Collateral Estoppel- a Colorado Primer
| Publication year | 1984 |
| Pages | 969 |
1984, June, Pg. 969. Collateral Estoppel- A Colorado Primer
Perhaps no legal doctrine has been the source of so much confusion and misunderstanding as collateral estoppel. This is unfortunate since issues involving collateral estoppel arise in a large number of cases, and when properly raised are often determinative of the entire case.(fn1) For the practicing attorney, it is just as important to know how to defend against an adversary's use of collateral estoppel as it is to know when and how to raise this doctrine offensively.
Collateral estoppel has assumed even greater dimensions in the past few years in the area of products liability. A finding of negligence against a manufacturer with regard to a particular product, even where only nominal damages are proved, creates a risk of preclusion of the issue of the manufacturer's negligence in subsequent suits against the manufacturer. Thus, the doctrine holds the potential for catastrophic consequences for certain defendants, and the possibility of obtaining a "free ride" for certain plaintiff's. The failure of a litigator to recognize and raise a collateral estoppel issue can have results seemingly out of all proportion to the doctrine itself.
A primary source of confusion is terminology. While some cases and treatises refer to res judicata in a broad sense, thereby including both issue and claim preclusion,(fn2) others use the term to refer specifically to the preclusion of claims, and "collateral estoppel" to refer to the preclusion of issues.(fn3) Perhaps because of this confusion, there is a modern trend toward using the term "claim preclusion" to describe the doctrine that holds that "an existing judgment is conclusive of the rights of the parties in any subsequent suit on the same claim," and "issue preclusion" to describe the doctrine that "bars relitigation not only of all issues actually decided, but of all issues that might have been decided."(fn4) In deference to this trend, the modern terminology is used in this article.
The rationale of both issue and claim preclusion is essentially the same: (1) judicial economy (the courts should not have to expend resources on matters already determined); (2) finality (parties should not be allowed to relitigate matters in which they have already had ample opportunity to litigate, and their adversaries should not be required to defend themselves in multiple lawsuits after they have already successfully litigated the same matter; and (3) judicial consistency (the risk and uncertainty of inconsistent decisions should be minimized).(fn5)
Claim preclusion in Colorado has been summarized as follows:
[A]n existing judgment is conclusive of the rights of the parties in any subsequent suit on the same claim. It bars relitigation not only of all issues actually decided, but of all issues that might have been decided. It requires an identity of parties or their priorities.(fn6)
The difficulty, of course, is in determining whether a later action is the same claim. The Colorado Supreme Court has set forth the following test to make this determination:
"The best and most accurate test as to whether a former judgment is a bar in subsequent proceedings between the same parties ... is whether the same evidence would sustain both, and if it would, the two actions are the same, and this is true although the two actions are different in form."(fn7)
For example, if a party to a contract commits two breaches of contract, and the other party brings an action for only one of the breaches and obtains a judgment, the later claim is merged into the earlier one, and the party is barred from bringing a later claim on the second breach, even though the question of the second breach was never litigated.(fn8) However, a party resisting claim preclusion can often defeat its assertion by arguing that the claim in the later suit is in fact a separate claim and thus not subject to bar and merger.
Indeed, the test set forth in Restatement of Judgments provides the resisting party with considerable leeway for argument: "[T]he claim extinguished includes all rights of the plaintiff to remedies against the defendant with respect to 'all or any part of the transaction'" (emphasis added). What
constitutes a "transaction" is to be determined
pragmatically, giving weight to such considerations as whether the facts are related in time, spare, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a unit conforms to the parties' expectations or business understanding or usage.(fn9)
The characteristics of claim preclusion may be summarized as (1) identity of parties and privities; (2) preclusion of a claim not only of matters litigated, but of matters which could have or might have been litigated; and (3) finality of judgment.(fn10)
Sometimes confused with claim and issue preclusion, the doctrine of "law of the case" differs in that it requires no finality of judgment, and is not binding on the court. The doctrine is simply that "[a]n issue which has been litigated in one stage of a case should not be relitigated in a later stage."(fn11) The doctrine is frequently applied when after an issue is decided on appeal, the case is remanded, and on subsequent appeal after remand, the same issue decided on the first appeal is again raised. The Colorado Supreme Court has recently made it clear, however, that law of the case "merely expresses the practice of courts generally to refuse to reopen what has been decided."(fn12)
Although discretionary, the law of the case is normally applied in the interests of judicial economy, unless error in the previous ruling is shown or the previous ruling is no longer sound due to changed conditions.(fn13) The doctrine should in no way be viewed as an impediment to review of an issue at a higher stage in the proceedings or to a motion for reconsideration which is timely filed.
Once collateral estoppel is distinguished from claim preclusion (res judicata) and law of the case, and once it sheds its colorful name in favor of the more modern and descriptive label of "issue preclusion," the doctrine becomes easier to understand and apply.
Issue preclusion differs from claim preclusion in that it can preclude particular issues decided within a claim, and, under certain circumstances, may be asserted by a party other than the parties to the earlier case. Thus, the final judicial decision on an issue actually litigated and decided is conclusive of that issue in any later suit. Issue preclusion is broader than res judicata in that it applies to a cause of action different from that involved in the original case, but is narrower in that it does not apply to issues which could have been litigated but were not.(fn14)
For example, in Pomeroy v. Waitkus,(fn15) Zeiler and Waitkus were passengers in an automobile driven by Pomeroy, who collided with an automobile driven by Vessey. Zeiler brought an action against Pomeroy and obtained a judgment against Pomeroy upon a finding that he had been negligent in operating the automobile. Waitkus later brought an action against Pomeroy, seeking a summary judgment against Pomeroy and asserting issue preclusion based on the earlier judgment obtained by Zeiler. Since Pomeroy had raised the affirmative defense of contributory negligence in the second action, the Supreme Court held that it was error to grant a summary judgment in favor of Waitkus because one of the issues necessary to such a determination (i.e., the issue of Waitkus' contributory negligence) had not been decided in the previous action. It would have been proper, however, to have precluded only the issue of Pomeroy's negligence since that one issue had indeed been fully litigated in Zeiler's action.(fn16)
The court in Pomeroy adopted three requirements for issue preclusion which had first been set out in the landmark case of Bernhard v. Bank of America and a fourth taken from a series of federal cases.(fn17) The Pomeroy requirements are as follows:
1) Was the issue decided in the prior adjudication identical with the issue in the present action?
2) Was there a final judgment on the previous action?
3) Was the party against whom the doctrine is asserted a party or a privity to a party in the previous case?
4) Did the party against whom the doctrine is asserted have a "full and fair opportunity to litigate" in the prior case?
There are three corollaries to the first Pomeroy requirement of identity...
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