-
