Academic journal article The Review of Litigation

Offensive Non-Mutual Issue Preclusion Revisited

Academic journal article The Review of Litigation

Offensive Non-Mutual Issue Preclusion Revisited

Article excerpt

Introduction............282

I. Background.............286

A. Claim Preclusion.............289

1. Derivation.............289

2. Requirements of Claim Preclusion.............290

i. Identical Parties.............290

ii. Identical Causes of Action.............291

iii. "On the Merits".............292

B. Issue Preclusion.294

II.Issue Preclusion in Action.............295

A. The Rise of Mutuality.............295

B. The Decline of Mutuality.............301

III.Parklane in Action.............307

A. The Parklane Factors.............309

1. Proliferation of Litigation through "Wait and See".. ............309

2. Locking in Inconsistent Judgments.............310

3. Differing Stakes in F-l and F-2.............311

4. Difference in Procedural Remedies.............312

5. "Full and Fair Opportunity to Litigate".............313

B. Modern Criticism.............314

1. Asymmetry of Risks.............314

2. Probability of Error.............318

3. Efficiencies Generated by Preclusion are Illusory ............... 319

C. The Mendoza Rule: Restricting Offensive Non-mutual Issue Preclusion.............322

IV.Litigation in the Twenty-First Century and Preclusion ............325

A. The Settlement Dynamic.............327

B. Class Actions and Mandatory Joinder.............328

1. Class Actions.............329

2. Mandatory Joinder.............329

C. The Way Forward.............330

CONCLUSION.......................331

INTRODUCTION

Some forty years ago, in Parklane Hosiery Co. v. Shore,1 the United States Supreme Court held that the rule of mutuality of estoppel was no longer an absolute bar to the invocation of issue preclusion for the benefit of a plaintiff who had been a stranger to the prior (F-l) litigation against a defendant who had been party to both the F-l and present (F-2) cases.2 In so ruling, the Supreme Court gave its imprimatur to Judge Traynor's dramatic takedown of the mutuality rule in Bernhard v. Bank of America National Trust and Savings Association3 nearly four decades earlier. The outcome in Parklane was also foreshadowed by the Court's earlier ruling in Blonder-Tongue Laboratories v. University of Illinois Foundation 4 There, the Court rejected mutuality where the stranger to F-l invoked the F-l decision holding a patent invalid as a defense to an infringement suit in F-2 involving the same patent.5 Blonder Tongue was consistent with the trend in many state and lower federal court decisions that had abrogated mutuality where preclusion was interposed defensively.6 Parklane, of course, involved offensive non-mutual issue preclusion,7 and at the time of the Blonder Tongue decision, many courts drew a line distinguishing defensive and offensive non-mutual preclusion, allowing the former but not the latter.8 Parklane acknowledged this bright-line distinction but rejected an outright ban on offensive non-mutual issue preclusion, leaving it to the trial courts to determine on a case-by-case basis when it should be applied.9 The Court in Parklane thus stopped short of a blanket approval of offensive non-mutual issue preclusion, and qualified its holding in three important respects: (1) a defendant must have had a full and fair opportunity to litigate the case in F-l; (2) invocation of non-mutual issue preclusion must not produce an unfair result; and (3) the decision of whether or not to allow offensive nonmutual issue preclusion is left to the sound discretion of the trial court and thus is not a matter of right.10

Following Parklane, many,11 but not all,12 states have abrogated the rule of mutuality and now allowed offensive non-mutual issue preclusion. In effect, Parklane and Blonder-Tongue have shifted presumptions 180 degrees. Instead of a rule of mutuality subject to specific exceptions, we now have a rule of non-mutuality subject to exceptions where that approach would generate unfair results. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.