Componente Forestal

Collateral estoppel, or issue preclusion, allows reliance upon findings in one proceeding to preclude their re-litigation in a subsequent proceeding.121 Historically, courts required that both the party asserting the estoppel and the party against whom it was asserted had to be parties, or in privity with parties, to the prior litigation. Over time, many courts replaced this strict “mutuality” requirement with a relaxed standard under which a party who had “a full and fair opportunity to litigate an issue” in a prior proceeding could be estopped from re-litigating the issue in later litigation.122

Prior to the United States Supreme Court’s decision in Parklane Hosiery Co. v. Shore.123 non-mutual collateral estoppel was largely confined to use by a defendant to prevent a plaintiff

119

926 F. Supp. 767 (1996), aff’d 227 F.3d 776 (7th Cir. 2000).

120

Id. at 771.

121

See Restatement (Second) of Judgments § 27 (1982).

122

Blonder Tongue Lab., Inc. v. Univ. of Ill. Found., 402 U.S. 313 (1971).

123

from asserting a claim that he or she had previously litigated and lost against another defendant. The Court in Parklane extended the use of non-mutual collateral estoppel to the offensive context. It allowed the plaintiff to use the doctrine to prevent the defendant from contesting issues previously litigated and lost against other parties.124 After considering and rejecting the rationales advanced by other courts for treating offensive and defensive issue preclusion differently, the Court held that offensive, non-mutual collateral estoppel did not violate the defendant’s Seventh Amendment right to a jury trial.125

Defendants facing the related claims of multiple plaintiffs must consider the implications of Parklane and its progeny on trial strategy. In Batson v. Lederle Laboratories126 the New Jersey Superior Court, Appellate Division, affirmed the trial court’s decision allowing a woman to use her sister’s verdict on liability in a tetracycline case to establish that the defendant knew that the antibiotic stained teeth, yet failed to issue appropriate warnings. Nevertheless, the Supreme Court of New Jersey rendered this ruling moot by ordering a new trial in Batson’s case,

which was consolidated with London v. Lederle Laboratories.127 Therefore, the question of

whether the a plaintiff can use a verdict in a similar case to establish that the defendant had notice of the harmful effects of the product remains unanswered.

Similarly, in Engle v. Liggett Group, Inc.,128 the Supreme Court of Florida found that a trial court had improperly certified a class in a multi-phased trial plan. Nonetheless, the court found that the claims would be allowed to go forward, and that “[c]lass members can choose to initiate individual damages actions and the Phase I common core findings we approved above will have res judicata effect in those trials.”129 While it is unclear exactly what constituted “common core findings,” this ruling seems consistent with other cases.130

The Tenth Circuit recently reiterated, however, that the issues previously decided must be identical to the one presented in the second action in order for the principle of collateral estoppel to be applicable. It found in Dodge v. Cotter Corporation131 that not only were the issues not 124 Id. at 332-33. 125 Id. at 337. 126 674 A.2d 1013 (N.J. Super. Ct. 1996). 127 702 A.2d 471 (N.J. 1997). 128 __ So.2d __ (Fla. 2006). 129 Id. at __. 130

See Daenzer v. Wayland Ford, Inc., 210 F.R.D. 202, 205 (W.D.Mich.2002) (entering summary judgment on the issue of liability, decertifying the class on the issue of damages and stating that “[t]he Court's decision as to liability is res judicata in any damages action individual class members decide to bring”); McCormack v. Abbott Labs., 617 F.Supp. 1521 (D.Mass.1985) (concluding that plaintiff's strict liability claim was barred by judgment for the defendants entered in a prior class action, which the plaintiff joined, before that class action was decertified).

131

identical, but that there was no indication in the record that the parties understood that determinations as to the bellwether plaintiffs in the first trial would bind the parties in subsequent trial. Therefore, the court did not allow the determinations in the first trial to be extended to the second.132

Whether the parties have had the full and fair opportunity to litigate the issue is also part of the analysis. For example, in Holland v. Kohn,133 the Fourth Circuit vacated and remanded a decision of the district court. It held that the plaintiffs had not had an opportunity to litigate an issue. Critical to that court’s analysis was a dispute over whether the plaintiffs had received notice of a motion to compel that ultimately led to the dismissal of their state court action and whether they received an opportunity to be heard in opposition to the motion.

In Holland, the plaintiffs filed suit against their counsel for legal malpractice alleging that counsel’s negligence caused the dismissal of the state court action. Former counsel moved for summary judgment on the ground that the state court had already heard and determined the reason for dismissal, which was the plaintiffs’ failure to respond to discovery. The district court agreed with former counsel and determined that collateral estoppel precluded the plaintiffs from re-litigating the issue of the cause of the state court action dismissal. The Fourth Circuit disagreed, stating that although the issue may have been presented during the motion to compel, there was undisputed evidence that the plaintiffs did not have the opportunity to litigate the issue in the state court proceeding. Plaintiffs’ counsel was moving to withdraw at the same hearing, stating plaintiffs’ lack of cooperation regarding discovery as the reason. Because plaintiffs’ counsel was adversarial to his own clients during the hearing on the motion to compel, it is undisputed that the plaintiffs lacked the opportunity to respond.

Notwithstanding Parklane, the use of non-mutual offensive collateral estoppel is not a fail-safe weapon for plaintiffs. Not all states recognize the non-mutual use of collateral estoppel.134 States that do, as well as the federal courts, abide by boundaries established by the Parklane Court for use of the doctrine. Specifically, use of collateral estoppel is prohibited where it would be unfair to defendants. The Court in Parklane identified four situations in which use of the doctrine would result in unfairness to a defendant:

(1) where the party asserting it could easily have joined in the earlier action; (2) where the judgment relied upon is inconsistent with other decisions;

132

Accord Setter v. A.H. Robins Co., 748 F.2d 1328, 1331 (8th Cir. 1984) (holding that offensive collateral estoppel did not apply because the previous jury’s verdict did not specify which of several theories of negligence served as the basis for the judgment); C.A. Hardy v. Johns-Manville Sales. Corp., 681 F.2d 334, 345 (5th Cir. 1982) (same).

133

No. 00-1195 & 00-1196, 2001 U.S. App. LEXIS 13771 (4th Cir., June 19, 2001).

134

See, e.g., Walker v. Kerr-McGee Chem. Corp., 793 F. Supp. 688, 697 (N.D. Miss. 1992) (noting requirement under Mississippi law of strict mutuality as prerequisite to use of collateral estoppel); Selected Risks Ins. Co. v. Dean, 355 S.E.2d 579 (Va. 1987) (same, under Virginia law).

(3) where the party against whom it is to be applied had no incentive to defend the earlier action; and

(4) where there are significant procedural differences between the actions.135

Courts considering the fairness of applying collateral estoppel offensively have not limited themselves to the specific examples set out in Parklane. In Owens-Corning Fiberglass Corporation v. Sitz,136 for example, the court determined that a plaintiff could not use offensive collateral estoppel to prove that asbestos products were unreasonably dangerous and defective as a matter of law because the plaintiff’s claim presented issues of fact that required a jury determination. Although the issue had been litigated in a similar case against Owens-Corning, the Texas Court of Appeals stated that applying collateral estoppel in this case would “elevate judicial experience over considerations of justice and fair play.”137

Other courts have held similarly, finding that the issues determined in prior cases were not identical to the issues previously litigated. Recently, the California Court of Appeals, Second District, in Arnold v. Ashland Chemical Company138 voided the first punitive damages award in a toxic exposure suit by 627 former and current Lockheed Corporation workers. The court said that “it was error as a matter of law to collaterally estop the defendants from litigating the failure to warn issues, and to instruct the jury, based on non-pilot jury findings that inadequate warnings were issued” for certain products. In overturning the lower court’s determination, the appellate court focused on the fact that not all of the products at issue in the

135

Parklane, 439 U.S. at 328-31.

136

970 S.W.2d 103 (Tex. Ct. App. 1998), rhr’g overruled (Jun. 11, 1998), review denied (Jan. 7, 1999).

137

Id. (citing Parklane, 439 U.S. at 326).

138

No. B121434 (Cal Ct. App., 2d App. Dist., Feb. 18, 2000) (unpublished) (summary of decision reported at 28 Prod. Liab. Rptr. 196 (Mar. 6, 2000), review denied, 2000 Cal. Lexis 4448 (May 29, 2000). Another example of a court finding that the issues determined in prior cases were not identical is Kessinger v. Grefco, Inc., 672 N.E. 2d 1149 (Ill. 1996). In Kessinger, an intermediate appeals court ruled that a defendant was estopped from arguing that diatomaceous earth could not cause pulmonary fibrosis in four plaintiffs, where the issue had been determined against the defendant in prior litigation. The Illinois Supreme Court reversed, holding that the intermediate court had misapplied the doctrine. The Kessinger court based its reversal on the fact that the plaintiffs were not similarly situated to the plaintiff in the earlier suit. The plaintiff from the prior litigation was frequently exposed to diatomaceous earth over a fifteen-year period, while the duration and intensity of the four employees’ exposure was more limited. According to the court:

allowing plaintiffs in the instant case to benefit from another individual’s recovery of damages under dissimilar circumstances is comparable to permitting patients of a doctor found liable for malpractice in one patient’s surgery to estop the doctor from fully defending against malpractice suits of the other patients who had the same problem.

trial before the court were identical to those in earlier trials that were found to have inadequate warnings.

A Kentucky court rejected the plaintiffs’ attempt to rely on a 1994 plaintiff’s verdict to establish that the drug Parlodel was defective and unreasonably dangerous.139 In Mounce v. Sandoz Pharmaceuticals Corporation,140 the plaintiffs, Linda and Damon Mounce, alleged that the drug Parlodel caused Mrs. Mounce’s injuries. Plaintiffs then attempted to rely on a 1994 case where the jury had found that Parlodel was defective and unreasonably dangerous. The court barred the plaintiffs’ reliance on the previous verdict because the interrogatories and verdict in the 1994 case were too case and fact specific to have application to the Mounce’s case. In addition, the court determined that there have been many other decisions regarding Parlodel, more recent than the one on which plaintiffs’ sought to rely, which reached a contrary result to the 1994 case.

At least one court has applied the doctrine of collateral estoppel to bar the re-litigation of causation issues decided in favor of the defendants. In National Bank of Commerce v. Dow Chemical Co.,141 the Arkansas Supreme Court granted the defendants’ motion for summary judgment, finding that the plaintiffs had failed to demonstrate a valid scientific basis for the expert testimony proffered as required by Daubert v. Merrell Dow Pharmaceuticals.142 The same plaintiffs then filed in state court and requested the court to consider new research providing support for the expert testimony. The court declined plaintiffs’ request and held instead that because the causation issue before the state court was identical to the one decided by the federal court, application of collateral estoppel was appropriate.143

139

Mounce v. Sandoz Pharmaceuticals Corp., No. 95-CI-1422 (Ky. Cir. Ct., Sept. 22, 2000), reported in 15 Tox. L. Rptr. 1113 (Nov. 2, 2000), summary judgment granted April 18, 2001, reported in 16 Tox. L.Rptr. (BNA) 499 (May 10, 2001).

140

No. 95-CI-1422 (Ky. Cir. Ct., Sept. 22, 2000), reported in 15 Tox. L. Rptr. 1113 (Nov. 2, 2000).

141

1 S.W.3d 443 (Ark. 1999).

142

509 U.S. 579 (1993).

143

Determining similar issues, the Seventh Circuit determined that a federal court may not enjoin a state court proceeding on the same ground if the state court has already considered and rejected the defense of res judicata. Ramsden v. AgriBank, 214 F.3d 865 (7th Cir. 2000), reh’g denied, 2000 U.S. App. LEXIS 15532 (7th Cir. 2000), cert. denied, 2000 U.S. LEXIS 8139 (2000). Ramsden was the second of two state court actions filed against the defendants by the plaintiffs. In the first action, alleging tortious conduct in the sale of agricultural property, the state court dismissed one of the defendants. While the appeal was pending, the plaintiffs filed a second action against AgriBank alleging that they and their cattle were poisoned by benzene contamination in the water on the farm Agribank sold them. AgriBank removed the second action to federal court and was successful in obtaining summary judgment on the grounds that the plaintiffs’ expert testimony failed the test under Daubert. AgriBank then moved for summary judgment in the first action arguing issue and claim preclusion due to the federal court’s summary judgment. The state court denied the motion stating that the plaintiffs’ expert would have been allowed to testify in state court since its evidentiary requirements are less stringent than Daubert. AgriBank requested the federal court to enjoin the state court action, which it did. The Seventh Circuit reversed stating that the state court’s decision that a federal injunction is not warranted even if the state court’s decision that res judicata does not apply is erroneous.

* * *

The cases addressing the issue, particularly in the context of mass tort litigation, generally find that offensive collateral estoppel has very limited applicability at best, due to the fact that, although the court and counsel may know how an issue was resolved, such knowledge cannot be fully imputed to a second jury without a clear indication of what, in fact, the first jury decided. Nevertheless, defense counsel must be prepared to address such arguments as a prepared plaintiffs’ lawyer, who establishes an exhaustive factual record through the use of special verdict forms and/or interrogatories, may seek to invoke collateral estoppel in a suit involving subsequent similar claims.

B. Cooperation Among Co-Defendants