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United States Court of Appeals,
Fifth Circuit.
No. 95-30009.
PRODUCTION SUPPLY CO., INC.; Production Supply Co. of
Washington, Inc., Plaintiffs-Appellants,
v.
FRY STEEL INC.; Cadwalader, Wickersham and Taft; Fry Steel Co.,
improperly named as Fry Steel, Inc., Defendants-Appellees.
Feb. 5, 1996.
Appeal from the United States District Court For the Eastern
District of Louisiana.
Before REYNALDO G. GARZA, JOLLY and DUHÉ, Circuit Judges.
DUHÉ, Circuit Judge:
Production Supply Company, Inc. (PSC) and Production Supply
Company of Washington, Inc. (PSCW) appeal the dismissal of their
malicious prosecution action against Fry Steel Company (Fry) and
Cadwalader, Wickersham and Taft (Cadwalader). Appellants seek
recovery for harm allegedly sustained as a result of Fry and
Cadwalader's commencement and maintenance of a civil action against
them in California state court. Because Appellants raised a
similar claim in the California action, the district court held
that the malicious prosecution claim was barred by res judicata.
We affirm.
BACKGROUND
I. The California State Action
Fry sued PSC and PSCW in California state court seeking money
damages for steel products sold by Fry to Sharp Steel, claiming
that Appellants had guaranteed Sharp Steel's obligations. A year
1

and a half after filing the California suit, Cadwalader began to
represent Fry. A lengthy and contentious period of discovery
followed. Eventually, Fry dismissed its suit voluntarily without
prejudice pursuant to California law.
Shortly after the dismissal, Appellants instituted proceedings
against Fry and Cadwalader in the California Superior Court under
section 128.5 of the California Code of Civil Procedure, which
provides sanctions for bad-faith litigation. Appellants sought a
monetary award, including attorneys' fees, on the grounds that "the
lawsuit, actions and tactics ... were frivolous, harassing, and
conducted in bad faith." After hearing oral argument, the Superior
Court ruled in favor of Fry and Cadwalader on these issues and
denied the section 128.5 motion. PSC and PSCW did not appeal this
decision.
II. The Louisiana Federal Action
Upon denial of the section 128.5 motion, PSC and PSCW sued Fry
and Cadwalader in the Eastern District of Louisiana for malicious
prosecution. Fry and Cadwalader moved to dismiss for failure to
state a claim upon which relief can be granted, Federal Rule of
Civil Procedure 12(b)(6), asserting that the parties' earlier
litigation of the same alleged harm and conduct barred this
later-filed action under the doctrine of res judicata. Applying
California law, the district court held that res judicata precluded
relitigation of the claim raised in the malicious prosecution suit.
Accordingly, the district court granted the motion to dismiss and
entered judgment in favor of Fry and Cadwalader.
2

DISCUSSION
I. Standard of Review
A district court's ruling on the application of res judicata
is reviewed de novo. See E. & J. Gallo Winery v. Gallo Cattle Co.,
967 F.2d 1280, 1287 (9th Cir.1992).
II. Res Judicata
"A federal court asked to give res judicata effect to a state
court judgment must apply the res judicata principles of the law of
the state whose decision is set up as a bar to further litigation."
E.D. Systems Corp. v. Southwestern Bell Tel. Co., 674 F.2d 453, 457
(5th Cir.1982). Because Appellees' argue that the California state
court judgment precludes this malicious prosecution lawsuit, we
must look to the res judicata law of California.
Under California law, res judicata bars a claim when: (1) the
prior litigation resulted in a final judgment on the merits; (2)
privity exists between the parties in the prior action and the
present action; and (3) the present action or proceeding relates
to the same primary right as did the prior action. See Cal. C.C.P.
§ 1908(a)(2); Busick v. Workmen's Comp. Appeals Bd., 7 Cal.3d 967,
974, 500 P.2d 1386, 104 Cal.Rptr. 42 (Cal.1972). Finality and
privity are clearly established and not disputed in this case.
Therefore, we need only address whether the malicious prosecution
claim concerns the same primary right as the section 128.5
adjudication.
Under the "primary right" theory, "the underlying right
sought to be enforced determines the cause of action. In
3

determining the primary right, the significant factor is the harm
suffered." Takahashi v. Board of Education, 202 Cal.App.3d 1464,
1474, 249 Cal.Rptr. 578, 584 (Cal.Ct.App.1988), cert. denied, 490
U.S. 1011, 109 S.Ct. 1654, 104 L.Ed.2d 168 (1989). Only one
primary right exists when two actions involve the same harm to the
plaintiff, even when different legal theories and remedies are
available for that particular harm. Eichman v. Fotomat Corp., 147
Cal.App.3d 1170, 1174-75, 197 Cal.Rptr. 612 (Cal.Ct.App.1983).
Consequently, "numerous cases hold that when there is only one
primary right an adverse judgment in the first suit is a bar even
though the second suit is based on a different theory ... or seeks
a different remedy...." Crowley v. Katleman, 8 Cal.4th 666, 881
P.2d 1083, 1091, 34 Cal.Rptr.2d 386, 394 (Cal.1994).
Our inquiry, therefore, must be whether the section 128.5 and
malicious prosecution actions address the same harm to PSC and
PSCW. Section 128.5 allows litigants to seek a monetary award for
damages incurred "as a result of bad-faith actions or tactics that
are frivolous or solely intended to cause unnecessary delay." Cal.
C.C.P. § 128.5(a).1 " "Actions or tactics' include, but are not
limited to, the making or opposing of motions or the filing and
service of a complaint or cross-complaint.... "Frivolous' means
(A) totally and completely without merit or (B) for the sole
purpose of harassing an opposing party." Cal. C.C.P. § 128.5(b).
Thus, section 128.5 compensates the injured party for the harms
1This section was amended as of January 1995. The amendment
is not material to the case before us.
4

resulting from frivolous or dilatory actions.
In federal court, Appellants brought a malicious prosecution
claim. "Malicious prosecution" generally provides redress when an
action is brought without probable cause and is initiated with
malice. Bertero v. National General Corp., 13 Cal.3d 43, 50, 529
P.2d 608, 614, 118 Cal.Rptr. 184, 190 (1974). "The malicious
commencement of a civil proceeding is actionable because it harms
the individual against whom the claim is made, and also because it
threatens the efficient administration of justice." Id. The
individual suffers a particular harm: being "compelled to defend
against a fabricated claim which not only subjects him to the
panoply of psychological pressures most civil defendants suffer,
but also to the additional stress of attempting to resist a suit
commenced out of spite or ill will, often magnified by slanderous
allegations in the pleadings." Id. at 50-51, 529 P.2d 608, 118
Cal.Rptr. 184.
To determine whether the section 128.5 proceeding and
malicious prosecution claim targeted the same harm, we look to
Appellants' pleadings in the respective actions. In the California
state action, PSC and PSCW alleged that Fry and Cadwalader's
actions were "frivolous, harassing and conducted in bad faith," and
that they "should be compensated for being the victims of a joint
Cadwalader-Fry vendetta." Likewise, the federal malicious
prosecution complaint charged that Fry and Cadwalader "commenced
and continued [the California lawsuit] for the purpose of
harassment and intimidation" and that the plaintiffs "suffered
5

extensive damages" as a result of that same conduct.
Although malicious prosecution and section 128.5 claims can
address different harms, in this case the specific harm alleged in
the malicious prosecution complaint is identical to the harm that
was previously adjudicated in the section 128.5 proceeding.
Therefore, we hold that the malicious prosecution claim is barred
by California's res judicata doctrine.
Appellants argue that different primary rights are at stake
because distinct procedures and remedies underlie the two theories
of liability. However, these differences are irrelevant under
California's "primary right" analysis. Courts must focus on the
similarity in the harms alleged in the first and second
proceedings, not the differences in procedures and remedies. "[I]f
two actions involve the same injury to the plaintiff and the same
wrong by the defendant, then the same primary right is at stake
even if in the second suit the plaintiff pleads different theories
of recovery, seeks different forms of relief and/or adds new facts
supporting recovery." Eichman v. Fotomat Corp., 147 Cal.App.3d
1170, 1174-75, 197 Cal.Rptr. 612 (Cal.Ct.App.1983); see also
Busick v. Workmen's Comp. Appeals Bd., 7 Cal.3d 967, 975, 500 P.2d
1386, 1392, 104 Cal.Rptr. 42, 48 (Cal.1972) ("Violation of one
primary right in the instant case constitutes a single cause of
action even though two mutually exclusive remedies are
available.").
In addition, Appellants' characterization of the section 128.5
motion as a "procedural rule" does not automatically bar the
6

application of res judicata. The proper inquiry is whether the
proceeding resulted in a final judgment on the merits. See Cal.
C.C.P. § 1908(a)(2). The California court made a determination on
the merits of the claim after the parties briefed the issue,
submitted evidence in support of their position, and presented oral
argument. A claim adjudicated pursuant to section 128.5 "is
dispositive of the rights of the parties," and therefore, operates
as a final judgment on the merits. Imuta v. Nakano, 233 Cal.App.3d
1570, 1580, 285 Cal.Rptr. 681, 687 (Cal.Ct.App.1991). Thus, there
is no reason why res judicata principles should not apply.
PSC and PSCW further argue that section 128.5 is only an
additional remedy and can never preclude a later suit for malicious
prosecution. Appellants rely on subparagraph (e) in § 128.5: "The
liability imposed by this section is in addition to any other
liability imposed by law for acts or omissions within the purview
of this section." However, this section in no way requires that
the court permit parties to bring both a section 128.5 action and
a malicious prosecution claim about the same harm. Rather, the
paragraph only makes clear that either remedy is available and that
section 128.5 was not intended to abolish common law causes of
action.
Although section 128.5 is not always an exclusive remedy,
there is no evidence that the legislature intended to carve out a
statutory exception to the doctrine of res judicata. To the
contrary, the legislative intent in enacting section 128.5 was to
"broaden the powers of trial courts to manage their calendars and
7

provide for the expeditious processing of civil actions by
authorizing monetary sanctions now not presently authorized...."
Stats.1981, ch. 762, § 2, p. 2968. The California Supreme Court
further clarified section 128.5's purpose:
While the filing of frivolous lawsuits is certainly improper
and cannot in any way be condoned, in our view the better
means of addressing the problem of unjustified litigation is
through the adoption of measures facilitating the speedy
resolution of the initial lawsuit and authorizing the
imposition of sanctions for frivolous or delaying conduct
within that first action itself, rather than through an
expansion of the opportunities for initiating one or more
additional rounds of malicious prosecution litigation after
the first action has been concluded.
Sheldon Appel Co. v. Albert & Oliker, 47 Cal.3d 863, 873, 765 P.2d
498, 503, 254 Cal.Rptr. 336, 341 (Cal.1989).
Thus, when meritless litigation is brought in bad faith,
California courts have viewed "the imposition of [section 128.5]
sanctions as a substitute for a malicious prosecution action."
Andrus v. Estrada, 39 Cal.App.4th 1030, 46 Cal.Rptr.2d 300, 304
(Cal.Ct.App.1995) (holding that trial court's imposition of
sanctions under section 128.5 was not an unconstitutional
"substitution of judge-imposed sanctions for the common law action
of malicious prosecution"). Even though either claim may be
pursued, case law suggests that a section 128.5 proceeding "might
be a preferable alternative to a malicious prosecution lawsuit."
Triplett v. Farmers Ins. Exch., 24 Cal.App.4th 1415, 1423, 29
Cal.Rptr.2d 741, 745 (Cal.Ct.App.1994).
Appellants cite the California Supreme Court's observation in
Crowley v. Katleman, 8 Cal.4th 666, 881 P.2d 1083, 1095, 34
Cal.Rptr.2d 386, 398 (Cal.1994), that the legislature did not
8

intend to "substitute section 128.5 for the cause of action for
malicious prosecution." Read in its proper context, however, the
court was simply rejecting the argument that the legislature
abolished all malicious prosecution claims by enacting section
128.5. Moreover, Crowley is not a res judicata case, and the court
never implied that a claim for malicious prosecution can be brought
after a section 128.5 proceeding already adjudicated the very same
harm.
Appellants finally argue that the district court erroneously
ignored section 1038 of the California Code of Civil Procedure,
which unlike section 128.5, explicitly bars a later claim for
malicious prosecution when relief is requested under the statute.
Section 1038's scope, however, is more limited than section 128.5.
The statute provides for the award of attorneys' fees and expert
witness costs when California Tort Claims Act claims or civil
actions for indemnity and contribution are brought in bad faith and
without reasonable cause.2
Because a section 1038 motion is necessarily based upon an
allegation that the plaintiff in the underlying case brought the
action in bad faith and without reasonable cause, an action for
malicious prosecution will always involve the same claimed harm to
the plaintiff. Thus, the same primary right would be addressed in
each instance. By contrast, under section 128.5, the same primary
right may sometimes be addressed by a malicious prosecution action,
2Even in those limited instances, the statute only applies
when the defendant prevails on a motion for summary judgment,
directed verdict, or nonsuit.
9

but not always.3 Section 128.5's silence regarding later claims
for malicious prosecution, therefore, is not an admission that the
same primary right can never be at stake in both actions. It
merely signifies that res judicata will not bar a later action in
every case.
III. Certification
Appellants ask this Court to certify to the California
Supreme Court a question regarding the application of the res
judicata doctrine to section 128.5 and a later-filed malicious
prosecution claim. A federal court, however, cannot compel a state
court to answer questions in the absence of state procedure, and
California has no certification procedure. See Board of Airport
Commissioners v. Jews for Jesus, Inc., 482 U.S. 569, 575, 107 S.Ct.
2568, 2572-73, 96 L.Ed.2d 500 (1987).
CONCLUSION
For the foregoing reasons, the decision of the trial court is
AFFIRMED.

3For example, a section 128.5 proceeding may sanction
unnecessary delays, but not address whether the claim itself was
brought in bad faith. That is not the case here. In this
instance, both the section 128.5 and malicious prosecution claims
charge that Fry and Cadwalader sued for the purpose of harassment
and intimidation.
10