1. If the court grants the company's motion, what is the likely explanation?

Once a final judgment on the merits has been rendered on a particular cause of action, the claimant is barred by claim preclusion (res judicata) from asserting the same cause of action in a later lawsuit. When the claimant wins the earlier lawsuit, the cause of action is said to have been «merged» into the judgment. When the defendant wins, the claimant is said to be «barred» by the earlier adverse judgment. Both terms simply mean that the claimant cannot sue again on the same cause. Before merger or bar apply, it must be shown that: (i) the earlier judgment is a valid, final judgment «on the merits»; (ii) the cases are brought by the same claimant against the same defendant — it is not enough that the same litigants were also parties in the previous case (it must be the same configuration of parties); and (iii) the same cause of action or claim is involved in the later lawsuit.

Claim and issue preclusion generally apply to bind only persons who were parties to the original action, not «strangers» to the original action. However, there are exceptions to this general rule. If someone is closely linked enough to a party in the original action that there is a substantive legal relationship between them, that person may be bound by the first result for preclusive purposes, just as if that person had been a party in the original action. The substantive legal relationship puts them in privity with each other, which allows the non-party to be bound by the original action.

A judgment binds the plaintiff or defendant (or their privies) in subsequent actions on different causes of action between them (or their privies) as to issues actually litigated and essential to the judgment in the first action. This conclusive effect of the first judgment is called issue preclusion (or collateral estoppel). Note that issue preclusion is narrower than claim preclusion. Claim preclusion focuses on the scope of a cause of action and bars the claimant from asserting a second case. Issue preclusion, in contrast, focuses on the narrower issue that was litigated and determined in the first case, and that is relevant in the second case.

A is correct. Claim preclusion prevents a claimant from splitting his cause of action; when the claimant loses a judgment, all possible grounds for relief arising out of the same transaction or occurrence are barred in future litigation between the same parties. Because the motorcyclist's personal injury and property damage claims arise out of the same accident, they are part of the same cause of action and he should have brought them in one action. Although claim preclusion typically operates to prevent re-litigation between the same parties, it also operates in favor of entities that are in privity with the parties. Here, because the company is in privity with the truck driver (based on the employer-employee relationship), the company cannot be found liable for the driver's acts if he is not found liable. Therefore, the first judgment extinguishes the claim against the company as well.

B is incorrect. It is true that the same negligence issue that was presented against the truck driver is being presented in the action against the company and that that issue was actually litigated in the first action — two requirements for the application of issue preclusion. However, the jury's general verdict for the truck driver does not necessarily establish that he was free from negligence. It may instead reflect the jury's conclusion that the motorcyclist was more negligent than the truck driver. This may prevent the application of issue preclusion. In addition, the court is not likely to base its ruling on issue preclusion because that defense will be utilized only if claim preclusion is unavailable.

C is incorrect. The election-of-remedies doctrine was a pleading limitation at common law and under some early codes that prevented a plaintiff from presenting alternative or inconsistent claims when the plaintiff had a choice among inconsistent remedies. For example, a plaintiff who was fraudulently-induced to enter into a contract had to elect either to sue under the contract for damages or to disaffirm the contract and seek rescission. The Federal Rules reject this doctrine and allow for alternative and inconsistent allegations in a complaint. Even if the doctrine were applicable, it would be inapposite here because there is no inconsistency between the motorcyclist's claims for personal injury and property damages, and the question presented is one addressed to preclusion, not pleading.

D is incorrect. Law of the case prevents the re-determination of issues that are decided in a case but that recur in later stages of the same case. For example, issues decided on appeal are binding on the trial court if the case is remanded to the trial court for further action. While there was only one accident here, there are two separate actions, one in the state court and one in the federal court. Therefore, the law-of-the-case doctrine is inapplicable.