## Facts

- Todd Williams was stopped late at night by Jacksonville, North Carolina police officers Billy J. Houston and Earl K. Burkhart.
- Williams alleged he was ordered out of his vehicle at gunpoint, subjected to a pat-down, and injured, claiming humiliation, loss of liberty, and emotional distress.
- Williams initially sued in North Carolina state court asserting federal constitutional claims under 42 U.S.C. § 1983 and state-law claims including negligence, false arrest, and negligent training/supervision by the City.
- Defendants removed the case to federal court.
- The federal district court granted summary judgment for defendants on the § 1983 claims, concluding the officers had probable cause to stop and detain Williams, acted reasonably in the pat-down and threat of force, and did not use excessive force.
- The federal district court declined supplemental jurisdiction over the state-law claims and dismissed them without prejudice.
- Williams then filed a new state-court complaint reasserting the state-law claims but omitting the § 1983 claims.
- Defendants moved for summary judgment in state court, asserting res judicata and collateral estoppel based on the federal judgment; the trial court denied the motion, and defendants appealed.

## Issues

1. Whether res judicata barred Williams’s refiled state-law claims after the federal court entered judgment on § 1983 claims but dismissed the state-law claims without prejudice for lack of supplemental jurisdiction.
2. Whether collateral estoppel barred the state-law claims because the federal court had already decided issues of probable cause and the reasonableness of the officers’ search and use or threat of force.

## Decision

- The Court of Appeals held the trial court’s denial of summary judgment was immediately appealable because it affected a substantial right.
- The court held res judicata did not bar the state-law claims because the federal court dismissed those claims without prejudice and did not enter a merits judgment on them.
- The court held collateral estoppel applied because the federal court actually litigated and necessarily decided issues dispositive of the state claims.
- The court reversed the denial of summary judgment and remanded for entry of summary judgment for defendants based on collateral estoppel.

## Legal Principles

- Res judicata requires a final judgment on the merits of the same cause of action; a dismissal without prejudice after a federal court declines supplemental jurisdiction is not a merits adjudication of the state-law claims.
- Collateral estoppel applies when an identical issue was raised, actually litigated, actually decided, and necessarily determined in a prior action.
- A party may not relitigate, under state tort theories, issues necessarily resolved against it in a prior federal action, including probable cause for detention and the reasonableness of a search or use/threat of force.
- Claims against a municipality premised on officer wrongdoing fail where issue preclusion establishes the officers committed no actionable wrong on the dispositive issues.

## Conclusion

The court distinguished claim preclusion from issue preclusion: the federal dismissal without prejudice left state causes of action unadjudicated for res judicata purposes, but the federal court’s necessary determinations that the officers had probable cause and acted reasonably barred Williams from pursuing state tort claims dependent on the opposite findings.


Williams v. City of Jacksonville Police Dep’t, 165 N.C. App. 587, 599 S.E.2d 422 (N.C. Ct. App. 2004)