Claim and Issue Preclusion

Question 1

What is the basic idea of claim and issue preclusion?

Answer 1

Whenever there has been an earlier case, watch for these
issues, which concern the preclusive effect of a prior
judgment on the merits. The question is whether a judgment
already entered (Case 1) precludes litigation of any matters in
another case (Case 2).

If Case 1 and Case 2 are in different judicial systems (for
example, state and federal courtsor courts in different U.S.
states), the court in Case 2 applies the preclusion law of the
judicial system that decided Case 1.

Question 2

What is claim preclusion?

Answer 2

A claimant may sue only once to vindicate a claim. So you
only get one case in which to seek recovery for all rights to
relief for that claim.

Question 3

What are the requirements for claim preclusion?

Answer 3

For a claim to be precluded (or barred), three things must be
true.
a. Same Claimant Suing the Same Defendant
Case 1 and Case 2 were brought by the same claimant
against the same defendant.
b. Valid, Final Judgment on the Merits
Case 1 must have ended in a valid final judgment on the
merits. Unless the court said the judgment was “without
prejudice” when entered, any judgment is “on the merits”
unless it was based on a lack of jurisdiction (both personal
and subject matter), improper venue, or a failure to join an
indispensable party. This is true even if there was no adjudication in Case 1.
c. Case 1 and Case 2 Must Be the “Same Claim”
Case 1 and Case 2 must assert the “same claim.” The majority
view (including federal law) is that a claim is any right to relief
arising from a transaction or occurrence. But there is one
minority view, the so-called “primary rights doctrine.” Under
this view, there are separate claims for property damage and
for personal injuries that arise in a single event. The theory
is that property damage and personal injury invade different
rights. (One to be free from personal injury and one to be
free from property damage.

Question 4

What is issue preclusion?

Answer 4

Issue preclusion is narrower than claim preclusion. Here,
an issue was litigated in Case 1. The same issue is then
presented in Case 2. But if issue preclusion applies, the issue
cannot be relitigated in Case 2. It is deemed established in
Case 2, thereby streamlining the scope of litigation in Case 2.
There are five requirements for issue preclusion.

Question 5

How does issue preclusion work?

Answer 5

Case 1 Ended in Valid, Final Judgment on the
Merits
This is the same as the second requirement for claim preclusion.

Same Issue Actually Litigated and
Determined in Case 1
The issue must actually have been litigated in Case 1.

Issue Was Essential to Judgment in Case 1
The issue must have been essential to the judgment in Case
1. “Essential to the judgment” means that the finding on the
issue is the basis for the judgment.

Question 6

Against whom is preclusion used?

Answer 6

Issue preclusion can be used only against somebody who
was a party to Case 1 or in “privity” with a party. “Privity”
means that a party to Case 1 represented someone who was
not a party to Case 1. (For example, a class action binds all
members of the class even though not all class members are
parties to the action. They were represented by the class
rep.) The requirement that the person against whom issue
preclusion is being asserted be a party (or in privity) is a
principle of due process; every person generally is entitled
to a day in court before her property is taken or her rights are
affected.