Finishing Issue Preclusion

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Finishing Issue Preclusion
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IP 4 Essential Inquiries

• If the answer to all four questions is yes,
  then the determination of that issue is
  conclusive in a subsequent action if that
  subsequent action is between the parties, --
  whether or not the subsequent action involves the
  same claim.

• (1) Was same issue of law or fact involved in
  prior suit?
• Watch BoPers
• (2) Was that issue actually litigated and
  determined?
• Parks case need to know
• (3) Was the determination of that issue essential
  to judgment?
• Multiple findings split
• (4) Was there final judgment?
• Same as CP.

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Between the parties Who is precluded? Who
can preclude?

• Old Law IP applied only if 2d suit involved
  same parties as 1st (same as CP).
• E.g., H driver sues RR for PI wins. W passenger
  then sues RR for PI. RRs answer pleads both CP
  and IP.
• What must RR do to have court rule?
• Is there CP?
• Old law No IP because no mutuality.
• If H had lost first suit, RR could not have used
  IP (why?)
• Mutuality W cannot benefit because H won must
  be mutual benefits and burdens of prior judgment,
  or IP was unavailable.

4
One Shot But Maybe Only One

• He is bound by that litigation only if he has
  been a party thereto or in privity with a party
  thereto.

• Just why a party who was not bound by a previous
  action should be precluded from asserting it as
  IP against a party who was bound by it is
  difficult to comprehend.

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Modern between the parties

• A party who wins a suit cant later use the
  judgment against person who wasnt party/ in
  privity with party to 1st suit.
• Due process requires one chance.
• But if party loses judgment, others can sometimes
  later use loss against it.
• The loser got to litigate the issue.
• Efficiency and consistency are served.
• But its an odd area

6
Blonder-Tongue Defensive

• Plaintiff sues defendant for infringing Ps
  patent.
• P loses. Patent held invalid.
• Then plaintiff sues a different defendant for
  patent infringement.
• Defendant raises IP on issue of invalidity.

• Supreme Court
• Defensive use okay even though, had plaintiff
  won, it could not use IP against the second
  defendant.
• Allowing defensive use of IP prevents plaintiffs
  from re-litigating issues just by switching
  defendants.
• Allowed as a matter of course.

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Parklane Hosiery Offensive

• 2d Suit Plaintiff sues for securities fraud,
  arguing 1st judgment is IP against PLH.
• Offensive use plaintiff is using judgment that
  another party had previously won against the
  defendant.

• 1st Suit SEC won nonjury finding proxy
  statement was false. Judgment entered against
  PLH.
• What fact was essential to that judgment?

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Contrast Offensive Defensive

• Allowing IP offensively encourages parties who
  may later be plaintiffs to not join in as
  plaintiffs in 1st suit.
• Allowing IP offensively could increase appeals or
  be unfair
• Binding defendant to finding made in case
  involving 10 when 2d suit involves 10m
• Binding defendant to finding made in 1st suit
  where it was inconvenient forum.
• Binding defendant to finding made in 1st suit
  where there were substantial procedural barriers
  to effective defense.
• Binding defendant to one judgment where there are
  other inconsistent judgments. (See State Farm.)

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Offensive Use The Rule

• Broad discretion as to allowance
• General rule in cases where a plaintiff could
  easily have joined in the earlier action or
  where, either because the 1st case was small or
  inconvenient or for other reasons, the
  application of offensive estoppel would be
  unfair a trial judge should not allow the use of
  offensive IP.

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Applied in PLH

• Plaintiff couldnt have joined SEC action.
• No unfairness because SEC made serious
  allegations clear a finding of falseness would
  lead to private suits
• Not case where defendant had won against X, then
  lost to SEC
• Not a case where procedural inconveniences makes
  unfair.
• So, offensive IP allowed.

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Problems (701)

• 2(a)
• (b)
• (c)
• 4(a)
• (b)
• (c)
• 5(a)
• (b)

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Hypos

• Mangia Pizza sues Grocer Supply alleging
  defective boxes judgment is entered on verdict
  against GS. (I.e., the jury decides the boxes
  are defective.)
• Could Dominos in a second suit against GS assert
  that GS is precluded form litigating whether the
  same batch of boxes are defective?
• MP sues GS alleging defective boxes judgment on
  jury verdict is entered against MP. (I.e., the
  jury decides the boxes are not defective.)
• If Dominos sues GS, could GS assert that Dominos
  is precluded from litigating whether the boxes
  are defective?
• So now we have asymetrical nonmutual preclusion
• A party who loses will be saddled with a judgment
  that others can use against it, but a party who
  wins a judgment wont be able to use the judgment
  against others....

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State Farm (703)

• A v. CHC.
• CHC wins but appellate court orders new trial
  (see below).
• B v. CHC.
• CHC wins.
• C v. CHC.
• C wins affirmed.
• A v. CHC (retrial)
• A wins affirmed.
• D (State Farm) v. CHC
• Can State Farm use the judgments in the retrial
  of As case, or Cs case, to estop CHC from
  denying negligence?

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Boundaries of Preclusion

• The exceptions to CP are narrow.
• If elements are met, it applies
• The exceptions to IP are narrow, too.
• Appellate review.