Bar Exam (Uniform) Quiz: Judgment Effects

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Judgment EffectsQuestion 1 of 20

A homeowner sued a contractor in state court for breach of contract, alleging the contractor used defective materials when building a deck. The homeowner sought $10,000 in damages for the cost of replacing the deck materials. After a full trial, the court entered a final judgment in favor of the contractor, finding that the materials used were not defective. Six months later, the homeowner filed a new lawsuit against the same contractor, alleging negligence in the construction of the same deck, claiming the deck is structurally unsound due to poor workmanship. The homeowner now seeks $50,000 for the cost to demolish and rebuild the entire deck.

The contractor has moved to dismiss the second lawsuit based on claim preclusion. What is the most likely outcome of the contractor's motion? Select one.

The motion will be granted, because the negligence claim arises from the same transaction as the breach of contract claim and should have been brought in the first lawsuit.

The motion will be denied, because breach of contract and negligence are distinct legal theories with different elements, constituting separate claims.

The motion will be denied, because the damages sought in the second lawsuit are substantially different from the damages sought in the first.

The motion will be granted, because the issue of the deck's quality was already decided in the first lawsuit, precluding the new claim under issue preclusion.

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Bar Exam (Uniform) Quiz

Bar Exam (Uniform) Quiz: Judgment Effects

Practice Judgment Effects in Bar Exam (Uniform) with focused quiz questions that help you check what you know, review explanations, and build confidence with test-style prompts.

What this quiz covers

This quiz focuses on Judgment Effects, giving you a quick way to practice the rules, question types, and explanations that matter most for Bar Exam (Uniform).

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Try each quiz question before looking at the correct answer. Use the explanations to review missed ideas, then come back to similar questions until the pattern feels familiar.

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Question 1

The contractor has moved to dismiss the second lawsuit based on claim preclusion. What is the most likely outcome of the contractor's motion? Select one.

The motion will be granted, because the negligence claim arises from the same transaction as the breach of contract claim and should have been brought in the first lawsuit. (correct answer)
The motion will be denied, because breach of contract and negligence are distinct legal theories with different elements, constituting separate claims.
The motion will be denied, because the damages sought in the second lawsuit are substantially different from the damages sought in the first.
The motion will be granted, because the issue of the deck's quality was already decided in the first lawsuit, precluding the new claim under issue preclusion.

Explanation: The correct answer is A. Claim preclusion (res judicata) bars a second suit on the same claim or any other claim arising from the same transaction or occurrence that could have been brought in the first suit. Here, both the breach of contract claim (defective materials) and the negligence claim (poor workmanship) arise from the single transaction of the deck's construction. Therefore, the homeowner was required to bring all related claims in the initial lawsuit. B is incorrect because the modern transactional test for claim preclusion focuses on the common nucleus of operative fact, not separate legal theories. C is incorrect because the amount or type of damages sought does not create a new claim for preclusion purposes. D is incorrect because it confuses claim preclusion with issue preclusion; while issue preclusion might apply to certain facts, the entire claim is barred by claim preclusion, which is the more comprehensive defense here.

Question 2

You are representing a client who was sued for breach of contract. The plaintiff, a supplier, alleged your client failed to pay for a shipment of goods. After a bench trial, the judge issued a written opinion finding that (1) a valid contract existed, but (2) your client had, in fact, paid the invoice in full. Accordingly, the court entered a final judgment in your client's favor. The supplier has now filed a second lawsuit against your client, this time for fraud, alleging that your client induced the supplier to enter the contract with false promises of future business. The supplier seeks punitive damages.

Your client wants you to file a motion to dismiss. Which preclusion doctrine provides the strongest basis for your motion? Select one.

Issue preclusion, because the finding that a valid contract existed binds the supplier and is a necessary element of its fraud claim.
Issue preclusion, because the finding that your client paid the invoice bars any claim related to that transaction.
Neither, because a claim for fraud is fundamentally different from a claim for breach of contract and is not barred.
Claim preclusion, because the fraud claim arises from the same transaction as the contract claim and should have been brought in the first action. (correct answer)

Explanation: When you encounter questions about successive lawsuits between the same parties, you need to analyze both claim preclusion (res judicata) and issue preclusion (collateral estoppel) to determine which doctrine applies. Claim preclusion bars a second lawsuit when four elements are met: (1) the same parties, (2) a final judgment on the merits in the first case, (3) the same claim or one arising from the same transaction, and (4) the claim could have been brought in the first action. Here, all elements are satisfied. The fraud claim arises from the same contractual transaction that was the subject of the first lawsuit—the supplier's alleged inducement occurred during contract formation, making it part of the same operative facts. The supplier could have brought both breach of contract and fraud claims together in the first action. Answer D correctly identifies that claim preclusion applies because both claims stem from the same transaction and the fraud claim should have been brought initially. Answer A incorrectly focuses on issue preclusion. While the contract's validity was determined, this finding doesn't necessarily bind the supplier regarding fraud elements, which involve different factual inquiries about misrepresentation and intent. Answer B misapplies issue preclusion by suggesting the payment finding bars all transaction-related claims. Payment relates to contract performance, not to pre-formation fraudulent inducement. Answer C incorrectly concludes no preclusion applies. Even though fraud and breach of contract are different legal theories, claim preclusion can still bar claims arising from the same factual transaction. Study tip: Remember that claim preclusion has a broader scope than issue preclusion—it bars entire claims from the same transaction, regardless of different legal theories involved.

Question 3

In a federal court action, a corporation sued a former executive for breaching his non-compete agreement. The executive failed to answer the complaint, and the court entered a default judgment against him, awarding the corporation damages. The corporation then brought a second lawsuit against the executive, alleging that the executive had committed fraud by making false representations during his employment contract negotiations. The fraud claim is based on the same set of facts surrounding his hiring and subsequent departure.

The executive argues that because the fraud claim was not raised in the first lawsuit, the corporation is now barred from bringing it by claim preclusion. Which of the following is the executive's strongest argument? Select one.

The default judgment is a final judgment on the merits, and the fraud claim arises from the same transaction as the contract claim. (correct answer)
The issue of the executive's misconduct was necessarily decided in the first action, precluding the fraud claim.
The corporation is estopped from bringing the fraud claim because it should have been joined as a compulsory claim in the first action.
The default judgment serves as an admission by the executive to all well-pleaded allegations, which resolves all possible claims.

Explanation: The correct answer is A. For purposes of claim preclusion (res judicata), a default judgment is considered a final judgment on the merits. Because the fraud claim arose from the same transaction or occurrence (the employment relationship and its termination) as the breach of contract claim, it should have been brought in the first lawsuit. Therefore, claim preclusion bars the second action. B is incorrect because a default judgment has no issue-preclusive effect; no issues are 'actually litigated.' C is incorrect because there is no such thing as a 'compulsory claim' for a plaintiff; the relevant doctrine is claim preclusion's bar on claim splitting. D is incorrect because while a default judgment is an admission, this fact doesn't form the basis of the preclusion argument against the plaintiff.

Question 4

The default judgment is a final judgment on the merits, and the fraud claim arises from the same transaction as the contract claim. (correct answer)
The issue of the executive's misconduct was necessarily decided in the first action, precluding the fraud claim.
The corporation is estopped from bringing the fraud claim because it should have been joined as a compulsory claim in the first action.
The default judgment serves as an admission by the executive to all well-pleaded allegations, which resolves all possible claims.

Question 5

A citizen filed a lawsuit in state court against a police officer, alleging a violation of his state constitutional rights during an arrest. The state court granted summary judgment for the officer, finding that the officer's actions were reasonable under state law. The citizen then filed a new lawsuit in federal court against the same police officer, alleging a violation of his Fourth Amendment rights under 42 U.S.C. § 1983 based on the very same arrest.

The officer moves to dismiss the federal lawsuit. In deciding the motion, what law of preclusion must the federal court apply? Select one.

Federal common law of preclusion, because the second case is brought in federal court.
Federal common law of preclusion, because the claim arises under federal law (§ 1983).
The preclusion law of the state where the first judgment was rendered. (correct answer)
The preclusion law of the state where the federal court sits.

Explanation: The correct answer is C. Under the Full Faith and Credit Act (28 U.S.C. § 1738), a federal court must give the same preclusive effect to a state court judgment that the judgment would be given by the courts of the state that rendered it. Therefore, the federal court must look to the claim and issue preclusion rules of the state where the first judgment was entered to determine if the § 1983 claim is barred. A and B are incorrect because the full faith and credit doctrine requires federal courts to apply state preclusion law to state judgments, even when the subsequent case involves a federal question. D is incorrect because the relevant state law is that of the rendering state, not necessarily the state where the federal court is located (though they are often the same).

Question 6

A plaintiff was injured in a three-car collision involving Defendant 1 and Defendant 2. The plaintiff sued only Defendant 1, alleging negligence. Defendant 1 defended by arguing that Defendant 2 was the sole cause of the accident. After a trial, the jury found Defendant 1 not liable, and a final judgment was entered. The plaintiff then sued Defendant 2 for negligence arising out of the same collision. Defendant 2 wishes to use the first judgment to his advantage.

What is the preclusive effect of the first judgment on the second lawsuit? Select one.

Claim preclusion bars the plaintiff's suit against Defendant 2, because the claim arises from the same transaction.
Issue preclusion prevents the plaintiff from relitigating the negligence of Defendant 1.
Issue preclusion prevents Defendant 2 from denying his own negligence, because Defendant 1 argued that he was at fault.
The first judgment has no preclusive effect because Defendant 2 was not a party to the first lawsuit. (correct answer)

Explanation: This question tests your understanding of claim and issue preclusion, fundamental concepts in civil procedure that determine when prior judgments prevent relitigation of claims or issues. The correct answer is D because both claim preclusion and issue preclusion require that the person against whom preclusion is asserted was a party (or in privity with a party) to the original lawsuit. Since Defendant 2 was not a party to the first lawsuit between the plaintiff and Defendant 1, neither form of preclusion can apply against him in the second lawsuit. Option A misapplies claim preclusion. While claim preclusion does bar relitigation of claims arising from the same transaction, it only applies when the same parties (or those in privity) are involved in both suits. Here, the second lawsuit involves different defendants, so claim preclusion doesn't apply. Option B incorrectly suggests issue preclusion would prevent relitigation of Defendant 1's negligence. However, Defendant 1's negligence isn't even at issue in the second lawsuit against Defendant 2, making this reasoning irrelevant. Option C presents a creative but wrong theory that Defendant 2 should be bound by Defendant 1's argument that Defendant 2 was at fault. Issue preclusion doesn't work this way - you can't bind a non-party based on another party's litigation strategy or admissions. Remember this key principle: preclusion doctrines protect parties from having to relitigate matters, but they cannot bind someone who wasn't a party to the original case and had no opportunity to defend themselves. Always check whether the person against whom preclusion is asserted was actually involved in the first lawsuit.

Question 7

You represent a client who was one of 50 passengers injured when a tour bus crashed. Another passenger, acting as a solo plaintiff, sued the bus company in a well-publicized trial. The bus company defended vigorously, but the jury found the company was grossly negligent and awarded the other passenger substantial damages. The judgment is now final. Your client now wishes to sue the bus company for her own injuries from the same crash. She cannot afford a lengthy trial and hopes to use the prior judgment to her advantage.

What is the best legal argument for your client to make regarding the prior judgment? Select one.

The bus company is barred by claim preclusion from denying liability, because your client's claim arises from the same transaction.
The bus company is barred by offensive non-mutual issue preclusion from relitigating the issue of its gross negligence. (correct answer)
The prior judgment has no preclusive effect because your client was not a party to that lawsuit.
The prior judgment can be used as persuasive, but not binding, evidence of the bus company's negligence under the doctrine of stare decisis.

Explanation: The correct answer is B. This is a potential use of offensive non-mutual issue preclusion. A new plaintiff (your client) seeks to prevent a defendant (the bus company) from relitigating an issue it previously lost (its gross negligence). Courts will allow this if it is not unfair to the defendant. Here, the bus company defended vigorously in the first suit, so it had a full and fair opportunity to litigate the issue. A is incorrect because claim preclusion requires the same parties or those in privity; your client is a new party, so claim preclusion does not apply. C is incorrect because it ignores the doctrine of non-mutual issue preclusion. D is incorrect because while stare decisis might apply, issue preclusion provides a much stronger, binding effect on the specific issue decided.

Question 8

An employee was fired and brought an action before a state labor relations board, alleging she was terminated without just cause. The board conducted an adversarial hearing and concluded that the employer had just cause for the termination. The employee did not appeal this administrative decision. The employee then sued the employer in state court for breach of her employment contract, alleging she was fired without just cause. The employer moved for summary judgment, arguing the claim is precluded by the labor board's decision.

Is the employee's breach of contract action likely to be barred? Select one.

Yes, if the administrative agency acted in a judicial capacity and its proceedings provided a full and fair opportunity to litigate the issue. (correct answer)
No, because decisions by administrative agencies never have preclusive effect in a court of law.
No, because the standard of proof in an administrative hearing is different from the standard in a civil trial.
Yes, but only if the employer can prove the employee's court claim is frivolous.

Explanation: The correct answer is A. Modern preclusion doctrine extends to the findings of administrative agencies when they act in a judicial capacity. If the agency proceeding involved elements of adjudication, such as notice, the right to present evidence, and a final decision, its findings can have preclusive (both claim and issue) effect. Since the board held a hearing and determined the central issue of 'just cause,' that finding is likely to preclude the employee's court action, which depends on the same issue. B is an incorrect statement of law. C is incorrect unless the burden of proof was substantially lower in the administrative proceeding, which is not indicated and generally not a bar if the party being precluded had the burden in both. D is irrelevant to the doctrine of preclusion.

Question 9

What is the preclusive effect of the first judgment on the second lawsuit? Select one.

Claim preclusion bars the plaintiff's suit against Defendant 2, because the claim arises from the same transaction.
Issue preclusion prevents the plaintiff from relitigating the negligence of Defendant 1.
Issue preclusion prevents Defendant 2 from denying his own negligence, because Defendant 1 argued that he was at fault.
The first judgment has no preclusive effect because Defendant 2 was not a party to the first lawsuit. (correct answer)

Question 10

A company sued a former employee in federal court, alleging the employee violated a non-disclosure agreement (NDA). The case was dismissed for lack of subject matter jurisdiction because the parties were not diverse and there was no federal question. The company then filed an identical lawsuit in state court, which has jurisdiction over the matter. The former employee moves to dismiss the state court action, citing the federal court's dismissal.

What is the preclusive effect of the federal court's dismissal on the state court action? Select one.

The action is barred by claim preclusion because the first case ended in a final judgment.
The action is barred by issue preclusion because the issue of the NDA's validity was implicitly decided.
The action is not barred because a dismissal for lack of subject matter jurisdiction is not an adjudication on the merits. (correct answer)
The action is not barred, but the issue of whether federal jurisdiction exists is precluded from being relitigated.

Explanation: The correct answer is C. A core requirement for both claim and issue preclusion is a final judgment 'on the merits.' A dismissal for lack of subject matter jurisdiction (or personal jurisdiction, or venue) is not a judgment on the merits. It is a determination that the court lacks the power to hear the case, not a decision on the substance of the claims. Therefore, the dismissal does not preclude the plaintiff from refiling the action in a court that does have jurisdiction. A is incorrect because the judgment was not on the merits. B is incorrect because no issues related to the merits were decided. D is a correct statement of law—the issue of federal jurisdiction is precluded—but it does not answer the ultimate question of whether the action is barred. C is the best answer because it directly addresses why the state court action can proceed.

Question 11

A landlord sued a tenant for failure to pay rent in June. The court found for the landlord and entered a judgment for one month's rent. The landlord then filed a second suit against the same tenant, seeking rent for July, August, and September, which has also gone unpaid under the same lease agreement. The tenant has moved to dismiss the second suit, arguing that claim preclusion bars the landlord from suing for rent that was due at the time the first lawsuit was filed.

Assuming the rent for July was due when the first lawsuit was filed but the rent for August and September was not, how should the court rule? Select one.

The court should dismiss the entire action, as all claims for rent under a single lease must be brought together.
The court should allow the entire action to proceed, as each month's unpaid rent constitutes a separate breach and a new claim.
The court should dismiss the claim for July's rent but allow the claims for August's and September's rent to proceed. (correct answer)
The court should allow the claim for July's rent to proceed but dismiss the claims for August's and September's rent as unripe.

Explanation: The correct answer is C. This question tests the application of claim preclusion to installment contracts like leases. A plaintiff must sue for all breaches that have occurred at the time the suit is filed. The landlord's first suit was for June's rent. At that time, July's rent was also due. By not including the claim for July's rent in the first lawsuit, the landlord split his claim, and that portion of the claim is now barred by claim preclusion. However, the claims for August's and September's rent had not yet accrued when the first suit was filed. Therefore, they could not have been brought, and claim preclusion does not bar them. A is incorrect because the claims for August and September were not barred. B is incorrect because it misstates the rule on claim splitting for installment contracts. D is incorrect because the claim for July's rent is barred, not permitted to proceed.

Question 12

An inventor sued a large corporation for infringing her patent. The corporation defended by arguing that the inventor's patent was invalid because the invention was obvious. The court agreed and entered a final judgment for the corporation on the basis of patent invalidity. The inventor later sued a small, unrelated startup for infringing the same patent. The startup was not in business when the first lawsuit occurred. The startup now seeks to prevent the inventor from relitigating the patent's validity.

Which doctrine provides the startup with its best defense? Select one.

Claim preclusion, because the claim involves the same patent.
Defensive non-mutual issue preclusion. (correct answer)
Offensive non-mutual issue preclusion.
Stare decisis, because the prior court's decision is persuasive authority.

Explanation: The correct answer is B. This is a classic example of defensive non-mutual issue preclusion. The party being precluded (the inventor) is the same one who lost on the issue in the prior case. The party asserting preclusion (the startup) is a new party. Because the startup is using preclusion as a defense (a 'shield') against the inventor's claim, it is defensive. The inventor had a full and fair opportunity to litigate the validity of her patent in the first case and lost, so she is now precluded from relitigating that same issue against a new defendant. A is incorrect because the defendant is different. C is incorrect because the new party is the defendant, making the use of preclusion defensive, not offensive. D is incorrect because issue preclusion is a binding doctrine, which is much stronger than the merely persuasive effect of stare decisis.

Question 13

What is the best legal argument for your client to make regarding the prior judgment? Select one.

The bus company is barred by claim preclusion from denying liability, because your client's claim arises from the same transaction.
The bus company is barred by offensive non-mutual issue preclusion from relitigating the issue of its gross negligence. (correct answer)
The prior judgment has no preclusive effect because your client was not a party to that lawsuit.
The prior judgment can be used as persuasive, but not binding, evidence of the bus company's negligence under the doctrine of stare decisis.

Question 14

A patient underwent a complex surgical procedure performed by a surgeon at a hospital. The patient later sued the surgeon for medical malpractice, alleging the surgeon was negligent during the procedure. After discovery, the surgeon moved for summary judgment, which the court granted, entering a final judgment for the surgeon after finding, as a matter of law, that the surgeon's conduct did not breach the standard of care. The patient then filed a second lawsuit against the hospital, proceeding on a theory of vicarious liability for the surgeon's alleged negligence during the same procedure.

The hospital moves for summary judgment, arguing the patient's claim is barred. What is the most likely outcome? Select one.

The motion will be granted, because the hospital was in privity with the surgeon, and thus the claim against the hospital is barred by claim preclusion.
The motion will be granted, because the patient is precluded from relitigating the issue of the surgeon's negligence, which is a necessary element of the claim against the hospital. (correct answer)
The motion will be denied, because the hospital was not a party to the first lawsuit, and therefore preclusion does not apply.
The motion will be denied, because a claim against an employee is separate and distinct from a vicarious liability claim against an employer.

Explanation: The correct answer is B. This is a classic case of non-mutual defensive issue preclusion. The patient, who was the plaintiff in the first case, lost on the issue of the surgeon's negligence. The hospital, a new defendant, can prevent the patient from relitigating that same issue. Since the surgeon's negligence is an essential element of the vicarious liability claim against the hospital, and that issue cannot be relitigated, the claim against the hospital must fail. A is incorrect because the primary doctrine is issue preclusion, not claim preclusion. While an employment relationship can create privity for some purposes, the cleaner and more direct analysis is issue preclusion, and claim preclusion would not bar a claim against a different party. C is incorrect because it fails to consider non-mutual preclusion. D is incorrect because while the claims are against different parties, the vicarious liability claim is entirely dependent on the underlying negligence of the employee, an issue that has already been decided.

Question 15

A pedestrian was struck by a car driven by a motorist. The pedestrian sued the motorist for negligence in federal court. The jury returned a special verdict with two findings: (1) the motorist was negligent, and (2) the pedestrian was also contributorily negligent. In the jurisdiction, contributory negligence is a complete bar to recovery. Accordingly, the court entered a final judgment for the motorist. Subsequently, the motorist sued the pedestrian for damages to his car arising from the same accident. The motorist moves for summary judgment on the issue of the pedestrian's negligence, arguing the pedestrian is precluded from relitigating that issue.

Is the pedestrian precluded from arguing that he was not negligent in the second action? Select one.

Yes, because the issue of the pedestrian's negligence was actually litigated and decided in the prior action.
Yes, because the pedestrian had a full and fair opportunity to litigate the issue of his own negligence in the first lawsuit.
No, because the finding of the motorist's negligence in the first action means the motorist has unclean hands.
No, because under the alternative findings doctrine, neither finding of negligence was essential to the judgment when both would support the same result. (correct answer)

Explanation: The correct answer is D. For issue preclusion to apply, the issue must have been actually litigated, decided, and essential to the judgment. Here, the jury made two independent findings that both parties were negligent. In a contributory negligence jurisdiction, either finding alone would support a judgment for the motorist. Under the alternative findings doctrine, when a judgment rests on multiple independent grounds, neither finding is considered essential to the judgment for purposes of issue preclusion. Therefore, the pedestrian can relitigate the issue of his own negligence. A and B are incorrect because they ignore the essential-to-judgment requirement. C is incorrect because unclean hands is not relevant to issue preclusion analysis.

Question 16

What is the preclusive effect of the federal court's dismissal on the state court action? Select one.

The action is barred by claim preclusion because the first case ended in a final judgment.
The action is barred by issue preclusion because the issue of the NDA's validity was implicitly decided.
The action is not barred because a dismissal for lack of subject matter jurisdiction is not an adjudication on the merits. (correct answer)
The action is not barred, but the issue of whether federal jurisdiction exists is precluded from being relitigated.

Question 17

A patent holder sued a corporation in federal court for patent infringement. The court, after a full trial, found that the patent was invalid and entered judgment for the corporation. The patent holder then sued a second corporation, a wholly-owned subsidiary of the first corporation, for infringing the same patent. The second corporation was formed after the first lawsuit was completed, and it now manufactures the same product that was the subject of the first suit. The second corporation moves for summary judgment.

What is the second corporation's best argument in support of its motion? Select one.

Claim preclusion bars the suit because the second corporation is in privity with its parent company.
Issue preclusion bars the suit because the patent holder is estopped from relitigating the issue of the patent's validity. (correct answer)
The suit should be dismissed for failure to join an indispensable party, the parent company.
The patent holder's claim is barred by the statute of limitations, which ran from the first judgment.

Explanation: The correct answer is B. This is an application of non-mutual defensive issue preclusion. The patent holder had a full and fair opportunity to litigate the validity of its patent in the first lawsuit and lost. The issue was actually litigated, determined, and essential to the judgment. A new defendant (the subsidiary) can now use that prior judgment to prevent the patent holder from relitigating the same issue. A is incorrect because, while the subsidiary might be in privity, claim preclusion is not the right doctrine as the defendant is a different legal entity and the infringing acts are new. Issue preclusion is the more precise and effective defense. C is incorrect because the parent company is not an indispensable party to a suit against the subsidiary for its own actions. D is incorrect as the statute of limitations runs from the infringing act, not from a prior judgment.

Question 18

A consumer brought a class action lawsuit against a smartphone manufacturer, alleging a specific battery defect. The class was properly certified under FRCP 23, and notice was sent to all potential class members, including a man who owned the phone. The man did not opt out of the class. The class action proceeded to trial, and the jury found that the battery was not defective. A final judgment was entered in favor of the manufacturer. The man later filed an individual lawsuit against the manufacturer, alleging that his phone's battery was defective due to the same issue litigated in the class action.

The manufacturer moves to dismiss the man's lawsuit. What is the likely outcome? Select one.

The motion will be denied, because the man never personally appeared or participated in the class action.
The motion will be denied, because applying preclusion would violate the man's due process rights to his own day in court.
The motion will be granted, because the man was a member of the class and is bound by the judgment rendered in the class action. (correct answer)
The motion will be granted, but only if the manufacturer can show the man had actual knowledge of the details of the class action lawsuit.

Explanation: The correct answer is C. A final judgment in a properly certified class action binds all class members who did not opt out. Due process is satisfied by the requirements of adequate representation, notice, and the opportunity to opt out. Because the man was a class member and did not opt out, he is in privity with the class representative and is bound by the judgment. Claim preclusion therefore bars his individual suit on the same claim. A is incorrect because personal participation is not required to be bound by a class action judgment. B is incorrect because the procedural protections of Rule 23 are designed to satisfy due process for absent class members. D is incorrect because the notice provided, not the man's actual subjective knowledge, is the legally relevant standard for due process and the binding effect of the judgment.

Question 19

Your client wants you to file a motion to dismiss. Which preclusion doctrine provides the strongest basis for your motion? Select one.

Issue preclusion, because the finding that a valid contract existed binds the supplier and is a necessary element of its fraud claim.
Issue preclusion, because the finding that your client paid the invoice bars any claim related to that transaction.
Neither, because a claim for fraud is fundamentally different from a claim for breach of contract and is not barred.
Claim preclusion, because the fraud claim arises from the same transaction as the contract claim and should have been brought in the first action. (correct answer)

Question 20

A plaintiff sued a defendant in federal court, asserting a single claim for breach of contract. The defendant filed a motion to dismiss for failure to state a claim under FRCP 12(b)(6). The court granted the motion and dismissed the plaintiff's complaint. The judgment stated the dismissal was "with prejudice." The plaintiff did not appeal. One month later, the plaintiff filed a new complaint in the same court against the same defendant, alleging the same breach of contract but adding several new factual allegations that cured the defects of the original complaint.

The defendant moves to dismiss the new complaint on the basis of claim preclusion. How should the court rule? Select one.

Deny the motion, because a dismissal under FRCP 12(b)(6) is not a judgment on the merits.
Deny the motion, because the new complaint contains new factual allegations, creating a new claim.
Grant the motion, because a dismissal with prejudice for failure to state a claim operates as a final judgment on the merits. (correct answer)
Grant the motion, but only if the court finds that the plaintiff's new allegations are made in bad faith.

Explanation: The correct answer is C. Under the Federal Rules of Civil Procedure, a dismissal for failure to state a claim under Rule 12(b)(6) is considered an adjudication on the merits unless the court specifies otherwise. When the court dismisses the case "with prejudice," it explicitly makes the judgment final and on the merits for preclusion purposes. Therefore, claim preclusion applies and bars the second suit. A is incorrect because a 12(b)(6) dismissal is one of the dismissals that is considered on the merits. B is incorrect because adding new facts related to the same underlying claim does not create a new claim for preclusion purposes; the plaintiff had the opportunity to plead these facts in the first action (or seek leave to amend). D is incorrect because the plaintiff's good or bad faith is not relevant to the application of claim preclusion.