, known in modern terminology as issue preclusion
, is a common law estoppel
doctrine that prevents a person from relitigating an issue. Simply put, "once a court has decided an issue of fact or law necessary to its judgment, that decision ... preclude[s] relitigation of the issue in a suit on a different cause of action
involving a party to the first case. This is for the prevention of legal harassment and to prevent the abuse of legal resources.
Parties may be estopped from litigating determinations on issues made in prior actions. The determination may be an issue of fact
or an issue of law
. Preclusion requires that the issue decided was actually and necessarily decided as part of a valid final judgment. Valid final judgments of state courts are given preclusive effect in other state and federal courts under the Full Faith and Credit Clause
of the U.S. Constitution
Valid final judgments must be issued by courts with appropriate personal and subject matter jurisdiction. It is notable, however, that an error does not make a decision invalid. Reversible errors must be appealed.
Collateral estoppel does not prevent an appeal of a decision, or a party from asking the judge for reargument or a revised decision. In federal court, judgments on appeal are given preclusive effect. However, if the decision is vacated, the preclusive effect of the judgment fails.
Due process concerns
Collateral estoppel cases raise constitutional due process problems, particularly when it is applied to a party that did not participate in the original suit. Due process mandates that collateral estoppel not be applied to a party that has not actually litigated the issue in dispute, unless that party is in legal privity to a party that did actually litigate it. In other words, every disputant is entitled to a day in court and cannot ordinarily be bound by the negative result of another disputant's suit, even if that other disputant had exactly the same legal and factual arguments.
Due process concerns also can arise even when a party did have a day in court to dispute an issue. For example, a defendant may have not effectively litigated an issue decided against the defendant in an earlier suit because the damages were too small, so it may be unjust to bar the defendant from relitigating the issue in a trial for much greater damages. As another example, suppose that a defendant did effectively litigate an issue to a favorable conclusion in nine cases, but to an unfavorable result in a tenth case. In this situation, note that the defendant did not have the opportunity to use the nine judgments in its favor as collateral estoppel against subsequent plaintiffs, because that would violate their right to a day in court. To allow a subsequent plaintiff to use the tenth, negative judgment as collateral estoppel against the defendant may seem unjust. See the leading Supreme Court case Parklane Hosiery Co, Inc. v. Shore.
Traditionally, collateral estoppel applied only where there was mutuality of parties, meaning that both the party seeking to employ collateral estoppel and the party against which collateral estoppel is sought were parties to the prior action.
Most courts have now abandoned mutuality as a requirement for collateral estoppel in most circumstances. The modern trend is clearly in favor of abandoning the mutuality requirement.
In the absence of mutuality, courts are more hesitant to apply collateral estoppel in an offensive setting than in a defensive one. In other words, courts are more hesitant to apply collateral estoppel to a defendant from a previous action if the defendant is sued by a new plaintiff for the same issue.
Collateral estoppel may be used either defensively or offensively; mutually or non-mutually:
- Defensive Mutual Collateral Estoppel
- Used against the plaintiff from the first suit regarding issue(s) that were previously litigated against the defendant from the first suit.
- Defensive Non-Mutual Collateral Estoppel
- Used by a new defendant in a subsequent suit who wants to assert a final judgment on an issue(s) against the plaintiff from the first suit
- Offensive Mutual Collateral Estoppel
- Used against the defendant from the first suit by the plaintiff (from the first suit) in a subsequent suit thereby preventing relitigation on an issue already decided
- Offensive Non-Mutual Collateral Estoppel
- Used by a new plaintiff in a subsequent suit who wants to assert a final judgment on an issue(s) against the defendant from the first suit
- Court employs 5 "Fairness Factors" from Parklane Hosiery Co, Inc. v. Shore, 439 U.S. 322 (1979), to determine validity of the ONMCE:
- Could the party trying to assert Collateral Estoppel have intervened in the earlier suit?
- Did defendant have incentive to litigate the first action?
- Are there multiple, prior inconsistent judgments?
- Did the party who is attempting to assert ONMCE sit out and wait during earlier suits?
- Are there any procedural opportunities available to defendant in the second suit that were not available in the first suit?
Collateral estoppel is an efficiency rule that is meant to save judicial resources by avoiding the relitigation of issues of fact that have already been actually litigated. The rule is also intended to protect defendants from the inequity of having to defend the same issue repeatedly.
But note that the use of offensive non-mutual collateral estoppel may work against the goal of judicial economy. The offensive use encourages potential plaintiff's to sit and "test the waters" to see the strength of the defendant's case. If the defendant's case is weak, there is great incentive for new parties to sue and claim that the defendant is estopped based on the prior adverse ruling.
Collateral estoppel is closely related to the concept of claim preclusion, which prevents parties relitigating the same cause of action
after it has been decided by a judge or jury. Res judicata
(literally - that which has been decided) can be used as the term for both concepts, or purely as a synonym for claim preclusion. Under the doctrine of res judicata, a judgment on the merits in a prior suit bars a second suit involving the same parties or their privies based on the same cause of action. Under the doctrine of collateral estoppel, on the other hand, the second action is upon a different cause of action and the judgment in the prior suit precludes relitigation of issues actually litigated and necessary to the outcome of the first action.
See also direct estoppel.
Although it emerged out of civil law, in the United States
it has applied to federal criminal law since United States v. Oppenheimer
in 1916. In 1970 in Ashe v. Swenson
, the United States Supreme Court
applied it to double jeopardy
to limit prosecution for crimes committed at the same time.