Claim/Issue Preclusion

Question 1

Claim Preclusion (Res Judicata)

Answer 1

Requirements—new claim will be precluded if:

1) Same parties—the second case was brought by the same party against the same party (e.g., same P against same D)

> An entity in privity with a party is considered “same party” (e.g., an employee and employer may be the same party for claim preclusion purposes)

2) Same claim—same claims in the first and subsequent suit

> Claim refers to the transaction or series of transactions or occurrences giving rise to the action
I.e., even if not previously raised, claim can be precluded if it is sufficiently related to prior claims

3) Final judgment on the merits in original claim

> Judgment is final even if it is being appealed
< Dismissal with prejudice operates as a judgment on the merits
Technical dismissals (SMJ, PJ, Venue) are not “on the merits” because they are not evaluating the substance of the plaintiff’s claim

Question 2

Issue Preclusion (Collateral Estoppel)

Answer 2

Narrower than claim preclusion; does not preclude the whole claim necessarily, just the same issue

Issue must have been actually litigated—distinguish from claim preclusion, which only requires opportunity to litigate

Requirements:

1) Final judgment on the merits—first case ended with a valid, final judgment on the merits

2) Same issue—same issue was actually litigated and determined in the first case

3) Issue was essential to the judgment—i.e., judgment would have been different in the first case absent litigation of this issue
> Must be clear how the issue was decided by the original trier of fact

4) Asserted against actual party to previous case

Who may assert:
> Mutuality (traditional view)—only parties to prior litigation can assert issue preclusion
> Non-mutuality (modern view)—issue preclusion may be asserted by those who were not parties in the prior litigation

Question 3

Nonmutual Issue Preclusion (Offensive and Defensive)

Answer 3

Non-mutual issue preclusion may be used defensively or offensively, although courts are reluctant to allow offensive use

Defensive use of prior judgment
> D seeks to prevent P from re- litigating an issue P lost in a prior suit against a different party

> Allowed if the party against whom issue preclusion is asserted had a full chance to litigate the issue previously
- E.g., D in second case can preclude P from re-litigating an issue P lost to another D in a prior case; this is “non- mutual” because the party asserting IP was not a party in the prior litigation

Offensive use of prior judgment
> P seeks to prevent D from re- litigating an issue that D previously lost in a prior suit against a different party

> Court will allow only if deemed fair after balancing factors

> Fairness Factors:
1) Whether party against whom prior judgment is asserted had full and fair opportunity to litigate
2) Whether party could foresee multiple suits being filed
3) Whether the party asserting IP controlled or could have joined the prior litigation
4) There are no inconsistent judgments on the record