Stewart v. U.S. Bancorp, 297 F.3d 953 (9th Cir. 2002)

The employees in this case sued their employer for breach of contract and violation of the Oregon wage law when they were given eight weeks’ severance pay instead of the 12 months’ severance that was provided to “middle management.” The employer removed the case to federal court and moved to dismiss it, asserting that the employees’ claims were preempted by ERISA. The employees did not seek leave of court to assert an ERISA claim, and the district court granted the employer’s motion to dismiss. One month after the dismissal, the employees filed a new complaint in federal court alleging violations of the ERISA statute. The employer moved to dismiss the new lawsuit based on the doctrine of res judicata since the employees had failed to seek leave of court to amend their original complaint. The district court granted the motion to dismiss, and the Ninth Circuit affirmed the dismissal after concluding that the first dismissal had been an “adjudication on the merits.”