Issue preclusion problems: explanations

  1. Issues versus claims I. P sues D in Homeria state court for negligence. D doesn’t appear and default judgment is later entered against him. P then files an action in Bartkansas state court to enforce the judgment. At that point, D objects to the merits and to personal jurisdiction from the earlier claim. P argues that preclusion principles prevent relitigation of both the merits and of personal jurisdiction. Is P correct?

Discussion. P is only partially correct. The default judgment of Homeria (the rendering court) was a final judgment on the merits of P’s negligence action. If the default judgment was valid, then full faith and credit require that the second state enforce the first judgment. Was the default judgment valid? Here, D objected to personal jurisdiction for the first time in the enforcing court (Bartkansas). Because the issue of personal jurisdiction was not actually litigated in the Homeria proceedings, D may litigate it now. Thus, if the enforcing court (Bartkansas) finds that the rendering court (Homeria) did not have personal jurisdiction over D, then it will refuse to enforce the judgment as invalid. But if the enforcing court finds that the rendering court did have personal jurisdiction, then it’s too late for D to challenge the merits of the negligence claim. The merits will be barred by claim preclusion.

2. Issues versus claims II. P sues D in Homeria state court for negligence. D appears and challenges personal jurisdiction. The Homeria court holds that it has personal jurisdiction over D. D also loses on the merits and the court enters a final judgment against him. P then files an action in Bartkansas state court to enforce the judgment. At that point, D objects to the merits and personal jurisdiction in the earlier claim. P argues that preclusion principles prevent relitigation of the merits and of personal jurisdiction. Is P correct?

Discussion. Yes. Claim preclusion bars relitigation of the negligence claim. Issue preclusion bars relitigation of the issue of personal jurisdiction. The issue was actually litigated and decided between the parties in a final judgment on the merits and the issue was necessary to the court’s judgment. D can’t attack personal jurisdiction now.

Posted Apr. 23, 2015