Res Judicata

The doctrine of res judicata, or claim preclusion, prevents relitigation of the same cause of action in a second suit between the same parties or parties in privity with them.   “A final judgment on the merits in a prior action is conclusive between the same parties in a subsequent action involving the same subject matter. Res judicata bars not only the reopening of the original controversy, but also subsequent litigation of all issues which were or could have been raised in the original suit.”  Alpha Mechanical, Heating & Air Conditioning, Inc. v. Travelers Casualty & Surety Co. of America, 133 Cal. App. 4th 1319, 1328 (2005).

The principle underlying the rule of res judicata/claim preclusion is that a party who once has had a chance to litigate a claim before an appropriate tribunal usually ought not to have another chance to do so.  The doctrine is designed to “minimize the expense and vexation attending multiple lawsuits, conserve judicial resources, and foster reliance on judicial action by minimizing the possibility of inconsistent decisions.”  Matrix IV, Inc. v. American Nat. Bank and Trust Co. of Chicago, 649 F.3d 539, 547 (7th Cir. 2011); see also McGruder v. B&L Const. Co., Inc., 331 So.2d 257, 259 (Ala. 1976) (“The underlying principle of res judicata or estoppel by judgment is based upon public policy and necessity, because it is to the interest of the state that there should be an end to litigation, and that the individual should not be vexed twice for the same cause.”)

Res judicata is generally asserted as an affirmative defense.  It can be asserted through an answer to the complaint and/or through a pleading motion (motion to dismiss/demurrer), “so long as (i) the facts establishing the defense are definitively ascertainable from the complaint and the other allowable sources of information, and (ii) those facts suffice to establish the affirmative defense with certitude.” Rodi v. S. New Eng. Sch. of Law, 389 F.3d 5, 12 (1st Cir.2004).

To succeed on the affirmative defense of res judicata, a defendant must establish the following three elements:

  1. A prior final judgment on the merits by a court of competent jurisdiction;
  2. Identity of parties or those in privity with them; and
  3. A second action based on the same claims as were raised or could have been raised in the first action.

Res judicata requires the defendant that the prior litigation was terminated by a final judgment on the meritsHydranautics v. FilmTec Corp., 204 F.3d 880, 888 (9th Cir. 2000).

“The judgment in the first suit precludes a second action by the parties and their privies on matters actually litigated and on causes of action or defenses arising out of the same subject matter that might have been litigated in the first suit.” Gracia v. RC Cola–7–Up Bottling Co., 667 S.W.2d 517, 519 (Tex.1984).  Dismissal based on lack of subject-matter jurisdiction, for example, is not judgment on the merits.  Cook v. Peter Kiewit Sons Co., 775 F.2d 1030, 1035 (9th Cir. 1985).

For res judicata to apply, the parties to the current lawsuit must be the same as those in the prior proceeding or in privity with the parties to the prior proceeding.  “People can be in privity in at least three ways: (1) they can control an action even if they are not parties to it; (2) their interests can be represented by a party to the action; or (3) they can be successors in interest, deriving their claims through a party to the prior action.” Amstadt v. United States Brass Corp., 919 S.W.2d 644, 653 (Tex. 1996).

Finally, identical issues do not have to be raised in both the first and the second lawsuit for the preclusive effects of res judicata to apply.  “Instead, the test is whether the claim of recovery asserted in the latter action arises out of all or any part of the transaction, or series of connected transactions” from which the earlier action arose.”  Hamed v.  JPMorgan Chase Bank, N.A., No. 13-5833 (E.D. La. Feb. 4, 2014).


Landor v. Lafayette Consol. Gov’t, 126 F. Supp. 3d 761 (W.D. La. 2015):

The Tenth Circuit explained the principles underlying res judicata as follows:  A plaintiff’s obligation to bring all related claims together in the same action arises under the common law rule of claim preclusion prohibiting the splitting of actions.  Critically, that doctrine requires a plaintiff to join all claims together that the plaintiff has against the defendant whenever during the course of the litigation related claims mature and are able to be maintained. Thus, even if an additional claim does not mature until well after the initial complaint has been filed, the plaintiff nevertheless must seek to amend the complaint to add additional claims as a compulsory claim when the additional claim can be brought.

One major function of claim preclusion, then, is to force a plaintiff to explore all the facts, develop all the theories, and demand all the remedies in the first suit.  When a valid and final judgment rendered in an action extinguishes the plaintiff’s claim, the claim extinguished includes all rights of the plaintiff to remedies against the defendant with respect to all or any part of the transaction, or series of connected transactions out of which the action arose.  The transaction is the basis of the litigative unit or entity which may not be split.

Test Masters Educational Services, Inc. v. Singh, 428 F.3d 559, 571 (5th Cir. 2005):

The rule of res judicata encompasses two separate but linked preclusive doctrines: (1) true res judicata or claim preclusion and (2) collateral estoppel or issue preclusion.  Claim preclusion, or res judicata, bars the litigation of claims that either have been litigated or should have been raised in an earlier suit.  The test for res judicata has four elements: (1) the parties are identical or in privity; (2) the judgment in the prior action was rendered by a court of competent jurisdiction; (3) the prior action was concluded by a final judgment on the merits; and (4) the same claim or cause of action was involved in both actions.  In order to determine whether both suits involve the same cause of action, this Court uses the transactional test.  Under the transactional test, a prior judgment’s preclusive effect extends to all rights of the plaintiff with respect to all or any part of the transaction, or series of connected transactions, out of which the original action arose. What grouping of facts constitutes a “transaction” or a “series of transactions” must be determined pragmatically, giving weight to such considerations as whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a unit conforms to the parties’ expectations or business understanding or usage.  If a party can only win the suit by convincing the court that the prior judgment was in error, the second suit is barred.  The critical issue is whether the two actions are based on the “same nucleus of operative facts.”

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