PRECLUSION

I. CLAIM PRECLUSION

4 Requirements for Claim Preclusion:

(1) Judgment On the Merits

- Merits adjudicated after trial
- Most dismissals; default judgment
- Judgment/dismissals not on merits
o Improper venue, jurisdiction, party joinder
o Plaintiffs voluntary dismissal (usually)

(2) Court of Competent Jurisdiction

- Jurisdiction over the parties
- Jurisdiction over the claims

(3) Same Parties or their Privies

(4) Same Cause of Action

- If the second case arises out of the same transaction and
operative facts, it can be considered same cause of action
- If plaintiff thinks he has multiple claims from same setoff facts,
he better bring them in same lawsuit

State judgments in Federal Court

- Every state court uses Res Judicata

II. ISSUE PRECLUSION

- Elements:
o (1) the issue on which preclusion is sought in the
subsequent case must be exactly the same as the issue in
the prior case
o (2) the issue must have been litigated in the prior case
o (3) the prior court must have actually decided the issue by
a final judgment on the merits
o (4) the decision on the issue must have affected the
outcome of the case
o (5) the party opposing issue preclusion must have been a
party to the prior case, or in privity with a party, and have
had a full and fair opportunity to litigate the issue.

- Defensive v. Offensive
o Defensive:
 the defendant seeks to rely on a prior finding to
defeat the plaintiffs claim in a later case
o Offensive:
The plaintiff seeks to rely on a prior finding to hold
the defendant liable in a later case

- Mutual:
o The parties asserting and opposing collateral estoppel are
both parties in prior case
- Non-mutual:
o The party asserting collateral estoppel was not a party to
the prior case.

- Distinction Between Defensive & Offensive:

o (1) Courts will almost always permit the use of defensive
non-mutual issue preclusion if the basic elements are
satisfied, unless the opposing party can show unfairness.
o (2) Federal court will NOT permit offensive, non-mutual
collateral estoppel if the plaintiff in the later case COULD
HAVE JOINED in the prior case, but chose instead to WAIT
AND SEE what the result will be.
o This rule does not apply to defensive, non-mutual collateral
estoppel.