CIVIL PROCEDURE CLASS 23

1. CIVIL PROCEDURE CLASS 23 Professor Fischer Columbus School of Law The Catholic University of America November 8, 2001

2. WRAP-UP OF LAST CLASS • We finished up the unit on pre and post trial adjudication by learning about new trial motions and motions to vacate judgment • We started the unit on preclusion by beginning our study of claim preclusion

3. WHAT WILL WE DO TODAY? • Finish up claim preclusion (res judicata) • Learn about issue preclusion (collateral estoppel) • Hand in Practice Exercise 33 and get, in return a model answer.

4. Gonzalez v. Banco Central Corp. (1st Cir. 1994) • What are the key facts? • What is the procedural history? • What is the issue on appeal? • Did the Gonzalez plaintiffs win their appeal?

5. Gonzalez: Final/Valid Judgment on the Merits • Did the 1st Circuit find that there was a final judgment on the merits in the earlier Rodriguez suit?

6. Gonzalez: Same Claim • Did the 1st Circuit find that the claims asserted in the Rodriguez suit were the same as in the Gonzalez suit? • Why or why not?

7. Gonzalez: Same Parties/Parties in Privity • Were the parties the same in the Rodriguez/Gonzalez suits? Why or why not? • Did the 1st Circuit find that the parties in both suits were in PRIVITY? Why or why not? • What are some examples cited by the 1st Circuit of when parties would be in privity? • What is the doctrine of virtual representation? Why did the Gonzalez court find it did not apply?

8. Gonzalez: Same Parties/Parties in Privity • Why are courts unwilling to interpret privity broadly? Why does Judge Selya describe it as a “murky corner of the law?” (CB 903)

9. ISSUE PRECLUSION • Like claim preclusion, issue preclusion is part of the broader topic of former adjudication, that is, the effect of judgments on subsequent litigation • Issue preclusion - precludes relitigation of a previously decided issue • Also known as collateral estoppel

10. CONTRAST CLAIM/ISSUE PRECLUSION • Res judicata is a BLUDGEON; collateral estoppel is a scalpel • Issue preclusion bars from relitigation ONLY issues that have been actually litigated and determined • Issues can be barred from relitigation in some claims that do not involve same parties to previous litigation • How is issue preclusion both broader and narrower than claim preclusion?

11. ELEMENTS OF ISSUE PRECLUSION • Same issue • Actually litigated thus an admission is not enough for issue preclusion to apply • Actually decided by a valid and final judgment • Determination is essential to judgment • Some courts require mutuality, i.e. same parties

12. SAME ISSUE • U.S. sues Student, alleging nonpayment on a student loan, signed on 3/12. Student defends on grounds of incapacity, alleging that his mental state on the day in question prevented him from entering into an enforceable contract. Student loses. U.S. sues Student alleging non-payment of a second student loan signed on the same day. Is the issue of student’s capacity precluded in the second action?

13. ANOTHER HYPO • Federal government criminally prosecutes an IRS agent, accusing her of stealing tax revenue. She is acquitted. Government then sues Agent in a civil action to recover funds allegedly embezzled in the same criminal acts. Agent seeks to invoke preclusion on the grounds that the previous case demonstrates acts did not occur. Does preclusion apply? What if the order of the cases are reversed?

14. NEW EVIDENCE • What if a party discovers new evidence on the issue. Should that party be allowed to relitigate the issue in a second action?

15. ACTUALLY LITIGATED AND DECIDED • Jessie and Bertha were driving in the car and collided with a train. They were both injured. B sued for her personal injuries, J sued for loss of consortium and personal services. B won damages; J recovered nothing. J brought a second suit seeking recovery for his personal injures. • Does claim preclusion bar Jessie’s second suit?

16. ACTUALLY LITIGATED AND DECIDED • Jessie and Bertha were driving in the car and collided with a train. They were both injured. B sued for her personal injuries, J sued for loss of consortium and personal services. B won damages; J recovered nothing. J brought a second suit seeking recovery for his personal injures. Assume the second suit permitted because no transactional test in that state. Did collateral estoppel apply to bar J from recovering in the second suit on the basis that the court had already decided the issue of whether J was contributorily negligent?.

17. ACTUALLY LITIGATED AND DECIDED • Hypo is from Illinois Central Gulf RR v. Parks, 290 N.E. 2d 1078 (Ind. Ct. App. 1979) • Court rejected issue preclusion. RR based case for issue preclusion on possibility that first jury returned verdict against the husband because he had been contributorily negligent. Equally possible that it was because husband proved no damages for loss of wife’s services and companionship. Under this possibility, contributory negligence was not determined in the first case at all.

18. VALID AND FINAL JUDGMENT • Same as res judicata

19. NECESSARY TO THE JUDGMENT • Davis sued Rios for negligence in an automobile collision. The jury found Rios negligent but also found Davis contributorily negligent. Judgment entered for Rios. • Should the court in a subsquent claim by Rios for injuries suffered in the same collision hold that Rios was barred from relitigating on the basis that his contributory negligence determined in first proceeding?

20. NECESSARY TO THE JUDGMENT • The finding that Rios was negligent was not essential to the judgment and the judgment was not based thereon. Since the judgment was in favor of Rios he had not right to complain of or appeal from the finding that he was guilty of such negligence even if such finding had been without support in the evidence. Right of appeal is from a jdugment not a finding.

21. NECESSARY TO THE JUDGMENT • A useful test_ ask yourself if the issue had been decided the opposite way, would the same judgment have been entered? If so, the judgment did not depend on the way the issue was actually resolved. Applying this test to Rios, we find that once jury found Davis to be contributorily negligent, Rios had to win.

22. JUDGMENT ON ALTERNATE GROUNDS • 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

23. JUDGMENT ON ALTERNATE GROUNDS • Currently, there is a division of authority on this question. • 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 restult, the judgment is not conclusive with respect to either issue standing alone.”

24. HOULT CASE (3d Cir. 1998) • What was Jennifer Hoult’s cause of action in the first action? • What was the outcome of the first action? • What is David Hoult’s cause of action in the second action? • What is the procedural issue in the second action? • How did the trial court rule?

25. THE HOULT APPEAL • Does the First Circuit affirm or dismiss Jennifer Hoult’s appeal? • What is the First Circuit’s reasoning?

26. MUTUALITY AND COLLATERAL ESTOPPEL • Old rule: parties had to be the same • New rule in federal court: Parklane Hosiery Co. v. Shore (1979) • NOTE THAT PARKLANE applies only to federal courts. State courts are not obligated to follow Supreme Court. You will need to check the law carefully to see whether a jurisdiction has abandoned mutuality, and if so, to what extent.

27. DEFENSIVE NON-MUTUAL COLLATERAL ESTOPPEL • In Blonder-Tongue, the Supreme Court first endorses the use of nonmutual estoppel • What are the key facts of Blonder-Tongue • What is the policy justification for the Supreme Court’s reversal of its long-standing rule requiring mutuality? • What is the difference between the use of collateral estoppel in Blonder-Tongue and in Parklane?

28. 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)

29. PARKLANE HOSIERY V. SHORE • Offensive nonmutual estoppel • What are the key facts in Parklane?

30. 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) • What are the risks posed by offensive use of estoppel?

31. SUPREME COURT IN PARKLANE • Does the Supreme Court categorically endorse or reject offensive nonmutual collateral estoppel? • What factors must lower courts consider?

32. 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?