Claim and Issue Preclusion

Question 1

Claim Preclusion

Answer 1

Once a final judgment on the merits has been rendered on a particular cause of action, the claimant is barred by claim preclusion from asserting the same claim in a later lawsuit

Question 2

Merger and Bar

Answer 2

Merger - when a claimant wins an earlier lawsuit, the cause of action is said to have merged into the judgment

Bar - when the defendant wins, the claimant is said to be barred by the adverse judgment

Question 3

Requirements for Claim Preclusion

Answer 3

Three things must be true
1) Same Parties - the same claimant must be suing the same defendant
2) valid final judgment - the original claim must have ended in a valid final judgment on the merits
3) Same Claim - the previous action and new action must assert the same claim

Question 4

Valid Final Judgment (claim preclusion)

Answer 4

the original claim must have ended in a valid final judgment on the merits

Unless the court states the judgment was without prejudice, any judgment is on the merits unless it was based on:
1) lack of jurisdiction (personal or subject matter)
2) improper venue
3) failure to join an indispensable party

Question 5

Same Claim (Claim Preclusion)

Answer 5

The original action and new action must assert the same claim.

Majority View (Federal Law) - Any rights to relief from a transaction or occurrence constitutes the same claim

Primary Rights Doctrine (Minority) - there are separate claims for property damage and personal injury that arise from a single event

Question 6

Issue Preclusion

Answer 6

A judgment binds the plaintiff or defendant in subsequent actions on different causes of action between them as to issues actually litigated and essential to the judgment in the first action

Question 7

Issue Preclusion Requirements

Answer 7

1) valid final judgment - first suit must have ended in a valid final judgment

2) Issue actually litigated and determined - the issue on which preclusion applies must have been litigated and determined in the previous case (default does not count)

3) Issue Was Essential to the Judgment - It must be clear that the issue was essential to the judgment in the previous case (finding on the issue is the basis of the judgment)

4) Issue preclusion is being used only against someone who was a party to the previous case or in privity with a party (required by due process)

5) Issue Preclusion is being used by someone who was a party in the previous case (unless nonmutual defensive or offensive apply)

Question 8

Nonmutual Defensive Issue Preclusion

Answer 8

The person using the preclusion was not a party to the previous case and is the defendant in case 2.

This is allowed if the plaintiff had a full chance to litigate the issue in the previous case.

Question 9

Nonmutual Offensive Issue Preclusion

Answer 9

The person using preclusion was not a party to the previous case and is the plaintiff in case 2.

In determining whether to allow non-mutual issue preclusion, the court will consider whether it is fair.

Question 10

Nonmutual Offensive Issue Preclusion Fairness Factors

Answer 10

1) Whether the party bound had a full and fair opportunity to litigate in case 1
2) Whether the party bound had a strong incentive to litigate in case 1 (think sum of money at risk)
3) whether the party asserting issue preclusion could have been easily joined in case 1
4) whether there have been any inconsistent findings on the issue

Question 11

Law Applied to Preclusion Questions

Answer 11

1) When Case 1 is Decided in State Court - the court in case 2 (whether state or federal) generally will apply the claim or issue preclusion law of the jurisdiction that decided case one

2) When case 1 is Decided in Federal Court under Diversity Jurisdiction - the court must apply federal law, but federal law is such instance would be the state law in which the federal court sat (bc diversity)