The question is whether you can file a malicious prosecution suit when the suit that you're suing over was dismissed on res judicata grounds. One Court of Appeal opinion, JSJ Limited, says that you can't, on the theory that a dismissal on such grounds isn't a favorable termination on the merits of the dispute. Today's Court of Appeal opinion, Alston, says that's not necessarily true: that a dismissal for res judicata may well involve a determination of the merits, as it was here.
Both opinions are talking about "res judicata" as if it's the same thing. But, in truth, they're talking about two entirely different concepts. The first case, JSJ Limited, involved the type of "res judicata" that -- to avoid precisely this type of linguistic confusion in the first place -- we call "claim preclusion" (or, if you prefer the old terms, "true" res judicata). Once you file Lawsuit #1, you can't file the same action as Lawsuit #2. When you do, JSJ Limited is generally right; the second suit is barred by claim preclusion, but that determination isn't necessarily on the merits (e.g., because the defendant is innocent). To take the most obvious example: Maybe the plaintiff won Lawsuit #1. Lawsuit #2 would still be barred by claim preclusion. Can't file the same suit twice.
By contrast, in today's case, we're talking about the type of res judicata that we generally call "issue preclusion" (or, the common law term, collateral estoppel). Those type of dismissals often do involve a determination of the merits. For example, if you lost Lawsuit #1 on the merits (because, say, defendant didn't do it), you lose Lawsuit #2 on the same basis via claim preclusion. No need to litigate the same thing twice. You lose. And if you filed Lawsuit #2 maliciously, you are (and should be) subject to a claim for malicious prosecution, because there was a favorable termination on the merits.
So today's opinion "disagrees" with JSJ Limited, and that's (maybe) technically right. That earlier case said that "res judicata" doesn't count as a favorable termination. If you count "res judicata" as including issue preclusion, then, yeah, that's wrong; sometimes it does. But, in truth, that earlier case involved only claim preclusion ("true" res judicata). As for claim preclusion, JSJ Limited is probably right. That type of "res judicata" isn't generally (or maybe even ever) a dismissal on the merits, so you can't file a malicious prosecution lawsuit as a result.
Justice Goethals writes a good opinion, and I pretty much agree with everything he says. But it might have helped out to identify that the two now-"conflicting" strains of precedent really involve two very different types of "res judicata" -- particularly as future trial courts struggle to decide which of these two Court of Appeal precedents they feel like following. I'd have made it clear: JSJ Limited is generally right that dismissals for claim preclusion don't count as favorable termination, but today's opinion is right that dismissals for issue preclusion may well (indeed, often) count as favorable determination.
'Cause that's the right rule.
And we should stop using "res judicata" to mean both things.
