Issue Preclusion (collateral estoppel): Part I

Why have it?
  • Efficiency and Repose, bad when system yields inconsistent outcomes.
  • Has part of the claim already been resolved and shouldn't be relitigated?
    • Only available if claim preclusion hasn’t killed all of claim #2...
  • Can be as effectively deadly as claim preclusion if the issue is one that is important to your case.
  • Whether you've had a jury in action #1 or not considered neutral.

1. Same issue has to be involved in actions #1 and #2
  • Cannot preclude relitigation if not litigated in the first case.
    • Not usually a big problem, usually the fight is over whether it was litigated in the first case or not (like Parks) as opposed to a fight about what the issue is.
    • Stipulations and admissions don’t count...
      • They have not been LITIGATED
      • Care only about that which was fought over, not that which was conceded.
    • What if the standard of proof over which that issue was fought over differs in the two lawsuits?
      • Example: State of Calif. loses criminal lawsuit over OJ. After they lose, Calif. wants to go after him for civil liability. No mutuality problem (same parties).
        • Does not bind Calif. in 2nd lawsuit because there are different standards of proof (reasonable doubt vs. preponderance).
        • But if OJ had lost in criminal case, it would preclude his arguing the opposite in a later civil suit.
    • In Parks the problem is that the jury verdict was too opaque. (Yeazell, p. 692)
    • Appellate affirmation?
      • When issue resolved was affirmed on appeal makes issue preclusion stronger.
        • More confidence that issue was fairly resolved.
    • When you lose on 2+ issues...
      • ... and know you must win on all, you may not appeal any of them.
      • Once party knows the ruling, may not put as much effort/thought into the rest of the issues.
      • Once outcome is ordained, don't trust the care with which other things are resolved.
      • Like dicta vs. holdings: talk is cheap...
      • 1st Restatement decides that it’s OK if finder of fact explicitly explains findings.
      • 2nd Restatement: multiple grounds for decision on an issue means none of the issues are subject for issue preclusion.
4. Mutuality of Parties
  • Allow issue preclusion even when one party has changed (relaxed mutuality)
    • Different than claim preclusion!
    • See also Parklane Hosiery (Yeazell, p. 695)
  • 5 "fairness factors" for Offensive Non-Mutual Collateral Estoppel:
    • 1. Could the party trying to assert Collateral Estoppel have intervened in the earlier suit?
    • 2. Did defendant have incentive to litigation first action?
    • 3. Are there multiple, prior inconsistent judgments?
    • 4. Did the party who is attempting to assert O.N.M.C.E. sit out and wait during earlier suits?
    • 5. Are there any procedural opportunities available to defendant in the second suit that were not available in the first suit?
  • Blonder-Tongue (D.N.M.C.E.)
    • Defendant #2 invokes issue preclusion since in first case court found no valid patent
    • D. #2 says shouldn’t relitigate that matter.
    • This is DEFENSIVE non-mutual collateral estoppel.
    • Used as a shield NOT a sword, so it's OK.
  • But in Parklane...
    • OFFENSIVE collateral estoppel (aka issue preclusion aka res judicata).
      • Not as OK as D.N.M.C.E.
        • Why did mutuality requirement survive for so long?
    • Basically, collateral estoppel/issue preclusion can never be used against someone who was not a party to action #1
    • Was party against whom issue preclusion being used treated fairly?
      • We care who won/lost.
    • Action #1: SEC sued Parklane saying proxy statements were fraudulent and WINS
      • "finding of fraud" = civil fines, injunction, etc.
    • Action #2: Mr. Shore (shareholder) suing Parklane for being defrauded.
      • Allowed to piggy-back on SEC claim in regards to fraud.
      • Worry about strategic behavior by party #2 to not be part of action #1.
      • But not an issue in Parklane because Mr. Shore could hardly join an action by the SEC!
Variety of possible scenarios:
  • P1 v. D1 (P1 wins)
    • P2 v. D1 (can P2 invoke?)
  • P1 v. D1. (D1 wins)
    • P2 v. P1 (can P2 invoke?)
  • P1 v. D1 (P1 wins)
    • D1 v. D2 (can D2 invoke?)
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