In Lynn v. Sure-Fire Music Company, Inc., 2007 WL 1645402 (6th Cir. June 6, 2007), a panel of the Sixth Circuit took something so much for granted that the issue does not seem to have occurred to them. It may be that is because I misunderstand re judicata, and hope therefore that readers will be able to point me in the correct direction.
The plaintiff was the famous country singer Loretta Lynn, the "First Lady of Country Music." She had brought suit in a Tennessee state court against defendant, her longtime music publisher asserting, multiple state claims arising from their contract. The state court held the claims preempted. Ms. Lynn then filed suit in federal court alleging the exact same state law causes of action. The district court held the claims not preempted, and that it therefore lacked subject matter jurisdiction. Oddly, it was the defendant who appealed, apparently upset over the ruling that the claims weren't preempted.
I would have thought the state claims would be barred in federal court by res judicata. Indeed, in a reverse situation, the Ninth Circuit awarded attorneys fees for objectively unreasonable behavior, Domingo Cambeiro Professional Corporation v. Advent, 2000 WL 262590 (9th Cir. March 7, 2000). In that case, plaintiff brought claims initially in federal court which held the claims preempted. It then brought the same claims in state court. Defendants removed to federal court. The district court denied a motion to remand and awarded attorneys fee on the ground that plaintiff attempted to relitigate the preempted claims.
By contrast in Ms. Loretta's case, the Sixth examined de novo the preemption issue and affirmed the district court's ruling that the claims were no preempted, contrary to the state court. That resulted in Ms. Loretta with no way to go: the federal courts found they had no subject matter jurisdiction over what they deemed state claims, but after the state court held that the state claims were preempted as, in effect, federal claims.