" Id. The Secretary asks the Court to preclude relitigation of the facts found by Judge Green, viz. (1) that USPS committed the violations, (2) that the violations were not de minimis, and (3) that USPS knew or should have known that its rules and procedures were in direct conflict with the FLSA and that such procedures would lead to a failure to compensate the employees. He further requests that, on the basis of these facts, the Court award 100% liquidated damages and order an accounting.
Defendant alleges that the doctrine of collateral estoppel is inapplicable here because (1) there are material differences between the facts in this case and those litigated in Smith/Kaplan, (2) there was no valid judgment in Smith/Kaplan, and (3) the facts did not form the predicate for a final judgment. It is clear that, for collateral estoppel to apply, "the same issue must be at stake in both cases, and the issue must have been litigated and decided in the first suit." McCord v. Bailey, 606 F.2d at 609. The issues at stake are identical. The violations were indigenous to USPS' payroll and timekeeping practices, and thus affected all employees who worked overtime between May 1, 1974 and the date of USPS' FLSA compliance.
Donovan v. U. S. P. S., 530 F. Supp. at 874. The significance of the violations, as found by Judge Green, has been reaffirmed in evidence presented to the Court in Donovan. Id., at 885, 886. Finally, Judge Green's ruling concerning what USPS "knew or should have known" apply to the violations alleged herein-they are exactly the same claims as those adjudicated in Smith/Kaplan. The issues in question are identical. See Schneider v. Lockheed, 212 U.S. App. D.C. 87, 658 F.2d 835, 851-852 (D.C.Cir.1981).
It is evident that a valid judgment issued in the Smith/Kaplan cases; they were dismissed with prejudice by stipulation pursuant to Fed.Rule Civ.Proc. 41(a)(1)(ii). Such a dismissal constitutes a valid judgment on the merits, and is entitled to res judicata effect. Lawlor v. Natl. Screen Service Corp., 349 U.S. 322, 327, 75 S. Ct. 865, 868, 99 L. Ed. 1122 (1955); Astron Industrial Assoc. v. Chrysler, 405 F.2d 958, 960 (5th Cir. 1968); Burns v. Fincke, 90 U.S. App. D.C. 381, 197 F.2d 165, 166 (D.C.Cir.1952). For res judicata and collateral estoppel purposes, a judgment does not, as USPS alleges, extinguish review of the underlying claim. Rather, courts must "examine the record of the prior proceedings" in order to ascertain res judicata and collateral estoppel effect. See Ashe v. Swenson, 397 U.S. 436, 444, 90 S. Ct. 1189, 1194, 25 L. Ed. 2d 469 (1970). This Court has had a unique opportunity to examine the record of the prior proceeding. Donovan v. USPS, supra. It is clear to the Court, upon examination of that record, that (1) Judge Green's rulings were thoughtful and well-reasoned, (2) the parties had a full and fair opportunity to litigate before her, and (3) her rulings in Smith/Kaplan were virtually immutable. Furthermore, it is evident that the Smith/Kaplan settlement agreement (which precipitated the dismissal with prejudice) was based upon Judge Green's rulings. The settlement provided compensation to the plaintiffs for all of the alleged violations and included payment of 80% liquidated damages. It obviated the need for an accounting by providing a payout formula agreed to by the parties. The dismissal with prejudice and the settlement agreement addressed all issues decided by Judge Green in a way that did not require her to vacate any Memoranda or Orders. The stipulation of dismissal with prejudice constitutes a valid, final judgment in the Smith/Kaplan litigation.
Finally, USPS alleges that it can be estopped from contending the facts as found by Judge Green only if those facts formed the predicate for a final judgment within the meaning of 28 U.S.C. § 1291. This contention is devoid of merit. "Under collateral estoppel, once an issue is actually and necessarily determined by a court of competent jurisdiction, that determination is conclusive..." Montana v. U. S., 440 U.S. 147, 153, 99 S. Ct. 970, 973, 59 L. Ed. 2d 210 (1979). Judge Green "actually and necessarily determined" that (1) USPS had committed the FLSA violations in question, (2) that the violations were not de minimis, and (3) that for all but one of the claims, USPS knew or should have known that its rules and procedures were in direct conflict with the FLSA. The finality requirement for collateral estoppel is not governed by 28 U.S.C. § 1291. Rather, it is governed by a rule of reason. As Judge Friendly stated for the Second Circuit in Lummus Co. v. Commonwealth Oil Refining Co., 297 F.2d 80, 89 (2d Cir. 1961), cert. denied, 368 U.S. 986, 82 S. Ct. 601, 7 L. Ed. 2d 524 (1962):
whether a judgment, not final in the sense of 28 U.S.C. § 1291, ought nevertheless be considered "final" in the sense of precluding litigation on the same issues, turns upon such factors as the nature of the decision (i.e. that it was not avowedly tentative), the adequacy of the hearing, and the opportunity for review. "Finality" in the context here relevant means little more than that the litigation of a particular issue has reached such a stage that a court sees no really good reason for permitting it to be litigated again.