Chapter 9

FORMER ADJUDICATION

ChapterScope
This Chapter examines the rules that prevent re-litigation of claims and issues that have already been contested (or, in some situations, could have been contested) in an earlier lawsuit. The most important concepts in this Chapter are:

• “Res judicata”: There is a set of rules that prevents re-litigation of claims and issues; the set is sometimes collectively called the doctrine of “res judicata.” There are two main categories of rules governing re-litigation: the rules of “claim preclusion” and the rules of “collateral estoppel.”
• Claim preclusion: The rules of “claim preclusion” prevent a claim (or “cause of action”) from being re-litigated. They break down into two sub-rules:
  • Merger: Under the rule of “merger,” if P wins the first action, his claim is “merged” into his judgment. He cannot later sue the same D on the same cause of action for higher damages.
  • Bar: Under the doctrine of “bar,” if P loses his first action, his claim is extinguished, and he is barred from suing again on that cause of action.
• Collateral estoppel: The rules of “collateral estoppel” prevent re-litigation of a particular issue of fact or law. When a particular issue of fact or law has been determined in one proceeding, then in a subsequent proceeding between the same parties, even on a different cause of action, each party is “collaterally estopped” from claiming that that issue should have been decided differently than it was in the first action. A synonym for “collateral estoppel” is “issue preclusion.”
  • Issues covered: For an issue to be subject to collateral estoppel, three requirements concerning that issue must be satisfied: (1) the issue must be the same as one that was fully and fairly litigated in the first action; (2) it must have been actually decided by the first court; and (3) the first court’s decision on this issue must have been necessary to the outcome in the first suit.
  • Persons who can be estopped: Generally, only the actual parties to the first action can be bound by the finding on an issue.
  • Persons who can benefit from estoppel: But even one who was not a party to the first action (a “stranger to the first action”) may in some circumstances benefit from estoppel. That is, the stranger to the first action may assert in the second suit that her adversary, who was a party to the first action, is collaterally estopped from re-litigating an issue of fact or law decided in that first action. (Courts are more willing to allow the “defensive” use of collateral estoppel by a stranger than they are to allow the “offensive” use. “Offensive” use refers to use by a stranger who is a plaintiff in the second action; “defensive” use refers to use by a stranger who is a defendant in the second action.)