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HomeHealth LawWhen Does Offensive Non-Mutual Collateral Estoppel Apply in MDLs?

When Does Offensive Non-Mutual Collateral Estoppel Apply in MDLs?


Right now’s submit is for process geeks, particularly those that litigate MDLs.

Offensive non-mutual collateral estoppel prevents a defendant from relitigating a problem that it misplaced in earlier litigation in opposition to a unique plaintiff.

The problem is when offensive non-mutual collateral estoppel applies to a case that was a part of an MDL. Extra particularly, the problem is which state’s legislation determines whether or not offensive non-mutual collateral estoppel applies in a selected case.

Earlier than we focus on a latest case that gives a doubtful (albeit useful within the occasion) reply to that query, a couple of phrases on among the the reason why offensive non-mutual collateral estoppel is a nasty thought, particularly from a protection perspective.

Offensive non-mutual collateral estoppel dangers perpetuating an misguided end result by stopping relitigation of points already determined in opposition to a defendant. If the defendant loses the primary case to succeed in ultimate judgment, the doctrine provides disproportionate, preclusive weight to the choice of a lone decide or jury, regardless of how fallacious that call.

The truth that an antagonistic judgment within the first case to succeed in ultimate judgment can cripple an organization’s protection in subsequent circumstances has two antagonistic penalties aside from the hazard of perpetuating error. First, it provides the plaintiff great leverage in settlement negotiations. Second, it induces defendants to spend rather more litigating a case than could be warranted by the quantity nominally in dispute.

As a result of it could possibly cripple an organization’s protection, offensive non-mutual collateral estoppel will be consequence determinative. Thus, the query whether or not it applies in a selected case is a crucial query when it arises. It’s particularly vital in MDLs (and different coordinated proceedings) given the bigger variety of follow-on circumstances during which the doctrine may theoretically be invoked.

The impetus for immediately’s submit is Dalbotten v. C. R. Bard, Inc., 2022 WL 2910125 (D. Mont. 2022), a case that had been a part of the G2 IVC filter MDL within the District of Arizona however was then despatched to the District of Montana for additional proceedings. Asserting a failure-to-warn declare beneath Montana legislation, the plaintiff moved for abstract judgment, arguing that the defendant was precluded from litigating the adequacy of its warning as a result of a jury in a bell-weather case tried by the MDL court docket within the District of Arizona beneath Georgia legislation had beforehand discovered the warning insufficient. For causes it doesn’t adequately clarify, the Dalbotten court docket concluded that Arizona legislation ruled whether or not offensive non-mutual collateral estoppel utilized. That was good for the defendant, as a result of Arizona doesn’t acknowledge the doctrine, however critical choice-of-law questions linger.

Because the Dalbotten court docket acknowledged, the Supreme Courtroom has held that in range circumstances a district court docket evaluating the applicability of offensive non-mutual collateral estoppel ought to comply with “‘the legislation that may be utilized by state courts within the State during which the federal range court docket sits.’” 2022 WL 2910125, at *2 (quoting Semtek Int’l Inc. v. Lockheed Martin Corp., 531 U.S. 497, 508 (2001)).

Given this rule, one would suppose that the District of Montana would have utilized Montana legislation when deciding whether or not the doctrine utilized in Dalbotten. However as a substitute it utilized Arizona legislation.

Why? Based on the court docket:

It’s undisputed that this matter is a federal range case and a federal district court docket sitting in Arizona rendered the prior judgment at difficulty. Due to this fact, it needs to be somewhat simple that Arizona legislation applies to the preclusion dedication.

2022 WL 2910125, at *2. However that conclusion doesn’t comply with from—and, certainly, appears opposite to—the rule {that a} federal court docket sitting in range applies the legislation of the state during which it sits.

The Dalbotten court docket didn’t clarify the relevance of the truth that the prior judgment had been rendered in Arizona, the place the MDL court docket was positioned. And it’s onerous to see the relevance. MDLs are a transitory procedural mechanism that ought to not have an effect on substantive rights.

That stated, the plaintiff’s arguments in favor of making use of offensive non-mutual collateral estoppel had been even much less persuasive than the court docket’s purpose for not making use of the doctrine. The plaintiff argued that Arizona acknowledges the doctrine and that even when it didn’t the query is ruled by federal legislation. Neither assertion is appropriate. Arizona doesn’t acknowledge the doctrine, and the Supreme Courtroom has squarely held that state legislation governs the query in range circumstances.

So, we’re left to ponder what legislation controls software of offensive non-mutual collateral estoppel in a case that had been a part of an MDL. Is it the legislation of the state the place the MDL was positioned, and the place maybe a bell-weather trial was held? Is it the legislation of the state whose substantive legislation governs the case? Is it the legislation of the state the place the case is being heard?

Supreme Courtroom precedent means that the query is managed by the legislation of the state the place the case is being heard. One may additionally think about arguments in favor of making use of the legislation of the state whose substantive legislation governs the case.

Dalbotten, nonetheless, utilized the legislation of Arizona, which is neither the state the place the case is being heard nor the state whose substantive legislation governs. Dalbotten didn’t say whether or not it did so as a result of that’s the place the MDL was positioned or as a result of that’s the place the bell-weather trial was held. If it utilized Arizona legislation as a result of that’s the place the MDL was positioned, the court docket, with out evaluation, adopted an MDL-specific rule. If it utilized Arizona legislation as a result of that’s the place the purportedly preclusive judgment was rendered, the court docket, with out evaluation, prioritized the place the sooner judgment was rendered over the place the next case is being heard.

In Dalbotten, it in all probability didn’t matter whether or not the court docket utilized Arizona or Montana legislation. Because the court docket held, Arizona doesn’t acknowledge offensive non-mutual collateral estoppel. And a reasonably diligent search of Montana precedent and federal circumstances making use of Montana legislation revealed no case recognizing the doctrine, which is probably going why the plaintiff didn’t argue for software of Montana legislation.

Even when immaterial to the end result in Dalbotten, it might be good to have better readability on which legislation controls software of offensive non-mutual collateral estoppel. At minimal, MDL practitioners ought to concentrate on Dalbotten. If the legislation of the state the place the MDL is positioned governs subsequent software of the doctrine, practitioners should take that under consideration in deciding the place MDLs are greatest positioned.

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