res judicata

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Res judicata is a principle most used in civil litigation. Directly translated, res judicata means “a matter judged.” Specifically, the res judicata principle indicates that if there is a final judgment based on merits, then another plaintiff cannot relitigate the same matter for the same cause of action. The court uses the term “finality” to indicate a judgment that is based on merits and is final. In the civil law context, there are two categories of preclusion: 

  • Issue preclusion 
  • Claim preclusion
    • Claim preclusion is often referred to as res judicata.

To be adjudicated based on merits refers to the ruling, judgment, or decision that the court makes after all the proper procedures of the trial. The court must also review and evaluate all the relevant materials and evidence regarding the trial at hand. Traditionally, res judicata only applied to cases that the court decided based on the merits. Nevertheless, the modern trend among most jurisdictions is that res judicata also applies to cases where the dismissal stems from the failure to state a claim. The Federal Rules of Civil Procedure Rule 12(b)(6) states the standard for a dismissal based on the failure to state a claim.

Rule 41(b) provides further guidance on when res judicata is not applicable. The following instances are not considered adjudication based on merits: a lack of jurisdiction, improper venue, the failure to join a party when required under the Mandatory Joinder Rule (Federal Rules of Civil Procedure 19), voluntary dismissals, and if the dismissal order does not state otherwise (e.g., it would not be claim preclusive for a decision that is made without prejudice). In most jurisdictions, res judicata also applies when the dismissal happens for a failure to prosecute. When the plaintiff does not comply with the court’s order in the specific manner, the court may involuntarily dismiss the plaintiff’s claim as a dismissal for a failure to prosecute.

Res judicata typically applies to counterclaims as well. Federal Rules of Civil Procedure Rule 13 governs the counterclaim procedures. However, one must be careful when reading the rules on unasserted counterclaims because the rule differs for permissive and compulsory counterclaims. While unasserted compulsory counterclaims are precluded, unasserted permissive counterclaims are not precluded. Furthermore, two exceptions exist for these rules:

  • If the defendant was unaware of the fact that they could bring the compulsory counterclaim, then the compulsory counterclaim of the defendant may not be precluded (Dindo v. Whitney).
  • If the defendant wins on an affirmative defense, the defendant may counterclaim based on the same facts.

A handful of jurisdictions follow the “Common Law Compulsory Counterclaim Rule.” The rule states that Party A is precluded from relitigating against the same party for the same cause of action if Party A failed to assert a counterclaim that was available in their initial trial and the relief granted from the assertion would have nullified the initial judgment from the initial trial.

There are two sub-categories of res judicata: bar and merger.

A bar refers to the prohibition of where a plaintiff lost the case and relitigating the same cause of action against the defendant who won the case.

  • For instance, imagine that Plaintiff A sues Defendant B based on a breach of contract claim, but A loses the case. Then, Plaintiff A cannot just sue B again in a new lawsuit for the same breach of contract claim, hoping for a different outcome.

On the other hand, a merger refers to an instance where the law prohibits a plaintiff who won the case from suing the same cause of action as the same defendant.

  • For example, imagine that Plaintiff A sues Defendant B on a breach of contract claim and wins. Then, Plaintiff A cannot sue B again in a new lawsuit for the same breach of contract claim, hoping to win a larger amount of recovery damages.

As is evident in the merger situation, the cause of action can be final even when the court does not award monetary compensation for recovery damages. Consequently, even if the winning party believes that they deserve more compensation for the harm they have received, they cannot relitigate the same defendant for the same cause of action.

Res judicata applies to adverse parties only for any judicial proceedings. Therefore, the co-parties (parties joined under either Federal Rules of Civil Procedure 19 or 20) cannot invoke res judicata. However, the principle of res judicata differs from issue preclusion (“collateral estoppel”), and issue preclusion may apply to both adverse parties and co-parties. Courts endorse the res judicata principle based on these main policy reasons: encouraging efficiency and fairness and avoiding inconsistent adjudication.

Finally, there are alternative techniques that may serve to preclude the other party’s actions other than the bar and merger. The courts may look into estoppel and judicial estoppel to prevent another party from litigating on the same cause of action.

  • Estoppel: when Party A’s position is inconsistent with the earlier conduct or stance of the same party and Party B has relied upon that earlier conduct of Party A detrimentally.
  • Judicial estoppel: if Party A has taken a factual position unfairly, and that position is inconsistent with the position Party A took in a prior judicial proceeding, then Party A is prohibited from taking that factual position.

 [Last updated in March of 2024 by the Wex Definitions Team]