CIVIL PROCEDURE CLASS 41

1. CIVIL PROCEDURE CLASS 41 Professor Fischer Columbus School of Law The Catholic University of America Nov. 30 2005

2. ELEMENTS OF ISSUE PRECLUSION (s. 27 Restatement (Second) of Judgments • Same issue • Actually litigated • Actually decided (final valid judgment ion the merits) • Determination is essential to judgment • Some state courts require mutuality, i.e. same parties

3. JUDGMENT ON ALTERNATE GROUNDS: NECESSARY? • What if judgment is explicitly based on alternate grounds? Strictly speaking, neither ground alone is necessary to judgment. • Yet each supports the judgment and is made against the losing party, so all may be reviewed on appeal • Old rule – each alternate ground entitled to preclusive effect

4. JUDGMENT ON ALTERNATE GROUNDS • Currently, there is a division of authority on this question. • First Restatement of Judgments: BOTH alternative findings are essential • Restatement (Second) of Judgments states that “if a judgment of a court of first instance is based on determinations of two issues, either of which standing independently would be sufficient to support the result, the judgment is not conclusive with respect to either issue standing alone.”

5. Alternative Determinations? • A sues Z for negligence. Case is tried to a jury. Jury returns a special verdict finding that 1. Z was negligent 2. A not negligent. Court enters judgment in favor of A. • This jurisdiction is a contributory negligence state

6. Due Process and Mutuality • Due process – against whom can preclusion be asserted? • Mutuality – by whom can preclusion be asserted?

7. Due Process Limit on Collateral Estoppel • Applies only to litigant who has already lost on the issue, not someone who has never had a chance to litigate the issue. • Preclusion can only be asserted AGAINST one who was a party or in privity with a party

8. MUTUALITY • Only people who can use preclusion in case 2 are people who would be bound by the judgment in Case 1 – based on fairness • Under traditional mutuality approach, only people who can assert preclusion in Case 2 are those who were parties or in privity with parties in case 1

9. MUTUALITY • Not based in constitutional principles • Courts thus are free to jettison it • Some have moved to permit “non mutual” assertion of issue preclusion (that is, using preclusion by someone not a party to Case 1)

10. Mutuality • Offensive vs. Defensive use of collateral estoppel • You should know the case of Blonder-Tongue, 402 U.S. 313, cited in Parklane at 916.

11. Blonder-Tongue: nonmutual defensive issue preclusion • Involved infringement of a patent • Case 1: P sued D1 alleging patent infringement • Judgment in favor of D1 – patent invalid • Case 2 P sued D2 alleging infringement of same patent • Can D2 assert preclusion? yes left open possibiiity of non mutual offensive collateral estoppel

12. Parklane Hosiery v. Shore (1979) • Violation of federal securities laws by corporation/managers/stockholders • Case 1: SEC sues Ds alleging materially false and misleading proxy statement in connection with merger. SEC wins. Finding that proxy statement was materially false and misleading • Case 2: Ps sue same Ds on same basic claim re same proxy statement. Can Ps rely on issue preclusion?

13. Non Mutual Offensive Collateral Estoppel • Justice Stevens in Parklane (CB p. 917): “Offensive use of collateral estoppel does not promote judicial economy in the same manner as defensive use does.” • Why not?

14. Non Mutual Offensive Collateral Estoppel – less judicial efficiency • Why? No joinder incentive – in defensive case; incentive to join all potential defendants to Case 1 • Offensive: If P1 loses in Case 1, P2 not bound by judgment (due process). If P1 wins, P2 can use P1s victory in Case 2. Likely increase amount of litigation

15. Offensive Collateral Estoppel • Provides incentive for Ps to “wait and see” • May be unfair to a defendant: 1. where D may have little incentive to defend Case 1 with vigor 2. multiple inconsistent judgments 3. D did not have a full and fair opportunity to litigate

16. Parklane • Did Court permit nonmutual offensive collateral estoppel, given its concerns?

17. Parklane • Did Court permit nonmutual offensive collateral estoppel, given its concerns? On facts of case, it did since Court convinced that party using issue preclusion could not “easily have joined the earlier action” and use of issue preclusion not unfair to the defendant

18. 4 PARKLANE FACTORS • 1. Could nonparty have joined prior litigation? • 2. Was subsequent litigation foreseeable at time of first suit? • 3. Is judgment being relied on consistent with prior judgments against this D? • 4. Are there any procedural opportunities available to D in second action that did not exist in the first that would lead to a different result?

19. Status of Parklane and nonmutual collateral estoppel • Led to “plaintiff shopping” strategy – let strongest potential claimants sue first • Does not represent the majority view. It is the approach in federal courts and some states (e.g. Alaska, SC, NM, Mo.) but many others states (e.g. Tenn, Tex) have not endorsed it

21. DEFENSIVE NONMUTUAL ESTOPPEL • Suit 1: P sues D1 (P loses on Issue A) • Suit 1: P sues D2 (D2 pleads collateral estoppel to bar plaintiff from relitigating Issue A)

22. OFFENSIVE NONMUTUAL COLLATERAL ESTOPPEL • Suit 1: P1 sues D (D loses on Issue A) • Suit 2: P2 sues D (new plaintiff invokes collateral estoppel to establish Issue A in her suit against D)

23. NEW UNIT • More consideration of venue (forum no conveniens and transfer of venue) • This will not be tested. If it appears on exam and a student accurately discusses this material, he or she will receive extra credit

24. FORUM SELECTION CLAUSES • Parties may select a venue that is not a statutory venue by including a forum selection clause in a contract. • Non-negotiable forum selection clauses have been enforced by the Supreme Court.

25. FORUM NON CONVENIENS • Compare this doctrine with: • 28 U.S.C. § 1404 • 28 US.C. § 1406

26. 28 U.S.C. § 1404 • (a) For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought • PIPER - After removal to US District Court for Central District of CA, action is transferred to US District Court for Middle District of PA • Cases are usually transferred under this section between federal district courts rather than dismissed for forum non conveniens

27. Improper Venue Provision • 28 U.S.C. § 1406(a) permits court to dismiss if venue has improperly been laid “or if it be in the interest of justice, transfer [the] case to any district or division in which it could have been brought”

28. PIPER AIRCRAFT CO. V. REYNO (1981) – CB 784 • Landmark decision on forum non conveniens • Who is the plaintiff? • Who is plaintiff suing? • What is the cause of action? • Where does plaintiff bring the action? • Why does plaintiff choose that forum?

29. Piper Aircraft Co. v. Reyno • Wrongful death suit originally brought in Superior Court of California by Gaynell Reyno on behalf of 5 Scottish passengers • Defendants were Piper Aircraft Co. (aircraft mfr) (PA) and Hartzell Propeller Inc. (OH) (propeller mfr)

30. Scottish Legal System • See also Kevin F. Crombie’s useful site: http://www.scottishlaw.org.uk/

31. DEFENDANTS’ MOTIONS • Explain the strategies and procedural moves of defendants Piper and Hartzell. How did the case get from the state court in CA (where filed) to the federal court in PA?

32. 28 U.S.C. § 1404 • (a) For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought • PIPER - After removal to US District Court for Central District of CA, action is transferred to US District Court for Middle District of PA

33. IN THE U.S. SUPREME COURT • How does the majority rule in the U.S. Supreme Court? Describe Justice Marshall’s reasoning in his majority opinion.

34. PIPER Test • In applying the doctrine of forum non conveniens to a foreign plaintiff, Supreme Court essentially follows two steps it had articulated in Gilbert. • 1. Requires a suitable forum in another country • 2. Considers 4 factors or interests to determine which forum would best serve private and public interests • Unfavorable choice of law alone should not bar dismissal

35. SIGNIFICANCE OF PIPER v. REYNO • This case extends doctrine of forum non conveniens for use in an international context by adopting a lower threshold and by decreasing its deference to foreign plaintiff’s choice of forum (takes nationality into consideration) • The foundation for any modern forum non conveniens analysis in an international context. • Decision has prompted continuing criticism

36. LORD DENNING • Famous and long-lived English judge • “As a moth is drawn to the light, so is a litigant drawn to the United States.”

37. Attractions of U.S. Legal System For Foreign Plaintiffs • Encouragement by U.S. plaintiffs’ bar for litigants to bring suit in U.S. • contingency fee arrangements • extensive pre-trial discovery • advantageous substantive law • availability of trial by jury • tendency for large jury awards