Claim Preclusion Doctrine Offers Escape from Repeated Claims
Written By David Duran
March 24, 2020

By Scott Kalter

Typically, when both the plaintiff and the defendant agree to a settlement, the defendant is released from all claims. The release is intended to put an end to any further litigation. 

However, on occasion, a plaintiff may attempt to get around this final release through a legal loophole. This could be done by filing two cases, one in state court and another in federal court–then when one of the cases is settled, the plaintiff uses the other case to continue litigating the same issue. Alternatively, a plaintiff could argue that claims against someone involved in the case had not been fully resolved.

To prevent defendants from battling never-ending litigation and incurring unnecessary legal expenses, it may be in the defendants’ interest to consider using Res Judicata. Res Judicata, or “claim preclusion,” is a legal doctrine that prohibits litigating the same claim more than once. This legal doctrine is recognized by both federal and California law. This term for “a matter already judged” can refer to two concepts. First, in civil law legal systems, a case where there has been a final judgement is no longer subject to appeal. Secondly, Res Judicata can refer to the legal doctrine meant to prevent re-litigation of a claim between the same parties.

This doctrine is meant to stop injustice to the parties involved that should have finished but also, it is meant to inhibit wasting resources, time, and money in the court system. Res Judicata also ensures future judgements will not contradict past ones, and stops litigants from multiplying judgements.

Res Judicata can be enforced by a judge who is presented with a suit that is identical, or largely similar, to an earlier case, or it can be implemented by a defendant to stop the plaintiff from initiating another action versus the same defendant.

To successfully use Res Judicata, a defendant must prove:

  • The first claim involves the same parties or parties in privity;
  • It is the same claim, incident, or cause of action; and
  • A final judgement on the merits was issued.

First, the defendant must establish that the parties involved in the current case are identical to the parties who litigated the first action. If this is not the case, defendants can also demonstrate that the parties are connected and share the same interests or that the first party was controlled by the second party. This can sometimes occur in insurance and employment cases.  

Then, many courts will use a “transaction or occurrence” test to determine if the claims might have been raised in previous litigation.

Lastly, a defendant must prove that the original action was judged on the merits of the case and whether the judgement was a final judgement. Final judgement does not occur when the case is settled by the parties on their own or when the judge makes a determination that does not resolve the case based on the facts and evidence. This could mean a case was dismissed because of a technicality, rather than on the merits.

This principle does not restrain the appeals process because an appeal is considered a part of the original lawsuit and is the appropriate way to challenge a judgement, rather than starting a new trial, which is called a “collateral attack”.

Whether federal or California principles of claim preclusion apply depends on where the final judgment was issued upon which the defendant is basing their claim preclusion argument. If the final judgment was issued in federal court, then federal legal principles of claim preclusion apply.  If the final judgment was issued in California state court, then California legal principles of claim preclusion apply. 

The elements for federal claim preclusion differ slightly from California state law.  Federal claim preclusion treats a claim or cause of action as being singular if they all arise from the same sphere of operative facts or single core of operative facts.  (See Gamble v. General Foods Corp. (1991) 229 Cal.App.3d 893, 898.) 

On the other hand, California state law defines a claim under the primary rights theory.  Under California law, a cause of action consists of one primary right possessed by the plaintiff. For example, a plaintiff may have multiple legal theories for which they hope to gain relief for an injury in a car accident. However, the car accident injury is the plaintiff’s one primary right. A plaintiff cannot fully litigate a negligence claim against a defendant and then bring a new lawsuit against that same defendant based on a different legal theory after a final judgment was issued in the first lawsuit. 

Properly utilizing Res Judicata works to maintain the court’s efficiency, promote judicial fairness, and create a finality for the case in question to avoid inconsistencies. When used effectively, it is a powerful legal defense which can stop a meritless lawsuit in its tracks and save a tremendous amount of unnecessary litigation expenses. 

Scott Kalter is an attorney who practices liability defense and municipal law at the law firm of Silver & Wright LLP in their Irvine Office. He is also experienced in code enforcement, receiverships, civil rights litigation, nuisance abatement, municipal law, and criminal prosecution.

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