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Georgia Supreme Court Clarifies, Finally, Res Judicata

Res judicata is a legal doctrine that holds that a matter decided on its merits by a court of competent jurisdiction may not be relitigated between the same parties.  In Georgia, until recently, two lines of cases established slightly different standards for determining whether the doctrine of res judicata applied.

In Coen v. CDC Software Corp., the Georgia Supreme Court recently homogenized those two competing lines of cases.  816 S.E.2d 670 (June 29, 2018).  Previously, one line of Georgia cases required “an identity of cause of action” between the first and second cases.  Id. at 672.  The other line of cases focused more broadly on the similarity of “subject matter” between the cases.  Id.

Coen clarifies that while res judicata still requires “an identify of cause of action” between the first and second cases, “identity of cause of action” now means “the entire set of facts which give rise to an enforceable claim . . . with special attention to the wrong claimed.” Id. at 674 (internal citations omitted).

In Coen, plaintiff sued his former employer for breach of contract, alleging failure to pay a severance package and related claims all sounding in contract.  Id. at 671.  No tort claim existed.  Id.   Plaintiff ultimately obtained a judgment in his favor.  After filing the first suit, the plaintiff filed a second suit claiming defamation based on alleged untrue statements in certain S.E.C. filings, which also occurred prior to the first suit. [1] Id. 672.

The trial court dismissed plaintiff’s second action based on res judicata and failure to state a claim.  Id.  The Court of Appeals then affirmed on res judicata grounds, holding that “both actions arose from the underlying circumstances surrounding the termination of [plaintiff’s] employment [and,]  [a]s such, the two actions concerned the same subject matter.”  Id.  The Supreme Court granted certiorari to consider the res judicata issue.

The Court began its analysis by glossing over the split in cases concerning res judicata.  “As our case law developed over the years . . . terminology we have employed appears, at first glance, to have created two lines of opinions-one line requiring an identity of ‘subject matter’ . . . and one requiring an identity of ‘cause of action.’” Id. at 672.

After discussing the historical origins of the split, the Court announced its unification of the two lines of cases by clarifying that the focus belongs on the “entire set of facts which give rise to the enforceable claim.”  Id. 674 (citations omitted).  Thus, Georgia law now holds that res judicataapplies only when there is 1) an identity of cause of action, 2) identity of parties or their privies, and 3) previous adjudication on the merits by a court of competent jurisdiction.  And, “cause of action” for purposes the first element considers “the entire set of facts which give rise to an enforceable claim.”  Id.

As applied in Coen, the new rule required that the facts at issue in the first case be necessary to the claims in the second.  Thus, the Court rejected the applicability of res judicata because the facts necessary to Coen’s first contract claim were separate and distinct from those alleged in the second defamation case.  “[T]he two suits are based on different wrongs and different sets of operative facts’ accordingly, the suits contained different causes of action and the second suit is not barred by res judicata.

[1] Plaintiff first filed his defamation suit in federal court prior to summary judgment in the contract action. Nearly two years later, the federal court dismissed the defamation case for lack of jurisdiction. Plaintiff then re-filed the defamation claims in Fulton County Superior Court.  This filing occurred nearly two years after Plaintiff obtained his judgment in the original breach of contract case.

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