Res Judicata and Related Doctrines

Question 1

Claim Preclusion (Res Judicata)

Answer 1

Claim preclusion prevents 1) the same parties from litigating 2) the same or similar claims in a subsequent action 3) after a final and valid judgment has been rendered.

The rationale for claim preclusion is to avoid the time and expenses of multiple suits and to prevent inconsistent outcomes. Claim preclusion in civil cases is similar to double jeopardy in criminal prosecution.

Question 2

Claim Preclusion (Res Judicata) - Same Claim

Answer 2

In federal court, a claim is the same it is transactionally related i.e. based on the same transaction or occurrence.

Question 3

Claim Preclusion (Res Judicata) - Same Claim

CALIFORNIA

Answer 3

CALIFORNIA: Follows the primary rights doctrine which gives the plaintiff a cause of action or each right that is invaded e.g. a property right is distinct from personal injury. Thus, a plaintiff can sue a defendant in one suit for the damage to her car and then sue the same defendant in a subsequent suit for personal injuries suffered in the same accident.

Question 4

Claim Preclusion (Res Judicata) - Same Parties

Answer 4

The ensuing case must be brought by the exact same plaintiff against the exact same defendant.

Question 5

Claim Preclusion (Res Judicata) - Final

Answer 5

In federal court, a judgment is deemed final when it is rendered. The fact that the case is under appeal is immaterial.

Question 6

Claim Preclusion (Res Judicata) - Final

CALIFORNIA

Answer 6

CALIFORNIA: In CA, judgment is considered final when the time for an appeal has expired or at the conclusion of the appeal.

Question 7

Claim Preclusion (Res Judicata) - Valid

Answer 7

A judgment is valid so long as the court had jurisdiction over the parties and the claim.

Question 8

Claim Preclusion - On the Merits

Answer 8

A judgment is on the merits where the claim has been litigated. A dismissal by the court for lack of personal jurisdiction, lack of subject matter jurisdiction, improper venue, or failure to join an indispensable party is NOT considered on the merits because the dismissal is NOT concerned with the merits of the claim.

Question 9

Issue Preclusion (Collateral Estoppel)

Answer 9

Issue preclusion prevents a re-litigation of the same issue in a subsequent lawsuit so long as the issue was 1) actually litigated 2) determined AND 3) essential to the judgment in the prior action. Issue preclusion compels a court to make the same findings as fact the first court made on an identical issue. Furthermore, the use of issue preclusion must be fair under the circumstances. Courts consider whether a party had a full and fair opportunity to litigate the issue in the first lawsuit.

Question 10

Issue Preclusion (Collateral Estoppel) - The Same Issue Must be Involved in Both Actions (Identity of Issues Requirement)

Answer 10

For issue preclusion to apply, the issue decided in the first case must be identical to the issue in the second case.

Question 11

Issue Preclusion (Collateral Estoppel) - The Issue was Actually litigated and Decided in the Prior Case

Answer 11

Actually litigated means the party had the opportunity to offer evidence on the issue. Decided means the fact finder decided the issue i.e. the judgment was not entered by default or pursuant to a settlement agreement.

Question 12

Issue Preclusion (Collateral Estoppel) - The Determination of the Issue Must Have Been Essential to the Judgment

Answer 12

An issue is essential only if the judgment could NOT have been reached without determining that particular issue. If there were two grounds for the decision, either issue may not have been essential to the judgment.
1) The main gist of collateral estoppel is that the issue is deemed established in the second case.

Question 13

Issue Preclusion (Collateral Estoppel) - Mutuality of Estoppel (Non-Mutual Collateral Estoppel)

Answer 13

Under the traditional mutuality rules, a judgment could not be used against a person who was not a party to prior action, nor could a stranger take advantage of a prior judgment.
1) However, federal courts (and California) have eliminated the mutuality requirement and, in certain situations, allow a non-party to take advantage of a prior judgment. Thus, issue preclusion can be used to prevent a party who has litigated and lost in an earlier action from relitigating the same issue in a subsequent case so long as it is fair to do so.

Question 14

ESSAY TIP

Answer 14

You have probably heard of the phrase “offensive non-mutual collateral estoppel” several times but have no idea what it means. Let’s break it down:

1) offensive means the plaintiff attempting to use a prior judgment to satisfy one of the elements of her claim e.g. breach, design defect;
2) non-mutual means the person who wants to take advantage of the prior judgment was not a party to the prior case. This is permitted so long as the issue had been fully and fairly litigated by the person who the judgment is being used against
3) collateral estoppel means the person, who the judgment is being used against, is prevent or estopped from re-litigating the issue. The word collateral actually refers to a prior suit, not the current case. The word estoppel simply means to prevent.

Question 15

Issue Preclusion (Collateral Estoppel) - Mutuality of Estoppel (Non-Mutual Collateral Estoppel)

Offensive Use of Collateral Estoppel by a Non-Party (Non-Mutual Issue Preclusion)

Answer 15

The plaintiff (who was not a party to the prior suit) may use a prior judgment to assist in obtaining relief preventing the defendant from relitigating an issue resolved against the defendant in an earlier proceeding. This offensive

Question 16

Issue Preclusion (Collateral Estoppel) - Mutuality of Estoppel (Non-Mutual Collateral Estoppel)

Offensive Use of Collateral Estoppel by a Non-Party (Non-Mutual Issue Preclusion)

EXAMPLE

Answer 16

For example, the Securities and Exchange Commission (SEC) charged the defendant with issuing a false proxy statement in violation of federal securities laws. The trial court determined that the proxy statement did in fact contain false statements and rendered judgment in favor of the SEC. In a subsequent action brought by stockholders of the company, the court held that the defendant was collaterally estopped from relitigating the issue regarding the false proxy statement. The court reasoned that under the circumstances it was fair to do so. Thus, the stockholders were able to use the prior judgment as a sword.

Question 17

Issue Preclusion (Collateral Estoppel) - Mutuality of Estoppel (Non-Mutual Collateral Estoppel)

Defensive Use of Collateral Estoppel by a Non-Party

Answer 17

A defendant (who was not a party to the prior suit) may use a prior judgment to avoid liability in a subsequent action if there are compelling reasons to do so. This defensive use of collateral estoppel is often referred to as using the judgment as a shield.

Question 18

Issue Preclusion (Collateral Estoppel) - Mutuality of Estoppel (Non-Mutual Collateral Estoppel)

Defensive Use of Collateral Estoppel by a Non-Party

EXAMPLE

Answer 18

For example, a pedestrian sued a pizza delivery company claiming that its employee failed to stop at a stop sign causing the pedestrian serious injuries. After trial, the jury rendered a verdict in favor of the pizza delivery company finding that the employee had exercised due care by coming to a complete stop. In a subsequent action by the pedestrian against the employee, the employee may benefit from the prior judgment (even though the employee was not a party to the prior case) because the issue of negligence had been fully litigated and was essential to the judgment. Therefore, the employee may use the judgment as a shield.

Question 19

Issue Preclusion (Collateral Estoppel) - Mutuality of Estoppel (Non-Mutual Collateral Estoppel)

The Use of Issue Preclusion Must be Fair

Answer 19

The most important aspect of non-mutual collateral estoppel (the use of a prior judgment by a non-party) is application of the doctrine must fair under the circumstances. Federal courts have discretion to deny the use collateral estoppel when it would be unfair to do so.

1) Issue preclusion should be denied when 1) sought by one who deliberately bypassed an opportunity to participate in the original proceeding 2) the stakes were significant small in the first case 3) the later proceeding affords considerably more procedural opportunities e.g. the first case was brought in small claims court 4) there are inconsistent judgments are 5) the party in the first action had little incentive to defend vigorously, particularly if future suits were NOT foreseeable.
2) The critical factor is whether the losing party had a fully and fair opportunity to litigate the issue in the first case.