Prima Facie Effect

• Pages: 199-215

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CHAPTER VI

COLLATERAL ESTOPPEL AND

PRIMA FACIE EFFECT

Under the doctrine of collateral estoppel, also known as issue preclusion,

once an issue of fact or law (1) has been actually litigated and

determined by a valid final judgment and (2) that determination is

necessary to the judgment, the decision is conclusive in a subsequent

action between the parties, whether on the same or a different claim.

Arizona v. California, 530 U.S. 392, 414 (2000) (quoting Restatement

(Second) Judgments § 27 at 250); United States v. Mendoza, 464 U.S.

154, 158 (1984); United States v. Alex Brown & Sons, Inc., 169 F.R.D.

532, 540, n.4 (S.D.N.Y. 1996); Wright & Miller, ¶¶ 4416-19.

The doctrine of collateral estoppel has particular application in antitrust

litigation because many private antitrust cases are preceded by other

administrative, civil, or criminal proceedings. Thus, the effect prior

proceedings will have on pending antitrust litigation is often an issue. As

discussed below, a federal statute, Section 5(a) of the Clayton Act,

governs some of these issues, but others are resolved under the general

common law doctrine of collateral estoppel. A decision in a prior action

adverse to the defendant obviously gives the plaintiff a significant

advantage if it has collateral estoppel effects or if Section 5(a) applies. A

party seeking to minimize general collateral estoppel effects should

prove that the requirements of the doctrine have not been satisfied or that

the prior action falls within an exception to the doctrine. A party seeking

to minimize adverse effects under Section 5(a) should emphasize any

limitations on the prior judgment, such as that proof of injury was absent,

that only a limited time period or certain products were involved, or that

the prior litigation involved a limited geographic scope. For examples of

jury instructions concerning the evidentiary effect of litigated

government judgments, see ABA Antitrust Section, Sample Jury

Instructions in Civil Antitrust Cases G20-G26 (1987).

200 Antitrust Evidence Handbook

A. General Principles

1. Res Judicata and Collateral Estoppel Compared

a. Collateral estoppel, as noted, bars relitigation only of those issues

that have been raised, litigated, and adjudicated as between the

parties. Pool Water Prods. v. Olin Corp., 258 F.3d 1024, 1031 (9th

Cir. 2001); see Sil-Flo, Inc. v. SFHC, Inc., 917 F.2d 1507, 1520

(10th Cir. 1990) (“once a court has decided an issue of fact or law

necessary to its judgment, that decision may preclude relitigation of

the issue in a suit on a different cause of action involving a party to

the first case”).

b. Res judicata provides that “a final judgment on the merits of an

action precludes the parties or their privies from relitigation issues

that were or could have been raised in that action.” Clough v. Rush,

959 F.2d 182, 185 (10th Cir. 1992) (emphasis added); see also

Restatement (Second) Judgments §§ 18, 19.

c. The key distinction between res judicata and collateral estoppel is

that “[w]hereas res judicata forecloses all that have been or might

have been litigated previously, collateral estoppel treats as final only

those questions actually and necessarily decided in a prior suit.”

Brown v. Felsen, 442 U.S. 127, 139 n.10 (1979).

2. Who Is Bound?

a. As a general rule, one not party to a judgment cannot be bound by

that judgment. Rozema v. Marshfield Clinic, 1997-1 Trade Cas.

(CCH) ¶ 71,796 (W.D. Wis. 1997); Alex Brown & Sons, Inc., 169

F.R.D. at 540.

b. A party that has had a full and fair opportunity to litigate an issue in

a prior action is bound in any subsequent action by the judicial

determination in the prior action. See GAF Corp. v. Eastman Kodak

Co., 519 F. Supp. 1203, 1211 (S.D.N.Y. 1981).

3. Offensive v. Defensive Collateral Estoppel

Collateral estoppel is available both to support a demand for relief and to

defend against a claim for relief. Collateral estoppel must be

affirmatively pleaded either as a claim or defense. It is often an issue in

antitrust cases where multiple purchasers file separate cases in different

federal courts or in state and federal courts.