Former Adjudication

1
Former Adjudication

• Res Judicata (Claim Preclusion)
• Collateral Estoppel (Issue Preclusion)

2
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

3
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.

4
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

5
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)
  

6
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 states court.
  D pleads res judicata. Does claim preclusion
  apply?

7
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?

8
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 formers claim

9
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 sons 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 werent parties to the divorce
  action they were not bound by the decree entered
  in the first action.
• You are the appellate judge. What result?

10
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).

11
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?

12
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.

13
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

14
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?
  

15
(No Transcript)
16
(No Transcript)