Law Lessons from DR. ENRICO BONDI, ETC. V. CITIGROUP, INC., ET AL., __ N.J. Super. __ (App. Div. 2011), A-2654-08T2, December 22, 2011:
Res judicata, or claim preclusion, insulates courts from the inefficiency of relitigating claims that have already been resolved, thereby protecting the integrity of judgments and preventing the harassment of parties. Velasquez v. Franz, 123 N.J. 498, 505 (1991); Watkins v. Resorts Int’l Hotel & Casino, Inc., 124 N.J. 398, 409 (1991). To apply the bar, three elements must be met:
(1) the judgment in the prior action must be valid, final, and on the merits;
(2) the parties in the later action must be identical to or in privity with those in the prior action; and
(3) the claim in the later action must grow out of the same transaction or occurrence as the claim in the earlier one.
[Watkins, supra, 124 N.J. at 412.]
If given preclusive effect, the prior judgment will bar not only the matters actually determined in the previous proceedings, but also all claims that could have been raised in the first action. Mortgagelinq Corp. v. Commonwealth Land Title Ins. Co., 142 N.J. 336, 338 (1995). Conversely, a claim that could not have been presented in the first action, for instance because of the first court’s lack of jurisdiction over the claim, will not be barred in the subsequent action. Watkins, supra, 124 N.J. at 413. The reasoning for this exception is that if the plaintiff could not have asserted the two claims “in a single forum, it would be unfair to force [the plaintiff] to sacrifice the claims that could not be so asserted in order to bring a single action in one forum.” Id. at 413-14.
The related principle of collateral estoppel, or issue preclusion, bars the relitigation of an issue that has already been addressed in a prior matter, if
(1) the issue to be precluded is identical to the issue decided in the prior proceeding;
(2) the issue was actually litigated in the prior proceeding;
(3) the court in the prior proceeding issued a final judgment on the merits;
(4) the determination of the issue was essential to the prior judgment; and
(5) the party against whom the doctrine is asserted was a party to or in privity with a party to the earlier proceeding.
[First Union Nat'l Bank v. Penn Salem Marina, Inc., 190 N.J. 342, 352 (2007).]
The Court has held that “[u]nlike claim preclusion, issue preclusion can result from a judgment even if that judgment was not rendered on the merits.” Watkins, supra, 124 N.J. at 422.
In Watkins, the Court held that, generally, the preclusive “effect of a judgment is determined by the law of the jurisdiction that rendered it.” Id. at 411 (citing Restatement (Second) of Conflicts of Laws § 95 comment e (1971)). Accord Restatement (Second) of Judgments § 86 (1982) (“A valid and final judgment of a state court has the same effects under the rules of res judicata in a subsequent action in a federal court that the judgment has by the law of the state in which the judgment was rendered . . . .”); Restatement (Second) of Judgments, supra, § 87 (“Federal law determines the effects under the rules of res judicata of a judgment of a federal court.”).
Slightly different considerations prevail in determining the preclusive impact of international judgments on domestic matters. See Restatement (Third) of Foreign Relations Law of the United States § 482(2) (1987) (identifying factors when a court may deny recognition). See also Innes v. Carrascosa, 391 N.J. Super. 453, 490 (App. Div.) (“foreign judgments should not be given [recognition] where such decisions violate the public policy of this state . . . .”), certif. denied, 192 N.J. 73 (2007). In this vein, in Hilton v. Guyot, 159 U.S. 113, 163-64, 16 S. Ct. 139, 143, 40 L. Ed. 95, 108 (1895), the United States Supreme Court explained that in international relations
“[c]omity,” in the legal sense, is neither a matter of absolute obligation, on the one hand, nor of mere courtesy and good will, upon the other. But it is the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens or of other persons who are under the protection of its laws.
Thus, the Restatement generally provides that
[a] valid judgment rendered in a foreign nation after a fair trial in a contested proceeding will be recognized in the United States so far as the immediate parties and the underlying cause of action are concerned.
[Restatement (Second) of Conflicts of Laws, supra, § 98.]
The rationale is that although a foreign nation’s judgment is not entitled to the same full faith and credit as a domestic one, a court may, in the interests of finality, accord the judgment the same deference it would confer to a sister state’s ruling, as long as certain conditions are satisfied. Id. § 98 comment b.
A court may, but is not required to, extend comity to a foreign judgment. Hilton, supra, 159 U.S. at 163-164, 16 S. Ct. at 143, 40 L. Ed. at 108.
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