Issue Preclusion

Question 1

Issue Preclusion

Answer 1

• aka collateral estoppel
• once an issue has been adjudicated between adverse parties, that identical issue cannot be relitigated in another lawsuit between the same parties
• this applies any time the issue pops up in subsequent suit between the parties (even if different claims)

Question 2

Claim Preclusion vs. Issue Preclusion

Answer 2

• claim preclusion forecloses all matters that “were or should have been” adjudicated in original suit
• vs. issue preclusion only forecloses issues that “were actively litigated + resolved” in prior action

Question 3

Requirements for Issue Preclusion

Answer 3

• issue or fact was actually litigated
• issue was determined by a valid judgment
• determination of the issue was essential to the final judgment

Note that if these three reqs met, the determination is conclusive on identical issue in subsequent action between the parties

Question 4

Relevant Considerations for Determining if Same Issue

Answer 4

• substantial overlap between evidence/argument in first and second?
• does new evidence or argument involve application of same rule of law as that involved in prior proceeding?
• could pretrial prep + discovery relating to matter presented in first suit reasonably be expected to have embraced matter in second?

Question 5

David P. Hoult v. Jennifer Hoult

Answer 5

• case w/ issue preclusion - assault case followed by subsequent libel case
• illustrates difficulty of figuring out whether issue actually litigated in original suit

Question 6

Jarosz v. Palmer - Facts

Answer 6

• Jarosz + three business partners hired attorney Palmer to assist in acquisition + financing of a business
• Jarosz terminated -> files suit against former partners + co -> says Palmer can’t represent them b/c conflict of interest-> judge dismisses this motion, saying Jarosz didn’t prove attorney-client relationship existed
• Jarosz then filed suit against Palmer, alleging breach of contract, breach of fiduciary duty, + legal malpractice -> Palmer argued issue preclusion on attorney-client relationship

Question 7

Jarosz v. Palmer - Decision + Reasoning

Answer 7

• no issue preclusion b/c the issue was actively litigated but wasn’t essential to the merits of the underlying case (essential to the particular decision on the motion, but not to the larger lawsuit)

Question 8

Essential to the Prior Judgment

Answer 8

• issue must be essential to the judgment in the prior case
• rationale = only matters central to outcome will likely be given sufficient attention by litigants + court to justify according them finality

Question 9

Settlements and Preclusion

Answer 9

• settlements generally don’t carry preclusive effect b/c no issue has been actually litigated + determined

Question 10

Preclusion and Burdens of Proof

Answer 10

• prior proceeding cannot have preclusive effect when party against whom preclusion now sought had significantly heavier burden of persuasion than the one in the present action
• no preclusive effect when adversary of party against whom preclusion sought has heavier burden in second case than the first

Question 11

Preclusion and Criminal Cases

Answer 11

• criminal cases usually have higher burden of proof (reasonable doubt vs. preponderance of the evidence)
• SO if you’re convicted of a crime, there is collateral estoppel in subsequent civil actions - you can’t contest liability in civil action after being found guilty in criminal one under higher burden

Question 12

Offensive Use of Collateral Estoppel

Answer 12

• use of collateral estoppel against defendant to block opportunity to relitigate same issues decided in a prior proceeding to which plaintiff wasn’t a party
• only allowed under certain circumstances (see Parklane)

Question 13

Defensive Use of Collateral Estoppel

Answer 13

• plaintiff estopped from litigating claim the plaintiff previously litigated + lost against another defendant
• promotes judicial economy b/c plaintiff can’t relitigate + therefore has incentive to join all potential defendants in first action if possible

Question 14

Parklane Hosiery Co. Inc v. Shore - Facts

Answer 14

• SEC filed suit against def in federal district court -> said proxy statement issued by Parklane materially false + misleading -> District Court ruled in favor of SEC
• Pls then brought stockholders’ class action against Parklane alleging same thing as SEC alleged -> moved for partial summary judgment on proxy statement issue due to prior SEC case - said defs collaterally estopped from relitigating the issues resolved against them in the SEC action

Question 15

Parklane Hosiery - Holding

Answer 15

• Offensive use of collateral estoppel discretionary but not prevented
• General Rule: in cases where pl could have easily joined the earlier action or where application of offensive estoppel would be unfair to def, trial judge shouldn’t allow use of collateral estoppel

Question 16

Potential Problems w/ Offensive Collateral Estoppel

Answer 16

• gives pls incentive to adopt “wait + see” attitude - stay out of first action b/c that way if defendant wins, it’s not binding on your later lawsuit, but if defendant loses, you’ll be able to invoke estoppel to automatically get the same judgment
• notion that it gives plaintiff everything to gain + nothing to lose by not intervening in first action

Question 17

Ways in Which Offensive Collateral Estoppel Might Be Unfair to Def

Answer 17

• if first action is for small or nominal damages, def may have little incentive to defend in first action (vs. potentially larger in second)
• judgment relied on as basis for estoppel might be inconsistent with one or more judgments in favor of defendant (allows plaintiff to benefit from the one that works while ignoring the others not in their favor)
• second action might afford defendant procedural opportunities unavailable in first action that might lead to different result

Question 18

Why allow for non-mutuality?

Answer 18

• efficiency of judicial resources

- incentivizing parties to put all resources into one dispute rather than multiple