John R. Stensrud, et ux. v. Rochester Genesee Regional Transportation Authority

28 U.S.C. §1738, the “Full Faith and Credit” statute, can result in res judicata. This Court, among others, has recognized exceptions to claim preclusion, particularly where it results in inequity. In Knick v. Township of Scott, Pennsylvania, 588 U.S. 180 (2019), this Court overruled the state litigation requirement of Williamson County Regional Planning Commission v. Hamilton Bank, 473 U.S. 172 (1985), to avoid the “preclusion trap” that resulted, as an unintended consequence of Williamson. Knick, 588 U.S. at 197. Here, petitioners commenced this federal action in 2019 promptly after Knick, but the state court litigation brought by the condemnor in 2015 was then still pending, and the Stensruds were unable to unilaterally discontinue the state case in favor of the federal action. Consequently, they were forced to trial in state court on a sharply restricted evidentiary record, in which the only valuation report that complied with federal law was excluded, based on the failure to follow federal law. After the state trial, the District Court, affirmed by the Second Circuit, dismissed this action based on res judicata. The questions presented are whether this Court should recognize an exception to res judicata where: 1. post-Knick condemnees are denied a federal forum because they remain caught in a preclusion trap, due to the mere arbitrariness of timing? 2. a state court’s failure to follow federal law caused the exclusion from evidence of the only expert valuation report that: (1) complies with federal law, and (2) could yield just compensation?  i