What is Res Judicata?
Claim Preclusion Encourages Parties to Pursue All Legal Claims Against Each Other at Once
You have one shot to bring your claims against a defendant for a specific incident in court.
This limitation stems from the Seventh Amendment of the U.S. Constitution, which says, “no fact tried by a jury shall be otherwise reexamined in any court of the United States, and the doctrine of res judicata (also called claim preclusion).
Res judicata is a common law doctrine (created by judges through written opinions) that bars parties who have received a final judgment on a claim’s merits from litigating that cause of action again.
But res judicata goes further; it bars the litigation of causes of action that you could have brought in the first case. As courts have held, res judicata applies to claims tendered in the pleadings and “to every claim which properly belonged to the subject of litigation and which the parties, by the exercise of reasonable diligence, might have raised at the time.”
Res judicata’s rationale: “Every litigant should have opportunity to present whatever grievance he may have,” but if allowed to do so and “having failed to avail himself of it, he must accept the consequences.”
This article analyzes the elements of res judicata so you thoroughly plan and prosecute your civil action or workers comp claim to avoid claim preclusion in the future. Remember – the law gives you one fair hearing for a particular event. And this information can help you make the most of your day in court.
In addition, you can use this doctrine to defeat an employer’s application to stop workers compensation benefits.
Keep reading for more information.
Then call our law firm so we can start working for you: 804-251-1620 or 757-810-5614. See why others regularly list us with Virginia’s best attorneys for personal injury, car crashes, construction site accidents, traumatic brain injury (TBI), and work injury litigation.
The Meaning of Res Judicata
Res judicata is a Latin term meaning “a thing decided.”
Black’s Law Dictionary (11th Edition) defines the doctrine as an issue definitively settled by judicial decision.
In practice, however, courts have divided res judicata into several elements, which we discuss below.
Res Judicata Concepts: Issue Preclusion vs. Claim Preclusion
The doctrine of res judicata involves two related but distinct concepts: issue preclusion and claim preclusion.
The first concept is issue preclusion (sometimes called collateral estoppel), which bars a party from relitigating any issue of fact or law decided in a past case and necessary to that judgment.
The second concept, claim preclusion (sometimes called res judicata), bars parties from raising issues (claims and defenses) they could have submitted in the first action – even if the first action did not decide these issues.
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Courts have divided claim preclusion into two smaller categories: bar and merger.
Bar is the principle that a plaintiff cannot relitigate a lost case.
In contrast, the merger concept means a plaintiff cannot relitigate a lawsuit it won to recover more damages in a second action.
Collateral estoppel has a narrower scope than claim preclusion.
But these concepts are intertwined, and the courts sometimes interchange the terms.
This article focuses on the claim preclusion part of res judicata.
What are the Elements of Res Judicata?
Since res judicata comes from the common law, its elements may vary between courts.
However, Virginia’s definition of res judicata gives an overview of the doctrine’s elements.
Rule 1:6 of the Rules of the Virginia Supreme Court, Res Judicata Claim Preclusion, says:
A party whose claim for relief arising from identified conduct, a transaction, or an occurrence, is decided on the merits by a final judgment, shall be forever barred from prosecuting any second or subsequent civil action against the same opposing party or parties on any claim or cause of action that arises from that same conduct, transaction or occurrence, whether or not the legal theory or rights asserted in the second or subsequent action were raised in the prior lawsuit, and regardless of the legal elements or the evidence upon which any claims in the prior proceeding depended, or the particular remedies sought.
The elements of res judicata, therefore, include the following:
- (1) an attempt to relitigate a claim when a court has entered a final judgment on the merits;
- (2) the exact parties (or the defendants in the first and second lawsuit are in privity); and
- (3) the same cause of action.
Now we will discuss each prong of the res judicata test.
Relitigation
Determining whether a party is trying to relitigate a dispute that was the subject matter of a past lawsuit is usually the easy part of a res judicata analysis.
But deciding whether an adjudication on the merits occurred may require closer examination.
A judgment is final for res judicata when it decides the case’s merits, and “nothing more is necessary to settle the rights of the parties or the extent of those rights.”
Case law and civil procedural rules (Rules 12(b)(6) and 41(b) of the Federal Rules of Civil Procedure) offer guidance on the types of court rulings considered adjudications on the merits.
For example, the following judgments are final for claim preclusion purposes:
- A judge’s verdict
- A jury’s verdict
- A final judgment based on a determination by the Workers Compensation Commission
- Dismissal based on a failure to state a claim
- Dismissal based on a failure to prosecute the claim
- Involuntary dismissal based on a failure to comply with procedural rules or a court order
- A confirmed bankruptcy plan
But the following court judgments are exceptions to the res judicata doctrine and are not considered an adjudication on the merits:
- Dismissal based on lack of jurisdiction
- Dismissal based on improper venue
- Dismissal based on failing to join a party under Rule 19 of the Federal Rules of Civil Procedure
- Voluntary dismissal (called a nonsuit in Virginia): No ruling is made on the merits of a claim or counterclaim when nonsuited; therefore, claim preclusion does not apply.
- Dismissal without prejudice (per the court order)
Same Parties (or Closely Related Parties)
Determining whether an action involves the same parties as a previously decided lawsuit is simple in a typical personal injury or workers comp claim involving individuals and a couple of employers (or insurer or third-party claim administrator).
But if the second action adds individuals, corporate entities, or organizations not named in the first lawsuit, you must determine if privity exists.
Courts decide whether privity exists on a case-by-case basis.
The privity analysis examines the parties’ interests and relationships to see if a party’s interests are so identical that representation by one party is a representation of the other party’s legal rights.
For example, suppose you lose a product liability lawsuit against Company A.
One year later, Company B buys Company A.
Then you bring an action against Company B for the same incident and injuries as your first lawsuit against Company A.
The court may find res judicata precludes your second action because Company B is a successor to Company A.
Same Cause of Action
The last prong of the res judicata test – same cause of action – creates the most confusion in contract and tort claims.
After a judicial opinion created confusion over the proper test for determining whether claims come from the same cause of action, the Virginia Supreme Court enacted Rule 1:6.
This rule defines a cause of action as an “identified conduct, a transaction, or an occurrence.” And courts will determine whether the causes of action in dispute share a common nucleus of operative facts and need the same types of evidence to prove in answering this test.
What is the Purpose of the Doctrine of Res Judicata?
Courts justify the doctrine of res judicata by pointing to several public policy considerations it helps:
- Avoiding confusion
- Bringing an end to litigation
- Conserving judicial resources
- Establishing certainty and reliance in legal relationships
- Preventing the use of the legal system to harass parties
- Prohibiting a plaintiff from obtaining multiple judgments against the same defendant for the same incident
- Saving time and money for litigants by eliminating redundant pretrial discovery, hearings, motions, briefs, and trials
- Stopping inconsistent and contradictory rulings from different judges or courts on the same issue
In simple terms, res judicata promotes judicial efficiency.
When Does Res Judicata Apply?
The doctrine of res judicata applies to all criminal and civil actions unless a statute specifically says otherwise.
Does Res Judicata Apply to Workers Compensation Cases?
Yes.
The Virginia Court of Appeals has held that res judicata principles apply to workers compensation claims (decisions from deputy commissioners and the full commission).
But the doctrine of res judicata may give way when it conflicts with a more critical public policy, such as the Workers Compensation Act’s humanitarian purpose: to protect injured workers. As the Court of Appeals of Virginia said:
When claimants come before the Commission, they are injured and either unable to work or unable to work at full capacity. This reality limits a claimant’s bargaining power. [citation omitted]. An injured claimant is more likely to need immediate compensation and, absent protective public policy measures, may “be forced by their circumstances to agree to [immediate] awards that only provide compensation for some of their work-related injuries.” [] Thus, we have determined that “[t]he prinicples of res judicata should not be applied in a way that facilitates such inequitable results.” [].
This principle is a critical reason why the Virginia General Assembly passed Code Section 65.2-706.2, Claims Not Barred, in 2021.
This new law says:
No order issued by the Commission awarding or denying benefits shall bar by res judicata any claim by an employee or cause a waiver, abandonment, or dismissal of any claim by an employee if the order does not expressly adjudicate such claim.
You should ensure any agreement form you sign does not include language to trigger the res judicata defense in a workers comp claim.
Does Res Judicata Apply to Social Security Disability Claims?
Yes.
The Social Security Administration (SSA) applies administrative res judicata “at all levels of the claims process to avoid deciding an issue that” it has “decided based on the same facts, same issues, same parties, and same adjudicative period.”
20 CFR 404.957(c)(1) and 416.1457(c)(1) establish the general rule that administrative res judicata exists in Social Security disability claims (SSDI and SSI) when:
- The SSA made a past determination or decision under the same subpart for the same claimant;
- The past determination was based on the same facts and the same issues; and
- The past decision has become final by either administrative or judicial action.
But claim preclusion does not apply to disability claims when the past decision is not administratively final or there has been a change in the specific section of the Listing of Impairments, a statute, or legal precedent.
In addition, the SSA will not dismiss your claim when you seek SSDI or SSI benefits for a period after the date of the final administrative determination in your past claim (often the administrative law judge’s (ALJ’s) opinion after a hearing).
Does Res Judicata Apply if I Bring the Second Action in a Different Court?
Yes.
A court will apply the preclusive effect of res judicata even when a different court entered the judgment in the first action.
For example, the United States Supreme Court has held that the U.S. Constitution’s Full Faith and Credit Clause requires federal courts to give the same preclusive effect to state court judgments that those judgments would receive in courts of the state from which the initial judicial decision emerged.
In addition, the Virginia Supreme Court has said it will “accord the same preclusive effect of res judicata to foreign judgments ad do courts in the foreign jurisdiction.”
Res Judicata Does not Apply to Appeals
The final-judgment rule says that appellate courts, such as the Virginia Supreme Court and the Court of Appeals of Virginia, will not hear appeals unless a lower court enters a final judgment.
This rule seems inconsistent with claim preclusion, where a court will dismiss a second action if another court has entered a final judgment on the merits.
Appeals, however, are an exception because the judicial system considers them an extension of the initial lawsuit, not a new action.
Who Can Raise a Res Judicata Defense?
Res judicata is an affirmative defense a party must raise in defense pleadings (usually the answer to the complaint or a motion to dismiss). Other affirmative defenses include the statute of limitations, contributory negligence, and the assumption of risk doctrine (liability waiver, implied risk, etc.).
As such, the defendant in a personal injury case will raise res judicata if the parties have litigated a similar lawsuit from the same event or transaction to its end.
However, a common situation in workers comp cases gives the exception to the general rule that defendants plead the res judicata doctrine.
The employer and its insurer (or claim administrator such as Gallagher Bassett or Sedgwick) may apply for a hearing to stop workers comp payments.
In this scenario, you become the “defendant” because the employer has the burden of proving benefits should stop, and you can raise defenses to the application.
And one of these defenses is the doctrine of res judicata.
If you have a Workers Compensation Award Letter or a final judicial opinion addressing the same arguments raised by the employer, you can raise res judicata.
Who Has the Burden of Proving the Doctrine of Res Judicata Applies?
The party asserting res judicata must prove by a preponderance of the evidence (more likely than not) that the judge (or deputy commissioner in workers comp) rendered a final judgment in its favor.
Does Res Judicata Apply to Counterclaims?
Whether claim preclusion applies to counterclaims, crossclaims, or third-party pleadings arising from the same occurrence depends on what court has jurisdiction over your case.
For example, in Virginia, Rule 1:6 says res judicata applies to counterclaims, crossclaims, and third-party pleading.
The federal court rules are similar, with some nuances.
Rule 13 of the Federal Rules of Civil Procedure, Counterclaim and Crossclaim, says a party must state any compulsory counterclaims (any claim arising out of the occurrence that is the subject matter of the opposing party’s claim that does not require adding another party over whom the court does not have jurisdiction) or risk claim preclusion. But res judicata does not apply to permissive counterclaims.
More Exceptions to Claim Preclusion
The claim preclusion rule does not bar a party or a party’s insurer from bringing separate personal injury and property damage lawsuits arising from the same conduct, transaction, or occurrence.
Nor will res judicata bar declaratory judgment actions.
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Many procedural rules can prevent you from recovering monetary damages caused by someone else, even when you can win on the case’s substance.
Instead of trying to overcome hurdles such as res judicata and claim preclusion yourself, get a top-rated attorney to help.
Contact us today to get started with your claim.
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