Friday, December 6, 2013

Parsons Steel, Inc. v. First Alabama Bank case brief

Parsons Steel, Inc. v. First Alabama Bank case brief summary
474 U.S. 518 (1986)

Respondent bank sought an injunction to prohibit petitioner company from enforcing a state judgment, which the bank asserted was barred by res judicata arising from an earlier federal court judgment in the bank's favor on the same issues. The district granted a permanent injunction. The United States Court of Appeals for the Eleventh Circuit affirmed the district court's order. The company sought certiorari.

The company brought an action against the bank in state court for fraudulent inducement. The company then brought an action against the bank in federal court for violations of the Bank Holding Company Act amendments, 12 U.S.C.S. § 1971 et seq. The federal court rendered a judgment notwithstanding the verdict for the bank. The state court refused to dismiss the case on res judicata grounds and rendered judgment for the company. The bank sought an injunction in federal district court against enforcement of the state judgment.


  • The U.S. Supreme Court granted certiorari to review the propriety of the injunction. 
  • The Court held that the Anti-Injunction Act, 28 U.S.C.S. § 2283, did contain an exception to the prohibition against federal courts enjoining state court proceedings in those circumstances when the federal court was protecting its own judgments. 
  • However, the Court held that the Full Faith and Credit Act, 28 U.S.C.S. § 1738, superceded the Anti-Injunction Act, and when the state court had reviewed and rejected the res judicata argument, the federal court had no authority to enjoin the state court's judgment based on its own opinion that res judicata did apply.
The Court granted certiorari and reversed the judgment from the court of appeals, which had affirmed the permanent injunction that prohibited enforcement of the state judgment in favor of the company. The Court remanded the case to the district court for reconsideration.

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