Matsushita Elec. Industrial Co. v. Epstein, 516 U.S. 367, 9 (1996)

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Cite as: 516 U. S. 367 (1996)

Opinion of the Court

See 470 U. S., at 382, n. 2. We suggested that the approach outlined in Marrese would also apply in cases like Nash that involve judgments upon settlement: that is, § 1738 would control at the outset. See 470 U. S., at 382, n. 2. In accord with these precedents, we conclude that § 1738 is generally applicable in cases in which the state-court judgment at issue incorporates a class-action settlement releasing claims solely within the jurisdiction of the federal courts.

B

Marrese provides the analytical framework for deciding whether the Delaware court's judgment precludes this exclusively federal action. When faced with a state-court judgment relating to an exclusively federal claim, a federal court must first look to the law of the rendering State to ascertain the effect of the judgment. See id., at 381-382. If state law indicates that the particular claim or issue would be barred from litigation in a court of that State, then the federal court must next decide whether, "as an exception to § 1738," it "should refuse to give preclusive effect to [the] state court judgment." Id., at 383. See also Migra v. Warren City School Dist. Bd. of Ed., 465 U. S. 75, 81 (1984) ("[I]n the absence of federal law modifying the operation of § 1738, the preclusive effect in federal court of [a] state-court judgment is determined by [state] law").

1

We observed in Marrese that the inquiry into state law would not always yield a direct answer. Usually, "a state court will not have occasion to address the specific question whether a state judgment has issue or claim preclusive effect in a later action that can be brought only in federal court." 470 U. S., at 381-382. Where a judicially approved settlement is under consideration, a federal court may consequently find guidance from general state law on the preclusive force of settlement judgments. See, e. g., id., at

375

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