Chicot County Drainage District v. Baxter State Bank
United States Supreme Court
308 U.S. 371 (1940)
Chicot County Drainage District (defendant) obtained a debt-readjustment decree in 1936 under a federal Municipal-Debt Readjustment statute, requiring creditors to bring claims within one year; Baxter State Bank (plaintiff), which had notice of the proceedings but didn't appear, later sued in 1937 on preexisting bonds, and Chicot raised the earlier decree as res judicata. After the Supreme Court separately declared the underlying readjustment statute unconstitutional in another case, the lower courts here found Baxter's suit not barred by res judicata; Chicot petitioned for certiorari.
Whether res judicata bars a subsequent claim based on issues previously litigated and decided under a statute that a court later declares unconstitutional, when the party asserting the later claim had notice and an opportunity to challenge the statute's validity in the earlier proceeding but failed to do so.