Preclusion and Joinder Outline

I. Preclusion in general
a. Applies when there are 2 cases i. Case 1: has ended in a judgment ii. Case 2: is pending (although it may have been filed first) iii. ISSUE: does judgment in case 1 preclude the parties from litigating any of the claims issues in case 2? b. POLICY (behind both claim and issue preclusion): i. Finality: at some point litigation has to end and parties need to move on ii. Repose: a defendant needs to know that he cant be sued repeatedly forever iii. Consistency: a judicial system shouldnt allow differing results on the same issues iv. Efficiency: dont want to waste resources by relitigating the same claim c. Applicable judgments i. RULE: Claim preclusion only applies to final, valid judgments on the merits 1. RULE: Valid means the court has jurisdiction 2. RULE: Final means the judgment is final the trial court, even though it is subject to appeal 3. RULE: On the merits means a. Litigated fully b. Or dismissals with prejudice i. RULE: Rule 41(b) dismissals against P qualify ii. RULE: Dismissals expressly made with prejudice qualify 1. RULE: Most 12(b)(6) dismissals are with prejudice 2. RULE: Most discovery abuse dismissals are with prejudice

II.

Claim preclusion and compulsory counterclaims (Rule 13-a)

a. RULE: Claims relating to the same transaction or series of transactions in case 1 that could have been brought by the P against a D but were not are barred i. XMPL: P sues D1. D1 joins D2 and sues D2. P sues D2 in this suit. In a 2nd suit, P later sues D2 for another claim stemming from the same incident as the 1st suit. Later suit barred by claim preclusion, since P brought a claim against D2 in initial suit. ii. cXMPL: P sues D1. D1 joins D2 and sues D2. P does not sue D2 in this suit. In a 2nd suit, P later sues D2 for another claim stemming from the same incident as the 1st suit. Later suit not barred by claim preclusion, since P never brought claim against D2. b. RULE: subsequent plaintiff cant be bound if they havent had an opportunity to present their case in court (unless subsequent plaintiff has privity w/ prior plaintiff) i. POLICY: Due process requires a plaintiff to have an opportunity to present their case in court for them to be bound by the judgment c. Privity i. RULE: Also applies to claims brought by those in privity w/ original plaintiff P where original plaintiff is legally recognized as having represented subsequent plaintiffs interests 1. RULE: trustee, guardian, class litigation representative qualifies 2. RULE: substantive legal relationship between the two plaintiffs qualify a. XMPL: subsequent owner of land cant sue to claim an easement if previous owner sued to claim easement and lost. d. Compulsory counterclaims (Rule 13) claim preclusion against defendants claims i. RULE: Compulsory counterclaim rule (Rule 13-a-1) applies claim preclusion to defendants who do not bring all counterclaims stemming from the same transaction.

1. XMPL: Paul sues David for injuries sustained during a car wreck. Judgment is for David. David then sues Paul for Davids injuries. Davids subsequent claim is barred by claim preclusion. 2. XMPL: P sues D1. D1 joins D2 and sues D2. P sues D2 in this suit. In a 2nd suit, D2 later sues P for another claim stemming from the same incident as the 1st suit. Later suit barred by claim preclusion, since P brought a claim against D2 in initial suit, therefore D2 was compelled to counterclaim on P. ii. cXMPL: P sues D1. D1 joins D2 and sues D2. P does not sue D2 in this suit. In a 2nd suit, D2 later sues P for another claim stemming from the same incident as the 1st suit. Later suit not barred by claim preclusion, since P never brought claim against D2, therefore D2 not compelled to counterclaim on P. iii. Settled claims and default judgments 1. RULE: Where there is a default judgment against the D, that D loses all opportunities to present counterclaims relating to same transaction in a subsequent enforcement suit. a. XMPL: Carteret S&L v. Jackson P sues D in FL, gets a default judgment. P sues D in MA for enforcement. D attempts to counterclaim. Court holds that Ds counterclaims are barred because of Rule 13. 2. RULE: Where Ps claim is settled against the D, a subsequent suit by D is not barred by Rule 13-a a. XMPL: Dindo v. Whitney D is Ps friend. D is driving Ps car with P as a passenger when he causes an accident. P is injured. P sues D. D settles. Ps insurance, which covers D as the cars driver, pays. D then sues P a year later. Court held that this suit was not barred by claim preclusion because the first suit was settled and D didnt know he had a claim. b. ISSUE: Odd that settled claims are treated differently than default judgments because neither settled claims nor default judgments take up much of the judiciarys resources. iv. RULE: Counterclaims cannot allow for supplemental jurisdiction over original complaint well-pleaded complaint rule! 1. XMPL: A (TX) sues B (TX) for a state law claim. B counterclaims for a federal claim. A removes to federal court. As claim over B does not have supplemental jurisdiction e. RULE: Changes in law not sufficient to get around claim preclusion! i. POLICY: Prevent relitigation of cases each time law changes

III.

Issue preclusion (Rule 13-a-1, 41-b)

a. LMENTs: i. Issue has to be actually litigated and determined 1. NOTE: this contrasts w/ claim preclusion in that it prevents issue preclusion from applying to default judgment decisions 2. cXMPL: Cromwell In 1st suit, P sued D for value of a 1st set of bonds. However, P forgot to litigate the issue of whether he was a BFP, so P lost. In 2nd suit, P sued D for value of a 2nd set of bonds. Here, issue preclusion does not prevent P from litigating BFP status, because P didnt litigate the issue in the 1st case. ii. Issue had to be essential to the judgment 1. RULE: 2 issues necessary to judgment are both precluded a. XMPL: In a jurisdiction with contributory negligence and no compulsory counterclaim rule, Sally sues Joe for negligence. Joe defends claiming contributory negligence. General Verdict for Sally. Joe sues Sally for negligence. Issue of Joes negligence is issue precluded Joe was necessarily negligent to win 1st suit. Issue of Sallys negligence is issue precluded Sally was necessarily non-negligent to win 1st suit. 2. RULE: 2 issues sufficient to judgment are both not precluded a. XMPL: In a jurisdiction with contributory negligence and no compulsory counterclaim rule, Sally sues Joe for negligence. Joe defends claiming contributory negligence. General Verdict for Joe. Joe sues Sally for negligence. Issue of Joes negligence is not issue

precluded Joe could have been negligent and won 1st suit if Sally had been negligent. Issue of Sallys negligence is not issue precluded Sally could have been non-negligent and lost 1st suit had Joe also been non-negligent. 3. RULE: issues expressly found are precluded a. XCPN: express findings not necessary to judgment are not precluded i. POLICY: winning party doesnt have incentive to appeal ii. XMPL: (Rios v. Davis) b. Against whom preclusion can be asserted i. RULE: Can only be brought against defendants who were a party to the 1st suit 1. XMPL: Hardy v. Johns Manville a. Case 1: P1 v. D1-6, j/m for P against D1-6, jury finding of breach of duty to warn b. Case 2: P2 v. D1-19 (1-6 were parties in Case 1) c. Issue: can P2 assert issue preclusion on issue of breach of duty to warn i. Against D7-19? 1. No, because these defendants did not have an opportunity to present their case in front of the jury in Case 1. ii. Against Case 1 Ds who settled prior to the finding? 1. No, because they never presented full case in front of jury. iii. Against D1-6? 1. Yes, under this rule. 2. XCPN: Can also be brought against parties who were in privity w/ defendants in the 1st suit c. Who can assert i. Defensive preclusion 1. RULE: Usually okay 2. POLICY: dockets are too crowded 3. XCPN: P did not have full and fair opportunity to litigate the issue ii. Offensive preclusion 1. POLICY: no need to duplicate litigation in mass tort scenarios BUT 2. POLICY: Prevent Ps attorneys from presenting most sympathetic plaintiffs first to try to get favorable rulings on these issues (plaintiff shop), allowing subsequent plaintiffs to assert preclusion a. NOTE: One way of getting around this problem is to consolidate a random sample of plaintiffs into a suit. 3. RULE: court has discretion whether to allow preclusion a. Factors for preclusion i. P had difficulty joining in the first case ii. D had high incentives to litigate the first case, and subsequent suits were foreseeable b. Factors against preclusion i. Inconsistent judgments on this issue ii. Procedural differences would have caused a different result 4. XMPL: a. Case 1: P1 v. D1-6, j/m for P against D1-6, jury finding of breach of duty to warn b. Case 2: P2 v. D1-19 (1-6 were parties in Case 1) c. Under this rule, against D1-6, P2 might be able to assert issue preclusion if the factors favor P2. d. Issue preclusion analysis summary i. Step 1: Was the issue actually litigated & determined? ii. Step 2: Was issue essential to the judgment?

iii. Step 3: Was there a final judgment? iv. Step 4: Who is issue preclusion being asserted against a party to the suit or his privy? v. Step 5: Who can claim issue preclusion? 1. Party? Then yes 2. Non-party? Then maybe, if nonmutuality not required a. Defensive yes, pretty much all the time b. Offensive maybe, if factors favor P e. QUESTION: Carteret defenses barred by issue preclusion?

IV.
f.

Joinder (Rule 18-a, 20, 14-a, 14-b, 19, 24, 21, 42, USC 1367)

POLICY: i. Judicial efficiency: in bringing together as many claims as possible ii. Protect the right of Ps to choose their forum 1. NOTE: joinder of Ps would reduce ability of joined Ps to choose where they want to litigate iii. Prevent jury from being confused as to which facts are being applied to which parties iv. NOTE: Policies are competing there is tension between them g. Major issues i. What parties must be compulsorily joined under the FRCP? ii. What parties may be permissively joined under the FRCP? iii. What claims must be compulsorily joined under the FRCP? iv. What claims may be permissively joined under the FRCP? v. Do the joined claims have subject matter jurisdiction? 1. Who is asserting the claims P or D? 1367-b only excludes suppl. Jurisdiction for claims asserted by P! h. Major themes i. Once one party has directly claimed against another for the same transaction claim, then Rule 18 allows for open season permissive joinder of non same-transaction claims i. Court-ordered joinder (Rule 42) i. RULE: Court has discretion to join claims or consolidate and try together similar issues j. Joinder of claims i. Counterclaims, both compulsory and permissive (Rule 13-a, Rule 13-b) 1. RULE: Party can join any claim that this party has against an opposing party (Rule 13-b, 18) 2. NOTE: Due to compulsory counterclaim rule (Rule 13), new claims unrelated to the transaction originally being litigated against a party requires that party to bring counterclaims related to this new transaction ii. Crossclaims always permissive (Rule 13-g) 1. POLICY: Why permissive? Because P should be master of his suit. 2. RULE: Party may sue other parties on same side of P/D grouping as long as claim relates to the same transaction as original action. a. RULE: once this is established, then Rule 18 allows joinder of non-same-transaction claims b. RULE: until a same transaction claim is levied, party cannot sue co-parties for non-sametransaction claims because Rule 18 doesnt yet apply. c. RULE: Once crossclaim is levied, normal claim preclusion and compulsory counterclaim rules apply i. XMPL: P collides Os car, driven by D. P has personal injuries, O has property damage. P sues O & D. O sues P for property damage (compulsory cc). O sues D for indemnity (crossclaim). J/M for P that D solely responsible for accident. O then sues D for property damage. Here, the court will dismiss due to claim preclusion.

O's crossclaim against D forced her to assert same transaction claims in the original suit. 3. NOTE: Specifically allows for indemnity claims iii. Subject matter jurisdiction requirement (USC 1367) 1. RULE: Subject matter jurisdiction is required to join claims against any party a. NOTE: Independent subject matter jurisdiction over the claim will allow that claim to be litigated. b. NOTE: Supplemental jurisdiction may be available (USC 1367) only for claims that arise from same transaction i. RULE: Court has discretion (subject to factors described in subsection c) to grant supplemental jurisdiction over claims arising from same case or controversy as a claim for which they have subject matter jurisdiction due to federal question jurisdiction. 1. NOTE: courts cannot assert supplemental jurisdiction over claims asserted by plaintiffs against parties whose joinder would destroy diversity of citizenship, or if joined plaintiffs are not diverse from defendants. a. NOTE: joined plaintiffs exclusion is because of a SCOTUS ruling, not because of language of USC 1367 b. XMPL: Alice (TX), Betty (CA) & Carol (CA) have a traffic accident. Alice has $90k damages, Betty $90k. A & B sue C in federal court. Here, the court cannot extend supplemental jurisdiction over A's claim against C. Here, no claim has been asserted by a P against a joined party the claim is being asserted by a joined P. But because of the SCOTUS ruling, supplemental jurisdiction is denied. c. cXMPL: Alice (TX), Betty (NY) & Carol (CA) have a traffic accident. Alice has $90k damages, Betty $25k. A & B sue C in federal court. Here, the court can extend supplemental jurisdiction over B's claim against C. This claim is not sufficiently large for the court to exercise diversity jurisdiction over it. However, the claim arises from the same transaction and C's joinder does not destroy diversity, so it is not excluded by USC 1367-b. 2. RULE: Supplemental jurisdiction only available for claims arising from same transaction as that for which there was original jurisdiction. Permissive joinder (Rule 18) counterclaims (Rule 13-b) do not have supplemental jurisdiction. a. cXMPL: A (TX) sues B (TX) for a federal question claim. B counterclaims on an unrelated state law claim. Bs counterclaim does not have supplemental jurisdiction, since it is a permissive counterclaim, unrelated to same transaction as As claim against B. ii. RULE: Supplemental jurisdiction available for crossclaims arising from same transaction as a claim over which the court had original jurisdiction. 1. RULE: USC 1367-b only excludes plaintiffs! a. XMPL: P (VT) v. D1 (KY) & D2 (KY) in ski accident, each suffering more than $75k in damages. A court can exercise suppl. jurisdiction for an indemnity suit by D1 v. D2.

b. XMPL: Claim1: TX v. OH & MO. Claim2: OH v. MO & OH2. Here, a court can extend supplemental jurisdiction to Claim2, since USC 1367-b only excludes plaintiff's claims. i. NOTE: Claim2 is considered a crossclaim (even though OH2 is being brought in), since it is being made against a coparty (MO). 2. RULE: Supplemental jurisdiction not available for crossclaims unrelated to the same transaction which brought a claim over which the court had jurisdiction. a. XMPL: P (VT) v. D1 (KY) & D2 (KY) in ski accident, each suffering more than $75k in damages. A court cannot exercise suppl. jurisdiction for an unrelated state law suit by D1 v. D2. k. Joinder of parties i. Jurisdictional and Venue Requirements 1. RULE: Personal jurisdiction and venue are required to join any party ii. Permissive joinder (Rule 20) Can only be joined if P, or part of a counterclaim/crossclaim if by D 1. RULE: Parties can be joined as Ps or Ds if a. They all assert a right w/ respect to same transaction/occurrence or series of transactions/occurrences AND b. There is a common question of law or fact 2. RULE: D cannot join non-impleader Ds for own claims against them out of same transaction a. XMPL: P sues D1 for injuries in a car crash. D1 wants to sue D2 for his own injuries, but not as an impleader to Ps claim. He cannot do this under Rule 20. b. XCPN: D can join non-impleader Ds for own claims against them if he does so for a crossclaim or counterclaim i. XMPL: P sues D1 for injuries in a car crash. D1 counterclaims against P1 for his own injuries. D1 also joins D2 and sues D2 for his own injuries. D1 can join D2 under Rule 20, since he is joining D2 as party of his counterclaim against P. iii. Impleader (Rule 14-a) 1. RULE: Defendant may, as a third party plaintiff, join a third party defendant and claim against him for indemnity or contribution for plaintiffs claim. a. XMPL: P sues D1 for injuries suffered in a car accident. D1 can implead D2 for indemnity from Ps claim. b. Compulsory claims by third party defendant i. RULE: Third party defendant must counterclaim same transaction claims against third party plaintiff. c. Permissive claims by third party defendant i. RULE: Third party defendant may counterclaim non same-transaction claims against third party plaintiff. ii. RULE: Third party defendant may crossclaim against another third party defendant. iii. RULE: Third party defendant may claim against original plaintiff any sametransaction claims 1. NOTE: not a counterclaim or crossclaim iv. RULE: Third party defendant cannot counterclaim against original plaintiff any non same-transaction claims until a same transaction claim is asserted between them. d. Claims by Plaintiff against third party defendant are permissive

i. RULE: Plaintiff may assert claims against third party defendant that arise out of same transaction as plaintiffs claims against third party plaintiff 2. RULE: Plaintiff may, as a party defending a counterclaim or crossclaim, join a third party defendant and claim against him for indemnity or contribution for claimants claim. (Rule 14-b) a. NOTE: This joinder may not have supplemental jurisdiction available if original basis for claim is diversity. This is because plaintiffs impleaders are claims by plaintiffs against parties joined by Rule 14! iv. Required joinder (Rule 19) 1. POLICY: prevent inconsistent judgments, incomplete remedies, harm to non-joined partys interests 2. Method of analysis a. 1st: Is a party necessary? (Rule 19-a) b. 2nd: Is it feasible to join the necessary party? (Rule 19-b) c. 3rd: If it is not feasible to join the necessary party, can the trial proceed anyways, or is the party indispensible? (Rule 19-c) 3. Determining which parties are necessary (Rule 19-a-1) a. RULE: Parties in whose absence court cant provide complete relief must be joined (Rule 19-a-1-A) i. POLICY: Efficiency of remedies b. RULE: Parties whose interests may be harmed by adjudication without his presence must be joined (Rule 19-a-1-B-i) i. POLICY: prevention of harm to parties-to-be-joined ii. XMPL: Haas v. Jefferson National Bank - Haas (OH) v. Bank (FL) for issuance of stock due to an agreement w/ Glueck (OH) that Glueck would give Haas the stock. Bank refuses because Glueck says stock is his and Glueck had pledged stock as collateral for loan. Glueck is a required party - if he is not joined and bank loses, then his stock will be given to Haas, harming his interests. iii. XMPL: P has k to purchase house. Owner enters into another k w/ A for more money. P sues O for specific performance of k. A is a required party - same reasons as Haas. c. RULE: Parties whose non-presence may leave a defendant or other target of a claim open to multiple liability must be joined (Rule 19-a-1-B-ii) i. POLICY: prevention of inconsistent judgments against parties against whom claims have been asserted ii. XMPL: Haas v. Jefferson National Bank - Haas (OH) v. Bank (FL) for issuance of stock due to an agreement w/ Glueck (OH) that Glueck would give Haas the stock. Bank refuses because Glueck says stock is his and Glueck had pledged stock as collateral for loan. Glueck is a required party if he is not joined and bank loses, then his stock will be given to Haas. Glueck can then sue the bank for conversion. If he wins that suit, then the bank will be doubly liable. iii. XMPL: P has k to purchase house. Owner enters into another k w/ A for more money. P sues O for specific performance of k. A is a required party - same reasons as Haas. d. RULE: Joint tortfeasors are never necessary parties (SCOTUS says so) i. XMPL: Temple v. Synthes - P v. Manufacturer for problems w/ medical implant. Manufacturer claims Dr and Hospital should be joined. Even though inconsistent judgments are a danger if negligence is allocated improperly, SCOTUS says that Dr, Hospital, and Manufacturer would be joint tortfeasors and therefore not necessary parties.

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4. Determining feasibility (Rule 19-b) a. RULE: personal jurisdiction, subject matter jurisdiction, and venue are required. b. RULE: supplemental jurisdiction cannot be extended to claim by/against joined party at all if original basis of claim was solely diversity. (USC 1367-b) i. XMPL: P (TX) v. D (MO) $200k diversity claim. A (MO) is necessary party. If A is to be joined as a plaintiff, then supplemental jurisdiction cannot be extended to A v. D, since that would make the parties non-diverse (SCOTUS rule, not plain-reading of USC 1367). Therefore, not feasible to join A as a plaintiff. If A is joined as defendant, then there would be diversity jurisdiction over P v. A. 5. Determining if the party is truly indispensible, or if the trial can proceed anyways (Rule 19-c) a. Factors to consider (comprehensive list at Rule 19-c) i. Is there another forum where all can be joined? ii. Can D join A if D is really worried about inconsistent judgments? iii. Can court tailor the remedy to avoid harm? v. Interveners (Rule 24) 1. Interveners of right a. RULE: Parties who claim in an interest situated that disposing of the action being litigated may impede that partys ability to protect that interest must be allowed to intervene on timely motion. i. NOTE: Requirement is similar to those of necessary parties due to harm to interests under Rule 19-a-1-B-i ii. XCPN: No need to allow intervention if current parties adequately represent their interests. 2. Permissive Interveners a. RULE: Parties who have a claim or defense that share w/ the main action a common question of law or fact may be granted intervention by court on timely motion. 3. Subject matter jurisdiction requirement a. RULE: supplemental jurisdiction cannot be extended to claim by/against intervening party at all if original basis of claim was solely diversity. (USC 1367-b) i. XMPL: P (TX) v. D (MO) $200k diversity claim. A (MO) is intervening party. If A is intervening as a plaintiff, then supplemental jurisdiction cannot be extended to A v. D, since that would make the parties non-diverse (SCOTUS rule, not plainreading of USC 1367). Therefore, A cannot intervene as a plaintiff. If A intervenes as defendant, then there would be diversity jurisdiction over P v. A. Complaining about joinder of parties or claims i. If parties are misjoined (Rule 19) 1. RULE: Remedy for misjoinder is not dismissal but adding or dropping parties, or severance (Rule 21) a. XMPL: P sues D1 and D2 alleging violations of contracts. D1 claims that his contract is a separate transaction from D2s contract. The court agrees. Therefore, the court will sever the claim against D1 from the suit. ii. If claims are properly joined, but joinder in same court presents objections 1. RULE: For convenience, to avoid prejudice, to expedite & economize, the court can order separate trial of any separate issues or claims (Rule 42(b)) a. XMPL: P1 and P2 sue D on a claim that D breached a contract between the 3. P1 also asserts a claim against D concerning a different contract, unrelated to the first. D objects and the court agrees. Court can order a separate trial of this claim.