| Question | Explanation |
| 1. The basics. P sues D (an auto manufacturer) in state court for negligence arising from a car accident. The alleged negligence is negligent manufacture of a component of P’s car, which P believes was the proximate cause of P’s injury. At trial, the jury finds for D and the court enters judgment against P. Believing her lawyer did a poor job in the trial, P files a second suit against D for the same injury, again alleging negligence, this time using a better lawyer. Can D object on the basis of claim preclusion? | Discussion: Yes. Claim preclusion (also known as res judicata) prevents relitigation of claims. Here, there was a final judgment on the merits between the same parties (or their privies) for the same claims. This is the exact kind of finality that claim preclusion is intended to protect. |
| 2. Privity. Same hypo as # 1. After losing the first suit, P dies. P’s spouse, serving as executor to P’s estate, files suit on behalf of the estate against D for P’s wrongful death. Can D object on the basis of claim preclusion? | Discussion. Yes. P’s spouse is in privity with P. As the executor of P’s estate, P’s spouse has succeeded to P’s interest in the lawsuit. Here, she is asserting the same claim against the same defendant; as P’s privy, the second suit is barred by claim preclusion. |
| 3. State-to-state. Same hypo as # 1. Would it matter if suit 2 was brought in the courts of a different state? | Discussion: No. State courts are required to give effect to the valid judgments of the courts of other states under both the Full Faith and Credit clause of the Constitution (Article IV, § 1), as well as under the full faith and credit statute, 28 U.S.C. § 1738. This is an example of “state-to-state preclusion.” |
| 4. State-to-federal. Same hypo as # 1. Would it matter if suit 2 was brought in federal court? | Discussion: No, but for slightly different reasons from # 3. The Full Faith and Credit clause of the Constitution (Article IV, § 1) does not apply to federal courts. However, the full faith and credit statute, 28 U.S.C. § 1738, does apply to federal courts and requires them to give full faith and credit to valid state court judgments. This is an example of “state-to-federal preclusion.” |
| 5. Same claim I? Same hypo as # 1, but in the second suit, P asserts claims for strict liability and breach of warranty. Can D object on the basis of claim preclusion? | Discussion: Yes. Claim preclusion prevents litigation of theories that were actually litigated as well as theories that were not litigated (usually because they were not raised), so long as they were the “same claim.” Historically, approaches to defining the “same claim” varied. Today, many (but not all) jurisdictions look to the transactional test of Restatement (Second) of Judgments § 24. Here, the strict liability and breach of warranty claims all arise from the same underlying transaction. Even though they weren’t asserted in the first suit, they are precluded. Otherwise, P could keep filing new suits, harassing D until P finally wins. |
| 6. Same claim II? Penny sues Donna in state court for breach of a contract to sell an electric guitar. At the time, Penny decides not to sue Donna for negligence for an unrelated car accident. Penny wins at trial and judgment is entered on her behalf. Emboldened by her victory, Penny files a second suit against Donna for negligence arising from the car accident. Donna asserts claim preclusion as a defense, arguing that Penny could have joined her negligence claim in the same suit. Will Donna win? | Discussion: No. Penny did get a final judgment on the merits. It’s the same parties. But it’s not the same claim: the negligence claim arising from the car accident is unrelated to the contract for the guitar. Claim preclusion therefore does not bar the second suit. The fact that Penny could have joined the claims under Rule 18(a) doesn’t change the result because that Rule permits but does not require the joinder of the second claim. If it did, then permissive joinder of claims would become effectively mandatory. Would the result change if Penny had lost the first suit? No, because the negligence claim still is not the “same claim” as the breach of contract claim. |
| 7. Same party? Paul, Penny, and David get into a bar fight. Paul sues David for battery in federal court and loses. Penny later sues David for battery from the same bar fight. David asserts claim preclusion as a defense. Will David prevail? | Discussion: No. Claim preclusion requires that the same parties or their privies have been the litigants in the prior suit. Claim preclusion does not bar Penny’s suit. (Looking-ahead question: would David be able to assert defensive non-mutual collateral estoppel? See non-mutual issue preclusion scenarios chart.) |
| 8. Counterclaims? Penny sues Donna in federal court for negligence arising from a car accident involving the two women. Penny loses at trial and judgment is entered against her. Emboldened by her victory, Donna then files suit against Penny in federal court for negligence arising from the same car accident. Penny asserts claim preclusion as a defense. Will she prevail? | Discussion. Yes, with a caveat. Under common law claim preclusion, Donna’s claim was a separate claim because it was not a claim asserted by the same party (which in the first suit was asserted by Penny). However, in federal court, Donna would be barred by rule-based claim preclusion. Rule 13(a) would treat Donna’s negligence claim as a compulsory counterclaim to Penny’s suit because it arose from the same transaction or occurrence (the same car accident). Donna’s failure to allege negligence as a compulsory counterclaim would bar her from litigating it later. Many state court rules of court could lead to a similar result. |
| 9. State-to-federal revisited. Bartkansas and Homeria are two states of the United States. P and D were parties to a licensing agreement that gave D the right to sell products containing P’s patented invention. P is upset at D because D never paid any of the royalties due under the license agreement in 2006. P sues D in Homeria state court for breach of the licensing agreement. P wins and judgment is entered in his favor. P later sues D in Bartkansas federal court for patent infringement arising from D’s 2006 sale of products containing the invention, seeking damages to P’s business above and beyond the license fees sought and obtained in the first action. D seeks dismissal on the basis of claim preclusion. P argues that federal common law bars the exercise of claim preclusion because the patent claim could not have been asserted in state court. Is she correct? | Discussion. No. In a Supreme Court opinion called Marrese, the Court held that, barring an express or implied repealer in another federal statute, 28 U.S.C. § 1738 generally required federal courts to give effect to state court-judgments according to preclusion principles of the state where the judgment was rendered. Here, where the patent claim was omitted from a state-court suit because the federal claim was exclusive to federal courts, some states would give their judgments preclusive effect. Other states, using a “prior jurisdictional competency” standard, would not give preclusive effect to their judgments because the state court lacked subject-matter jurisdiction over the exclusive federal claim. Here, the Bartkansas federal court would have to ask whether Homeria state courts would give preclusive effect when the omitted patent claim could not have been asserted by P in the Homeria state court. |
| 10. Federal-to-state I. P sues D in federal court in Bartkansas for defamation. Applying the two-year Bartkansas statute of limitations, the federal court involuntarily dismisses the suit with prejudice and on the merits. P then refiles the same suit in Homeria state court. Homeria uses a 10-year statute of limitations for defamation claims. D argues that P’s claim is barred because the FRCP treats an involuntary dismissal like this as an adjudication upon the merits, barring relitigation. Is D correct? | Discussion. No. In Semtek (not in the though discussed briefly p. 1218 bottom footnote), the Court read Rule 41(b) narrowly, saying that the “adjudication upon the merits” language merely meant that the suit couldn’t be refiled in the same federal court. Regarding preclusion, the court held that the preclusive effect of a federal court judgment was instead a matter of federal common law. Regarding diversity cases, federal common law would usually be determined by using the preclusion principles of the state in which the federal court sat. See Semtek. For federal questions, federal courts may develop uniform rules of federal preclusion law. See Taylor v. Sturgell (not in casebook). Here, the enforcing Homeria state court would measure the preclusive effect of the rendering Bartkansas federal court diversity judgment by looking to the preclusion law of the state of Bartkansas. |
| 11. Federal-to-state II. P sues D in federal court in Bartkansas for defamation. P refuses to comply with a discovery order and the court enters judgment in D’s favor, dismissing with prejudice P’s claims. P later sues D in Homeria state court for the same alleged defamation. D moves for dismissal on the basis of claim preclusion, and P objects, noting that Bartkansas state courts would not give preclusive effect to an involuntary dismissal done as a discovery sanction. Is D correct? | Discussion. Not necessarily. Again, the issue of federal-to-state preclusion is a matter of federal common law, and again, the normal rule would be to apply Bartkansas preclusion law. If so, D is correct. However, Semtek recognized that where “state law is incompatible with federal interests,” it might be necessary to fashion a contrary federal rule rather than using state law as federal common law. As an example of such incompatibility, Justice Scalia described (albeit in dictum) state law that did not accord claim-preclusive effect to dismissals for willful violation of discovery orders. Thus, it is very possible that the Bartkansas state-law preclusion rule would not apply in this case. |
| 12. Federal-to-federal. Same fact pattern as # 11. The second suit, however, is in Homeria federal court rather than Homeria state court. D moves for dismissal on the basis of claim preclusion, and P objects, noting that Bartkansas state courts would not give preclusive effect to an involuntary dismissal done as a discovery sanction. Is D correct? | Discussion. Probably not. Although Semtek dealt with the scenario of federal-to-state preclusion, there is no reason to believe that the Semtek framework isn’t equally applicable to diversity cases in the federal-to-federal scenario. |
Posted Mar. 28, 2015