## Facts

- River Park, Inc. owned or controlled a 162-acre parcel known as the Highland Park Country Club; related entities financed acquisition and planned residential development.
- The developers petitioned the City of Highland Park for rezoning and development approval; the City granted preliminary approval subject to final engineering plans.
- The developers alleged the City intentionally delayed and obstructed final approvals to trigger foreclosure and enable the City to obtain the property at below-market value.
- The developers first sued in federal court under 42 U.S.C. § 1983, alleging deprivation of property without due process.
- The federal district court dismissed the § 1983 action with prejudice for failure to state a due process violation; the Seventh Circuit affirmed.
- After the federal case ended, the developers filed state-law claims based on the same dispute, including tortious interference with business expectancy, breach of implied contract, and abuse of governmental power.
- The circuit court dismissed the state case under 735 ILCS 5/2-619 on res judicata and, independently, a one-year limitations period in the Tort Immunity Act (745 ILCS 10/8-101).
- The appellate court affirmed dismissal of tortious interference but reinstated the implied-contract and abuse-of-power counts as not precluded; the City sought review.

## Issues

1. Whether res judicata barred the developers’ state-law claims because a prior federal judgment dismissed their § 1983 action with prejudice arising from the same development controversy.
2. Whether the one-year limitations period in 745 ILCS 10/8-101 independently barred the state-law claims.

## Decision

- The Illinois Supreme Court reversed the appellate court’s partial reinstatement of claims.
- The court held the federal dismissal with prejudice was a final judgment on the merits by a court of competent jurisdiction and involved the same parties.
- Applying the transactional test, the court held all state-law claims arose from the same group of operative facts as the federal § 1983 suit and were therefore barred by res judicata.
- Because res judicata was dispositive, the court did not resolve the limitations issue.

## Legal Principles

- Res judicata applies when there is (1) a final judgment on the merits by a court of competent jurisdiction, (2) identity of the cause of action, and (3) identity of parties or their privies.
- Illinois determines “identity of the cause of action” using the transactional test: claims are the same cause of action if they arise from a single group of operative facts, even if they assert different legal theories or seek different remedies.
- A plaintiff must bring in one action all claims arising from the same operative facts when they could have been joined; omitting available claims constitutes impermissible claim-splitting and bars later litigation.
- A federal judgment can preclude later state-court claims when the state claims arise from the same transaction and could have been brought in the earlier federal action (including through supplemental jurisdiction).

## Conclusion

The court held that the developers’ later state tort and contract claims were precluded because they arose from the same operative facts as their earlier federal § 1983 action, and Illinois res judicata—under the transactional test—bars subsequent litigation of omitted theories arising from the same transaction.


River Park, Inc. v. City of Highland Park, 703 N.E.2d 883 (Ill. 1998)