Res judicata and collateral estoppel, also known, respectively, as claim preclusion and issue preclusion, are two separate and distinct affirmative defenses.
As explained the the United States Supreme Court in Lawlor v. National Screen Service Corp., 349 U.S. 322:
Under the doctrine of res judicata, a judgment on the merits in a prior suit involving the same parties or their privies bars a second suit based on the same cause of action. Under the doctrine of collateral estoppel, on the other hand, such a judgment precludes relitigation of issues actually litigated and determined in the prior suit, regardless of whether it was based on the same cause of action as the second suit.
(Id. at 326-27.)
REFERENCE DESK
Lucido v. Superior Court, 51 Cal.3d 335 (1990):
The doctrine of collateral estoppel is one aspect of the concept of res judicata. In modern usage, however, the two terms have distinct meanings. The Restatement Second of Judgments, for example, describes collateral estoppel as “issue preclusion” and res judicata as “claim preclusion.” (Rest.2d Judgments, § 27.)
In re Mannie, 258 B.R. 440 (Bankr. N.D. Ca. 2001):
The doctrines of res judicata and collateral estoppel are similar but distinct. Res judicata, which is sometimes referred to as claims preclusion, precludes the same claim between the same parties from being tried a second time. For res judicata to apply, the following requirements must be met:
1) The second action must involve the same claim that was involved in the prior action;
2) A final judgment must have been obtained in the first action;
3) Both actions must involve or have involved the same parties or their privies; and
4) The court that rendered the prior judgment must have had jurisdiction to do so.
Collateral estoppel, which is sometimes referred to as issue preclusion, on the other hand, precludes a second trial of an issue that was necessarily determined in the prior action between the same parties even if the claim that is asserted in the second action is different than that asserted in the first. Under California law, the application of collateral estoppel requires that:
1) The issue sought to be precluded must be identical to the issue presented in the prior action;
2) The issue must have been actually litigated in the prior action;
3) The issue must have been decided in the prior action;
4) The judgment in the prior action must be a final judgment on the merits; and
5) The party against whom preclusion is sought must be the same party as in the prior action.
Meyer v. State, Dept. of Revenue, Motor Vehicle Div., 143 P.3d 1181 (Colo. 2006):
Terminology
The [Colorado] supreme court now uses the terms “claim preclusion” and “issue preclusion” instead of “res judicata” and “collateral estoppel.” Although the terms have been used interchangeably in previous opinions, use of the phrases ‘res judicata’ and ‘collateral estoppel’ can lead to confusion because ‘res judicata’ is commonly used as an overarching label for both claim and issue preclusion.
Although the parties and the district court analyzed the preclusive effect of the county court’s ruling as “res judicata,” we will use the terms “claim preclusion” and “issue preclusion” in our discussion.
Claim Preclusion
Claim preclusion bars relitigation of claims or issues which were or could have been raised in a prior suit between the same parties. Claim preclusion protects litigants from the burden of relitigating an identical issue with the same party or his privy and promotes judicial economy by preventing needless litigation.
Claim preclusion applies in a second judicial proceeding when (1) the first judgment is final; (2) the subject matter is identical; (3) the claims for relief are identical; and (4) the parties are identical or a party in the second judicial proceeding was in privity with a party in the first one. In addition, the party against whom claim preclusion is sought must have had a full and fair opportunity to litigate the issue in the first proceeding.
Issue Preclusion
Issue preclusion bars relitigation of a legal or factual matter already decided in a previous proceeding. Similar to claim preclusion, issue preclusion requires that the precluded issue be identical to the issue actually and necessarily decided at a previous proceeding. There must be a final judgment on the merits at the prior proceeding, the parties in the two proceedings must be identical or in privity, and the party against whom preclusion is sought must have had a full and fair opportunity to litigate the issue in the first proceeding.
When the first proceeding’s purposes and procedures are significantly different from those in the second proceeding, then the fourth element of issue preclusion has not been satisfied because the party against whom the doctrine is asserted did not have a full and fair opportunity to litigate the issue in the prior proceeding.