§ 17.3 Issue Preclusion (collateral Estoppel)

• Library: Oregon Civil Pleading and Litigation (OSBar) (2020 Ed.)

§ 17.3 ISSUE PRECLUSION (COLLATERAL ESTOPPEL)

§ 17.3-1 Basic Doctrine

Under the doctrine of issue preclusion, a party is bound by the determination of a particular issue in an earlier proceeding. Nelson v. Emerald People's Util. Dist., 318 Or 99, 103, 862 P2d 1293 (1993). "Issue preclusion arises in a subsequent proceeding when an issue of ultimate fact has been determined by a valid and final determination in a prior proceeding." Nelson, 318 Or at 103. See also State Farm Fire & Cas. Co. v. Sallak, 140 Or App 89, 92, 914 P2d 697, rev den, 324 Or 18 (1996). "[The doctrine] applies to an issue of either fact or law." Drews v. EBI Cos., 310 Or 134, 140, 795 P2d 531 (1990). Issue preclusion is an affirmative defense, but it may also be used to support a claim for relief. See Nelson, 318 Or at 102.

In Nelson, the court enumerated five requirements that must be met for a tribunal's decision on an issue to preclude litigation of that issue in a subsequent proceeding:

1. The issue in the two proceedings is identical.

2. The issue was actually litigated and was essential to a final decision on the merits in the prior proceeding.

3. The party sought to be precluded has had a full and fair opportunity to be heard on that issue.

4. The party sought to be precluded was a party or was in privity with a party to the prior proceeding.

5. The prior proceeding was the type of proceeding to which [the] court will give preclusive effect.

Nelson, 318 Or at 104 (internal citations omitted).

The party asserting issue preclusion bears the burden to establish the first, second, and fourth Nelson factors. Barackman v. Anderson, 214 Or App 660, 666-67, 167 P3d 994 (2007), rev den, 344 Or 401 (2008) (citing State Farm Fire & Cas. Co. v. Century Home Components, Inc., 275 Or 97, 104-05, 550 P2d 1185 (1976)). Thereafter, the burden shifts to the party opposing issue preclusion to negate the third and fifth factors. Barackman, 214 Or App at 667. But see Emp. Dep't v. Nat'l Maint. Contractors of Or., Inc. 226 Or App 473, 490, 204 P3d 151, rev den, 346 Or 363 (2009) (citing Barackman for the proposition that the party asserting issue preclusion bears the burden on the first four factors). See also Berg ex rel. Estate of Higbee v. Benton, 297 Or App 323, 327-28, 443 P3d 714 (2019) (describing the burden).

Recent decisions of the court of appeals have engrafted an additional fairness requirement onto the Nelson factors, beginning with Minihan v. Stiglich, 258 Or App 839, 855, 311 P3d 922 (2013). See also State v. Manwiller, 295 Or App 370, 378, 435 P3d 770 (2018); Hancock v. Pioneer Asphalt, Inc., 276 Or App 875, 880, 369 P3d 1188 (2016); Stewart Title Guar. Co. v. State ex rel. Dep't of Consumer & Bus. Servs., 272 Or App 138, 143, 354 P3d 744 (2015); City of Portland v. Huffman, 264 Or App 312, 316, 331 P3d 1105 (2014).

Under these cases, even if all of the Nelson requirements are met, the court "must also consider the fairness under all the circumstances of precluding a party." Minihan, 258 Or App at 855 (quoting State Farm Fire & Cas. Co., 275 Or at 110). This line of decisions also states that issue preclusion does not apply "[i]f the circumstances are such that our confidence in the integrity of the determination is severely undermined, or that the result would likely be different in a second trial, it would work an injustice to deny the litigant another chance." Minihan, 258 Or App at 855 (quoting State Farm Fire & Cas. Co., 275 Or 108). Accord Manwiller, 295 Or App at 378 (summarizing cases). None of these cases, however, appears to have actually declined to apply issue preclusion solely on fairness grounds after finding that all five Nelson requirements were met.

COMMENT: The idea that issue preclusion must comport with fundamental fairness would seem to be already included in the third and fifth Nelson requirements: (3) full and fair opportunity to be heard and (5) type of proceeding accorded issue-preclusive effect. Nelson, 318 Or at 104. The court of appeals' additional fairness requirement derives from the Oregon Supreme Court's decision in State Farm Fire & Cas. Co. v. Century Home Components—a decision that predates Nelson by 17 years.

Although Nelson does not cite State Farm, the court in Nelson examined its prior case law on issue preclusion to derive the five requirements. Nelson, 318 Or at 103-04. It seems unlikely that the court in Nelson would have inadvertently failed to mention the existence of the overarching fairness requirement identified by the court of appeals.

Issue preclusion is frequently confused with claim preclusion. See, e.g., Steiner v. E.J. Bartells Co.(In re Steiner), 170 Or App 759, 762, 13 P3d 1050 (2000). Issue preclusion requires actual litigation on the merits of a particular issue, whereas claim preclusion requires only the opportunity to litigate. Evangelical Lutheran Good Samaritan Soc'y v. Bonham (In re Bonham), 176 Or App 490, 498, 32 P3d 899 (2001), rev den, 334 Or 75 (2002). See § 17.2-1 (claim preclusion). Unlike claim preclusion, the party raising issue preclusion need not have been involved in the prior proceedings, as long as the party sought to be precluded actually litigated the issue. Nelson, 318 Or at 104; see § 17.2-4 (same parties and parties in privity).

In addition to civil proceedings, issue preclusion also applies in criminal cases. State v. Gipson, 234 Or App 316, 321, 227 P3d 836, rev den, 349 Or 173 (2010) (additional subsequent history omitted); State v. Romanov, 210 Or App 198, 202, 149 P3d 1224 (2006), rev den, 342 Or 633 (2007). However, application of issue preclusion to the elements of a crime to obtain a conviction violates a criminal defendant's right to a jury trial under Article I, section 11, of the Oregon Constitution. State v. Davis, 265 Or App 179, 193, 335 P3d 1266 (2014). Issue preclusion may apply to other parts of a criminal proceeding, such as an evidentiary hearing. State v. Ipsen, 288 Or App 402, 405, 405 P3d 156 (2017).

§ 17.3-2 Identical Issue

Whether issue preclusion applies frequently depends on whether the issues in the two proceedings are truly identical, as opposed to being similar or related. See Hickey v. Settlemier, 318 Or 196, 202, 864 P2d 372 (1993); Nelson v. Emerald People's Util. Dist., 318 Or 99, 105, 862 P2d 1293 (1993); N. Clackamas Sch. Dist. v. White, 305 Or 48, 56-57, 750 P2d 485, modified on recons en banc, 305 Or 468, 752 P2d 1210 (1988); Patton v. Mut. of Enumclaw Ins. Co., 296 Or App 266, 274, 438 P3d 441, rev den, 365 Or 533, rev den, 365 Or 657 (2019); Zybach v. Perryman, 281 Or App 670, 676-77, 383 P3d 314 (2016); State v. Romanov, 210 Or App 198, 203-04, 149 P3d 1224 (2006), rev den, 342 Or 633 (2007); Hayes Oyster Co. v. Dulcich, 199 Or App 43, 52, 110 P3d 615, rev den, 339 Or 544 (2005); Boise Cascade Corp. v. Bd. of Forestry, 186 Or App 291, 298-99, 63 P3d 598...