Essie Peschong; D.P.; E.P.P.; E.C.P., minors, by and through their parent and natural guardian, Essie Peschong Plaintiffs - Appellants
Children's Healthcare, doing business as Children's Hospitals and Clinics of Minnesota; Alice Swenson, M.D. Defendants - Appellees
Submitted: June 14, 2018
from United States District Court for the District of
Minnesota - Minneapolis
WOLLMAN, ARNOLD, and KELLY, Circuit Judges.
WOLLMAN, CIRCUIT JUDGE.
Peschong and her three minor children, D.P., E.P.P., and
E.C.P., (collectively, the Peschongs) appeal the district
court's dismissal of their complaint against
Children's Healthcare and Alice Swenson, M.D., arguing
that the district court erred in applying the doctrine of
collateral estoppel to their claims. We affirm.
his birth in 2004, D.P. has undergone numerous medical
examinations, tests, and surgeries for various conditions.
Children's Healthcare provided D.P.'s primary care
from 2004 through 2007. As part of D.P.'s medical care,
he received supplemental oxygen and used a wheelchair. By
2015, D.P. had undergone two adenoidectomies, a
tonsillectomy, a turbinectomy, numerous laryngoscopies and
bronchoscopies, and a half dozen sleep studies. D.P. had also
spent forty-one days of his life hospitalized due to
breathing difficulties and had been treated in the emergency
room nine times for reactive airway disease and pneumonia.
2015, Nurse Practitioner Cindy Brady contacted Dr. Swenson
with concerns that D.P. was suffering from medical child
abuse. Dr. Swenson reviewed D.P.'s medical records and
concluded in a report (the report, or Swenson Report) that
Essie Peschong "appears to be misrepresenting
[D.P.'s] medical conditions in order to obtain care that
D.P. does not need and that may, in fact, be harmful."
Swenson Report 4. Dr. Swenson submitted the report on June
22, 2015, to Hennepin County Child Protective Services, which
filed a child protection petition with the Hennepin County
Juvenile Court (juvenile court). On December 31, 2015, the
juvenile court denied Peschong's motion to dismiss the
petition. Following a bench trial in January 2016, the
juvenile court adjudicated D.P. a child in need of protection
or services and ordered that he be transferred to the
Hennepin County Child Protective Services for continued
foster care placement, in which he remained for some seven
months. The juvenile court's ruling was affirmed by the
Minnesota Court of Appeals. Peschong's petition for
review was denied by the Minnesota Supreme Court.
Peschongs filed this action on March 7, 2017, seeking relief
under Minnesota and federal law. They alleged that the report
was false and caused D.P. to be separated from his family.
Children's Healthcare and Dr. Swenson subsequently filed
a motion for judgment on the pleadings, which the district
court granted, concluding that "because the elements of
collateral estoppel have been met, [the Peschongs] are barred
from re-litigating the accuracy of the report," a
threshold question for each of the Peschongs' district
court claims. Peschong v. Children's Healthcare,
No. 17-706, 2017 WL 3016767, at *6 (D. Minn. July 14, 2017).
review de novo an order granting a motion for
judgment on the pleadings. Wishnatsky v. Rovner, 433
F.3d 608, 610 (8th Cir. 2006). We apply Minnesota's law
on collateral estoppel, which "precludes a party from
relitigating a legal or factual issue that was actually
litigated in a prior proceeding and was essential to the
judgment rendered." Mandich v. Watters, 970
F.2d 462, 465 (8th Cir. 1992) (citing Hauser v.
Mealey, 263 N.W.2d 803, 806 (Minn. 1978)). For
collateral estoppel to apply, Children's Healthcare and
Dr. Swenson must show: "(1) the issue was identical to
one in a prior adjudication; (2) there was a final judgment
on the merits; (3) the estopped party was a party or in
privity with a party to the prior adjudication; and (4) the
estopped party was given a full and fair opportunity to be
heard on the adjudicated issue." Id. (quoting
Kaiser v. N. States Power Co., 353 N.W.2d 899, 902
(Minn. 1984)). The Peschongs argue that collateral estoppel
cannot be applied here because the relevant issue-whether the
report is credible-was not previously adjudicated. We
report's veracity was a central issue in the state court
proceedings. The Peschongs have conceded that "[m]ost of
the Petition's factual allegations were taken verbatim
from the Report." Am. Compl. 8, ¶ 49. Although the
similarity between the report and the petition is not
dispositive, we agree with the district court that "Ms.
Peschong attacked the report and corresponding petition
repeatedly throughout [the state court] proceedings,
including on appeal." Peschong, 2017 WL
3016767, at *4. The report's credibility was thus
necessarily an issue before the Minnesota state courts, and
thus not merely an ancillary, undecided matter.
Peschongs nevertheless argue that collateral estoppel does
not apply because neither the juvenile court nor the
Minnesota Court of Appeals explicitly stated that the report
was credible. As set forth more fully below, however, it is
clear that the juvenile court addressed nearly all of the
allegedly false statements that the Peschongs had set forth
in their Amended Complaint. The juvenile court found those
statements credible and also found "in all respects that
the testimony of Dr. Alice Swenson was credible." In
re Welfare of the Child of Essie Peschong, No.
27-JV-15-3545, slip op. at 4, ¶ 15.0 (Minn. Dist. Ct.
Feb. 5, 2016) [hereinafter Juvenile Court Order]. ...