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Collateral estoppel, also known as issue exclusion, prohibits the relitigation of identical issues of fact or law determined in a prior action. It applies when the party against whom it is asserted had a full and fair opportunity to argue the issue in the previous trial.
Offensive and defensive use
Collateral estoppel can be applied offensively or defensively. Offensive collateral estoppel is used by a plaintiff seeking to prevent a defendant from pursuing a matter that the defendant has previously argued and lost in a suit involving another party. Defensive use of collateral estoppel is the opposite, i.e. the defendant asserts collateral estoppel as an affirmative defense because the plaintiff has already argued the issue and lost.
Elements of collateral estoppel
A party seeking to assert the prohibition of collateral estoppel must establish that (1) the question of fact or law sought to be argued in the second action was fully and fairly argued in the first action, (2 ) those issues were material to the judgment in the first action, and (3) the party against whom the doctrine is asserted was a party or was in relation to a party in the first action.
What is the purpose of collateral estoppel?
The exclusion of issues is designed to promote judicial efficiency, protect parties from multiple suits, and prevent inconsistent judgments by preventing any reliance on an ultimate question of fact.
Specifically, the doctrine extends only to questions [issues] which were expressly determined or necessarily determined in a decision and not to matters which could have been, but were not, raised and decided therein.
Collateral estoppel is a matter of law
Whether the exclusion applies is a question of law for the court to decide.
Mutuality of the parties
The application of collateral estoppel to close the door to the courthouse on a litigant who was not a party to the previous proceeding raises due process issues. The rule has exceptions, however, and Texas courts have held that under federal law the exclusion may apply as long as the party against whom collateral estoppel is asserted was either a party or was in private1 with a party in the first action. Due process dictates that collateral estoppel only be applied to litigants who have had their day in court either as a party to the previous suit or as a private party.
That is, strict reciprocity of parties is not required. It is only necessary that the party against whom the collateral estoppel is asserted was a party or in relation to a party in the first action.
1. Lien in law involves those who are at law so linked to a party to a judgment that they have an identity of interest such that the party to the judgment represents the same legal right. The Texas Supreme Court has stated that there is no specific definition of confidentiality that can be applied generally to all exclusion cases; instead, the circumstances of each case must be carefully considered. Generally, “privilege” exists if: (1) a third party agrees to be bound by the determination of the issues in an action among others; (2) a pre-existing substantive legal relationship governs a third party and a party to a judgment; (3) a like-minded party adequately represents a third party in a prior action; (4) a non-party assumes control of the litigation in the prior action; (5) a non-party serves as an attorney for a party to a prior action; or (6) a special statutory scheme expressly excludes successive litigation by non-litigants and the exclusion of claims is otherwise consistent with due process.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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