Claim Versus Issue Preclusion

Claim Versus Issue Preclusion

Claim preclusion and issue preclusion both stop a party from relitigating what a court has already decided, but they act on different units. Claim preclusion works on the whole claim: it bars relitigation of any claim that was litigated to judgment, or could have been, based on the same transaction. Issue preclusion works on a smaller piece of a lawsuit, often the finding needed to establish an element of a claim, such as ownership of property, the validity of an instrument, or a family relationship, and sometimes a broader element of a claim or defense such as a party’s negligence or contributory negligence. It reaches only issues that were actually litigated and decided.¹ One set of facts is enough to show the difference, and a survey of look-alike doctrines then marks the outer edge of claim preclusion.

Two Levels of Preclusion

Smith sues Jones for trespass on her land, and Jones defends on the ground that she holds an easement to enter and cut firewood. The court finds the easement valid and enters judgment for Jones. Claim preclusion now bars Smith from suing Jones again over that same wood-cutting. She cannot argue that the easement carried an implied condition that Jones pay fair value for the timber, and she cannot seek damages for harm done to the land during the cutting. Claim preclusion forces her to bring every claim arising from the incident in the original action, so that Jones is not plagued with successive suits on new theories or for different relief.²

Issue preclusion adds a second, separate bar. Smith cannot try again to prove that the easement is invalid, because that issue was litigated and decided in the first action, though she remains free to litigate issues the first court did not resolve.³ The two bars come apart if Jones cuts firewood again the next season. Claim preclusion guards against a second suit over the same wood-cutting incident, so it does not bar a suit over the later cutting. The easement question still returns in that suit, and issue preclusion keeps Smith from reopening it.⁴

Issue preclusion is narrower than claim preclusion in what it covers and broader in where it applies. It is narrower because it precludes only issues actually litigated and decided; an issue that could have been raised in the first case but was never raised and decided is not barred.⁵ It is broader because claim preclusion applies only when the claim in the second action matches the first, while issue preclusion applies whenever a single issue matches, even though the causes of action differ.⁶ The common law added the actually-litigated requirement to counterbalance that broader exposure, and the requirement also makes it more likely that the issue was reliably decided, to the extent that the adversarial process improves fact-finding.⁷

The same requirement spares a party who skips a defense. The rent example in Jacobson v. Miller makes the point. A landlord sues for one installment of rent under a lease and wins. In a later suit for subsequent installments under the same lease, the tenant may still deny that the lease was ever executed. Execution was not actually litigated and decided the first time, so issue preclusion does not reach it, even though the tenant could have raised it as a defense. Unlike a compulsory counterclaim, an unraised defense is not forfeited.⁸

Cromwell v. County of Sac shows both halves of the picture in one dispute. Cromwell had failed in his first suit to show that he was a bona fide holder of the coupons then in suit, so he could not try again to show it for those coupons; as to them, the matter was closed. He remained free to prove that he was a bona fide holder for value of newly matured coupons, because failing to show value for one bond or coupon is “not even presumptive, much less conclusive, evidence that he may not have given value for another and different bond or coupon.”⁹

Three differences keep the doctrines apart:

1. Claim preclusion applies only when the claim in the second action is the same as the claim in the first, while issue preclusion applies whenever any issue is the same, even though the causes of action differ.¹⁰
2. Claim preclusion reaches matters that could have been raised in the first case, while issue preclusion reaches only an issue that was fully and fairly litigated, actually decided, and necessary to the first court’s judgment.¹¹
3. Claim preclusion prevents the second suit altogether, while issue preclusion lets the suit proceed and compels the court to make the same finding of fact that the first court made on the identical issue.¹²

The doctrines also answer to different concerns. Claim preclusion aims at finality between the litigants. Defining the claim by the same transaction or occurrence reflects both careful use of scarce judicial resources and the parties’ need to rely on the resolution of their dispute in ordering their affairs. Issue preclusion is not so neatly wrapped up. Its concern is the efficient use of courts’ factual determinations: once issue preclusion is invoked, a determination of fact is treated as conclusive, absent the normal processes of appellate review.¹³

When a second suit appears, ask two questions in order. Does it repeat a claim arising from the transaction the first judgment decided, including grounds that could have been raised? If so, claim preclusion bars it. If not, does it present an issue the first court actually decided and needed to decide? If so, the suit goes forward, but the court must adopt the earlier finding.¹⁴

Look-Alike Doctrines

Several procedures resemble claim preclusion without being it, and the first group turns on one question: is there a new, second case? A retrial is simply a continuation of the original case, so claim preclusion does not apply to it; the doctrine applies when the plaintiff files a new, second case against the defendant. An enforcement action fails the test for a similar reason. A plaintiff who wins a default judgment in one state may sue to enforce it in another state where the defendant has substantial assets. That proceeding is collateral to the original case and does not re-allege the claim, so claim preclusion has nothing to bar.¹⁶

Law of the case operates inside a single lawsuit. When an appellate court reverses and rules on the law to be applied and how it affects certain issues, those rulings bind the trial court when the action is remanded for a new trial.¹⁷ Courts enforce the doctrine less rigorously than res judicata and collateral estoppel, because it “merely expresses the practice of courts generally to refuse to reopen what has been decided, not a limit on their power.”¹⁸

Stare decisis and claim preclusion both look to earlier decisions, but they protect different things. Stare decisis applies only to questions of law, while former adjudication precludes litigation of both law and fact. Former adjudication protects a judgment that applied rules of law to a specific set of facts, such as title to a particular piece of land or the interpretation of a particular contract. Stare decisis is unconcerned with the facts of the earlier case except as they illustrate the legal doctrine. In short, former adjudication makes a judgment final between specific litigants in a particular dispute, while stare decisis carries the general principle by which a case was decided into the body of the law.¹⁹

Double jeopardy functions much like claim preclusion but differs in three respects. It applies only in criminal cases, while claim preclusion applies in civil cases. It is a constitutional doctrine, while claim preclusion is usually a common law one. And it benefits only the defendant, while a civil judgment has preclusive effect whoever wins.²⁰ The two doctrines also rest on different standards. Jeopardy attaches when the accused is in imminent danger of conviction, ordinarily when the jury is sworn or a witness examined, and from then on the prosecution may not renew the same charges in a second proceeding however the first case was handled. One can therefore imagine criminal cases in which one doctrine applies and the other does not.²¹