The doctrine ofres
judicata prevents a litigant
from getting yet another day in court after the first lawsuit is concluded by
giving a different reason than he gave in the first for recovery of damages for
the same invasion of his right. The rule provides that when a court of
competent jurisdiction has entered a final judgment
on the merits of a cause of action, the parties to the suit and their privies
are bound "not only as to every matter which was offered and received to
sustain or defeat the claim or demand, but as to any other admissible matter
which might have been offered for that purpose." A final judgment on
the merits bars further claims by the same parties based on the same cause
Res judicata prevents a plaintiff from suing on a claim that
already has been decided and also prevents a defendant from raising any new
defense to defeat the enforcement of an earlier judgment. It also
precludes relitigation of any issue, regardless of whether the second action is
on the same claim as the first one, if that particular issue actually was
contested and decided in the first action. (Friedenthal §
14.1) Former adjudication is an analogue of the criminal law concept of
Res judicata = A general term referring to all of the ways in
which one judgment will have a binding effect on another.
Claim preclusion (true res judicata) = A valid and final judgment on a claim precludes a
second action on that claim or any part of it. Claim preclusion is
divided into two areas, bar and merger.
In res judicata the second or subsequent suit involves the same
claim or cause of action. In collateral
estoppel the second or subsequent suit involves a different claim or cause
of action. In res judicata
the first judgment is conclusive not only on all matters which actually
were litigated, but on all matters which could have been litigated. In
collateral estoppel the judgment is conclusive only in regard to issues that
actually were litigated.
A judgment in a prior suit between the same
parties is final not only as to all matters that were in fact offered and
received to sustain or defeat the claim but also as to all matters that might
have been offered for that purpose. A party may not litigate a claim and
then, upon an unsuccessful disposition, revive the same cause of action with a
Factors Are Considered in Determining the Validity of a Plea of Claim
1) Was the claim decided in the
prior suit the same claim being presented in the action in question?
2) Was there a final judgment on
3) Was the party against whom the
plea was asserted a party or in privity with a party to the prior suit?
4) Was the party against whom the
plea was asserted given a fair opportunity to be heard on the issue?
The Requirement of a Final Judgment
Judgment "On the Merits"
The requirement that a judgment, to be res
judicata, must be rendered "on the merits" guarantees to every plaintiff
the right once to be heard on the substance of his claim. Ordinarily, the
doctrine may be invoked only after a judgment has been rendered which reaches
and determines "the real or substantial grounds of action or defense as
distinguished from matters of practice, procedure, jurisdiction or
form." One of the exceptions to this rule is found in FRCP
41(b). It provides that an involuntary dismissal for failure to
prosecute, or for failure to comply with the Rules or any order of the court,
shall operate as an "adjudication upon the merits," although the
substantive issues of the case are never reached. This exception does not
apply in the case of a dismissal for lack of jurisdiction or improper venue.
The policy behind Rule 41(b) is to bar
subsequent action only in situations in which the defendant must incur the
inconvenience of preparing to meet the merits because there is no initial bar to
the Court's reaching them.
The res judicata consequences of a final,
unappealed judgment on the merits are not altered by the fact that the judgment
may have been wrong or rested on a legal principle subsequently overruled in
another case. An erroneous conclusion reached by the court in the first
suit does not deprive the defendants in the second action of their right to
rely upon the plea of res judicata. (Federated Dept. Stores v. Moitie,
452 U.S. 394 (1981)
I.e., a judgment need not be right to
preclude further litigation, it need only be final and on the merits.
Identity of Parties
The general rule is that a judgment
has no binding effect upon anyone who was
not a party to the action. A stranger cannot take advantage of a
judgment, nor can it be enforced against him. Consequently, the rules of res
judicata and collateral estoppel do
not apply unless the parties in the subsequent suit are identical with the
parties in the first suit.
For res judicata to apply, both suits must involve the same parties
or their privies and also the same cause of action. If the subsequent
suit involves different parties, those parties cannot be bound by the prior
judgment. Collateral estoppel arises from a different cause of action and
prevents parties or their privies from relitigating facts and issues in
second suit that were fully litigated in the first suit. The plea
of collateral estoppel can be asserted only against a party in the subsequent suit
who was also a party or in privity with a party in the prior suit.
A person in privity with another is a
person so identified in interest with another that he represents the same legal
right. Privity means one whose interest has been legally represented at
the time. Collateral estoppel is not a defense against a litigant who was
not a party to the action and judgment claimed to have created an estoppel.
"Actually Litigated &
To protect the integrity of the prior
judgment by precluding the possibility of opposite results by two different
juries on the same set of facts, the doctrine of issue preclusion allows the
judgment in the prior action to operate as an estoppel as to those facts or
questions actually litigated and determined in the prior action. In order
to determine what facts were actually litigated in the prior case, the
following test is applied: Where a judgment may have been based upon
either or any of two or more distinct facts, a party desiring to plead the judgment
as issue preclusion or a finding upon the particular fact involved in a
subsequent suit must show that it went upon that fact, or else the question
will be open to a new contention. The estoppel of a judgment is only
presumptively conclusive, when it appears that the judgment could not have been
rendered without deciding the particular matter brought in question.
Collateral estoppel applies only to issues
that have actually been determined in the first action and not to those which
might have been determined but were not. When a case may have been
decided on more than one ground but it is impossible to ascertain which ground
or grounds were actually decided, none of the grounds are collateral estoppel
in a subsequent action.
In any lawsuit between two parties who have
engaged in previous litigation, the first question will be whether this is the
same claim. Only if one answers that question in the negative does the
second question arise: are there then issues that the first case
precludes from relitigation?
for Collateral Estoppel
(1) The issue in the second case
must be the same as the issue in the first.
(2) The issue must have been actually
(3) The issue must have been
(4) The issue must have been necessary
to the court's judgment. (Friedenthal, sec. 14.11)
Mutuality of Preclusion
Under traditional issue preclusion
principles, a party may be estopped from relitigating an issue that he had
litigated in a prior suit and lost. The general rule was that estoppel
must be mutual, i.e., the only parties who could invoke collateral estoppel
were those who were involved in the suit in which the issue was initially
decided. I.e., parties are bound, nonparties are not.
(Wright, sec. 100A)
Non-Mutuality - Defensive Use
Bernhard v. Bank of America 19 Cal.2d 807, 122 P.2d 892 (1942) is the case
thought to be the turning point that brought about the demise of
mutuality. (Wright, sec.100A) In Bernhard, Mrs. Bernhard claimed that certain funds held
by Cook, the executor of an estate, belonged to the estate. Cook claimed they
were a gift to him from the decedent, which he need not include in the assets
of the estate. Bernhard challenged Cook's claim in a probate proceeding during
the course of the settlement of the estate, and the court held the funds were a
gift to Cook. Bernhard then sued the bank that had been holding the funds
and paid them to Cook, alleging again that the funds were assets of the estate
that should have been paid to the estate rather than to Cook. The bank
pleaded collateral estoppel, arguing that Bernhard had already adjudicated the
right to the funds in the probate proceeding, had lost, and should be precluded
from relitigating the issue against the bank. The court concluded that it
was not improper to allow a new party to take advantage of findings in an
earlier suit to estop a party who had litigated the issue in the prior
action. Bernhard had been a party to the first action and had a full and
fair opportunity to litigate the issue there. The court saw no reason to
allow her to relitigate the same issue by simply switching defendants. Bernhard holds that collateral estoppel runs against anyone
who has fully and fairly litigated an issue in an earlier action.
Non-Mutuality - Offensive Use
The general rule should be that in cases
where a plaintiff could easily have joined in the earlier action or where, for
other reasons the application of offensive estoppel would be unfair to a
defendant, a trial judge should not allow the use of offensive collateral
Hosiery Co v. Shore, 439 U.S. 322 (1979)
A nonparty may assert collateral estoppel
offensively against someone who was a defendant in a prior action. Under Parklane the court must evaluate on a case by case basis
whether it is necessary to allow what appears to be duplicative litigation to
ensure the reliability and fairness of a judgment. No precise rules can
be formulated. The Parklane
standard is applicable only to the federal courts. (Friedenthal,
Ã‚Â¬ÃƒÅ¸14.14) "Offensive" use of issue preclusion involves a
plaintiff who is seeking to prevent a defendant from relitigating issues that
the defendant had previously litigated and lost against another plaintiff.
Laboratories, Inc. v. University of Illinois Foundation, 402 U.S. 313
(1971) the University of Illinois Foundation sued the defendant for
infringing a patent but lost on the ground that its patent was invalid.
It then brought a subsequent suit against another defendant for infringement of
the same patent. The Supreme Court reversed its long standing rule
allowing such relitigation and approved the use of nonmutual collateral
estoppel against the Foundation on the issue of the validity of the
patent. The Court noted the unfairness and waste of judicial resources
that flows from allowing repeated litigation of the same issue as long as
plaintiff is able to locate new defendants to sue. Note that preclusion
is only appropriate if the precluded party had a full and fair opportunity to
litigate the issue in the first action.
Nonmutual collateral estoppel cannot be
used against the federal government. (United States v. Mendoza,
464 U.S. 154 (1984)
Full Faith & Credit Doctrine
faith and credit requires that judicial proceedings shall have the same
full faith and credit in every court within the U.S. as they have by law or
usage in the courts of such state from which they are taken. It requires
every state to give a judgment at least the res judicata effect which the judgment would be accorded in the
state which rendered it. (Durfee v. Duke, 375 U.S. 106
This doctrine involves successive stages of
the same lawsuit. However, the doctrine is fundamentally the same as res
judicata, an issue which has been litigated
and decided in one stage of a case should not be relitigated in a later stage.
Law of the case, like issue preclusion,
bars a litigant from repeating the same argument that was previously
rejected. It refers to the principle that issues once decided in a case
that recur in later stages of the same case are not to be redetermined.
This doctrine limits relitigation in successive stages of a single suit.
E.g., it will apply when an issue in the case is decided by the trial court and
appealed. If the appellate court reverses and rules on the law to be
applied, those findings will be binding on the trial court when the action is
remanded for a new trial. (Friedenthal, sec. 14.1)