Claim Preclusion (res judicata)

3-parts of claim preclusion:
  • 1. Actions #1 and #2 involve same claim
  • 2. Same parties or "privies" (relationship between parties are strong or unusual enough to bind 2nd parties--1st were representative of 2nd)
  • 3. Action #1 resolved on merits
1. How do we know if the two actions involve the same claim?
  • Different jurisdictions answer “how we know the claim is the same” differently.
  • What counts as related transactions?
    • Determined by how fit together due to time/space/etc. (Yeazell, pp. 694-695).
      • Rule 15c -- relation back... part of same transaction/occurrence (i.e., similar in various settings, due to efficiency.)
      • OR evidentiary approach (Illinois), Yeazell, p. 662, second from bottom paragraph (NOT from Restatement).
  • Permissive counterclaims:
    • Have to have an independent basis for subject matter jurisdiction.
      • Part of different transaction.
  • Compulsory counterclaims:
    • Part of same transaction, must be brought now or will be precluded.
    • Rule 13 forces parties to raise certain claims chosen by opponents or lose them.
      • A result of balancing interests.
      • But ONLY if REQUIRED to bring if you CAN bring that claim (federal questions, etc.)
2. Involve same parties or their "privies."
  • Privity not that interesting... says Professor Amar...
  • But were you or your agent really present in the previous lawsuit?
    • Employee/employer
    • Insurer/Insured
3. Resolved on Merits?
  • Lack of jurisdiction: NO
  • Dismissal for failure to prosecute? Complicated...
Merrel Lynch v. Gargallo (sp?)
  • Merril Lynch sues Gargallo in state court for money owed.
  • Later Gargallo files a lawsuit in federal court resurrecting securities violations.
    • Look to Ohio law to see impact of 1st judgment on 2nd.
  • Ohio would treat second claim as same as counterclaim in first lawsuit.
  • (No issue about parties as they are the same.)
  • But dismissal on the merits in 1st?
    • YES: otherwise no one would care about Ohio discovery rules.
      • Sanctions must be given weight.
    • So if Ohio would have blocked, federal courts must as well.
      • BUT Ohio NEVER could have processed securities claim in the first place!
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