Collateral estoppel

Collateral estoppel (CE), known in modern terminology as issue preclusion, is a common law estoppel doctrine that prevents a person from relitigating an issue. One summary is that, "once a court has decided an issue of fact or law necessary to its judgment, that decision ... preclude[s] relitigation of the issue in a suit on a different cause of action involving a party to the first case". The rationale behind issue preclusion is the prevention of legal harassment and the prevention of abuse of judicial resources.

Parties may be estopped from litigating determinations on issues made in prior actions. The determination may be an issue of fact or an issue of law. Preclusion requires that the issue decided was decided as part of a valid final judgment. Valid final judgments of state courts are given preclusive effect in other state and federal courts under the Full Faith and Credit Clause of the U.S. Constitution.

Valid final judgments must be issued by courts with appropriate personal and subject matter jurisdiction. It is notable, however, that an error does not make a decision invalid. Reversible errors must be appealed. The legal defense (CE) applies even if an erroneous judgment, or erroneous use of legal principles, occurred in the first action. An incorrect conclusion of the court in the first suit does not cause defendant to forsake the protection of res judicata (and by extension, of CE). A judgment need not be correct to preclude further litigation; it is sufficient that it be final, and that it have been decided on the merits of the case.

Collateral estoppel does not prevent an appeal of a decision, or a party from asking the judge for re-argument or a revised decision. In federal court, judgments on appeal are given preclusive effect. However, if the decision is vacated, the preclusive effect of the judgment fails.

Collateral estoppel cases raise constitutional due process problems, particularly when it is applied to a party that did not participate in the original suit. Due process mandates that collateral estoppel not be applied to a party that has not litigated the issue in dispute, unless that party is in legal privity to a party that litigated it. In other words, every disputant is entitled to a day in court and cannot ordinarily be bound by the negative result of another disputant's suit, even if that other disputant had exactly the same legal and factual arguments.

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