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Civil Procedure Fall 2014

Notes on Offensive and Defensive Nonmutual Collateral Estoppel

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Under mutuality doctrine, a party may not use a prior judgment against another party unless both parties would have been bound by that prior judgment.  As we have seen from the cases, the doctrine of mutuality has been limited or rejected by courts, beginning most prominantly in the Bernhard case, and extending to federal issues in Blonder-Tongue.  

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Under the nonmutuality doctrine, "if a litigant fully and fairly litigated an issue of fact or law, which was necessary to the court's judgment and the litigant lost, then third parties unrelated to the original action can bar the litigant from relitigating the same issue in a subsequent suit."  21A Fed. Proc., L. Ed. § 51:254.  Note the two different types of nonmutual collateral estoppel that the cases address.  Bernhard and Blonder-Tongue addressed defensive use of collateral estoppel, used by a defendant against a plaintiff for issues decided against the plaintiff in a prior case.  Parklane, on the other hand, dealt with offensive nonmutual collateral estoppel, used by a plaintiff against a defendant for issues decided against the defendant in a prior case.

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Although Parklane permitted the use of offensive nonmutual collateral estoppel, the case limited the doctrine's application.  For one thing, a party would not be estopped from litigating an issue that involves prior judgments inconsistent with one another.

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Other issues arise.  What if before a case settles, there is a judicial finding that conflicts with a prior adjudication of the same issue?  For instance, it is possible that a judge might deny a motion to dismiss before a settlement is eventually reached.  At least one court has concluded that in a similar circumstance, there is sufficient inconsistency to block offensive use of issue preclusion.  See, e.g., Jack Faucett Assocs. v. American Telephone & Telegraph Co., 744 F.2d 118 (D.C. Cir. 1984). 

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Relatedly, what if before a case settles, there is a judicial ruling in limine on an issue that arises in a different lawsuit against the same defendant?  Consider Garcia v. General Motors Corp., 195 Ariz. 510 (Ct. App. 1999).  There, certain passengers driving a General Motors van were injured in a car accident while not wearing their seatbelts.  One of the injured individuals filed suit against General Motors in federal court and settled.  The rest of the passengers brought suit regarding the same accident in Arizona state court.  These passengers sought to use the Idaho federal court's ruling that prohibited General Motors from using seatbelt evidence against General Motors in the Arizona case.  The court "conclude[d] that the Idaho court's in limine order does not carry collateral estoppel consequences.  Id. at 516.

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Finally, what happens in suits against the federal government.  In United States v. Mendoza, 464 U.S. 154 (1984), the Court held that the doctrine of nonmutual offensive collateral estoppel does not operate against the government.  Numerous policy justifications guided the Court's decision:

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A rule allowing nonmutual collateral estoppel against the government in such cases would substantially thwart the development of important questions of law by freezing the first final decision rendered on a particular legal issue.  Allowing only one final adjudication would deprive this Court of the benefit it receives from permitting several courts of appeals to explore a difficult question before this Court grants certiorari. . . . Indeed, if nonmutual estoppel were routinely applied against the government, this Court would have to revise its practice of waiting for a conflict to develop before granting the government's petitions for certiorari. . . .

In addition to those institutional concerns traditionally considered by the Solicitor General, the panoply of important public issues raised in governmental litigation may quite properly lead successive Administrations of the Executive Branch to take differing positions with respect to the resolution of a particular issue.  While the Executive Branch must of course defer to the Judicial Branch for final resolution of questions of constitutional law, the former nonetheless controls the progress of government litigation through the federal courts.  It would be idle to pretend that the conduct of government litigation in all its myriad features, from the decision to file a complaint in the United States District Court to the decision to petition for certiorari to review a judgment of the Court of Appeals, is a wholly mechanical procedure which involves no policy choices whatever. . . .
 
We hold, therefore, that nonmutual offensive collateral estoppel simply does not apply against the government in such a way as to preclude relitigation of issues such as those involved in this case.  The conduct of government litigation in the courts of the United States is sufficiently different from the conduct of private civil litigation in those courts so that what might otherwise be economy interests underlying a broad application of collateral estoppel are outweighed by the constraints which peculiarly affect the government.
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Id. at 161 - 63.