Legal Memorandum: Doctrine of Res Judicata and Collateral Estoppel

Issue: Under Minnesota law, what effect do privity and dismissal without prejudice have on res judicata and collateral estoppel?

“Privity does not follow one specific definition but rather expresses the idea that, in some situations, a judgment should determine the interests of certain non-parties closely connected with the litigation.”  Tokheim v. Pollard, No. C1-00-1937, 2001 Minn. App. LEXIS 1012 (Minn. Ct. App. Sept. 11, 2001) (unpublished) (citing Brunsoman v. Seltz, 414 N.W.2d 547, 550 (Minn. App. 1987)). 

Although courts have held that a dismissal without prejudice may be a non-final disposition that does not create a res judicata bar, see Rosemann v. Roto-Die, Inc., 276 F.3d 393, 398 (8^th Cir. 2002); Pohlman v. Bil-Jax, Inc., 176 F.3d 1110, 1112 (8^th Cir. 1999), there is an exception to this general rule: 

Where a judgment dismisses an action on account of a formal or technical defect, the fact that by its terms it is without prejudice does not prevent it from being res judicata as to the formal or technical defect actually adjudicated and from precluding the plaintiff from maintaining another action upon the same cause if this other action has the same defect as the former action.

See E.H. Schopflocher, Annotation, Provision that Judgment Is “Without Prejudice” or “With Prejudice” as Affecting Its Operation as Res Judicata, 149 A.L.R. 533, § II(d)(4) (1944 & 2008) In other words, “notwithstanding the fact that a judgment has dismissed an action without prejudice, it is necessary for the plaintiff to obviate, in his subsequent action, the defect or […]