Let's return to Q. 9 of the MBE sample questions (by the way, this discussion is definitely not for my current civ pro class...yet):
9. A motorcyclist was involved in a collision with a truck. The motorcyclist sued the truck driver in state court for damage to the motorcycle. The jury returned a verdict for the truck driver, and the court entered judgment. The motorcyclist then sued the company that employed the driver and owned the truck in federal court for personal-injury damages, and the company moved to dismiss based on the state-court judgment.
If the court grants the company’s motion, what is the likely explanation?
(A) Claim preclusion (res judicata) bars the motorcyclist’s action against the company.
(B) Issue preclusion (collateral estoppel) establishes the company’s lack of negligence.
(C) The motorcyclist violated the doctrine of election of remedies.
(D) The state-court judgment is the law of the case.
(C) and (D) are obviously nonstarters. The question is whether (A) or (B) is right. Let's start with issue preclusion. The examiners are right that issue preclusion is a problem because we do not know why the jury returned a verdict for the truck driver. It may not have been because the driver was found non-negligent. Indeed it may be that the issue of the driver's negligence never came up (perhaps negligence was admitted). The only finding might have been the contributory negligence of the motorcyclist. We just don't know. For that reason, I can't see why the examiners even say, "It is true that the same negligence issue that was presented against the truck driver is being presented in the action against the company and that that issue was actually litigated in the first action—two requirements for the application of issue preclusion." We don't know that the negligence of the driver was actually litigated and decided in the first action. Indeed, we don't even know that the action against the driver was for negligence. The question doesn't even say that!
But there is a more fundamental problem with issue preclusion. Assume that the jury found that the driver was not negligent and that is the reason the jury rendered a verdict for the driver. Answer (B) says "Issue preclusion (collateral estoppel) establishes the company’s lack of negligence." The company's negligence is a different issue from the driver's. If the motorcyclist is suing the company under respondeat superior, the relevant issues would be, among others, the driver's negligence and whether the driver was acting within the scope of his employment. But it sounds like the motorcyclist might be suing the company for its negligence (negligent hiring? some negligence in connection with the truck's maintenance?). So issue preclusion is inappropriate. But, for this reason, I once again don't see why the examiners say that the same negligence issue that was presented against the truck driver is being presented in the action against the company. We don't know that.
So issue preclusion is out. What about claim preclusion? I agree with Professor Clermont that the examiners are wrong to say that claim preclusion applies because the driver and his employer are in privity. That’s not so.
To see why, assume that the driver lost the first suit because the driver was found to have been negligent. Assume further that the motorcyclist couldn’t get any money from the driver and so decided to bring a second suit against the company under respondeat superior. If the driver and the company were in privity, the company could be issue precluded from relitigating the driver’s negligence. But that would be unfair to the company - they should get their day in court on that issue. Clearly privity does not exist.
It is true, however that nonmutual claim preclusion will often bar a plaintiff from suing an employer under respondeat superior if he already sued an employee concerning the same transaction and lost. The reason is that if the plaintiff were not precluded, the employer or the employee would be treated unfairly if the plaintiff won against the employer. In general employers who lose when sued under respondeat superior have an indemnification action against the employee responsible. But if we allowed an indemnification action against the employee when the employee already won against the plaintiff, that would be unfair to the employee. The earlier judgment was supposed to insulate the employee from all subsequent causes of action concerning that transaction – but now the employee must defend (against employer) all over again. On the other hand, if we say no indemnification action is allowed, then the employer is treated unfairly. The liability of employers for the torts of their employees is predicated on the possibility of the employer being indemnified by the employee. It would be unfair to hold the employer liable to the plaintiff, while insisting that the employer cannot recover his loses through an indemnification suit against the employee. The solution is to bar the plaintiff from bringing the action against the employer in the first place. Non-mutual claim preclusion is commonly allowed in such cases. See, e.g., Citibank, N.A. v. Data Lease Fin. Corp., 904 F.2d 1498, 1502-1503 (11th Cir. 1990) (claim against the person vicariously responsible is barred by a judgment in favor of the person primarily responsible).
But in Question 9, we don’t know what the motorcyclist is suing the employer for. We are not told it is under respondeat superior, and the talk about the employer’s negligence in answer (B) creates more worries that it is not a respondeat superior action at all. If it isn’t nonmutal claim preclusion may not be available
If forced to do so, I would have answered (A), but this question and examiners’ discussion of answers do not inspire confidence...