Conflict of Laws

Question 1

Res Judicata / Claim Preclusion

Answer 1

Res judicata provides that a final judgment on the merits of an action precludes the parties from successive litigation of an identical claim in a subsequent action. To bar a claim under res judicata:

1. The original claim must have resulted in a valid final judgment on the merits;
2. The original and later-filed causes of action must be sufficiently identical (i.e., related to the same transaction or occurrence); AND
3. The claimant and the defendant must be the same (and in the same roles) in both the original and later-filed action, or privity exists between the parties in the original and later-filed action.
4. (NOTE. Res Judicata is limited to the parties and their privies; thus, a similar action by a different party would NOT be barred under res judicata.)

Question 2

Collateral Estoppel / Issue Preclusion

Answer 2

Collateral estoppel precludes the re-litigation of issues of fact or law that have already been necessarily determined by a judge or jury as part of an earlier claim. To bar an issue under collateral estoppel:

1. The issue sought to be precluded must be the same as that involved in the prior action [i.e., the facts relevant to the particular issue and the applicable law must be identical];
2. The issue must have been actually litigated in the prior action;
3. The issue must have been determined by a valid final judgment on the merits; AND
4. The determination of the issue must have been essential to the prior judgment.

Question 3

Erie Doctrine

Answer 3

Under the Erie Doctrine, a federal court sitting in diversity jurisdiction must apply the law of the forum state in which it sits (NOT its own federal law) regarding substantive issues.

However, federal courts are free to apply their own rules to procedural issues.

Choice of law issues are considered substantive; therefore, a federal court sitting in diversity MUST apply the forum state’s choice of law rules.

Substantive Rules Always Applied: (CESS)