This opinion is subject to revision before final publication in the Pacific Reporter

202 4 UT 12

IN THE


## S UPREME 

## C OURT OF THE 

## S TATE OF 

## U TAH

N ICHOLAS K UHAR and J ULIE K UHAR ,

Respondents

,

v.

T HOMPSON M ANUFACTURING , I NC

. ,

Petitioner

.

No. 20220282
Heard January 9, 2023
Filed April 25, 2024

On Certiorari to the Utah Court of Appeals

Third District

, Salt Lake
The Honorabl e 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

J USTICE P E TERSEN au thored the opinion of the Court

, in which
C HIEF J USTICE D URRANT , A SSOCIATE C HIEF J USTICE P EARCE , J USTICE H AGEN , and J USTICE P OHLMAN joined.

J USTICE P ETERSEN , opinion of the Court:

I NTRODUCTION

¶1 This case involves the doctrine of issue preclusion

. Under
this doctrine , a party can preclude another part y 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.K UHAR v

. T HOMPSON M ANUFACTURING
Opinion of the Court

2 ¶2 In th e 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. T hat suit was unsuccessful. Thompson was dismissed from the case based on a lack of personal jurisdiction

—

a nd 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 T he 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. Th e court of appeals’ decision is now before us.

¶5 On certiorari, w e 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 plaintiff s ha ve 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 s uffer ed serious injuries. Kuhar and hisCite as: 202 4 UT 12
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, t he Kuhars asserted claims of design defect
under the New Jersey Product s 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 the ir 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 dismiss ed it from the case

. T he Kuhars then initiated the p resent 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 th at 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 opinions 1 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 exc luding the expert’s testimony, the remaining defendants in the New Jersey case moved for summary judgment. T he 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) )

.K UHAR v

. T HOMPSON M ANUFACTURING
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
instrumentalit ies ” 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 s eeks to preclude here

— whether the harness was
defective

— i s 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 sub section 78A

- 3

- 102(3)(a)

.Cite as: 202 4 UT 12
Opinion of the Court

5 STANDARD OF REVIEW

¶14 “ On certiorari, w e 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 review ed 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 bar s 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,
f ederal 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 s its controls. Accordingly, we conclude that New Jersey law governs the question before us

. ¶16 A pplying New Jersey law, we conclude that the elements of issue preclusion are satisfied here . W e therefore reverse.

I

. N EW J ERSEY L AW G OVERNS THE I SSUE

- P RECLUSIVE E FFECT OF THE

F EDERAL C OURT ’ S D ECISION
¶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 la w 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 T he 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, 42 4 (N.J. 2007)

. And we (continued

. . .)K UHAR v

. T HOMPSON M ANUFACTURING
Opinion of the Court

6 determination, we first turn to f ederal 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 U nited S tates 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, 4 federal law requires subsequent courts to

__________________________________________________________ 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

- preclu sive 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 j urisdiction

, B LACK ’ S L AW D ICTIONARY (11 th 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

- q uestion j urisdiction

, B LACK ’ S L AW D ICTIONARY (11th ed. 2019). For the specific requirements of federal question jurisdiction, see United States Code title 28

, section 1331.Cite as: 202 4 UT 12
Opinion of the Court

7 apply federal c ommon 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 whe n a federal

court s its in diversity, the law of the state in which the federal court

s its govern s 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 C ourt 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). A s these cases involve only claim preclusion, many courts have grappled with whether to extend th e 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 C ourt engaged in a general discussion of
both claim and issue preclusion

. See i d. at 891

– 93. And in stating that federal common law governs the preclusive effect of federal court judgments, the C ourt did not distinguish between issue and claim preclusion

. See i d. 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 doctrine s

. Second, t he rationale underlying the Semtek decision

— the prevention of forum shopping and inequitable administration of the
law s

— applies equally in the issue preclusion context

. Accordingly

, we join other state and federal courts i n 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
Ins urance Co. of Am erica , 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 o n 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

. . .)K UHAR v

. T HOMPSON M ANUFACTURING
Opinion of the Court

8 ¶21 U nder 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 judgment s

. 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. T HE E LEMENTS OF I SSUE P RECLUSION A RE S ATISFIED H ERE
¶22 Applying New Jersey law, we conclude that the elements of issue preclusion are met here. Is sue 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)

.Cite as: 202 4 UT 12
Opinion of the Court

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 d ecided 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 t he court of appeals concluded that
whether the harness wa s defective is “not the same” as “the issues actually decided in the New Jersey litigation

. ” Id

. ¶ 10. The court of

app eals 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 W e 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 no t dispute that the issue of
whether the ha rness 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 dismiss ing 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 g enerally, a summary judgment ruling that plaintiff s ha ve not met their burden o f proof functions as a determination onK UHAR v

. T HOMPSON M ANUFACTURING
Opinion of the Court

10 the merits. T he relevant section of the Restatement of Judgments

, which New Jersey has adopted, discuss es 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. ” R ESTATEMENT (S ECOND ) OF J UDGMENTS § 27 cmt. d ( A M

. L. I NST

. 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 th at court ruled that the
Kuhars could not proceed with their design defect claims without expert evidence

, it effectively determin ed 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 th e 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 cou rt explained,
Defendants make two arguments in relation to [ the
Kuhars ’ design defect theory]: (1) [ the Kuhar s ] 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 Kuhar s ] canno t 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)

.Cite as: 202 4 UT 12
Opinion of the Court

11 ¶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 th e 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 R ESTATEMENT (S ECOND ) OF J UDGMENTS § 27 cmt. d (A M

. L. I NST

. 1982).

¶33 Turning to the second element of issue preclusion

, t he

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

. Th us, th e 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

ac tually litigat ed there

. An issue is actually litigated when it “is properly raised, by the pleadings or otherwise, and is submitted for determination, and is determined.” R ESTATEMENT (S ECOND ) OF J UDGMENTS § 27 cmt. d ( A M

. L. I NST

. 1982 )

. Importantly, the relevant
section of the Restatement clarifies that a n 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 I t 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 the re were defects in
the harness. They selected an expert, Dr. Lynch, to help them make this showing.K UHAR v

. T HOMPSON M ANUFACTURING
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 . 2 7 , 201 8 ). 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. A nd 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 F ederal law governs the issue

- preclusive effect of a federal
court decision. In cases like this one, where a federal court exercise s diversity jurisdiction

, we conclude that federal law dictate s that the
substantive issue

- preclusion jurisprudence of the state in which the
federal court s its controls . Here, that was New Jersey.

¶40 Applying New Jersey law, we conclude that Thompson
has satisfied the e le ments of issue preclusion

. Specifically, we
conclude that the issue of w hether the harness was defective was actually litigated and de cided in the New Jersey federal case

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

reverse

.