Saturday, December 20, 2014

Offensive use of Collateral Estoppel doctrine by the Plaintiff against the Defendant

When the Plaintiff invokes collateral estoppel 

In seeking to invoke the doctrine of collateral estoppel, a party must establish three elements: (1) the facts sought to be litigated in the second action were fully and fairly litigated, (2) those facts were essential to the judgment in the prior action, and (3) the issue is identical to an issue in the prior action. Tex. Dep't of Pub. Safety v. Petta, 44 S.W.3d 575, 579 (Tex. 2001).

When collateral estoppel is being used offensively, as it is here, the plaintiff uses the doctrine to estop a defendant from relitigating an issue that the defendant litigated and lost in prior litigation. Yarbrough's Dirt Pit, Inc. v. Turner, 65 S.W.3d 210, 216 (Tex. App.-Beaumont 2001, no pet.).

A trial court has broad discretion in determining whether to allow a plaintiff to use collateral estoppel offensively. Parklane Hosiery Co. v. Shore, 439 U.S. 322, 331 (1979); see also Scurlock Oil Co. v. Smithwick, 724 S.W.2d 1, 7 (Tex. 1986) (citing Parklane Hosiery with approval); Goldstein v. Comm'n for Lawyer Discipline, 109 S.W.3d 810, 812-13 (Tex. App.-Dallas 2003, pet. denied). A trial court abuses its discretion only when its action is arbitrary and unreasonable, without reference to guiding rules or principles. Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223, 226 (Tex. 1991).

In determining whether to apply collateral estoppel offensively, the trial court must consider the Parklane Hosiery factors. See Parklane Hosiery Co., 439 U.S. at 329-30; Yarbrough's Dirt Pit, 65 S.W.3d at 216. The first factor is whether application of the doctrine will tend to increase litigation by allowing a plaintiff to "wait and see" before filing suit instead of joining in the prior litigation. See Parklane Hosiery, 439 U.S. at 329-330; see also Avila v. St. Luke's Lutheran Hosp., 948 S.W.2d 841, 858 (Tex. App.-San Antonio 1997, pet. denied).

Second, the trial court must determine whether the offensive use of collateral estoppel is unfair under the circumstances of the particular case. See Parklane Hosiery, 439 U.S. at 330. Under this factor, we consider the defendant's incentive in the first action to vigorously defend the suit, the foreseeability of future suits, and the availability of procedural safeguards in the second suit that were not available in the first suit. See id.; see also Goldstein, 109 S.W.3d at 812-13.


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