                      United States Court of Appeals
                            FOR THE EIGHTH CIRCUIT
                                     ___________

                                     No. 06-3656
                                     ___________

Jarvis C. Jones,                       *
                                       *
             Appellee,                 *
                                       *
       v.                              * Appeal from the United States
                                       * District Court for the
The St. Paul Companies, Inc.,          * District of Minnesota.
a Minnesota Corporation; and its       *
wholly owned subsidiary, St. Paul      *
Fire and Marine Insurance Company,     *
                                       *
             Appellants.               *
                                  ___________

                              Submitted: April 3, 2007
                                 Filed: August 6, 2007
                                  ___________

Before BYE, BRIGHT, and RILEY, Circuit Judges.
                             ___________

BYE, Circuit Judge.

       The St. Paul Companies, Inc. (St. Paul), successful in defending claims brought
against it in federal court by Jarvis Jones, challenges the district court's1 declination
to enjoin a Georgia state court action Jones later filed against five current or former
employees of St. Paul alleging tort claims which, although different from the claims


      1
       The Honorable James M. Rosenbaum, Chief Judge, United States District
Court for the District of Minnesota.
brought in federal court, arose out of the same set of facts and circumstances. The
district court concluded the relitigation exception to the Anti-Injunction Act, 28
U.S.C. § 2283, did not permit enjoining claims that could have been but were not
brought in the federal court action. Jones v. St. Paul Cos., Inc., 450 F. Supp. 2d 1003,
1005 (D. Minn. 2006). We affirm.

                                           I

       After St. Paul terminated Jones from his position as Regional Vice President of
the Small Commercial business unit of St. Paul's U.S. Insurance Operations Division,
he sued St. Paul in Minnesota federal district court2 alleging race discrimination under
state and federal law, and defamation. The defamation claim arose from statements
his supervisor, Marc E. Schmittlein, made regarding the termination. The federal case
went to trial. After hearing from numerous witnesses over nine days, a jury found in
favor of St. Paul.

       Nine months after the adverse jury verdict, Jones brought an action in Georgia
state court3 against Frank Agan, Bruce Berthelsen, Julia Musial, Louis Snage, and
Schmittlein (the Georgia defendants). All five were current or former employees of
St. Paul who testified in the federal court action. The Georgia state court action
alleged claims of tortious interference with contractual relations against each of the
five defendants, as well as one count of tortious interference with prospective business
relations against Schmittlein. The five contract interference claims arose out of the
events leading to Jones's termination. The prospective business interference claim
was based on statements Schmittlein made concerning the reasons for the termination,
the same statements which formed the basis for the defamation claim in federal court.


      2
       St. Paul maintains its corporate headquarters in Minnesota.
      3
        At the time of his termination, Jones was working near Atlanta, Georgia, at St.
Paul's Small Commercial Center.

                                          -2-
        The Georgia defendants answered the Georgia state court action asserting, inter
alia, the action was barred by the doctrine of res judicata. St. Paul brought a motion
in the federal court proceeding also arguing res judicata applied, and seeking to enjoin
the state court action under the relitigation exception to the Anti-Injunction Act. The
Georgia defendants successfully obtained a stay of the Georgia state court action
pending resolution of the issues raised by St. Paul in federal court in the District of
Minnesota.

       The district court denied St. Paul's motion, concluding the relitigation exception
did not encompass the full scope of the doctrine of res judicata, that is, while res
judicata bars claims actually litigated as well as claims that could have been litigated,
the relitigation exception is limited to claims actually litigated. Jones, 450 F. Supp.
2d at 1005 (interpreting Chick Kam Choo v. Exxon Corp., 486 U.S. 140 (1988)).
Because the tortious interference claims brought in the Georgia state court action were
not actually litigated in federal court, the district court declined to issue an injunction
determining "the proper forum for defendants' res judicata argument is the state court,
which is 'presumed competent to resolve' such matters." Id. (quoting Chick Kam
Choo, 486 U.S. at 150).

       St. Paul filed a timely appeal. On appeal, St. Paul contends the district court
erred in concluding it did not have statutory authority to enjoin the state court action,
and assuming it had authority to do so, abused its discretion in declining to issue an
injunction. Jones counters that the district court correctly limited the scope of the
relitigation exception, and further argues the doctrine of res judicata does not bar the
Georgia state court action in any event because the Georgia defendants are not in
privity with St. Paul.




                                           -3-
                                            II

      We review de novo the issue whether the Anti-Injunction Act's relitigation
exception applies. Canady v. Allstate Ins. Co., 282 F.3d 1005, 1014 (8th Cir. 2002).

         The relitigation exception to the Anti-Injunction Act provides a "court of the
United States may not grant an injunction to stay proceedings in a State court except
. . . to protect or effectuate its judgments." 28 U.S.C. § 2283. Congress added the
phrase "to protect or effectuate its judgments" to the statute in 1948 in response to the
Supreme Court's decision in Toucey v. New York Life Insurance Co., 314 U.S. 118
(1941). Toucey reversed two decisions of the Eighth Circuit which enjoined parties
from using state courts to relitigate issues already adjudicated in federal court, holding
it was inappropriate for federal courts to issue injunctions in such circumstances
because the Anti-Injunction Act did not contain an express exception granting that
power. 314 U.S. at 139-41. In a dissenting opinion, Justice Reed indicated the
majority's decision was inconsistent with how courts had been interpreting the Anti-
Injunction Act. Justice Reed believed it was appropriate, under the doctrine of res
judicata, for a court which had already examined a claim to enjoin a subsequent court
from reexamining a settled controversy. Id. at 149 (Reed, J., dissenting).

      Prior to Toucey, courts had generally recognized a federal court's power to
enjoin a state court action if the doctrine of res judicata would apply, irrespective of
whether the claims involved in the state court action were actually litigated or merely
could have been litigated in the federal court proceeding. See, e.g., Gunter v. Atl.
Coast Line R.R., 200 U.S. 273, 291, 293 (1906) (affirming an injunction preventing
the relitigation of a railroad's exemption from property taxes even though the
subsequent state action concerned taxes for a different period of time and thus "related
to a different cause of action" than the earlier federal court action); Wilson v.
Alexander, 276 F. 875, 882 (5th Cir. 1921) (reversing the denial of a request for
injunction to prevent relitigation of a dispute over ownership of bonds even though

                                           -4-
a new theory of recovery was asserted for the first time in the state court action). In
amending the Anti-Injunction Act to specifically include the words "to protect or
effectuate its judgments," Congress indicated its intent was "[to] restore[] the basic
law as generally understood and interpreted prior to the Toucy (sic) decision."
Amalgamated Clothing Workers of Am. v. Richman Bros., 348 U.S. 511, 515 n.1
(1955) (quoting H.R. Rep. No. 308 at A181 revisor's notes (1947)).

       For forty years after the 1948 amendment, the federal courts were nearly
unanimous in interpreting the relitigation exception as encompassing the full scope
of res judicata, that is, the exception applied both to claims actually litigated and to
claims that could have been litigated. See, e.g., First Ala. Bank, N.A. v. Parsons Steel,
Inc., 747 F.2d 1367, 1376 (11th Cir. 1984), rev'd on other grounds, 474 U.S. 518
(1986) ("It is now settled that the relitigation exception enables a federal court to
enjoin state litigation which is precluded by the doctrine of res judicata."); Harper
Plastics, Inc. v. Amoco Chem. Corp., 657 F.2d 939, 947 (7th Cir. 1981) ("Harper had
a full opportunity to join the contract claim with the claim for relief under the
Robinson-Patman Act, and by failing to do so it split its cause of action. While
§ 2283 may be grounded in principles of comity and federalism . . . those principles
do not supercede the doctrine of res judicata. The relitigation exception to § 2283
recognizes that much."); CCMS Pub. Co. v. Dooley-Maloof, Inc., 645 F.2d 33, 38
(10th Cir. 1981) ("In the federal case defendants had full opportunity to litigate their
claim for earned commissions and they lost. They may not relitigate their claim [in
state court] by changing its label to quantum meruit. . . . A federal court may enjoin
state proceedings where necessary to protect or effectuate its judgments. 28 U.S.C.
§ 2283 . . . The injunction was proper.").

       The sole exception during this period of time was Delta Air Lines, Inc. v.
McCoy Restaurants, Inc., 708 F.2d 582 (11th Cir. 1983). The Eleventh Circuit limited
the application of the relitigation exception to those claims actually litigated in federal
court and did not apply it to claims that could have been litigated, explaining:

                                           -5-
      Because of the sensitive nature of federal interference with state court
      litigation, the exceptions to the rule against injunctions, including the
      third which applies to relitigation of claims that threatens a federal
      court's judgment, must be narrowly construed. The injury to a litigant
      from a denial of an injunction often appears minor where the argument
      is one of relitigation. If the federal court is too cautious, all is not lost.
      A state court is as well qualified as a federal court to protect a litigant by
      the doctrines of res adjudicata and collateral estoppel. . . . A federal
      court's judgment is presumably far more threatened if the state
      proceeding involves the same issues than if it involves only issues that
      could have been, but were not, raised.

Id. at 585, 586 (emphasis added) (internal citations and quotations omitted).

       Relying upon this history, St. Paul argues the relitigation exception
encompasses the full scope of the res judicata doctrine, applying both to claims
actually litigated and claims that could have been litigated in federal court. St. Paul
further argues the district court therefore erred when it limited application of the
relitigation exception to claims actually litigated. We disagree. As the district court
recognized, the legal landscape changed in 1998 when the Supreme Court decided
Chick Kam Choo.

       In Chick Kam Choo, the Supreme Court indicated the relitigation exception
must be narrowly construed. 486 U.S. at 146. More specifically, the Court limited
the scope of the exception to claims or issues actually decided in federal court:

      Thus, as Atlantic Coast Line4 makes clear, an essential prerequisite for
      applying the relitigation exception is that the claims or issues which the
      federal injunction insulates from litigation in state proceedings actually
      have been decided by the federal court. Moreover, Atlantic Coast Line
      illustrates that this prerequisite is strict and narrow. The Court assessed


      4
       Atl. Coast Line R.R. v. Bhd. of Locomotive Eng'rs, 398 U.S. 281 (1970).

                                           -6-
      the precise state of the record and what the earlier federal order actually
      said; it did not permit the District Court to render a post hoc judgment as
      to what the order was intended to say.

Id. at 148.

       Subsequent to Chick Kam Choo, several circuits have indicated the relitigation
exception's incorporation of res judicata extends only to those claims actually litigated
in federal court, not to claims which merely could have been litigated.

      By referring to both 'claims' and 'issues,' we understand the Supreme
      Court to have permitted the relitigation exception to be applied to protect
      a federal court's judgment that would be entitled to more than the
      issue-preclusion effect of collateral estoppel. A judgment adjudicating
      a claim could also be protected. But by insisting that the 'claims or
      issues . . . actually have been decided,' the Court was not permitting
      protection of the full res judicata effect of a judgment, i.e., preclusion of
      claims that, while not litigated, arose from the same common nucleus of
      operative facts as the litigated claim.

Smith v. Woosley, 399 F.3d 428, 434 n.8 (2d Cir. 2005) (internal citation omitted);
see also Tex. Commerce Bank Nat'l Ass'n v. Florida, 138 F.3d 179, 182 (5th Cir.
1998) ("Contrary to TCB's contentions, however, the Supreme Court in Chick Kam
Choo emphasized that claims must be actually litigated in federal court to qualify for
the relitigation exception."); Am. Town Ctr. v. Hall 83 Assocs., 912 F.2d 104, 112 n.2
(6th Cir. 1990) ("[T]here were additional claims in the state complaint that were not
discussed in the federal judgment – the breach of good faith and the promissory
estoppel issues. Because these claims could have been raised in the federal complaint,
the state has the authority to bar them under res judicata. But the issue here is whether
the district court could enjoin state proceedings under the relitigation exception, where
some of the issues in the state complaint were not raised in the federal case. . . . [T]he



                                           -7-
additional claims in the state court proceeding limit the federal court's authority to
enjoin. As such, the refusal to enjoin the Michigan proceeding was proper.").

       St. Paul contends because Chick Kam Choo involved the doctrine of collateral
estoppel, not res judicata, the Supreme Court's references to "claims" should be treated
as dicta. St. Paul urges us to join the Ninth Circuit, which believes the relitigation
exception encompasses the full scope of the doctrine of res judicata:

      We disagree with those Circuits which have concluded that the
      relitigation exception is limited to issues "actually litigated" in a prior
      court proceeding. As the Supreme Court noted in Choo, the relitigation
      exception is "founded in the well-recognized concepts of res judicata and
      collateral estoppel." 486 U.S. at 147, 108 S.Ct. at 1690. To read Choo
      as the other Circuits have, however, would in essence be to read res
      judicata entirely out of section 2283. Any issue which was 'actually
      litigated' by the parties in a prior proceeding will be barred by collateral
      estoppel ("issue preclusion"), without any need to rely on res judicata
      ("claim preclusion").

Western Sys., Inc. v. Ulloa, 958 F.2d 864, 870 (9th Cir. 1992).

       We decline St. Paul's invitation to join the Ninth Circuit. Instead, we believe
Chick Kam Choo requires us to adopt the narrower construction of the relitigation
exception followed in other circuits, which is consistent with the approach this circuit
has taken. See Canady, 282 F.3d at 1005 ("The relitigation exception is narrowly
construed and allows a district court to enjoin litigation of only those claims and
issues that the district court has already decided."); see also In re SDDS, Inc., 97 F.3d
1030, 1037 (8th Cir. 1996) ("[T]he relitigation exception is 'narrow and [is] not to be
enlarged by loose statutory construction.'" (quoting Chick Kam Choo, 486 U.S. at
146)); In re BankAmerica Corp. Sec. Litig., 263 F.3d 795, 803 (8th Cir. 2001) ("In the
context of the Anti-Injunction Act, these principles [of federalism and comity]
demand that '[a]ny doubts as to the propriety of a federal injunction against state court

                                          -8-
proceedings should be resolved in favor of permitting the state courts to proceed in
an orderly fashion to finally determine the controversy.'" (quoting Atl. Coast Line
R.R. v. Bhd. of Locomotive Eng'rs, 398 U.S. 281, 297 (1970))).

        In Ulloa, the Ninth Circuit indicated the more restrictive reading of Chick Kam
Choo reads res judicata entirely out of § 2283. We disagree. Ulloa appears to
conflate the distinct concepts of issue preclusion and claim preclusion. While it is true
"issues" actually litigated will be barred by collateral estoppel without having to rely
on res judicata, our concern here is with "claims" not "issues." In order to determine
whether the restrictive reading of Choo reads res judicata entirely out § 2283, the
relevant inquiry is whether any "claim" actually litigated in a prior proceeding would
be barred by collateral estoppel, without any need to rely on res judicata.

       For example, assume a plaintiff brings a workers compensation claim against
another party. One of the disputed issues is whether the parties have an
employee/employer relationship. The court decides there is no employee/employer
relationship and dismisses the claim. The plaintiff subsequently files another action
against the same party, bringing the same workers compensation claim. The
subsequent claim would be barred by res judicata, not collateral estoppel, because the
same claim was actually litigated in the prior proceeding. The second court would not
have to address collateral estoppel, because res judicata would bar the entire claim
without having to determine whether particular issues were actually litigated.

       We also reject St. Paul's suggestion we can ignore the Supreme Court's
references to "claims" as mere dicta. In Chick Kam Choo, the Supreme Court
discusses both the doctrines of res judicata and collateral estoppel, and specifically
refers to both "issues" and "claims." We are not free to ignore the references to res
judicata and "claims" as accidental.




                                          -9-
      Federal courts . . . are not 'free to limit Supreme Court opinions precisely
      to the facts of each case.' McCoy v. Mass. Inst. of Tech., 950 F.2d 13,
      19 (1st Cir. 1991), cert. denied, 504 U.S. 910, 112 S.Ct. 1939, 118
      L.Ed.2d 545 (1992). Instead, federal courts 'are bound by the Supreme
      Court's considered dicta almost as firmly as by the Court's outright
      holdings, particularly when ... [the dicta] is of recent vintage and not
      enfeebled by any [later] statement.' Id.

City of Timber Lake v. Cheyenne River Sioux Tribe, 10 F.3d 554, 557 (8th Cir. 1993).

       Finally, St. Paul argues Chick Kam Choo used the word "claim" in a broad
sense to refer to all assertions or a right to relief by a plaintiff with respect to a
particular set of facts, such that the word should be interpreted to encompass both
claims that could have been litigated and those claims actually litigated. As support
for this argument, St. Paul refers us to Supreme Court decisions decided before and
after Chick Kam Choo which it contends used the term "claim" in a more general
sense to refer to all of a party's assertions of legal rights arising from a particular
transaction. See Baker ex rel. Thomas v. Gen. Motors Corp., 522 U.S. 222, 233 n.5
(1998) (indicating "a valid final adjudication of a claim precludes a second action on
that claim or any part of it"); Kremer v. Chem. Constr. Corp., 456 U.S. 461, 482 n.22
(1982) (stating the doctrine of res judicata "has recently been taken to bar claims
arising from the same transaction even if brought under different statutes."); Allen v.
McCurry, 449 U.S. 90, 95 n.6 (1980) (indicating the Court recently had noted "trends
in the state and federal courts expanding the preclusive effects of judgments, such as
the broadened definition of 'claim' in the context of res judicata").

      We disagree these isolated footnotes from decisions spanning eighteen years,
when cobbled together, support St. Paul's argument. We doubt the Supreme Court
would refer to "claims" in the broad sense urged by St. Paul, only to immediately
modify the term by limiting application of the relitigation exception to "claims" which
"actually have been decided by the federal court." Chick Kam Choo, 408 U.S. at 148.


                                         -10-
                                   III

For the reasons stated, we affirm the decision of the district court.
                 ______________________________




                                  -11-
