Res Judicata (Claim Preclusion) Collateral Estoppel (Issue Preclusion) Former Adjudication Res Judicata (Claim Preclusion) Collateral Estoppel (Issue Preclusion)

Res Judicata (Claim Preclusion) Forbids a party from relitigating a claim that was or should have been raised in prior litigation Would be raised by a D as an affirmative defense under 8(c) It is a common law doctrine not a FRCP Force litigants to utilize liberal joinder rules In what document should this affirmative defense be filed? In either the answer or other responsive pleading (i.e., pre-answer motion)

Res Judicata (Claim Preclusion) Three-step inquiry for precluding claims: 1) Did the prior suit end with a judgment on the merits? 2) Does the subsequent action arise out of the same claim as the prior suit? Car Carriers v. Ford Motor Company (court compares majority and minority approaches to determining relatedness of claims) Heacock v. Heacock (claim preclusion does not apply where relief sought in the second action was unavailable in the first action) 3) Are the parties at issue in both suits identical or in privity with one another? Gonzalez v. Banco Central Corp.

Res Judicata- Final Judgment? Dismissals that do not have Res Judicata Effect (i.e., not on the merits) 12(b)(1) P/Jurisdiction 12(b)(2) SM/ Jurisdiction 12(b)(3) Venue 12(b)(7) Joinder/ Non-joinder Dismissals w/o prejudice Dismissals w/ Res Judicata Effect (i.e., on the merits) Involuntary Dismissals 41(b) Dismissal as Sanction 12(b)(6) Dismissals Rule 56 Dismissals Dismissals w/ prejudice

Res Judicata – Same Claim? Central questions relating to whether a claim arises out of a previously litigated claim: How broadly do we define the initially litigated claim? Broad definition will result in the preclusion of more subsequent claims. Narrow definition will result in the preclusion of fewer subsequent claims. Which test do we use? The same occurrence and transaction test considers the relatedness of the previously and subsequently litigated claims according to whether the facts inherent to each are related in time, space, origin or motivation and whether they form a convenient unit for trial purposes. This test is fact intensive and fact specific. (Majority Approach suggested by the Restatement (Second) of Judgments) The Rights / Duties test focuses on the theories of relief in comparing the relatedness of the claims. (Minority Approach)

Practice Q P sues D for damages in construction of a house, asserting theories of breach of warranty and negligence. D moves to dismiss for lack of personal jurisdiction. The motion is granted, and the case is dismissed. P later sues D using the identical complaint in another state’s court. D pleads res judicata. Does claim preclusion apply?

Practice Q P sues D in federal court for age discrimination because D terminated her employment. Following a jury trial and verdict, judgment is entered for D. P later files action vs. D in state court for breach of employment contract and defamation. D pleads the affirmative defense of res judicata. Does claim preclusion apply?

Former Adjudication - Privity Typical Examples of Privity A person acquires an interest in property that has already been the subject of a lawsuit A party litigates in a representative capacity A close familial relationship exists between a party in the prior case and a non-party whose claim is derivative of or closely aligned with the former’s claim

Privity Practice Q Action 1: W sues H for divorce. The Ct awarded marital home to the W. The H, whose name was the sole name on the deed, argues that he owned half of the house and the other half was owned by a partnership comprised of himself and his sons. The father was the managing partner of the claimed partnership and the sons testified as witnesses in the divorce action but they were not parties to the suit. Action 2: The son’s partnership sues W for their ownership portion of the property. The W challenges the action as precluded. The trial ct held that claim preclusion barred the action. The partnership appealed the decision arguing that since they weren’t parties to the divorce action they were not bound by the decree entered in the first action. You are the appellate judge. What result?

Issue Preclusion Example 1: Law student obtains 2 student loans both signed on the same day, at the same time, containing the same representations, and underwritten by Sallie Mae. Sallie Mae initiates a lawsuit vs. the student for the 1st loan for nonpayment. The student defends on the grounds that the statements contained in the promissory note are fraudulent and loses on summary judgment. Sallie Mae then brings a suit on the second note. The issue as to the fraudulence of the second note is precluded (i.e., the student cannot assert fraud as a defense in the second action).

Issue Preclusion Question Assume the same facts as presented on the previous screen, except that the second action is a criminal action by the U.S. vs the student for fraudulently obtaining the student loans. Is the issue of fraud asserted as a defense by the student in the first action precluded?

Issue Preclusion Questions related the application of Issue Preclusion Has an issue of fact or law been actually litigated and determined? David P. Hoult v. Jennifer Hoult Jarosz v. Palmer Was the issue determined by a final judgment? Was the determination essential to the judgment in the case? If the answer to all of these inquires is yes the determination is conclusive in a subsequent action between the parties whether on the same or a different claim.

Issue Preclusion Definition of Defensive Non-Mutual Collateral Estoppel (DNCE): when a D seeks to foreclose the P from asserting an issue the P has previously litigated and lost in an action with another defendant. Definition of Offensive Non-Mutual Collateral Estoppel (ONCE): when P seeks to foreclose a D from litigating an issue (defense) the D has previously litigated unsuccessfully in an action with another party Parklane Hoisery v. Shore Rule of thumb: where P seeks to estop a D in a subsequent action it is ONCE; where D seeks to estop a P in a subsequent action it is DNCE

Offensive Non-Mutual Collateral Estoppel Relevant Inquiries that guide consideration of ONCE: 1) Did the D have the same incentive to vigorously litigate the issue in the 1st action as may motivate him with respect to the 2nd action? 2) Did the P adopt a “wait and see” posture or was there a legitimate reason for not participating in the 1st action? 3) Are there different procedural devices available in the 2nd action that are outcome determinative?