## Facts

- Two board-certified orthopaedic surgeons applied for membership in a national professional association and were denied without a hearing or stated reasons.
- Each surgeon filed an Illinois state-court action alleging a violation of state common-law rights related to association membership.
- The Illinois courts dismissed those state actions, and further review was denied.
- After the state losses, the surgeons filed a federal action alleging the membership denial was a concerted boycott violating Sherman Act § 1.
- The association argued the federal antitrust claims were barred by res judicata (claim preclusion) based on the Illinois judgments.
- The federal district court denied dismissal and later held the association in criminal contempt for refusing to comply with a discovery order seeking membership-application materials.
- The Seventh Circuit consolidated an interlocutory appeal of the denial of dismissal with the appeal from the contempt order.

## Issues

1. Whether prior Illinois judgments dismissing state common-law suits arising from the same membership denial barred a later federal Sherman Act § 1 action.
2. Whether the court of appeals could review the interlocutory order denying dismissal and, if the action was barred, whether the discovery-based criminal contempt order could stand.

## Decision

- The Seventh Circuit (en banc) held the Illinois judgments precluded the federal antitrust suit.
- The court applied a federal transactional approach, treating the state and federal theories as the same “claim” because they arose from the same nucleus of operative facts.
- The court concluded claim preclusion barred not only matters litigated, but also those that could have been raised with diligence, notwithstanding the federal courts’ exclusive jurisdiction over Sherman Act claims.
- Because the antitrust case was barred, the court treated the underlying discovery order as unauthorized and reversed the criminal contempt order.

## Legal Principles

- Under a transactional view of claim preclusion, a final judgment on the merits bars later litigation between the same parties arising from the same operative facts, including alternative theories not asserted earlier.
- Claim preclusion may apply even when the later claim falls within exclusive federal jurisdiction, if the later federal suit is deemed impermissible claim-splitting from the same transaction.
- If an underlying action is barred and should not proceed, discovery orders issued in that action may be invalid, and contempt sanctions predicated on noncompliance may be set aside.

## Conclusion

The Seventh Circuit concluded that the surgeons’ earlier Illinois losses over the same membership denial barred their later federal Sherman Act § 1 boycott claim and, on that basis, vacated the contempt sanction stemming from discovery in the federal case.


Marrese v. Am. Acad. of Orthopaedic Surgeons, 726 F.2d 1150 (7th Cir. 1984) (en banc)