17. Is the court likely to grant the grocer's motion to dismiss?

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 «merged» into the judgment. This simply means that the claimant cannot sue again on the same cause.

Before merger can 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.

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. With issue preclusion, the issue is deemed established in the second case without the need to proffer evidence on it. For issue preclusion to apply, the judgment must have been final, the issue actually litigated, and it must have been essential to the judgment.

B is correct. The likely outcome here is that the journalist will lose because he will be precluded under the doctrine of res judicata. Under res judicata or claim preclusion, a winning plaintiff may not bring a second lawsuit against the same defendant based on the same cause of action. The actions are said to have merged. Merger applies if the initial judgment is valid and final, on the merits, if the same claimant brings the second case against the same defendant, and if the same claim is brought in the subsequent suit.

Here, the federal court will apply the preclusionary rules of State B and most states would find that claims for personal and property damage resulting from a single-car accident constitute the same cause of action. The journalist prevailed in state court on the property damage claim and then attempted to bring a personal injury claim based on the same accident. The personal injury claim will likely be found to have merged with the judgment on the property damage claim under res judicata.

A is incorrect. The suit will likely be dismissed because claim preclusion applies to this same claim being litigated by the same configuration of parties. However, even if the court were to find that issue preclusion applied, this would not automatically cause the case to be dismissed. The grocer would be barred from relitigating the issue of his negligence, but he would still be able to challenge the existence and extent of personal injuries that the journalist suffered from the accident.

C is incorrect. These facts satisfy all the requirements of claim preclusion, which means that the most likely outcome is the court will dismiss the action based on claim preclusion. For the parties to be able to litigate the remaining issue of the journalist's injuries, claim preclusion would have to be inapplicable, which is not the case.

D is incorrect. The suit will likely be dismissed, for the reasons explained above. Although it is true that diversity jurisdiction requires there to be an amount in controversy exceeding $75,000 and that the amount is generally determined from the allegations in the complaint, this is not the reason why the suit will probably be dismissed. Claim preclusion will likely bar the suit from moving forward altogether, which means a challenge to the amount in controversy giving rise to diversity is unnecessary.