Claim Preclusion Applies to Malpractice Claims Against Opposing Counsel as Privies When Based on the Same Transaction: Commentary on Zirvi v. Illumina, Inc. (3d Cir. 2025)

Introduction

In this non-precedential opinion authored by Judge Porter, the United States Court of Appeals for the Third Circuit affirmed the dismissal of a state-law malpractice claim brought by Monib Zirvi against lawyers and law firms that represented Thermo Fisher Scientific in earlier intellectual property litigation. The central question on appeal was whether claim preclusion (res judicata) barred Zirvi’s attempt to relitigate—under a new malpractice theory—controversies previously adjudicated in the Southern District of New York, where his earlier suit was dismissed with prejudice as time-barred and that disposition was affirmed on appeal.

The appeal also challenged the District of New Jersey’s denial of leave to amend. The Third Circuit affirmed on both grounds, holding that:

Claim preclusion barred the malpractice claim because it arose from the same nucleus of operative facts as the prior action and the defendant-attorneys were in privity with Thermo Fisher, their client in the prior litigation.
The plaintiff’s “post-complaint” exception argument failed because the alleged later-discovered events were neither pleaded as predicates in the operative complaint nor outside the time frame of amendments filed in the earlier New York case.
The district court did not abuse its discretion in denying leave to amend given the preclusion bar and the plaintiff’s failure to propose any meaningful amendment.

Although designated “not precedential,” the opinion provides a clear and practical roadmap for applying claim preclusion where a later suit re-frames an already-dismissed controversy as attorney malpractice against the client’s counsel.

Summary of the Opinion

The Third Circuit affirmed the District of New Jersey’s judgment dismissing Zirvi’s malpractice claim with prejudice on claim-preclusion grounds and affirmed the denial of leave to amend. The court:

Applied the familiar three-part test for claim preclusion: (1) a final judgment on the merits, (2) the same parties or their privies, and (3) a subsequent suit based on the same cause of action.
Held that the Southern District of New York’s dismissal with prejudice (as time-barred) was a final judgment on the merits; any argument to the contrary was forfeited by inadequate briefing.
Found privity between Thermo Fisher and its attorneys for claim-preclusion purposes because the new malpractice theory alleged conduct undertaken in the course of the attorney-client relationship and on the client’s behalf.
Concluded the malpractice allegations arose from the same transactional nucleus (a purported trade-secret theft and related litigation/settlements) and could have been raised earlier—thus they are barred.
Rejected the plaintiff’s “post-complaint” exception argument because (a) the operative complaint in New Jersey did not actually predicate claims on the later settlement he referenced, and (b) he amended his complaint in the prior New York case after learning of the purportedly later events.
Affirmed the discretionary denial of leave to amend because the plaintiff neither explained how he would cure the preclusion defect nor showed any injustice warranting amendment.

The court also granted a motion to seal a portion of the appendix and clarified that it had appellate authority to review the state-law malpractice claim under 28 U.S.C. § 1291, even though the federal patent claim had been dismissed and only supplemental jurisdiction remained at the district court.

Analysis

Precedents and Authorities Cited

Elkadrawy v. Vanguard Group, Inc., 584 F.3d 169 (3d Cir. 2009) — Cited for the standard of review: application of res judicata is reviewed de novo (plenary review). This sets the lens through which the panel evaluated the district court’s preclusion ruling.
Morgan v. Covington Township, 648 F.3d 172 (3d Cir. 2011) — Quoted for the purposes and scope of res judicata: it bars not only claims brought but also those that could have been brought, promoting judicial economy and protecting defendants from repetitive litigation. Morgan also supplies the “post-complaint” qualification: claim preclusion does not bar claims predicated on events postdating the initial complaint. The court tightly construes this qualification here.
Elkadrawy; Vanguard — Together with Morgan, these cases are cited for the classic three-element test of claim preclusion in the Third Circuit: (1) final judgment on the merits, (2) same parties or privies, (3) same cause of action.
Fed. R. App. P. 28(a)(8)(A) and Doeblers’ Pa. Hybrids, Inc. v. Doebler, 442 F.3d 812, 821 n.10 (3d Cir. 2006) — Used to deem forfeited the appellant’s undeveloped assertion that there was no final judgment in the prior (S.D.N.Y.) litigation. This reinforces that perfunctory assertions without developed argument or citation are not considered.
Fink v. Ritner, 2007 WL 9797650 (D.N.J. Mar. 29, 2007) — The appellant relied on this state-law, mandatory-joinder decision. The Third Circuit explains why it is irrelevant: mandatory joinder is conceptually distinct from claim preclusion; and in any event the preclusive effect of a federal judgment is governed by federal common law.
Taylor v. Sturgell, 553 U.S. 880 (2008) — Authoritative Supreme Court statement that the preclusive effect of a federal-court judgment is a matter of federal common law. This forecloses reliance on New Jersey joinder principles to define preclusion from a New York federal judgment.
Semtek Int’l Inc. v. Lockheed Martin Corp., 531 U.S. 497 (2001) — The Third Circuit invokes Semtek to note that, to the extent federal common law borrows state law to determine preclusion for state-law claims decided in federal court, the relevant state law is that of the state where the rendering court sits—here, New York, not New Jersey.
In re Berge, 953 F.3d 907, 916–17 (6th Cir. 2020) — Cited in support of the Semtek-derived principle about looking to the law of the rendering state when federal common law incorporates state preclusion rules.
Jackson v. Dow Chemical Co., 902 F. Supp. 2d 658, 671 (E.D. Pa. 2012), aff’d, 518 F. App’x 99 (3d Cir. 2013) — Used to illustrate privity between a client and its attorneys for claim-preclusion purposes where the allegations concern actions taken in the course of the attorney-client relationship. The court relies on this to connect Thermo Fisher and its lawyers for the “same parties or privies” element.
Garrett v. Wexford Health, 938 F.3d 69, 82 (3d Cir. 2019) — Cited for the proposition that the most recently filed amended complaint is the “operative pleading,” which matters when assessing what the claim is “predicated on” for purposes of the post-complaint exception in Morgan.
Carlsbad Tech., Inc. v. HIF Bio, Inc., 556 U.S. 635, 640 (2009) and 28 U.S.C. § 1367(c)(3) — Clarify that a federal court’s supplemental jurisdiction over state-law claims persists even when federal claims are dismissed; and that district courts may decline to exercise supplemental jurisdiction, but they are not required to. The panel uses this to confirm its appellate authority to review the state-law malpractice disposition.
United States ex rel. Zizic v. Q2Administrators, LLC, 728 F.3d 228, 234, 243 (3d Cir. 2013) — Provides the standard for reviewing denial of leave to amend (abuse of discretion) and supports the conclusion that denying amendment is not an abuse when amendment would be futile or when the movant offers no meaningful amendment to cure a fundamental defect like preclusion.
28 U.S.C. §§ 1291, 1331, 1338(a), 1367(a) — Jurisdictional statutes: trial-court jurisdiction over patent claims and supplemental state-law claims, and the court of appeals’ jurisdiction over final decisions.

Legal Reasoning

The court’s analysis proceeds in two clean steps: first, claim preclusion; second, denial of leave to amend.

On claim preclusion, the court applies the three-element test:

Final judgment on the merits. The S.D.N.Y. dismissal with prejudice of Zirvi’s 2018–2019 suit (which alleged a long-running conspiracy by Illumina and Thermo Fisher to steal trade secrets) constituted a final judgment on the merits. The appellant’s contrary assertion was forfeited by failure to develop the argument or cite supporting authority, invoking Fed. R. App. P. 28 and Doeblers’.
Same parties or their privies. Although the later New Jersey suit newly named Thermo Fisher’s outside counsel (Akin Gump, Latham & Watkins, and individual attorneys), the panel held those lawyers are in privity with their client for purposes of claim preclusion where the alleged wrongdoing arises from actions taken in the course of the representation and on the client’s behalf. The court relies on Jackson v. Dow Chemical for that proposition and rejects the appellant’s reliance on a New Jersey mandatory-joinder decision as both conceptually distinct and legally inapposite under Taylor v. Sturgell and Semtek.
Same cause of action. The new malpractice claims arose from the same transactional nucleus as the earlier S.D.N.Y. case: an alleged two-decade scheme to misappropriate trade secrets associated with DNA microchip technology and subsequent litigation/settlements. Reframing those facts as “malpractice” against counsel did not create a new cause of action outside the prior controversy. Under Morgan, claim preclusion reaches claims that were brought and those that could have been brought.

The court then addresses the appellant’s reliance on Morgan’s “post-complaint” qualification. That doctrine permits later suits for claims based on events that genuinely occur after the filing of the initial complaint. The panel rejects its applicability for two independent reasons:

Not pleaded as predicate facts. The operative complaint in New Jersey did not actually plead the later (2018) settlement as a predicate for the malpractice claim. Under Garrett, the operative pleading controls. If the new claim is not predicated on post-complaint events, the exception does not apply.
Not “post-complaint” in the prior case. Zirvi amended his S.D.N.Y. complaint in 2019 after he says he learned of the second (2018) settlement. Because those events did not postdate the operative complaint in the prior action, they could and should have been raised there. Their omission undercuts reliance on the Morgan exception.

Having found all elements satisfied and no exception applicable, the panel affirms dismissal with prejudice on claim-preclusion grounds and expressly declines to reach the Rule 12(b)(6) merits of the malpractice theory.

Denial of Leave to Amend

Reviewing for abuse of discretion under Zizic, the court affirms the denial of leave to amend. Two considerations drive the result:

The plaintiff did not identify any proposed amendments or explain how amendment would cure the preclusion bar.
Given the district court’s conclusion that the claims were precluded by a prior merits judgment (time-bar dismissal with prejudice), allowing amendment would be futile; thus, denying leave was not an abuse of discretion.

Jurisdictional Clarifications

Although the district court had original jurisdiction over patent claims (28 U.S.C. §§ 1331, 1338(a)), it exercised supplemental jurisdiction over the state-law malpractice claim (28 U.S.C. § 1367(a)). On appeal, only the malpractice dismissal was at issue. Relying on Carlsbad Tech. and § 1367(c)(3), the panel confirms it can review the merits of the state-law claim under § 1291 even though no federal question remained. This is a useful reminder that the presence of federal claims at the outset supports supplemental jurisdiction over related state claims, and dismissal of the federal claims does not retroactively eliminate appellate authority over the final judgment on those state claims.

Impact

While non-precedential, the opinion offers practical guidance with likely influence in future litigation within the Third Circuit and beyond:

Privity between client and counsel for preclusion. Litigants cannot evade preclusion by later suing their adversary’s lawyers for malpractice or conspiracy when the alleged misconduct occurred within and because of the attorney-client relationship in the prior action. This anchors preclusion analysis in functional relationships rather than formal party identity.
Reframing is not avoiding. Recasting a dismissed controversy (e.g., trade-secret misappropriation) as “malpractice” or “conspiracy” will not defeat claim preclusion if the claims arise from the same transactional nucleus and could have been raised previously.
“Post-complaint” exception is narrow and fact-dependent. To invoke Morgan’s qualification, the later claim must be genuinely predicated on events that occur after the prior complaint and that could not have been included even through amendment. Knowledge of such events before a prior amendment—and failure to plead them—undercuts the exception.
Choice-of-law for preclusion of federal judgments. Parties should brief preclusion under federal common law, with attention to Semtek’s directive about borrowing the rendering state’s preclusion rules for state-law claims. Reliance on forum-state joinder or preclusion law in a later-filed case may be misplaced.
Leave to amend after a preclusion ruling is uncommon. Where a court finds claim preclusion dispositive, leave to amend will often be futile—especially if the movant offers no concrete amendment that could escape the preclusion bar.

For practitioners in intellectual property and complex commercial litigation, the opinion underscores the importance of comprehensive pleading and timely amendment in the first forum. Plaintiffs who learn of new facts during a pending case should amend there, rather than hold them back for a separate, later suit against new defendants in the litigation orbit.

Complex Concepts Simplified

Res judicata (claim preclusion): A rule that prevents a party from relitigating a claim that was, or could have been, raised in a prior case that ended in a final judgment involving the same parties (or their close equivalents, called privies) and the same underlying transaction or occurrence.
Final judgment “on the merits”: A conclusive court decision that resolves claims. Dismissals “with prejudice,” including those based on statutes of limitations, generally qualify.
Privity: A close legal relationship with a party such that another person or entity’s rights and obligations are deemed sufficiently aligned with the party’s to bind or benefit them (e.g., a client and its attorneys acting within the scope of representation).
“Post-complaint” exception (from Morgan): A later suit is not barred if it is based on events that truly occurred after the filing of the first complaint and could not have been added by amendment in the prior case.
Operative pleading: The most recent amended complaint that governs what claims and facts are before the court at a given time.
Forfeiture under appellate rules: Arguments that are not adequately developed with citations and analysis in the appellate brief may be treated as forfeited and not considered.
Supplemental jurisdiction: A federal court’s power to hear state-law claims tied to federal claims in the same case. It may—but need not—decline to exercise that jurisdiction if all federal claims are dismissed.
Abuse of discretion (leave to amend): A deferential standard of review; a district court does not abuse its discretion in denying amendment when the movant offers no concrete proposal and amendment would be futile in light of a dispositive bar like claim preclusion.

Conclusion

The Third Circuit’s decision in Zirvi v. Illumina, Inc. reinforces several core principles of claim preclusion and litigation management:

Dismissals with prejudice—such as statute-of-limitations dismissals—are final merits judgments for preclusion purposes.
Attorneys are often in privity with their clients for preclusion analysis when alleged misconduct occurs within the representation.
Claim preclusion bars not only the claims that were raised but also those that could and should have been raised in the prior case, including via amendment.
The “post-complaint” exception is narrow: later-acquired knowledge must be timely incorporated into the operative pleading; it cannot be saved for a new lawsuit against new defendants.
Denial of leave to amend after a preclusion finding will typically be affirmed absent a concrete, plausible amendment that would escape the preclusion bar.

Although non-precedential, the opinion offers a pragmatic blueprint that will be persuasive in future cases: parties must bring the entirety of a controversy—against all relevant actors in privity and under all plausible legal theories—when the controversy first ripens, or risk forfeiting the ability to relitigate it later under a new label.