Legal Memorandum: Res Judicata and Default Judgments

Issue: Cases that address the question of whether a prior default judgment against a party precludes a nonparty to that litigation who is in privity with the original defaulted party from relitigating in a subsequent lawsuit matters determined by the default judgment.

Area of Law: Litigation & Procedure
Keywords: Res judicata effect; Default judgment
Jurisdiction: Federal
Cited Cases: 220 F.3d 1325; 91 F.3d 265
Cited Statutes: None
Date: 04/01/2005

  United States v. Schimmels, 127 F.3d 874 (9th Cir. 1997) (res judicata effect given to default judgment against individuals in bankruptcy adversary proceeding precluded government’s relitigating non-dischargeability claim in its adversary proceeding; contains discussion of various forms of privity).

Int’l Nutrition Co. v. Horphag Research, Ltd., 220 F.3d 1325 (Fed. Cir. 2000) (trademark litigation; recognizing that res judicata could operate against nonparty to prior default judgment, but finding that requisite privity did not exist).

Lundborg v. Phoenix Leasing, Inc., 91 F.3d 265 (1st Cir. 1996) (if not tainted by fraud, default judgment against cable company precluded claims in subsequent lawsuit by sole shareholder of cable company and by corporation of which cable company was a general partner).

Jaffe v. Grant, 793 F.2d 1182 (11th Cir. 1986) (individual who was “alter ego” of corporation was in privity for purposes of giving res judicata effect to earlier default judgment against corporation).

Allen v. Brody-Bilt Constr. Co., No. 241716 (Mich. Ct. App. Dec. 18, 203) (unpublished) (individual family shareholders of corporation bound by prior default judgment against corporation on res judicata grounds).

Grisanzo v. Bilka, 511 N.E. 2d 762 (Ill. App. Ct. 1987) (reverse situation; res judicata precluded contract action against officers of corporation where plaintiff previously obtained a default judgment on the same contracts against corporation).

Klaus v. Vander Heyden, 316 N.W.2d 664 (Wis. 1982) (successor receiver bound by default judgment against predecessor receiver regarding share of profits […]

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