Power to set aside a judgment on grounds discovered after it was rendered

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  Briones v. Riviera Hotel & Casino – sued his former employer for unlawful discharge and failed to respond to MD; P moved for relief under 60(b) on the ground that the court never informed him that his case might be dismissed and on the basis that the P failed to notify his translator; Sided with idea that excusable neglect falls under 60(b); must be remanded to see if excusable neglect present
  
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    SC gave (in bankruptcy case) four factors to consider:
    

(2) the length of the delay and its potential impact on the judicial proceedings,

(3) the reason for the delay, and

(4) whether the moving party acted in good faith

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  Patrick v. Sedwick – P brought an action for medical malpractice, alleging permanent physical injuries; D moved for a new trial on the ground that in 1963 Dr had devised a new treatment that would ameliorate P’s injuries and therefore would reduce his damages; TC denied motion, COA affirmed because Lewy technique was not in existence at the time the trial took place and under the above authorities would not qualify as new discovered evidence
  
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    Motion for new trial on the grounds of newly discovered evidence must meet the following requirements:
    

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  Must be such as would probably change the result on a new trial
  
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  Must have been discovered since the trial
  
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  Must be of a such a nature that it could not have been discovered before trial by due diligence
  
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  Must be material
  
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  Must not be merely cumulative or impeaching
  

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  “newly discovered” – must relate to facts which were in existence at time of the trial
  

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  Smith v. Great Lakes Airlines, Inc. – Smith sold plane to airline, but never provided documentation of conducting overhaul, so airline allegedly had to conduct costly overhaul; Smith contended major overhaul was neither required nor made and that the govt official who testified had conspired with the airline to perjure himself; trial judge sustained demurrer to Smith’s complaint and smith appealed; AC affirmed on the ground that the fraud alleged was intrinsic
  

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  Action can be set aside only on the basis of extrinsic fraud
  
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  Extrinsic fraud prevents litigant from making a claim or defense
  
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  Intrinsic fraud that which the trial itself should discover
  

1. 
   After final judgment on the merits, P is barred from bringing same cause of action in later suit where the issue was raised or could have been raised and involves that same parties or those in privity
   
   1. 
      Merger  If Π wins – cause of action merges and cannot be brought again to recover again
      
   2. 
      Bar  If Π loses – Π is "barred" from bringing cause of action again to try to recover
      
2. 
   Three Elements
   
   1. 
      Judgment must be final, valid and on the merits
      
   2. 
      Parties in Subsequent suit must be identical to those in first action, or privities
      
   3. 
      Claim in 2^nd suit MUST involve matters adjudged in the first suit
      
      1. 
         Π cannot "split claims" ag. the same Δ if they come from the same t or o or wrongful act
         
         1. 
             If the same evidence will support both, that there is one cause of action
            
         2. 
            But, if first court would not have had SM of the "split claim", not barred by res jud.
            
         3. 
            Installment K and notes are each their own cause of action Jones
            
3. 
   State law followed in diversity cases:
   
   1. 
      In diversity cases, the federal courts follow state law with respect to the application of the rules of claim preclusion (as well as collateral estoppel).
      
   2. 
      If (and only if) the law of the state where the district court sits would have granted claim preclusion or collateral estoppel effect to an earlier state ct. judgment, the feds will do the same.
      
4. 
   Adjudication on merits:
   
   1. 
      Π will be barred only if the original adjudication in favor of the Δ was "on the merits."
      
      1. 
         Non-prejudicial grounds: In other words, some of the ways that a plaintiff may "lose" the first suit are deemed to be "without prejudice" to future suits.
         
      2. 
          if the first suit is brought in federal court, plaintiff will not be barred from bringing a new action if the first action is dismissed because of: (1) lack of jurisdiction; (2) improper venue; or (3) failure to join an indispensable party. See FRCP 41(b).
         
      3. 
         Any other type of dismissal (e.g., dismissal for failure to state a claim under 12(b)(6)) does bar a future claim by P, unless the court granting the dismissal specifies otherwise in its order. FRCP 41(b), last sentence. (NOTE: Π Must appeal in these cases)
         
5. 
   Counterclaims:
   
   1. 
      A defendant who pleads a counterclaim is, in effect, a plaintiff with respect to that claim. He is bound by the outcome, just as a plaintiff is bound by the outcome of his original claim.
      
      1. 
         No splitting: Thus D may not split his counterclaim into two parts.
         
         1. 
            Example: P sues D for damages from an auto accident. D counterclaims for his property damage from that same accident, but not for personal injuries. Whether D wins or loses with the counter-claim, D may not bring a 2^nd suit against P for personal injury arising from that same accident.)
            
   2. 
      Compulsory counterclaim:
      
      1. 
         Observe that state and federal rules making certain counterclaims "compulsory" serve a similar function to the merger or bar doctrine.
         
      2. 
         Example: P sues D for damages arising out of an auto accident. Although merger and bar do not force D to assert either his claim for property damage, or for personal injury, arising out of that same accident. But in the federal court and in most state courts, any counterclaim by D for either of these things would be "compulsory," so that D would not be able to use that claim in a subsequent suit against P.)
         
6. 
   Change of law: Once a final judgment is rendered (and appeals resolved), not even a change in the applicable law will prevent claim preclusion from operating. The fact that the losing party would, because of such an overruling of legal precedent, win the lawsuit if she were allowed to start it again, is irrelevant. Moitie v. Brown
   
7. 
   Modern Trends:
   
   1. 
      You only get one shot, and because there are so many new procedural rules, i.e. pleading in the alternative, if you try to come back on another theory – court has discretion to find res jud. Smith
      
8. 
   Heaney - The Δ was not barred by suing school district for wrongful term. b/c issue in first case was not fully litigated
   

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  Anguilano v. Transcontinental Bus System, Inc. - claim dismissed on failure to file ______ not on the merits, but res judicata barred him from bringing the claim
  
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    gross negligence and the court has to bar him from coming back because otherwise you encourage that behavior, must get punished for violating the court’s authority and the punishment needs to mean something
    
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  Rinehart v. Locke - in first suit P brought a claim for an unlawful suit for unlawful arrest, he failed to bring probable cause; res judicata applies despite the fact that it wasn’t tried on the merits; Rule 41b might be construed in a way that permits him to bring the suit again if we follow Costello; He had other remedies available
  
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  Semtek International Inc. v. Lockheed - Semtek International filed a complaint against Lockheed Martin Corporation in California state court, alleging breach of contract and various business torts. Based on diversity of citizenship, Lockheed Martin moved the case to the District Court. In the District Court, Lockheed Martin successfully moved to dismiss Semtek's claims, as they were barred by California's 2-year statute of limitations.
  
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    Consider issue of forum shopping (*look in legal lines)
    
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    Traditional doctrine that statute of limitations only relates to remedy and not to right
    

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  Cromwell v. County of Sac - bonds case, first case lost because didn’t prove that he had gotten the bond value (?), the second case was allowed to be brought because he brought the evidence ;
  
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    Can you switch theories and bring another suit? We have said up until now that you have to bring all theories and if you skip one then you are out of luck.
    
  • 
    There is a special rule for bonds that says they are different causes of action. → No claim preclusion.
    
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  Russel v. Place - in second suit, P tried to bar D bringing defenses because had lost in previous actions, but the record of the first action didn’t disclose the intention of the court; there can only be preclusion where the issue was litigated; D sues the first time and says you are infringing my patent and wins, also says he is infringing patent in second suit; The first court didn’t say what was infringed upon
  
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    Ambiguous as to what the basis of the first judgment was so there is no preclusion
    
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    You can’t have preclusion unless you know unambiguously what was ruled on
    
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  Rios v. Davis - Case 1: Davis wins; Case 2: Claim of recovery on his own injuries, Rios won; Davis claims there is not estoppel because it has been established that Rios is contributory negligent; COA says that it should not be estopped because the previous judgment wasn’t appeallable
  
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    The finding that he was negligent might be completely unfounded, but since he did win there is nothing he can do about the claim that he was negligent, can’t ask them to set it aside because he’s already won
    
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    Rule 13(a) compulsory counterclaim – it seems Rios should have brought the claim in the first place
    
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  Patterson v. Saunders - in original suit he was denied recovery because he failed to prove ownership of the land that they alleged the timber was cut down on; P fails in second suit to say anything different, offers no proof of title; A strong finding might be shielding a weak finding from appellate review
  

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  Ralph Wolff & Sons v. New Zealand Ins. Co. - the Wolffs who were brothers/partners had a candy factory and they had insurance coverage and the candy factor was partially burned down in fire and they originally brought a suit against 9 of the insurance companies, the verdict was for the P’s to recover damages for their property loss; they again brought a suit against two new insurance companies whom each insured them for $1000
  
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    Issue: If the two companies in the second case are bound by the first case.
    
  • 
    Why does the court think he should get his day in court?
    

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  The courts position is the doctrine of mutuality.
  
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  The also recognized that there was a notion of privity.
  
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  The enforce the principle of mutuality even though it looks shady.
  

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  old woman moved in with Cooks who opened bank account for her, then transferred the money to themselves
  
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  Case 1: HB → Cook
  
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  Case 2: HB → B of A
  
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  In determining the validity of a plea of res judicata three questions are pertinent:
  
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    Was the issue decided in the prior adjudication identical with the one presented in the action in question?
    
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    Was there a final judgment on the merits?
    
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    Was the party against whom the plea is asserted a party or in privity with a party to the prior adjudication?
    
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  She has already been told the money was a gift
  
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  The difference between a non-,usual estoppel principle is that it creates litigation risks for litigants who face a number of similar situated adversaries
  
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    First suit that gets tried can only help them, it can’t hurt them.
    
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    There need to be restraints on potential abuses
    

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  SEC* → Parklane
  
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  Shore → Parklane (shore tried to use the SEC verdict as collateral estoppel)
  
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  Court said this would be an offensive
  
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    Cases where a P could easily have joined in the earlier action or where, either for the reasons discussed above or for other reasons, the application of offensive estoppel would be unfair to a D, a trial judge should not allow the use of offensive collateral estoppel.