Today's post is for procedure geeks, especially those who litigate MDLs.
Offensive non-mutual collateral estoppel prevents a defendant from relitigating an issue that it lost in earlier litigation against a different plaintiff.
The issue is when offensive non-mutual collateral estoppel applies to a case that was part of an MDL. More specifically, the issue is which state's law determines whether offensive non-mutual collateral estoppel applies in a particular case.
Before we discuss a recent case that provides a dubious (albeit helpful in the instance) answer to that question, a few words on some of the reasons why offensive non-mutual collateral estoppel is a bad idea, especially from a defense perspective.
Offensive non-mutual collateral estoppel risks perpetuating an erroneous result by preventing relitigation of issues already decided against a defendant. If the defendant loses the first case to reach final judgment, the doctrine gives disproportionate, preclusive weight to the decision of a lone judge or jury, no matter how wrong that decision.
The fact that an adverse judgment in the first case to reach final judgment can cripple a company's defense in subsequent cases has two adverse consequences apart from the danger of perpetuating error. First, it gives the plaintiff tremendous leverage in settlement negotiations. Second, it induces defendants to spend much more litigating a case than would be...
