1. Thurs., Nov. 29

2. issue preclusion

3. if in an earlier case an issue was - actually litigated and decided - litigated fairly and fully - and essential to the decision then the earlier determination of the issue precludes relitigation of the same issue by someone who was a party (or in privity with a party) in the earlier litigation

4. essentiality requirement

5. example of two issues, one not essential

6. Cambria v. Jeffrey (Mass
Cambria v. Jeffrey (Mass. 1940) P sues D for negligence D wins – D negligent but P contributorily negligent D then sues P for negligence is D precluded from relitigating own negligence?

7. example of alternative determinations – two issues, neither essential (because either sufficient on its own)

8. - P sues D for interest on note - D alleges fraud in execution of note and release of obligation to pay interest - D wins on both grounds - P then sues for principal - D brings up fraud in execution of note - Is P issue precluded?

9. some courts (1st Rest. Js. ): both preclusive some courts (Halpern v
some courts (1st Rest. Js.): both preclusive some courts (Halpern v. Schwartz (2d Cir. 1970)): neither some courts (2d Rest. Js.): neither unless one is appealed some courts (Malloy v. Trombley, (NY 1980)): preclusive if evidence that issue was given thorough and careful deliberation

10. exceptions to issue preclusion

11.   Restatement (Second) of Judgments §28 Although an issue is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, relitigation of the issue in a subsequent action between the parties is not precluded in the following circumstances:

12. (1) The party against whom preclusion is sought could not, as a matter of law, have obtained review of the judgment in the initial action; or (2) The issue is one of law and (a) the two actions involve claims that are substantially unrelated, or (b) a new determination is warranted in order to take account of an intervening change in the applicable legal context or otherwise to avoid inequitable administration of the laws; or (3) A new determination of the issue is warranted by differences in the quality or extensiveness of the procedures followed in the two courts or by factors relating to the allocation of jurisdiction between them; or...

13. (4) The party against whom preclusion is sought had a significantly heavier burden of persuasion with respect to the issue in the initial action than in the subsequent action; the burden has shifted to his adversary; or the adversary has a significantly heavier burden than he had in the first action; or (5) There is a clear and convincing need for a new determination of the issue (a) because of the potential adverse impact of the determination on the public interest or the interests of persons not themselves parties in the initial action, (b) because it was not sufficiently foreseeable at the time of the initial action that the issue would arise in the context of a subsequent action, or (c) because the party sought to be precluded, as a result of the conduct of his adversary or other special circumstances, did not have an adequate opportunity or incentive to obtain a full and fair adjudication in the initial action.

14. issue preclusion used to require mutuality

15. Ohio Georgia still have the mutuality requirement

16. Virginia (and some other states)… allow only defensive nonmutual issue preclusion

17. Blonder-Tongue Labs (US 1971) Univ
Blonder-Tongue Labs (US 1971) Univ. of Illinois Foundation first sues Winegard Co. concerning patent infringement - U. of Ill. lost (patent invalid) - U. of Ill. then sues B-T concerning infringement of same patent

18. accident involving A, B, and C A sues B for negligence and wins (B is found negligent) B then sues C for negligence in connection with the same accident C offers the defense of B’s contributory negligence – B precluded from relitigating his negligence

19. federal and some states also allow offensive nonmutual issue preclusion under certain circumstances plaintiff in second suit was not a party in first suit and uses issue preclusion as a sword

20. accident involving A, B, and C A sues B for negligence A wins (B is found negligent) C then sues B for negligence in connection with the same accident – if offensive nonmutual issue preclusion is allowed, then B is precluded from litigating own negligence

21. accident involving A, B, and C A sues B for negligence B wins (A is found contributorily negligent) C then sues A for negligence in connection with the same accident – if offensive nonmutual issue preclusion is allowed, then A is precluded from litigating own negligence

22. Parklane Hosiery v. Shore (U.S. 1979)

23. Amendment VII In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise reexamined in any court of the United States, than according to the rules of the common law.

24. Since a plaintiff will be able to rely on a previous judgment against a defendant but will not be bound by that judgment if the defendant wins, the plaintiff has every incentive to adopt a "wait and see" attitude, in the hope that the first action by another plaintiff will result in a favorable judgment. Thus offensive use of collateral estoppel will likely increase rather than decrease the total amount of litigation, since potential plaintiffs will have everything to gain and nothing to lose by not intervening in the first action.

25. accident involving A, B, and C A sues B for negligence A wins (B is found negligent) C then sues B for negligence in connection with the same accident – if offensive nonmutual issue preclusion is allowed, then B is precluded from litigating own negligence

26. A second argument against offensive use of collateral estoppel is that it may be unfair to a defendant. If a defendant in the first action is sued for small or nominal damages, he may have little incentive to defend vigorously, particularly if future suits are not foreseeable. Allowing offensive collateral estoppel may also be unfair to a defendant if the judgment relied upon as a basis for the estoppel is itself inconsistent with one or more previous judgments in favor of the defendant. Still another situation where it might be unfair to apply offensive estoppel is where the second action affords the defendant procedural opportunities unavailable in the first action that could readily cause a different result. 

27. P1 sues D Corp for damages from defective product – loses (product not defective) P2 sues D Corp for damages from defective product – loses (product not defective) P3 sues D Corp for damages from defective product – loses (product not defective) P4 sues D Corp for damages from defective product – wins (product defective) P take advantage of offensive nonmutual issue preclusion against D Corp…?

28. DISTINGUISH. P sues D for negligence. P wins (D is negligent)
DISTINGUISH! P sues D for negligence. P wins (D is negligent). X knew about the suit but refused to intervene. X sues D for negligence in connection with the same accident. X may not be able to issue preclude D concerning D’s negligence. P sues D to put up a dam. X’s property will be flooded, but he refuses to intervene in the suit. P wins. X may be precluded to sue D to take down dam.

29. Question 4. P, a citizen of New York, sues D, a citizen of New Jersey, for $100,000 in damages under New York battery law in the Federal District Court for the Southern District of New York. P seeks compensation for the partial loss of sight in an eye, as a result of a barroom brawl between P, on one side, and D and D’s friend, X (a citizen of New Jersey), on the other. D joins a contribution action against X for $50,000. After discovery, X brings a motion for summary judgment against D on the grounds that a reasonable jury would have to find that all of P’s damages were the result of D’s actions alone. X’s motion is granted. At trial, P receives a verdict in his favor and the court awards him a judgment against D for $60,000. Some months later, D sues X in New York state court under New York battery law for the $10,000 in damages caused by X’s blows against D during the brawl. Which of the following is most accurate about D’s $10,000 action against X? a. It is not claim precluded, because X was not a necessary party in the earlier proceedings in federal court. b. It is not claim precluded. The action could not have been entertained by the federal court because there would have been no federal subject matter jurisdiction for it. c. It is not claim precluded, because Fed. R. Civ. P. 14(a) would not have allowed the action to be joined. It was not a claim that X was liable to D for all or part of P’s claim against D. d. It is not claim precluded, because D’s action against X in the earlier proceedings in federal court was disposed of on summary judgment. e. It is claim precluded.

30. 4. D is a partnership. W and H are wife and husband
4.    D is a partnership. W and H are wife and husband. In reliance upon statements made by employees of D, W and H each made separate purchases of bonds issued by D. The price of these bonds subsequently plummeted and W and H each had to sell them at a heavy loss. W sued D in federal court in New York for her damages resulting from D’s alleged violation of federal securities laws. On a motion for summary judgment, the court found that no reasonable jury could find that the statements made by D’s employees were materially misleading. The court therefore granted summary judgment to D. Subsequently, D was purchased by the X Corp. After this purchase, H sued the X Corp in federal court in California for H’s damages as a result of D’s violations of federal securities laws. Which of the following is most accurate? a.    Under Parklane Hosiery, H is issue precluded from relitigating whether D’s employees’ statements were materially misleading. b.    H is not issue precluded under Parklane Hosiery from relitigating whether D’s employees’ statements were materially misleading, because H could have easily intervened in W’s suit against D. c.    Parklane Hosiery is irrelevant to whether H is issue precluded, since the matter is determined by New York state law. d.    H is not issue precluded from relitigating whether D’s employees’ statements were materially misleading, because the X Corp and D are not in privity.  e.    H is not issue precluded from relitigating whether D’s employees’ statements were materially misleading, because W and H are not in privity.

31. - X (a domiciliary of Nevada) established a trust for the benefit of twin brothers: P (a domiciliary of Oregon) and Y (a domiciliary of Oregon) - upon reaching the age of 50, P will receive 75% and Y 25% of the value of the trust - at the age of 25, P sued the trustee of the trust, D (a domiciliary of Nevada), in the federal district court for Northern District of Georgia - P alleged that D wrongly claimed ownership of a $200,000 parcel of land in the Northern District of Georgia (the land, P argued, belonged to the trust) - Y testified as a witness in the case - the jury determined that the land is in fact D’s and the federal court issued a judgment for D - soon afterward, D died and Z inherited his estate - within a year, Y sued Z in state court in Georgia - Y claims that the $200,000 property that Z inherited in fact belongs to the trust - Z claims that Y is issue precluded from relitigating whether the property belongs to the trust - how should the state court rule?

32. one sovereign’s law in another sovereign’s courts…

33. a federal court entertains a state law action, or action under the law of a foreign nation a state court entertains a federal action, or sister state action, or action under the law of a foreign nation

34. Rules of Decision Act 28 U. S. C
Rules of Decision Act 28 U.S.C. § The laws of the several states, except where the Constitution or treaties of the United States or Acts of Congress otherwise require or provide, shall be regarded as the rules of decision in civil actions in the courts of the United States, in cases where they apply.

35. how to interpret the other sovereign’s law?

36. Swift v. Tyson (US 1842) P sues D in federal court in New York concerning commercial paper issued in New York the Supreme Court held that in interpreting the general common law prevailing in New York, a federal court need not follow opinions of New York state courts - concerning local usages (e.g. real property) and New York’s statutes and constitution, the decisions of New York state courts are binding

37. Story, J. – “laws” in the RDA refers to state statutes and to common law rules that are local – not to the general common law

38. BLACK & WHITE TAXICAB & TRANSFER CO. v
BLACK & WHITE TAXICAB & TRANSFER CO. v. BROWN & YELLOW TAXICAB & TRANSFER CO U.S. 518 (1928)

39. Holmes (dissenting) If there were such a transcendental body of law outside of any particular State but obligatory within it unless and until changed by statute, the Courts of the United States might be right in using their independent judgment as to what it was. But there is no such body of law. The fallacy and illusion that I think exist consist in supposing that there is this outside thing to be found. Law is a word used with different meanings, but law in the sense in which courts speak of it today does not exist without some definite authority behind it. The common law so far as it is enforced in a State, whether called common law or not, is not the common law generally but the law of that State existing by the authority of that State without regard to what it may have been in England or anywhere else.

40. assume that facts of the Brown & White Taxicab case had taken place in Louisiana the Cree Tribe Turkey what result?

41. OK, so the general common law is binding in Kentucky only because Kentucky officials say so

42. but isn’t it clear that Kentucky officials want the courts of other jurisdictions (federal, sister state, and foreign) to follow the decisions of Kentucky courts concerning general common law cases that arise in Kentucky…?

43. Holmes, dissenting If a State Constitution should declare that on all matters of general law the decisions of the highest Court should establish the law until modified by statute or by a later decision of the same Court, I do not perceive how it would be possible for a Court of the United States to refuse to follow what the State Court decided in that domain. But when the Constitution of a State establishes a Supreme Court it by implication does make that declaration as clearly as if it had said it in express words, so far as it is not interfered with by the superior power of the United States.

44. how do we know whether Kentucky courts want their decisions to bind federal and sister state courts concerning general common law cases arising in Kentucky? will there ever be a Kentucky case in which that position is articulated?

45. move the facts of the Black and White case to Tennessee (that is, it is a Tennessee contract is at issue) a Kentucky state court is addressing the case would it defer to the decisions of Tennessee courts…?

46. Connecticut – deferred to sister state courts pre-Swift Pennsylvania – moved to deferring around Georgia – still does not defer!

47. state by state approach?

48. vertical forum shopping

49. Erie R.R. v. Tompkins (US 1938)

50. three justifications

51. Except in matters governed by the Federal Constitution or by acts of Congress, the law to be applied in any case is the law of the state. And whether the law of the state shall be declared by its Legislature in a statute or by its highest court in a decision is not a matter of federal concern. There is no federal general common law. Congress has no power to declare substantive rules of common law applicable in a state whether they be local in their nature or “general,” be they commercial law or a part of the law of torts. And no clause in the Constitution purports to confer such a power upon the federal courts.

52. Reed concurring I am not at all sure whether, in the absence of federal statutory direction, federal courts would be compelled to follow state decisions. There was sufficient doubt about the matter in 1789 to induce the first Congress to legislate. No former opinions of this Court have passed upon it….If the opinion commits this Court to the position that the Congress is without power to declare what rules of substantive law shall govern the federal courts, that conclusion also seems questionable. The line between procedural and substantive law is hazy, but no one doubts federal power over procedure.

53. Upshot of Erie: When entertaining a state law cause of action (e. g
Upshot of Erie: When entertaining a state law cause of action (e.g. in diversity, supplemental jurisdiction) the federal court should apply state law as interpreted by that state’s courts - this applies to common law cases too!

54. Boyle v. United Technologies Corp
Boyle v. United Technologies Corp. (US 1988) estate of a serviceman sued a federal military contractor under Virginia tort law in federal court for a design flaw in a helicopter that led to his death contractor asserted federal common law defense of immunity for federal military contractors

55. Hinderlider v. La Plata River & Cherry Creek Ditch Co. , 304 U. S
Hinderlider v. La Plata River & Cherry Creek Ditch Co., 304 U.S. 92, 110 (1938) (Brandeis, J.) (describing apportionment of water from the La Plata River between Colorado and New Mexico as “a question of ‘federal common law’ upon which neither the statutes nor the decisions of either State can be conclusive”)

56. - there may be a federal interest giving a federal court common law making power, but diversity or supplemental jurisdiction itself does not create such an interest

57. In the light of Erie, how to interpret state law?

58. binding nature of state court decisions in the state court system

59. New decision announced by Va trial ct (circuit ct) Not binding authority anywhere That is, no court is obligated to follow that Va trial ct’s decision concerning Va law Strong precedential value for another Va trial ct deciding cases of Va law Will strongly suggest how the law should be decided, but a Va trial ct could decide differently A mere source for arguments for Va Ct App or the Va Supreme Court

60. Va Ct App asserts new decision on Va law Binding authority over trial courts (circuit cts) Such trial courts are obligated to follow that the Appellate Ct’s decision even if legal circumstances have changed and the appellate courts would surely decide differently now Precedential value for Ct App. Will strongly suggest how the law should be decided, but a Va Ct App could decide differently – for example, if legal circumstances have changed A mere source for arguments for the Va Supreme Court

61. The Va SCt issues a new rule of Va law Binding authority over trial courts and appellate courts within the state of Va Such courts are obligated to follow the Va SCt decision even if legal times have changed Precedential value for the Va SCt Will strongly suggest how the law should be decided, but the Va Sct could decide differently

62. There is an old US SCt case on point that says X
There is an old US SCt case on point that says X. A state court or lower federal court feels that the US SCt would say not-X now. Can the state court or lower federal court decide not-X?

63. - P sues D in federal court in diversity under Pennsylvania law - The last Pennsylvania Supreme Court decision on point is 80-years old – it looks like they would decide otherwise now - Does the federal court follow the decision?

64. The last Pennsylvania Supreme Court opinion on point is an 80-year old case You think they would decide otherwise now The change in the law would be to your benefit Your case is a diversity case Where do you sue, in a Pennsylvania state trial court or in a federal district court?

65. You are federal district judge in the E. D. Va
You are federal district judge in the E.D. Va. entertaining a question of Virginia law The only cases on point are a 20-year-old decision by the 4th Circuit and conflicting 5-year-old decision by a Va. trial court Is the 4th Circuit decision binding authority for you?