## Facts

- R. Anthony Marrese, M.D., and Michael R. Treister, M.D., board-certified orthopaedic surgeons, applied for membership in the American Academy of Orthopaedic Surgeons (AAOS).
- AAOS denied the applications without providing a hearing or reasons.
- Treister (and separately Marrese) sued AAOS in Illinois state court, alleging that denial of membership violated rights protected by Illinois common law.
- The state complaints did not assert Illinois antitrust claims, and the surgeons did not simultaneously file federal antitrust actions.
- Illinois courts dismissed Treister’s case for failure to state a claim; review was denied, and Marrese’s similar case was dismissed.
- The surgeons then sued in federal district court, alleging AAOS’s denial of membership was part of a boycott violating § 1 of the Sherman Act.
- AAOS moved to dismiss on claim preclusion based on the Illinois judgments; the district court denied dismissal.
- After AAOS refused discovery, the district court held AAOS in criminal contempt.
- The Seventh Circuit took an interlocutory appeal, held the federal suit barred “as a matter of federal law,” and reversed the contempt order because the discovery order could not stand if the case was precluded.

## Issues

1. Whether the court of appeals had jurisdiction to review the district court’s denial of the motion to dismiss while an appeal from a contempt order was pending.
2. Under 28 U.S.C. § 1738, how a federal court must determine the preclusive effect of an Illinois judgment on a later federal Sherman Act claim within exclusive federal jurisdiction.

## Decision

- The Supreme Court held the Seventh Circuit had jurisdiction to review the denial of the motion to dismiss and to consolidate that review with the contempt appeal.
- The Supreme Court reversed the Seventh Circuit’s preclusion ruling and remanded.
- The Court held that § 1738 generally requires federal courts to determine the preclusive effect of a state-court judgment by applying the rendering state’s preclusion law in the first instance.
- The Court declined to decide whether Illinois law actually barred the federal antitrust claim because the lower courts had not applied Illinois preclusion rules.

## Legal Principles

- 28 U.S.C. § 1738 requires federal courts to give state judgments the same preclusive effect they would receive in the courts of the rendering state.
- A federal court may not assign a state judgment broader claim-preclusive effect than state law would provide.
- Exclusive federal jurisdiction over a federal cause of action does not, by itself, eliminate the possibility of preclusion based on an earlier state judgment.
- Proper analysis proceeds in two steps: (1) apply state preclusion law to determine whether the later claim would be barred; (2) only if state law would bar it, consider whether Congress created an express or implied exception to § 1738 for the federal statute at issue.
- Absent clear congressional intent, federal courts should not create a categorical federal common-law exception to § 1738 for Sherman Act claims.

## Conclusion

The Supreme Court required federal courts to apply the rendering state’s preclusion law under § 1738 when assessing whether a prior state judgment bars a later federal antitrust suit, even though federal antitrust claims are exclusively federal, and it remanded because the lower courts had not applied Illinois preclusion doctrine.


Marrese v. Am. Acad. of Orthopaedic Surgeons, 470 U.S. 373 (1985)