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Res Judicata

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Case:  Elvis Presley Enterprises, Inc., et al. v. City of Memphis, et al.

Facts:  The City of Memphis entered into an agreement with the now-Memphis Grizzlies basketball team to build an arena, which included a provision that the city would not fund or benefit “any new competing facility.” Years later, Elvis Presley Enterprises was granted tax incentive funding to develop a new hotel and other facilities. It then sought an adjustment of the tax incentives to build an arena, prompting the basketball team to file a complaint for declaratory judgment that this plan would violate its agreement with the City. The trial court granted the City’s motion to dismiss, holding that Elvis Presley Enterprises had not exhausted its administrative remedies. Elvis Presley Enterprises then filed a second suit after further administrative action, which the trial court dismissed for lack of standing.

Appellate Decision:  In a split decision, the intermediate court affirmed the dismissal but on different grounds: the second suit was barred under the doctrine of res judicata because a prior suit between the same parties regarding the same issue had already been decided. Judge Stafford dissented, writing that the first case was not truly decided “on the merits” but rather on a threshold issue of exhaustion of remedies. Moreover, “both logic and common sense dictate that a dismissal for failure to exhaust remedies is non-prejudicial.”

Review Granted:  July 21, 2020.

Prediction:  Ben thinks the Supreme Court will agree with the dissenting opinion that res judicata does not apply in this case, and remand for consideration on the merits.