This opinion is subject to revision before final

publication in the Pacific Reporter

2024 UT 12

IN THE

SUPREME COURT OF THE STATE OF UTAH

NICHOLAS KUHAR and JULIE KUHAR,

Respondents,

v.

THOMPSON MANUFACTURING, INC.,

Petitioner.

No. 20220282

Heard January 9, 2023

Filed April 25, 2024

On Certiorari to the Utah Court of Appeals

Third District, Salt Lake

The Honorable Kristine E. Johnson

No. 190900751

Attorneys:

Colin P. King, Paul M. Simmons, Salt Lake City, Matthew Weng, 

Bridgeton, N.J., for respondents

Robert L. Janicki, Michael L. Ford, Sandy, for petitioner

JUSTICE PETERSEN authored the opinion of the Court, in which 

CHIEF JUSTICE DURRANT, ASSOCIATE CHIEF JUSTICE PEARCE, 

JUSTICE HAGEN, and JUSTICE POHLMAN joined.

JUSTICE PETERSEN, opinion of the Court:

INTRODUCTION

¶1 This case involves the doctrine of issue preclusion. Under 

this doctrine, a party can preclude another party from litigating an 

issue if the same issue was litigated and determined in a previous 

case; the previous case resulted in a final judgment on the merits; and 

the party to be precluded was a party, or in privity with a party, in

the previous case. Buckner v. Kennard, 2004 UT 78, ¶ 13, 99 P.3d 842.
KUHAR v. THOMPSON MANUFACTURING

Opinion of the Court

2

¶2 In the instant case, Nicholas Kuhar and his wife Julie have 

asserted a product liability claim against a Utah company, 

Thompson Manufacturing. They seek compensation for injuries 

Kuhar sustained in New Jersey, when his safety harness failed as he 

was cleaning rain gutters and he fell thirty-seven feet to the ground.

¶3 But this is not the first lawsuit the Kuhars have brought

involving this incident. They previously sued Thompson and other 

defendants in New Jersey federal court, alleging that the harness 

was defective. That suit was unsuccessful. Thompson was 

dismissed from the case based on a lack of personal jurisdiction—

and the Kuhars refiled their claims against Thompson here. 

Meanwhile, the other New Jersey defendants prevailed on a 

summary judgment motion after the federal court excluded the 

Kuhars’ expert witness. Once the New Jersey case was dismissed, 

Thompson moved in the instant case to preclude the Kuhars from 

litigating the issue of whether the harness was defective.

¶4 The district court concluded that Thompson had shown 

the elements of issue preclusion were met. And this resulted in the 

dismissal of the Kuhars’ claims. But the court of appeals reversed, 

concluding that the issue litigated and decided in New Jersey was 

not identical to the issue Thompson seeks to preclude here. Kuhar 

v. Thompson Mfg. Inc., 2022 UT App 22, ¶¶ 9–10, 16, 506 P.3d 1200. 

Specifically, the court of appeals concluded that the New Jersey 

court had not resolved on the merits whether the harness was 

actually defective, but had determined only that (1) the expert 

report disclosed by the Kuhars was inadmissible, and (2) the 

Kuhars needed expert testimony in order to proceed on their 

claims. Id. ¶ 10. The court of appeals’ decision is now before us.

¶5 On certiorari, we conclude that the elements of issue 

preclusion are satisfied here. As a threshold matter, we clarify that

to determine the issue-preclusive effect of the New Jersey federal 

court’s judgment in this case, the substantive law of New Jersey

applies. Under that law, we conclude that the issue Thompson 

seeks to preclude the Kuhars from litigating—whether the harness 

was defective—was actually litigated and decided on the merits in 

the New Jersey court’s summary judgment order. This is because, 

in general, a ruling that plaintiffs have not met their burden of proof 

functions as a determination on the merits. Accordingly, we reverse.

BACKGROUND

¶6 Nicholas Kuhar was cleaning rain gutters in New Jersey 

when his safety harness failed, causing him to fall thirty-seven feet 

onto crushed concrete. He suffered serious injuries. Kuhar and his 
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Opinion of the Court

3

wife, Julie, sued the companies involved in the harness’s design, 

manufacture, production, and distribution in New Jersey state 

court. But the defendants removed the case to the United States 

District Court for the District of New Jersey.

¶7 Relevant here, the Kuhars asserted claims of design defect

under the New Jersey Products Liability Act. The harness consisted 

of three component parts: “a ‘micrograb,’ a bolt, and a rope.” The 

Kuhars alleged that the “bolt attached to the carabiner of the safety 

harness snapped,” causing Kuhar’s fall.

¶8 In the federal court, the Kuhars amended their complaint 

to add Thompson Manufacturing as a defendant, asserting that 

Thompson “advertised, promoted, sold, distributed, and otherwise 

introduced into the stream of commerce the safety harness.”

Thompson, whose principal place of business is in Utah, moved to 

dismiss the complaint for lack of personal jurisdiction. After about 

a year of jurisdictional discovery, the court granted Thompson’s 

motion and dismissed it from the case. The Kuhars then initiated 

the present action in Utah, asserting claims of design defect, breach 

of warranties, negligence, and loss of consortium.

¶9 Meanwhile, in the New Jersey case, the Kuhars disclosed 

the report of their liability expert, Dr. Richard Lynch. Dr. Lynch 

opined that “the bolt would not have failed if not for the presence 

of two design defects and one manufacturing defect.” Two of the 

remaining defendants filed motions to preclude Dr. Lynch’s report 

and testimony. The court granted the motion, concluding that 

Dr. Lynch’s report was inadmissible under Federal Rule of 

Evidence 702 and Daubert v. Merrell Dow Pharmaceuticals Inc., 509 

U.S. 579 (1993). The court determined that the report was 

unreliable, consisted of Dr. Lynch’s “subjective belief or 

unsupported speculation,” did not rely on scientific methods and 

procedures, was based on improper net opinions1 and bald 

assertions, did not lay the proper foundation, “merely [told] the 

jury what result to reach,” and did not contain sufficient 

quantitative data.

¶10 After successfully excluding the expert’s testimony, the 

remaining defendants in the New Jersey case moved for summary 

judgment. The court granted the defendants’ motions, concluding 

__________________________________________________________

1 A net opinion is an opinion that contains “bare conclusions, 

unsupported by factual evidence.” Kuhar v. Petzl Co., Civ. No. 16-

0395 (JBS) (JS), 2018 WL 7571319, at *4 (D.N.J. Nov. 27, 2018)

(quoting Worrell v. Elliot, 799 F. Supp. 2d 343, 349 (D.N.J. 2011)).
KUHAR v. THOMPSON MANUFACTURING

Opinion of the Court

4

that expert testimony was required for the Kuhars to establish their

design defect claim and “[they] ha[d] none.” Specifically, the court 

determined that the micrograb and bolt were “complex 

instrumentalities” under New Jersey law, meaning that “without 

the assistance of an expert[,] a jury is not able to adequately 

understand the relevant design considerations involved with [the] 

bolt and micrograb.” The United States Court of Appeals for the 

Third Circuit affirmed the district court’s decision.

¶11 After learning of the summary judgment ruling in New 

Jersey, Thompson moved for summary judgment in the instant 

case. It argued that because the New Jersey federal court had 

determined that the harness was not defective, the Kuhars should 

be precluded from relitigating that issue here. The district court

ultimately agreed with Thompson and granted summary judgment 

in its favor. The Kuhars appealed.

¶12 The court of appeals reversed the district court’s decision. 

Kuhar v. Thompson Mfg. Inc., 2022 UT App 22, ¶ 1, 506 P.3d 1200. 

Applying Utah law, the court of appeals used the issue preclusion 

standard set out in Buckner v. Kennard, 2004 UT 78, 99 P.3d 842. See 

Kuhar, 2022 UT App 22, ¶ 9. Buckner states that to invoke issue 

preclusion, a party must prove that:

(1) the issue decided in the prior adjudication is 

identical to the one presented in the instant action; 

(2) the party against whom issue preclusion is 

asserted was a party, or in privity with a party, to the 

prior adjudication; (3) the issue in the first action was 

completely, fully, and fairly litigated; and (4) the first 

suit resulted in a final judgment on the merits.

2004 UT 78, ¶ 13. The court of appeals concluded that Thompson 

could not establish the first and third elements. See Kuhar, 2022 UT 

App 22, ¶ 9. Specifically, the court reasoned that the issue 

Thompson seeks to preclude here—whether the harness was 

defective—is not identical to the issue that was actually decided in 

New Jersey. Id. ¶¶ 10, 12. The court concluded that the New Jersey 

court had decided only that the Kuhars’ expert evidence was 

inadmissible, and they needed an expert to prove their claims. Id.

¶ 10. Consequently, the court of appeals held that the question of 

whether the harness was defective had not been decided or fully 

litigated in the New Jersey case. Id. ¶ 13.

¶13 Thompson petitioned for certiorari, and we granted its 

petition. We have jurisdiction under Utah Code subsection 78A-3-

102(3)(a).
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Opinion of the Court

5

STANDARD OF REVIEW

¶14 “On certiorari, we review the court of appeals’ decision for 

correctness, focusing on whether that court correctly reviewed the 

trial court’s decision under the appropriate standard of review.”

State v. Rushton, 2017 UT 21, ¶ 9, 395 P.3d 92 (cleaned up). Whether 

issue preclusion bars litigation in a subsequent action is a question 

of law that is reviewed for correctness on appeal. Macris & Assocs., 

Inc. v. Neways, Inc., 2000 UT 93, ¶ 17, 16 P.3d 1214.

ANALYSIS

¶15 The question before us is whether the doctrine of issue 

preclusion bars the Kuhars from litigating the defectiveness of the 

harness in the instant case. Before addressing this question, 

however, we must first ascertain which forum’s law is controlling. 

Because the previous case was litigated in New Jersey federal court, 

federal law governs the preclusive effect of that judgment. And 

where, as here, a federal court exercises diversity jurisdiction, 

federal law dictates that the law of the state in which the federal 

court sits controls. Accordingly, we conclude that New Jersey law

governs the question before us.

¶16 Applying New Jersey law, we conclude that the elements 

of issue preclusion are satisfied here. We therefore reverse.

I. NEW JERSEY LAW GOVERNS THE ISSUE-PRECLUSIVE EFFECT OF THE 

FEDERAL COURT’S DECISION

¶17 The parties dispute which law should govern the question 

before us. The court of appeals applied Utah law, observing that 

“no party assert[ed] that [the court] should apply New Jersey law

. . . . And in any event, no suggestion has been made that New 

Jersey law and Utah law differ in application.” Kuhar v. Thompson 

Mfg. Inc., 2022 UT App 22, ¶ 9 n.1, 506 P.3d 1200. On certiorari, 

Thompson asserts that federal common law applies. The Kuhars, 

on the other hand, argue that the court of appeals was correct in 

applying Utah law because “there is no discernible difference 

between Utah and federal common law on issue preclusion.”

¶18 We clarify that New Jersey law governs the question 

before us, and we apply it in our analysis.

2 To make this 

__________________________________________________________

2 The court of appeals was right that the rules governing issue 

preclusion in Utah and New Jersey are similar. Compare Buckner v. 

Kennard, 2004 UT 78, ¶ 13, 99 P.3d 842, with First Union Nat’l Bank 

v. Penn Salem Marina, Inc., 921 A.2d 417, 424 (N.J. 2007). And we 

(continued . . .)
KUHAR v. THOMPSON MANUFACTURING

Opinion of the Court

6

determination, we first turn to federal common law, which applies 

“when deciding if a federal court’s decision has preclusive effect on 

a subsequent state court proceeding.” Oman v. Davis Sch. Dist., 2008 

UT 70, ¶ 28 n.5, 194 P.3d 956; see also Taylor v. Sturgell, 553 U.S. 880, 

891 (2008) (“The preclusive effect of a federal-court judgment is 

determined by federal common law.”). However, this does not end 

the choice-of-law analysis because federal common law 

incorporates different substantive rules depending on the type of 

jurisdiction exercised by the federal court.

¶19 The United States Supreme Court has not spoken 

definitively about which law governs the issue-preclusive effect of 

a decision of a federal court exercising diversity jurisdiction.

3 But 

the Court has directly answered the choice-of-law question in the 

context of claim preclusion, which provides guidance here. “In 

brief, claim preclusion applies to all claims growing out of the same 

facts that could have been brought, but issue preclusion applies 

only to those issues that were actually litigated and decided.”

Watkins v. Resorts Int’l Hotel & Casino, Inc., 591 A.2d 592, 604 (1991). 

The Court has held that where a federal court exercises federal 

question jurisdiction,4federal law requires subsequent courts to 

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recognize that we have opted to apply Utah law in the past in such 

circumstances. See, e.g., Oman v. Davis Sch. Dist., 2008 UT 70, ¶ 28 

n.5, 194 P.3d 956. But here, we provide guidance on the correct 

choice-of-law analysis in cases involving the issue-preclusive effect 

of the judgment of a federal court exercising diversity jurisdiction,

because the potential sources of law in such cases may not always 

be similar to Utah’s, and the jurisprudence in this area is not 

definitively settled.

3 Diversity jurisdiction is a form of subject matter jurisdiction 

that allows federal district courts to have original jurisdiction over 

civil actions that (1) “involv[e] parties who are citizens of different 

states” and (2) have “an amount in controversy greater than a 

statutory minimum.” Diversity jurisdiction, BLACK’S LAW 

DICTIONARY (11th ed. 2019). For the specific requirements of federal 

diversity jurisdiction, see United States Code title 28, section 1332.

4 Federal question jurisdiction is a form of subject matter 

jurisdiction that allows federal district courts to have original 

jurisdiction “over claims arising under the U.S. Constitution, an act 

of Congress, or a treaty.” Federal-question jurisdiction, BLACK’S LAW 

DICTIONARY (11th ed. 2019). For the specific requirements of federal 

question jurisdiction, see United States Code title 28, section 1331.
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Opinion of the Court

7

apply federal common law to determine the claim-preclusive effect 

of the federal judgment. See, e.g., Heck v. Humphrey, 512 U.S. 477, 

488 n.9 (1994); cf. Haik v. Salt Lake City Corp., 2017 UT 14, ¶ 8, 393 

P.3d 285 (recognizing Heck’s holding). Then, in Semtek International 

Inc. v. Lockheed Martin Corp., the Court held that when a federal 

court sits in diversity, the law of the state in which the federal court 

sits governs the claim-preclusive effect of the federal judgment. 531 

U.S. 497, 508 (2001); cf. Haik, 2017 UT 14, ¶ 8 (recognizing Semtek’s 

holding). In reaching its decision in Semtek, the Court reasoned that 

basing the applicable claim-preclusion law on the type of jurisdiction 

exercised by the federal court would prevent “forum-shopping and 

inequitable administration of the laws.” 531 U.S. at 508–09 (cleaned 

up). As these cases involve only claim preclusion, many courts have 

grappled with whether to extend the Court’s analysis in these cases 

to the issue preclusion context.

¶20 We ultimately conclude that the best approach is to do so, 

for two reasons. First, in Taylor v. Sturgell, which was decided after 

Semtek, the U.S. Supreme Court stated broadly that “[t]he 

preclusive effect of a federal-court judgment is determined by 

federal common law.” 553 U.S. at 891. Although Taylor involved 

only claim preclusion, the Court engaged in a general discussion of 

both claim and issue preclusion. See id. at 891–93. And in stating 

that federal common law governs the preclusive effect of federal 

court judgments, the Court did not distinguish between issue and 

claim preclusion. See id. at 891. So, while Taylor is not dispositive as 

to issue preclusion, it at least suggests that the Court sees no 

distinction between the choice-of-law analyses for the two doctrines.

Second, the rationale underlying the Semtek decision—the 

prevention of forum shopping and inequitable administration of the 

laws—applies equally in the issue preclusion context. Accordingly, 

we join other state and federal courts in concluding that the Semtek 

claim preclusion rule applies to issue preclusion as well.

5

__________________________________________________________

5 For examples of state courts extending the claim preclusion 

choice-of-law analysis to issue preclusion, see Garcia v. Prudential 

Insurance Co. of America, 293 P.3d 869, 872 (Nev. 2013) (reasoning 

that Semtek applied to issue preclusion because Taylor discussed 

Semtek “in light of issues regarding both claim and issue 

preclusion”), and Marshall v. Inn on Madeline Island, 631 N.W.2d 113, 

120–21 (Minn. Ct. App. 2001) (extending the Semtek rule to issue 

preclusion claims because “the Semtek holding rests on the 

constitutional obligation of state courts to respect federal 

(continued . . .)
KUHAR v. THOMPSON MANUFACTURING

Opinion of the Court

8

¶21 Under Semtek, when a federal court sits in diversity, the law 

of the state in which the federal court sits governs the preclusive 

effect of its judgments. 531 U.S. at 508; see also Taylor, 553 U.S. at 891 

n.4. In this case, the federal court exercising diversity jurisdiction sat 

in New Jersey. Accordingly, we conclude that New Jersey’s 

jurisprudence on issue preclusion governs the question before us.

II. THE ELEMENTS OF ISSUE PRECLUSION ARE SATISFIED HERE

¶22 Applying New Jersey law, we conclude that the elements of 

issue preclusion are met here. Issue preclusion bars relitigation of 

“issue[s] of fact or law,” First Union Nat’l Bank v. Penn Salem Marina, 

Inc., 921 A.2d 417, 423 (N.J. 2007), and “applies only to those issues 

that were actually litigated and decided,” Watkins v. Resorts Int’l 

Hotel & Casino, Inc., 591 A.2d 592, 604 (N.J. 1991) (cleaned up).

¶23 However, issue preclusion does not bar relitigation of 

“every fact which may have been litigated in the prior action.”

Mazzilli v. Accident & Cas. Ins. Co., 139 A.2d 741, 746 (N.J. 1958). 

Instead, it applies only to “matters or facts which were directly in 

issue,” not matters or facts that were “merely collateral or 

incidental” to the judgment. Id.

¶24 Under New Jersey law, to establish issue preclusion,

the party asserting the bar must show that: (1) the 

issue to be precluded is identical to the issue decided 

in the prior proceeding; (2) the issue was actually 

litigated in the prior proceeding; (3) the court in the 

prior proceeding issued a final judgment on the 

merits; (4) the determination of the issue was 

essential to the prior judgment; and (5) the party 

against whom the doctrine is asserted was a party to 

or in privity with a party to the earlier proceeding.

First Union Nat’l Bank, 921 A.2d at 424 (cleaned up).

¶25 The parties do not dispute that the third, fourth, and fifth 

elements of issue preclusion are met here. The New Jersey federal 

__________________________________________________________

judgments” and “federalism principles apply equally to claim 

preclusion and issue preclusion”). For examples of federal courts 

extending the claim preclusion choice-of-law analysis to issue 

preclusion, see Taco Bell Corp. v. TBWA Chiat/Day Inc., 552 F.3d 1137, 

1144–46 (9th Cir. 2009), NAS Electronics, Inc. v. Transtech Electronics 

PTE Ltd., 262 F. Supp. 2d 134, 143–45 (S.D.N.Y. 2003), and Cannon v. 

Armstrong Containers Inc., 92 F.4th 688, 706 (7th Cir. 2024).
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9

court issued a final judgment on the merits. Whether the harness 

was defective was essential to the judgment in New Jersey. And the 

parties against whom Thompson asserts the doctrine, the Kuhars, 

were parties to the earlier proceeding.

¶26 But the court of appeals held that Thompson could not 

establish what New Jersey law identifies as the first and second 

elements of the test—that the issue Thompson seeks to preclude is 

identical to an issue decided in the New Jersey case and that the 

issue was actually litigated in that case. See Kuhar v. Thompson Mfg. 

Inc., 2022 UT App 22, ¶ 16, 506 P.3d 1200. As noted, the issue 

Thompson seeks to preclude the Kuhars from litigating is whether 

the harness was defective. And the court of appeals concluded that

whether the harness was defective is “not the same” as “the issues 

actually decided in the New Jersey litigation.” Id. ¶ 10. The court of 

appeals reasoned that the only issues decided by the New Jersey 

court were “(1) that a particular expert’s testimony, proffered by 

the Kuhars, was inadmissible under rule 702 of the Federal Rules 

of Evidence and applicable federal case law” and “(2) that without 

that expert’s testimony, under New Jersey law the Kuhars could 

not satisfy their burden of establishing their product liability 

claims.” Id. On this basis, the court of appeals concluded that the

New Jersey court had not determined on the merits whether the 

harness was defective. Id. ¶ 12.

¶27 We come down differently on this analysis. To determine 

whether the issue Thompson seeks to preclude is identical to the 

issue decided in New Jersey, we must first identify what was 

decided in that case. The parties do not dispute that the issue of 

whether the harness was defective was present, in identical form, 

in the New Jersey case. After all, both cases involve the same 

incident, the same harness, and substantively similar claims that 

depend upon the Kuhars proving that the harness was defective.

¶28 The harder question is whether this issue was decided in 

the New Jersey litigation. The court of appeals concluded that in

the New Jersey court’s summary judgment order dismissing the 

Kuhars’ claims against the remaining defendants, that court “never 

grappled with the merits” of whether the harness was defective. Id.

Instead, “it decided the case against the Kuhars not because it made 

a factual determination that the product was not defective but 

because it determined that the Kuhars could not satisfy their 

burden of proof on that point without expert testimony.” Id.

¶29 But generally, a summary judgment ruling that plaintiffs

have not met their burden of proof functions as a determination on 
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Opinion of the Court

10

the merits. The relevant section of the Restatement of Judgments, 

which New Jersey has adopted, discusses when an issue has been 

decided. See Olivieri v. Y.M.F. Carpet, Inc., 897 A.2d 1003, 1009–11 

(N.J. 2006) (recognizing and adopting the general rule and 

exceptions for issue preclusion as set forth in sections 27 and 28 of 

the Restatement (Second) of Judgments); see also Barker v. Brinegar, 

788 A.2d 834, 839–40 (N.J. Super. Ct. App. Div. 2002) (“New Jersey 

courts follow the doctrine of collateral estoppel or the rule of issue 

preclusion described in the Restatement of Judgments.” (cleaned 

up)). That Restatement section explains that “[a] determination 

may be based on a failure of pleading or of proof as well as on the 

sustaining of the burden of proof.” RESTATEMENT (SECOND) OF 

JUDGMENTS § 27 cmt. d (AM. L. INST. 1982); see also Allesandra v. 

Gross, 453 A.2d 904, 909–10 (N.J. Super. Ct. App. Div. 1982) 

(quoting and applying the same).

¶30 And we read the New Jersey court’s summary judgment 

order to function in such a manner. When that court ruled that the 

Kuhars could not proceed with their design defect claims without 

expert evidence, it effectively determined that the Kuhars had not 

met their burden to prove the existence of a design defect. And a 

merits determination “may be based on a failure . . . of proof.” Id.

¶31 But we can understand why the court of appeals viewed the

New Jersey ruling differently. In its order, the New Jersey court used 

narrow language when describing its decision, which seemed to 

draw a distinction between a dismissal based on a failure of proof 

and a dismissal based on the lack of an expert. The court explained,

Defendants make two arguments in relation to [the 

Kuhars’ design defect theory]: (1) [the Kuhars] cannot 

make a prima facie case for design defect, therefore, 

defendants’ summary judgment motions should be 

granted; and (2) [the Kuhars’] claims are not 

supported by expert testimony, therefore, summary 

judgment should be granted. The Court finds 

defendants’ first argument need not be addressed because 

the second argument disposes of all design defect claims 

against all defendants. In short, [the Kuhars] cannot 

pursue a design defect theory against defendants 

without supporting expert testimony.

Kuhar v. Petzl Co., Civ. No. 16-0395 (RMB) (JS), 2019 WL 6211544, at 

*4 (D.N.J. Oct. 21, 2019) (emphasis added), report and 

recommendation adopted, 2019 WL 6130741 (D.N.J. Nov. 19, 2019).
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Opinion of the Court

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¶32 But the court went on to conclude that, based on the lack 

of an expert, the Kuhars could not “make a prima facie case of 

design defect.” Id. at *5. While some of the court’s language seemed 

to narrow its reasoning to more technical grounds, we ultimately 

conclude that the court’s grant of summary judgment based on a 

failure of proof functioned as a merits determination that the 

Kuhars could not show the harness was defective. See RESTATEMENT 

(SECOND) OF JUDGMENTS § 27 cmt. d (AM. L. INST. 1982).

¶33 Turning to the second element of issue preclusion, the

court of appeals held that the existence of a design defect had not

been fully litigated because the New Jersey court did not “hold[] a 

trial to weigh the evidence and make a finding as to the alleged 

defective nature of the product—because it determined that the 

Kuhars’ overarching claim failed on what amounted to a 

procedural ground.” Kuhar, 2022 UT App 22, ¶ 13. Thus, the court of 

appeals characterized the New Jersey court’s summary judgment 

ruling as being premised on “nonmerits procedural grounds” akin 

to striking a party’s answer as a sanction for discovery abuses or 

“because a party fails to appear at a hearing.” Id. ¶ 14.

¶34 Although the Kuhars’ case did not proceed to trial in New 

Jersey, we conclude that the existence of a design defect was 

actually litigated there. An issue is actually litigated when it “is 

properly raised, by the pleadings or otherwise, and is submitted for 

determination, and is determined.” RESTATEMENT (SECOND) OF 

JUDGMENTS § 27 cmt. d (AM. L.INST. 1982). Importantly, the relevant 

section of the Restatement clarifies that an issue may be considered 

“submitted and determined” based on a

motion to dismiss for failure to state a claim, a motion 

for judgment on the pleadings, a motion for summary 

judgment . . . , a motion for directed verdict, or their 

equivalents, as well as on a judgment entered on a 

verdict. A determination may be based on a failure of 

pleading or of proof as well as on the sustaining of 

the burden of proof.

Id.

¶35 It is not disputed that the Kuhars raised the issue that the 

harness was defective through the claims in their pleadings. The 

New Jersey litigants then conducted discovery, and the Kuhars had 

the opportunity to gather evidence to prove there were defects in 

the harness. They selected an expert, Dr. Lynch, to help them make 

this showing. 
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Opinion of the Court

12

¶36 The defendants then submitted the issue for determination 

in motions to exclude and for summary judgment. First, some of 

the defendants moved to exclude the Kuhars’ expert report. And 

the evidence did not hold up. The federal court found that 

“Dr. Lynch’s report and the opinions contained therein leave too 

large a gap between the data presented and the conclusions 

rendered, and consequently, it fails to satisfy Daubert’s reliability 

and fit requirements.” Kuhar v. Petzl Co., Civ. No. 16-0395 (JBS) (JS), 

2018 WL 7571319, at *4 (D.N.J. Nov. 27, 2018). So the court excluded 

it entirely. Then, in ruling on the summary judgment motions, the 

court concluded that without any expert evidence, the Kuhars 

could not prove their design defect claims. And as we have 

explained, a dismissal based on a failure of proof is a form of 

merits determination.

¶37 In light of this, we conclude that in the New Jersey 

litigation, the issue of whether the harness was defective was 

raised, submitted for determination, and determined. Thus, the 

issue was actually litigated in New Jersey.

¶38 Accordingly, because the other elements of issue 

preclusion are not in dispute, we conclude that the elements of 

issue preclusion are met here.

CONCLUSION

¶39 Federal law governs the issue-preclusive effect of a federal 

court decision. In cases like this one, where a federal court exercises

diversity jurisdiction, we conclude that federal law dictates that the 

substantive issue-preclusion jurisprudence of the state in which the 

federal court sits controls. Here, that was New Jersey.

¶40 Applying New Jersey law, we conclude that Thompson 

has satisfied the elements of issue preclusion. Specifically, we 

conclude that the issue of whether the harness was defective was 

actually litigated and decided in the New Jersey federal case. And 

as the other elements of issue preclusion are not in dispute, we 

reverse.