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self-study / Civil Practice

Jan. 3, 2019

Claim preclusion across jurisdictions: Navigating the labyrinth

Ryan P. McCarl

Rushing McCarl LLP

Phone: (310) 896-5082


Ryan is an attorney and writer based in Los Angeles.


Plaintiffs normally get only one chance to litigate their claims against a defendant. Claim preclusion -- also known as res judicata ("matter adjudicated") -- is the primary mechanism by which courts enforce this "one bite at the apple" principle. A defendant raising the defense asserts that the plaintiff's claim is barred because the plaintiff sued the same defendant for the same injury in an earlier suit, and that suit resulted in a final judgment on the merits.

Unfortunately for 1Ls, bar examinees, and litigants, claim preclusion can be complex. Its boundaries are fuzzy. It is one of the few remaining common law procedural doctrines with no statutory basis in either California or federal law. As with other rules that can cause plaintiffs to forfeit otherwise meritorious claims on procedural grounds, courts have developed equitable exceptions to the doctrine and defined it in ways that exclude many cases.

Much of the confusion arises from courts' use of ambiguous, vague and Latinate terms in their preclusion opinions. "Claim" is most often used to describe a legal theory or cause of action (e.g., a "fraud claim" as opposed to a "negligent misrepresentation claim" based on the same facts). But the term has a specialized meaning in preclusion law, albeit a meaning that is difficult to pin down. The concept of a "claim" is particularly unclear in California, where courts have hewed to the arcane definition of "claim" as a plaintiff's right to recover for violation of a single "primary right" -- another concept that eludes coherent definition.

Still, the term "claim preclusion"is an improvement on "res judicata." The latter once encompassed both claim preclusion and the distinct doctrine of issue preclusion -- and no lawyer has ever described the term "res" as unambiguous.

The California Court of Appeal recently considered how claim preclusion interacts with even denser procedural thickets: sovereign immunity and the relation between state and federal courts. Guerrero v. California Department of Corrections and Rehabilitation, 28 Cal. App. 5th 1091 (2018). The scenario was as follows:

The California Department of Corrections rejected two job applications submitted by Victor Guerrero, a U.S. citizen of Mexican origin who was brought to the United States by his parents at age 11. The department refused Guerrero's application because he admitted having used a false Social Security number in order to work between ages 15 and 27. (The federal government took more than 10 years to approve Guerrero's application for legal status.)

Guerrero sued the department in federal court. His state law damages claims were barred by 11th Amendment sovereign immunity, so the district court dismissed those claims without prejudice and said that Guerrero could bring them in state court. Guerrero continued to litigate in federal court and obtained a final judgment granting him equitable relief. He then sued on the damages claims in San Francisco County Superior Court.

In state court, the department argued that Guerrero's claims were barred by claim preclusion because the federal action had resulted in a final judgment on the merits, and that judgment barred later suits on the same "primary right" to be free from discrimination. The superior court agreed and dismissed Guerrero's claims. Was it correct?

The answer is no, and the Court of Appeal reversed.

Guerrero clarifies two rules that earlier California decisions had left muddled. First, the preclusive effect of a federal court judgment is decided by reference to federal preclusion law. Second, an earlier judgment does not bar a later suit on the same claim if, in the earlier case, the plaintiff was jurisdictionally barred from obtaining the relief sought. (A few caveats and nuances apply, but these are the basic rules.)

Unfortunately, the Guerrero opinion -- though well-reasoned and correct -- does not clearly articulate the legal framework litigants should use to decide whether claim preclusion applies. I attempt to do so as painlessly as possible in the summary below. The analysis I suggest necessarily overlooks exceptions and nuances, but it suffices for most cases.

When, in broad terms, does claim preclusion apply?

Defendants should think about whether claim preclusion applies if the current (later) case looks suspiciously similar to an earlier case brought by the same plaintiff. Claim preclusion can bar repetitive litigation. The doctrine, broadly summarized, requires two successive lawsuits involving (1) the same parties and (2) the same claim where (3) the first lawsuit resulted in a final judgment.

The doctrine's complexity arises because its elements can sometimes be satisfied by facts that are "close enough." Two parties may be "close enough" to be treated as identical, and two events can be treated as similar enough to give rise to a single claim. But most cases do not involve such difficulties. Attorneys need not explore every element of claim preclusion -- much less the doctrine's toughest edge-cases -- if any of its elements are missing. Litigants should therefore begin their analysis by analyzing the easiest questions that could falsify one of the elements, thereby disposing of the entire defense. I suggest tackling the five questions below in order. The goal is to "short-circuit" the problem and render further research and analysis unnecessary.

Q1: Can claim preclusion be ruled out early? Claim preclusion requires two or more lawsuits featuring similar parties. If your case does not relate to a prior lawsuit, or if the earlier lawsuit involved completely different parties or unrelated events, you are excused from further analysis.

Q2: Did the first lawsuit end in a final judgment on the merits? Claim preclusion applies only if the earlier lawsuit ended in a valid final judgment "on the merits." Do not be misled by the term "merits," however; it has nothing to do with the substantive merits of the plaintiff's case. Examples of final judgments on the merits include orders granting summary judgment, sustaining a demurrer without leave to amend, entering a final class settlement to which the plaintiff is bound as a class member, or dismissing a plaintiff's claims with prejudice following an arbitration award or even a missed deadline that the court refuses to forgive.

Most lawsuits end with a final judgment that qualifies as "on the merits" for purposes of claim preclusion. Examples of final judgments not on the merits include a dismissal without prejudice and a dismissal for lack of personal or subject-matter jurisdiction. In Guerrero, the earlier federal case indisputably ended in a final judgment on the merits. The essential question was not whether the federal judgment was final or "on the merits," but rather whether that judgment encompassed Guerrero's state law causes of action even though the federal court had dismissed those without prejudice.

Q3: Are the parties to the second lawsuit the same as, or "in privity" with, the parties bound by the earlier judgment? Suppose a plaintiff sues a corporation and wins but is dissatisfied with the damages award. Self-evidently, the plaintiff does not get a do-over; it cannot sue the same corporation again on the same grounds. May the plaintiff instead sue one of the corporation's parents, wholly owned subsidiaries, or employees?

The answer, unsurprisingly, is no. These persons would likely be deemed "in privity" (another incoherent term) with the first defendant. This sense of "privity" is broader than contractual privity. It merely expresses a legal conclusion that the court has found the parties sufficiently close to justify a departure from the usual requirement of identity between the parties in the later and earlier cases. See Taylor v. Sturgell, 553 U.S. 880, 892-93 (2008).

Q4: Which jurisdiction's law of claim preclusion applies? A choice-of-law problem arises if, as in Guerrero, the plaintiff brings the second lawsuit in a different jurisdiction. Preclusion doctrine is mostly uniform across jurisdictions. But if you must argue about claim preclusion, which jurisdiction's cases should you cite?

The short answer is that courts apply the preclusion law of the forum whose court rendered the earlier judgment. The preclusion law of the second forum -- that of the court asked to decide the claim preclusion issue -- is irrelevant. There are three possible scenarios:

1. If the earlier judgment was rendered by a state court, that state's preclusion law applies. State courts are bound by the full faith and credit clause (U.S. Const. Art. IV, Section 1) to give full effect to the judgment of courts in other states. Federal courts are required to do the same under the Full Faith and Credit Act (28 U.S.C. Section 1738).

2. If the earlier judgment was rendered by a federal court having federal question jurisdiction, federal preclusion law applies. State courts are bound by the supremacy clause to apply the federal common law of preclusion as articulated by the Supreme Court. Semtek Intern. Inc. v. Lockheed Martin Corp., 531 U.S. 497, 507 (2001).

3. If the earlier judgment was rendered by a federal court having diversity jurisdiction, federal preclusion law applies, but federal law calls for applying the preclusion law of the state in which the federal court sits. See Semtek, 531 U.S. at 508.

California and federal claim preclusion doctrines are similar in most respects. The only difference -- notable but rarely dispositive -- is in how they define "claim."

Q5: Does the later suit involve the same "claim" as the earlier suit? The "same claim" question is the trickiest part of claim preclusion and should therefore be saved for last.

"Claim" means something broader than a legal theory, cause of action, or remedy. Plaintiffs cannot sue for breach of contract in Case #1 and then later sue the same defendant on the same facts for fraud in Case #2.

Federal courts define "claim" as recommended in Section 24 of the Restatement (Second) of Judgments. Under this "transactional" approach, two causes of action comprise a single "claim" if they arise from the same transaction, event or series of related transactions or events. This criterion is sometimes expressed as a requirement that the earlier and later cases share a "common nucleus of operative fact." If federal preclusion law governs and there is doubt as to whether the later case involves the same "claim" as the earlier case, parties should compare the material facts alleged in the first case with those alleged in the second case. (An allegation is material if its proof would satisfy one or more elements of a cause of action).

California courts, by contrast, define "claim" by reference to an antiquated and confusing "primary rights" approach. Under the "primary rights" theory, a claim arises when a defendant violates a single "primary right" of the plaintiff. A violation of a "primary right" can be thought of as an injury of a certain type.

In most cases, a single injury or a single transaction (or a series of closely related injuries or transactions) will give rise to a single "claim" under both California and federal preclusion law. In rare cases, however, a defendant's malfeasance could give rise to a single claim under the federal "transaction or occurrence" test but several claims under the California "primary rights" test. For example, if a creditor simultaneously defrauded and published a defamatory statement about a debtor, the creditor would cause economic and reputational injury to the plaintiff. This would violate the plaintiff's right to be free from fraud as well as his or her right to be free from defamation. In theory, this violation of two distinct rights might enable the plaintiff to sue the same defendant twice in California without having the second claim barred by claim preclusion. (Note that the second suit wastes judicial resources because the plaintiff could have raised these claims in a single suit.)

The main effect of the "primary rights" doctrine is to sow confusion by exaggerating the differences between federal and state claim preclusion. No light is shed on the meaning of "claim" by defining it in reference to an equally vague concept of "primary rights." A bright-line definition of "claim" is impossible, but the federal and Restatement formulations have at least the virtue of relative simplicity. The persistence of the primary rights doctrine in California illustrates Justice Oliver Wendell Holmes' dictum that the "life of the law has not been logic: it has been experience." Holmes, "The Common Law" (1881).

The "primarily rights" doctrine had no bearing on the outcome of the Guerrero case -- the Department of Corrections' insistence to the contrary notwithstanding. The corrections department denied two of Guerrero's job applications for the same reason before Guerrero filed his federal complaint. Federal courts would likely deem these two denials a "series of connected transactions" giving rise to a single claim. Restatement (Second) of Judgments Section 24. California courts would likewise deem them violations of a single "primary right" to be free from employment discrimination. Either way, they should be treated as a single claim to be litigated in one lawsuit, not in two successive lawsuits, because both relate to the same conduct and occurred before Guerrero filed his complaint.

Litigants should be skeptical when an opponent claims that some aspect of California law is fundamentally different from the law of other jurisdictions. In Guerrero, the court spent seven pages explaining that federal law determines the preclusive effect of federal judgments -- only to conclude that "claim preclusion does not apply here under either federal or California law." In most cases, it will be clear whether or not claim preclusion applies before reaching the nuances of the "same parties" or "same claim" requirements.


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