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20. Is the court likely to grant the car manufacturer's motion to dismiss?
Three months after final judgment was entered on that claim, the driver brought a products liability suit against the car manufacturer in federal court in State B. The driver sought injunctive relief to prohibit the car manufacturer from continuing to produce the type of ignition that malfunctioned in the driver's car. The car manufacturer filed a motion to dismiss, arguing that claim preclusion precluded the driver's second suit.
A driver from State A brought a negligence suit against a car manufacturer from State B in federal court in State A. The driver sought $100,000 as compensation for injuries suffered after the ignition of the driver's car allegedly malfunctioned. A jury found, pursuant to a special verdict, that the car manufacturer was negligent.
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When the plaintiff, or claimant, wins the first lawsuit, the cause of action is said to have «merged» into the judgment. When the defendant wins the first lawsuit, the plaintiff is said to be «barred» by the earlier adverse judgment. Both of these terms mean that the plaintiff may not sue again on the same claim, also called the same cause of action.
The requirements for merger and bar are the same. It must be shown that:
(i) the earlier judgment is a valid, final judgment «on the merits;»
(ii) the cases were brought by the same claimant against the same defendant; AND
(iii) the same cause of action is involved in the later lawsuit.
A is correct. The driver won the first lawsuit, so the judgment merged with the driver's claim of negligence against the car manufacturer. At first glance, it may seem that a claim for negligence and then a claim for injunctive relief in products liability are different causes of action entirely. However, the modern approach is to define a «cause of action» by a transaction definition, meaning that there will be merger or bar of all the claimant's rights against the defendant with respect to any part of the transaction or series of transactions out of which the initial action arose.
Additionally, the rules of merger and bar apply to equitable remedies as well. This means that a demand for legal relief and a demand for equitable relief will be considered to be part of the same claim, and both demands must be made in the same action. This is exactly what is happening in this case: The car manufacturer may use claim preclusion to prevent the driver's second suit seeking equitable relief. The claims for legal and equitable relief are considered the same claim, which has already been merged into the judgment as a result of the jury's finding of negligence on the car manufacturer.
B is incorrect. While merger and bar have the same effect (preventing a claimant from suing a defendant on the same claim again), merger refers to when the claimant wins, and bar refers to when the defendant wins.
In this fact pattern, the claimant, the driver, won the first case, which means the judgment merged. If the car manufacturer had won, the driver would be barred by that adverse judgment from relitigating the claim again.
C is incorrect. As explained above, the rules of merger and bar apply to legal and equitable remedies. Even though the driver is seeking an injunction in the second lawsuit, that injunction is a claim that the driver should have brought in the first lawsuit. After the first suit, the judgment has now merged with all causes of action available that were brought and that could have been brought in the first lawsuit.
D is incorrect. Venue is not determinative of claim or issue preclusion.