Res judicata

Definition

Res judicata translates to "a matter judged." 

Overview

Generally, res judicata is the principle that a cause of action may not be relitigated once it has been judged on the merits. "Finality" is the term which refers to when a court renders a final judgment on the merits.

Res judicata is also frequently referred to as "claim preclusion," and the two are used interchangeably throughout this article. 

Breaking Down the Concept

Claim preclusion can be best understood by breaking it down into two sub-categories:

  1. Bar - a losing plaintiff cannot re-sue a winning defendant on the same cause of action
    1. example: Plaintiff P sues Defendant D on Cause of Action C, but P loses. P may not try for better luck by initiating a new lawsuit against D on C.
  2. Merger - a winning plaintiff cannot re-sue a losing defendant on the same cause of action
    1. example: Plaintiff P successfully sues Defendant D on Cause of Action C. P may not again sue D on C to try to recover more damages.

Damages

As illustrated in the merger example, a claim can have finality, even when the judge does not award damages. Thus even if a winning party believes he deserves more in damages than he received (or if he received no damages, he believes he deserves some damages), he is not able to sue on the same cause of action. 

Policies of Preclusion 

There is a litany of cases dealing with res judicata. Courts, often uphold the doctrine, and typically justify res judicata based on several polices:

  1. promoting efficiency
  2. promoting fairness
  3. avoiding inconsistent adjudication

Does Claim Preclusion Apply for Adjudication Not "On The Merits?" 

"On the merits" refers to a judgment, decision, or ruling that a court will make based on the law, after hearing all of the relevant facts and evidence presented in court. Claim preclusion historically only referred to cases decided on the merits. However, the modern view taken by most jurisdictions is that a dismissal based on a failure to state a claim is also claim preclusive. Rule 12(b)(6) of the Federal Rules of Civil Procedure deals with a dismissal based on a failure to state a claim. 

According, however, to Rule 41(b) of the Federal Rules of Civil Procedure, the following are not claim preclusive and are not considered an adjudication "on the merits":

  1. a lack of jurisdiction
  2. improper venue
  3. failure to join a party when required to do so under Federal Rule of Civil Procedure 19 (aka "Mandatory Joinder")
  4. voluntary dismissals
  5. if the dismissal order does not state otherwise (i.e. a decision made "without prejudice" would not be claim preclusive")

Many jurisdictions also find that res judicata applies to a "dismissal for a failure to prosecute." This phrase refers to an involuntary dismissal of a plaintiff's claims when the plaintiff fails to comply with the court's orders in some ways. These dismissals, however, are highly reviewable by appellate courts to ensure that the trial court was not abusing its discretion. 

Counterclaims

Generally, claim preclusion applies to counterclaims. Rule 13 of the Federal Rules of Civil Procedure governs counterclaims. 

The rules regarding unasserted counterclaims, however, have some nuance. While an unasserted permissive counterclaim is not precluded, an unasserted compulsory counterclaim, is precluded. There are 2 exceptions to this rule:

  1. The defendant's compulsory counterclaim may not be precluded if he was not aware that he could bring the compulsory counterclaim (Dindo v. Whitney 1971)
  2. If the defendant wins an affirmative defense, then the defendant can counterclaim on the same facts 

Some jurisdictions also follow the "Common Law Compulsory Counterclaim Rule." This rule states that if "Party A" fails to assert an available counterclaim during "Trial A," then "Party A" is precluded from suing in "Trial B" if if granting relief of that action would nullify the judgment from "Trial A."

Alternative Techniques to Preclude Another Party’s Actions 

In addition to bar and merger, there are two other techniques that courts look to which have the same effect on a cause of action as claim preclusion:

  1. Estoppel
    1. "Party A" cannot litigate a position when that position is inconsistent with "Party A's" earlier conduct which "Party B" has detrimentally relied upon
  2. Judicial estoppel
    1. "Party A" cannot unfairly take factual positions in litigation that are inconsistent with previous positions that Party A had taken in prior judicial proceedings

Claim Preclusion and Adverse Parties 

In judicial proceedings, claim preclusion only applies to adverse parties, it does not apply to co-parties (ex: a party that has been joined via Federal Rule of Civil Procedure 19 or Federal Rule of Civil Procedure 20). Contrast this rule with collateral estoppel (also known as "issue preclusion"), which applies to both co-parties and adverse parties. 

Exceptions to res judicata