The Lawletter Vol 42 No 7
Lee Dunham, Senior Attorney, National Legal Research Group
Collateral estoppel, also known as "issue preclusion," prohibits relitigation of factual or legal issues that have been "actually and necessarily decided" in earlier litigation. See, e.g., Banga v. First USA, 29 F. Supp. 3d 1270, 1280-81 (N.D. Cal. 2014) (citing San Remo Hotel L.P. v. San Francisco City & County, 364 F.3d 1088, 1094 (9th Cir. 2004)). Unlike the related doctrine of res judicata (or "claim preclusion"), which operates as a complete bar to relitigation of an entire claim, under collateral estoppel, the (new and different) claim may proceed, but "the prior judgment conclusively resolves an issue actually litigated and determined in the first action." DKN Holdings LLC v. Faerber, 61 Cal. 4th 813, 824, 352 P.3d 378, 386-87 (2015), reh'g denied (Aug. 12, 2015). Claim preclusion bars litigation of all issues that were or could have been litigated in the original action under the original claim, while issue preclusion resolves only those issues that were actually litigated. Banga, 29 F. Supp. 3d at 1280-81.
There are multiple prerequisite elements for the application of the doctrine of issue preclusion, including a prior proceeding that resulted in a final judgment on the merits and identity or privity of parties between the two proceedings. However, this article will focus on the third element, "identity of issues" in cases where the "issue" is the satisfaction of a statutory requirement and where the claims in the first and second proceedings arise under different statutes.
Issue preclusion can apply where the first and second claims were brought under different statutes as long as the statutory standards are sufficiently similar that the same "issue" is raised. See B&B Hardware, Inc. v. Hargis Indus., Inc., 135 S. Ct. 1293, 1306 (2015) ("Often a single standard is placed in different statutes; that does not foreclose issue preclusion."). B&B Hardware involved two separate federal trademark statutes involving the phrase "likely to cause confusion." Id. (citing 15 U.S.C. §§ 1114(1), 1052(d)). The rule holds true even where the statutes were not enacted by the same legislative body, such as in cases involving statutes of different states, or in cases where one is a state statute and the other is federal. See Kaufman v. BDO Seidman, 984 F.2d 182, 183 (6th Cir. 1993); William O. Gilley Enters., Inc. v. Atl. Richfield Co., 588 F.3d 659 (9th Cir. 2009); Murphy v. Gallagher, 761 F.2d 878 (2d Cir. 1985); Clough v. Rush, 959 F.2d 182 (10th Cir. 1992); Brannan v. Eisenstein, 804 F.2d 1041 (8th Cir. 1986); Bustop Shelters, Inc. v. Convenience & Safety Corp., 521 F. Supp. 989 (S.D.N.Y. 1981). It also holds true where the statutes use different language to refer to the same "issue." See In re Goldbronn, 263 B.R. 347, 361 (Bankr. M.D. Fla. 2001) (for collateral estoppel purposes, "falsification or concealment of facts" as used in Florida statute was identical to “false pretenses, false representation, or actual fraud” as used in Bankruptcy Code).
There are several caveats to this application of issue preclusion. Generally, a prior judicial decision cannot have issue preclusive effect if the plaintiff had a higher (or different) burden of proof in the earlier proceeding than in the later proceeding. See Guardianship of Simpson v. Brown, 67 Cal. App. 4th 914, 79 Cal. Rptr. 2d 389, 401 (1998). Therefore, even if the statutes are otherwise identical, if a different burden of proof applied to the statutory issue in the initial case, "identity of issues" will be deemed to be lacking.
Additionally, where preclusion is sought with respect to an issue of law (either a mixed fact/law issue or a legal issue), the court will generally examine the underlying policy of the statutes before precluding relitigation of the issue, and if the policies in the two statutes are not similar, then preclusion will not apply. See In re Mickletz, 544 B.R. 804, 815 (Bankr. E.D. Pa. 2016).
Finally, and perhaps obviously, while collateral estoppel may apply despite substantive differences between two legal schemes, Liberty Bank of Seattle, Inc. v. Henderson, 75 Wash. App. 546, 548, 559-60, 878 P.2d 1259 (1994), review denied, 126 Wash. 2d 1002, 891 P.2d 37 (1995), when the statutes are sufficiently different that they preclude the full litigation of an issue, the doctrine will not be applied. See Southcenter Joint Venture v. National Democratic Policy Comm., 113 Wash. 2d 413, 418, 780 P.2d 1282 (1989); City of Des Moines v. Puget Sound Reg'l Council, 98 Wash. App. 23, 988 P.2d 27, 35 (1999).
