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Driver and Cyclist, both residents of State X, collided while traveling through State Y. Cyclist first sued Driver in State Y small-claims court for damage to Cyclist's bicycle. Driver appeared, denied negligence, and the State Y court entered a final judgment for Driver after finding that Cyclist failed to prove Driver was negligent. Under State Y law, small-claims judgments after contested hearings are final judgments on the merits and have ordinary claim-preclusion and issue-preclusion effect.
Cyclist then sued Driver in State X court for personal injuries arising from the same collision. Cyclist argues that the State Y judgment concerned only property damage and that State X should allow the personal-injury claim. Driver argues that the State Y judgment bars the entire action, or at least bars relitigation of Driver's negligence.
Discuss what preclusive effect State X must give the State Y judgment. Address full faith and credit, claim preclusion, issue preclusion, and the effect of State Y preclusion law.