Civ Pro Outline, Spring 2006 Ogden I. Claim Preclusion/Res Judicata-former adjudication, based on efficiency A. Elements 1) Final Judgment (in LS #1) 2) On the merits (LS #1)-can’t be a dismissal w/out prejudice 3) Same Claim (LS #2) a. What is the same Claim? 1) what was plead-minority [same writ in CL] 2) same cause of action [primary right] i. joinder rules got broader, so did preclusion rules ii. includes something that wasn’t plead, but could have been plead-so closely linked…involved same primary right iii. ex. suing for contract specific performance, law suit 2 trying to affirm contract and get damages 3) same transaction-FRCP-most broad i. reflection of widespread acceptance of FRCP in state & fed. Court ii. Restatement 2nd of judgment-same test makes sense, same as the scope of joinder rules iii. focuses on out of court events and actions iv. allows scope of preclusion to arise out of different legal theories, makes it more broad than same cause of action as you get more broad, more likely to affect joinder 4) Same parties (LS #2) Claim Preclusion Rule Paragraph Claim preclusion (CP)/Res Judicata, an affirmative defense, bars parties in LS2 relitiggatin claims decided in LS1 in the same ct. The basic elements of CP are: final judgment (termination on the merits), on the merits (deciding claims or defenses or sanctions dismissals ), same claim (split in the juris between the same cause of action test (aka primary right test in CA or same transaction or occurrence test which is most used), and same parties, and same parties (same parties or parties in privity with the former party). The policies that these promote are efficiency and consistency. Final Judgment: Final Judgment requires that LS1 be the final decision made, for example a full trial with all appeals exhausted. However, there is a split in the jurisdictions if an appeal is pending. In some juris the judgment is final even if appeal is pending (CP applies) and in other jurirsidction the judgement is not final while an appeal is pending (and preclusive effect is suspended, and a further suit is not barred by CP). On the Merits: On the merits is when the court decides on the substantive substance of the parties “passes directly on the substance of a particular claim” (full jury trial). However, on the merits has been broadened to include judgments of : directed verdicts, 12b6 motions to dismiss, sanctions awards, summary judgment on the merits. However, procedural dismissals for improper venue, lack of SMJ or lack of PJ are notice considered on the merits as far as CP is concerned. Same Parties The same parties requirement has two aspects: 1. the party must be named and servedin LS1 or 2. the party must be in privity with the party in LS1 meaning that they were adequately represented (full and fair or legal) in the LS1. For example, if the parties were in successive ownership of property or the parties were in an express agreement to be bound by the outcome of LS1. Thus, a person in privity with a party to LS1 is bound by the judgment even if the person does not have notice of the action and is not served with process. See Searle brothers case where the brothers were not parties to the divorce lawsuit nor were they in privity with the father; therefore they were not precluded from filing a latter action. Same Claim: Same claim requires that the claims invoked in the both LS1 and LS2 must be the same. The three tests that are used are the same writ CL test (says that what was plead in the first suit can’t be plead in the second suit, this is not used today), the the primary right test used in CA (says a K issue can be plead in a separate case than a tort issue, See Mycogen where the court held that pure declaratory relief can be sought in LS1 and then in LS2 other remedies can be sought without CP), and the same transaction or occurrence test that is most used today (looks for same events, same facts, similar damages, and related remedies). The effect of the same transaction and occurrence test as stated in Rest. § 24 requires that a party who has asserted a right to relief arising out of a particular transaction or occurrence must join all claims she has arising from it, or the omitted claims will be barred by CP. II. Issue Preclusion/Collateral Estoppel A. Elements 1) Final Judgment 2) On the merits 3) Same issue (instead of same claim)-must meet ALDEJ 4) Same parties primary or non mutual preclusion a. Binding non parties to judgment in certain circumstances i. substantive legal relationship-seller/buyer land; trustees/beneficiaries ii. virtual representation-is a representing B? usually has k or settlement agreement, ie from last semester: Mulane iii. Instances of ‘procedural representation”-happens in the lawsuit itself iv. express agreement to be bound by a decision to which one is not a part b. final judgment-question if final for preclusion purposes-do we have to wait for appeals to be finishedno, once entered into the trial court, preclusion applies c. for purposes of the preclusion-sanctions include judgment on the merits B. Difference from Claim preclusion 1) Issue preclusion is narrow(single issue), but deeper (because of ALDEJ) 2) Claim preclusion is wider but more shallow-things litigated and not litigated, so long as part of same claim C. Factors to take into consideration:: efficiency, consistency & fairness (looked @from Parklane case) 1) opportunity to join:a private P Shore couldn’t have joined bc SEC doesn’t want private litigants; thus this discretionary factor did not apply 2) incentive to litigate-did they have an adequate incentive to litigate the first suit; not applicable here, the private suit was filed first; def. knew about second lawsuit 3) new procedural opportunity-scope of discovery, broader discovery can make a difference, can bring up more info…another ex. might have a court that has limited ability to render remedies; in this case no procedural opportunities 4) inconsistent judgments-nothing like that here a. ISSUE PRECLUSION (collateral estoppel) Rule Paragraph: Issue preclusion prohibits a party from putting in issue in subsequent suit facts or questions determined and adjudicated in an earlier case. Issue preclusion does not affect issues or defenses that could have been raised in the 1st lawsuit but were not. The elements are: final judgment (termination on the merits), on the merits (deciding the claims, defenses, sanctions or dismissals), same parties (except non-mutual preclusion (NMP) or privity), and same issue (use four factors of § 27 rest. 2nd, Judgments to determine) which was actually litigated and determined essential to the judgment ONLY INCLUDE THIS IF AT ISSUE (to determine if essential, ask if the losing party has an incentive to appeal on that issue); thus issue preclusion is narrower when compared to CP. It also is different than CP cause it requires that the issue be “actually litigated”. Final Judgment: Final Judgment requires that LS1 be the final decision made, for example a full trial with all appeals exhausted. However, there is a split in the jurisdictions if an appeal is pending. In some juris the judgment is final even if appeal is pending (CP applies) and in other jurirsidction the judgement is not final while an appeal is pending (and preclusive effect is suspended, and a further suit is not barred by CP). On the merits: A court must have jurisidiction to render a final judgment on the merits for the purpose of IP. Examples include a full jury trial, directed verdicts, summary judgments and dismissal with prejudice for failure to prosecute RULE 41b. Also defaults and discovery sanctions are also considered on the merits for IP. (A good example is that civil claims and criminal claims are different issues because of the different procedural standards of proof). However, dismissals for improper venue, lack of SMJ or lack of PJ are considered on the merit for the purposes of IP unless within the same court. Same Parties : The same parties requirement has three aspects: 1. the party must be named and served in LS1; 2. the party must be in privity with the party in LS1 meaning that they were fully and fairly represented in the LS1. For example, if the parties were in successive ownership of property or the parties were in an express agreement to be bound by the outcome of LS1. Thus, a person in privity with a party to LS1 is bound by the judgment even if the person does not have notice of the action and is not served with process or subject to service of process; or 3. if NMP is applied then it allows a new party to invoke issue preclusion against a party who litigated and lost an issue in a prior action where they had a full and fair opportunity to litigate. Non-mutual preclusion paragraph NMP allows a new party to invoke issue preclusion against a party who litigated and lost an issue in a prior action where they had a full and fair opportunity to litigate in LS1. Defensive NMP occurs when a D seeks to prevent a pl from asserting a claim the P has previously had a full and fair opportunity to litigate and lost against another D. (1P and 2Ds). This encourages the P to join all possible Ds in the first action. Offensive NMP involves a new P who seeks to assert a finding from LS1 to impose liability on a D who lost in LS1. (2Ps and 1D). Offensive NMP is discretionary, and the factors courts use to determine whether to apply it are: 1-if P could have joined LS1, then the court may not apply Off. NMP; 2. if D did not have incentives to litigate LS1, then the court may not apply Off. NMP (for example there was no incentive in LS1 because there was little at stake); 3. if there are inconsistent judgments the courts may not apply Off. NMP (See State Farm Fire & Casualty Co v. Century Home (two state farm cases) where the court did not apply Off. NMP because massive tort litigation led to inconsistent judgments on the same issue); if the D lacked procedural opportunities in LS1 then the court may not impose Off. NMP (if the rules were more restrictive in LS1 than LS2, like in an administrative setting where not much discovery is available) (See Parklane – holding that the procedural opportunity to the D in LS2 were unimportant and did not preclude Off. NMP). ** However, despite these factors that may limit Ds liability, NMP tends to favor Plaintiffs who can use it as a sword to impose liability, whereas Ds can only use it defensively as a shield and this may lead to unfair outcomes. Same Issue To determine if the same issue is in question in subsequent lawsuit as in the primary lawsuit § 27 Rest. 2nd, Judgments suggest the following 4 factors: 1. whether the evidence or argument presented overlap as to the issues in the first and the second action; 2. whether the same rule of law applies to the issue in the first action as in the second; 3. whether the discovery in the first action have included the issue in the second action; and 4. whether the claims in the first and the second are related. Actually Litigated and Determined IP requires that the issue be actually litigated and determined, in that the issue must be presented to /or argued before to a judge or jury thus when compared to CP, IP has a stricter standard for its preclusive effect, in that most of the time default judgments, settlements and consent judgments and dismissals do not satisfy this issue. One exception to this rule is that when extreme sanctions are rewarded this will have preclusive effect as to the issue being brought in other courts (for example when there is a serious abuse of discovery). Also when there is a general verdict given by the court in LS1 an issue may not be given preclusive effect in LS2 becaues the court cannot always determine if this particular issue was actually litigated and determined. But if LS1 was a criminal suit then anything decided it it will not be deemed actually determined for the purposes IP, if LS2 is a civil case. (See Parks where after a general verdict was given in LS1 against the P, the court in LS2 did not preclude the issue of liability for P’s later action for injury because it was not clear that the court in LS1 actionally litigated and determined this issue). Essential to the Judgement: IP requires that the issue be essential to the judgment when determining this one should ask if the losting party on the issue has an incentive to appeal on that issue. The Rest. 2nd approach addresses the problem with alternative holdings. Stating that when there are TWO ALTERNATIVE HOLDINGS THAT NEITHER ARE SEEN AS ESSENTIAL TO THE JUDGEMENT UNTIL APPEALED AND AFFIRMED.