BURLINGTON NORTHERN RAILROAD COMPANY, Appellee, v. HYUNDAI MERCHANT MARINE CO., LTD., Appellant.
No. 94-5550
United States Court of Appeals, Third Circuit
Decided Aug. 18, 1995
Sept. 20, 1995
63 F.3d 1227
Sept. 12, 1995
LEWIS, Circuit Judge.
The petition for rehearing filed by appellant, Frank L. Baird, in the above-entitled case having been submitted to the judges who participated in the decision of this court and to all other available circuit judges in regular active service, and no judge who concurred in the decision having asked for rehearing, and majority of the circuit judges in regular active service not having voted for rehearing by the court in banc, the petition for rehearing is denied. Judge Sarokin would have voted for rehearing.
Argued March 7, 1995.
Sur Petition for Panel Rehearing Sept. 20, 1995.
Barry N. Gutterman (argued), William D. Bierman, Barry N. Gutterman & Associates, New York City, for appellee.
Before: BECKER, SCIRICA, and WOOD, Jr., Circuit Judges.*
BECKER, Circuit Judge.
This appeal concerns the timeliness of a maritime indemnity claim under the Carmack Amendment to the Interstate Commerce Act,
Burlington brought a declaratory judgment action in district court. The court granted summary judgment for Burlington, and Hyundai brought this appeal. Although the legal question implicated by the timeliness issue is an interesting and important one, this appeal turns not on that issue but on the doctrine of issue preclusion, for Hyundai‘s principal argument on appeal is that, in holding the notice of the claim untimely, the district court erred by failing to give issue preclusive effect to a decision by the District Court for the Western District of Washington in Atlantic Mutual v. OOCL, 1992 WL 226953, 1992 U.S.Dist. LEXIS 13284 (W.D.Wash.1992). That case involved an indemnity claim brought against Burlington by a different ocean carrier for damage sustained to a shipment of Samsonite luggage from Taiwan to Denver via Seattle. The Atlantic Mutual court concluded that a time limit contained in a Burlington circular (adopted as part of the contract of carriage) did not foreclose the action in indemnity since such claims do not accrue and time limitations therefore cannot commence until liability is determined or a cognizable loss is incurred. If this general rule for indemnity claims were applied in the present action, Hyundai‘s claim would have been timely presented.
The district court in this case rejected Hyundai‘s argument and refused to apply the doctrine of issue preclusion to the issue resolved in Atlantic Mutual, relying on an exception for “unmixed questions of law,” the scope of which is a question of first impression in this circuit. While the continued viability of this exception has been called into question by the Supreme Court‘s decision in United States v. Stauffer Chemical Co., 464 U.S. 165, 104 S.Ct. 575, 78 L.Ed.2d 388 (1984), we conclude that such an exception for questions of law continues to apply, and1 that it is satisfied only so long as the issue involved is one of law and either (1) the two actions involve claims that are substantially unrelated or (2) a new determination of the legal issue is warranted in order to take account of an intervening change in the applicable legal context or otherwise to avoid inequitable administration of the laws. See
Because the Atlantic Mutual action and this case are not substantially unrelated and since a new determination of the legal issue involved is not warranted, we conclude that the district court erred by relying on this exception to the otherwise applicable doctrine of issue preclusion. Accordingly, we will reverse the order of the district court granting summary judgment to Burlington, and direct the district court on remand to grant issue preclusive effect to the decision of the district court in Atlantic Mutual.
I. FACTS AND PROCEDURAL HISTORY
A. The Tongil Action
Hyundai‘s indemnity claim originates in an action brought by Tongil in the District Court for the Central District of California for damages sustained to a cargo of furnace equipment shipped aboard M/V Hyundai Innovator in 1986 from Seattle, Washington to Pusan, South Korea. See Tongil Co. v. Vessel Hyundai Innovator, Case No. 88-04895 (C.D.Ca.1988). The cargo had originally been shipped from Milwaukee to Seattle via Burlington Railcar. On August 10, 1988, Tongil filed suit against Hyundai for the damages sustained to the shipment. On December 15, 1988, in response, Hyundai gave Burlington notice of its indemnity claim, but Burlington denied Hyundai‘s claim as not having been filed within the nine-month time limitation prescribed in its circular and adopted as part of the contract of carriage.
As a condition precedent to recovery, any claim for loss or damage to lading shall be filed with BN [Burlington Northern] within nine (9) months of the date of delivery of the shipment, or within nine (9) months of a reasonable time for delivery in the event of non-delivery. Claim shall be supported with a copy of the shipping order, invoice, inspection report, or other proof of loss, and, if possible, the paid freight bill.
App. at 107.
In the underlying action by Tongil against Hyundai, to which Burlington was not a party, the District Court for the Central District of California concluded, following a bench trial, that the cargo was in fact damaged while in the possession of Burlington; yet the court awarded Tongil $114,870.64 in damages, interests, and costs against Hyundai. Hyundai appealed the judgment to the Ninth Circuit Court of Appeals, which reversed. See Tongil Co. v. Vessel Hyundai Innovator, 968 F.2d 999 (9th Cir.1992). Following the appeal, Hyundai settled the action with Tongil for $10,000 and then on January 26, 1993, requested indemnity of this amount together with legal expenses and costs totaling $104,079.49, which Burlington again denied.
B. The Atlantic Mutual Action
While Burlington was relying on Item 2-C of its Rules Memorandum to deny Hyundai‘s indemnity claim, it was defending another indemnity action in the District Court for the Western District of Washington brought by Orient Overseas Container Line (“OOCL“). See Atlantic Mutual v. OOCL, 1992 WL 226953, 1992 U.S.Dist. LEXIS 13284 (W.D.Wash.1992). Like Hyundai‘s claim, the viability of OOCL‘s claim in the Atlantic Mutual action turned on the question whether the general rule for indemnity accrual--that an indemnity claim “does not accrue until the indemnitee‘s liability is determined by judgment or payment,” id. at *3, 1992 U.S.Dist. Lexis 13284 at *9-10, and, therefore, that a statute of limitations on an indemnity claim cannot begin to run until such time--should apply despite Item 2-C of Burlington‘s Rules Memorandum, which provided that the time limitation should be measured from the date of delivery. Atlantic Mutual had filed suit against OOCL to recover payments that Atlantic Mutual had made as an insurer to Samsonite Pacific, Ltd. (“Samsonite“) for damages to a shipment of luggage en route from Taiwan to Denver via Seattle. In response, OOCL had filed a third party claim against Burlington for indemnity for its liability to Atlantic Mutual.
Burlington‘s denial of OOCL‘s indemnity claim was based solely on its contention that the claim was time barred since OOCL had failed to bring suit within the time period specified in Burlington Rules Memorandum 2-C. This provision provided that “all suits against BN [Burlington Northern] shall be commenced no later than 1 year after the date of delivery.” Id. at *2, 1992 U.S.Dist. Lexis 13284 at *5. OOCL, which notified Burlington of its claim more than one year after delivery, contended that this contractual limitations period did not alter the general rule governing actions in indemnity. The Washington district court agreed with OOCL and concluded that its “cross-claim for indemnification is not barred by the limitations period in Burlington Northern‘s Rules Memorandum 2-C.” Id. at *4, 1992 U.S.Dist. Lexis 13284 at *12. In reaching this conclusion, the court relied on the opinion of the Ninth Circuit in States S.S. Co. v. American Smelting & Refining Co., 339 F.2d 66, 70 (9th Cir.1964), cert. denied, 380 U.S. 964 (1965), which it read as concluding that an “indemnity claim ... does not accrue until the indemnitee has made actual payment.” Atlantic Mutual at 1992 WL 226953 at *4, 1992 U.S.Dist. Lexis 13284 at *12; see also id. (“[A]n action for indemnification accrues at the time of the indemnitee‘s payment despite a shorter contractual time limitations period applying to claims between the parties.“).
C. The Hyundai Action
Following the decision in Atlantic Mutual, Burlington, having already denied Hyundai‘s claim for indemnity in connection with the shipment of furnace equipment on several occasions, instituted this action on April 1, 1993, in the District Court for the District of
Burlington responded by moving for summary judgment on its declaratory judgment action. Hyundai opposed this motion on the grounds (1) that Burlington was estopped from relitigating the issues decided in Atlantic Mutual and (2) that, on the merits, Hyundai‘s indemnity claim was timely presented. The district court rejected both of these arguments, granted Burlington‘s request for summary judgment in the declaratory judgment action, dismissed Hyundai‘s counterclaim, and denied as moot Hyundai‘s motion to transfer the case. In rejecting Hyundai‘s estoppel argument, the district court held: “The Court interprets the Atlantic Mutual decision as involving a pure question of law, decided under the law of another Circuit, and therefore will not accord it issue-preclusive effect.” Dist. Op. at 8. This appeal followed.2
Since the district court‘s decision to grant summary judgment rested on a legal determination of when issue preclusion should apply to “unmixed questions of law,” our review is plenary. In reviewing the district court‘s decision, we apply federal common law principles of issue preclusion since we are examining the issue preclusive effect of a prior federal court action. See NLRB v. Yellow Freight Sys., Inc., 930 F.2d 316, 320 (3d Cir.1991); Hicks v. Quaker Oats Co., 662 F.2d 1158, 1166 (5th Cir.1981).
II. ISSUE PRECLUSION
A. Introduction
The doctrine of issue preclusion,2 which is at issue in this action, derives from the simple principle that “later courts should honor the first actual decision of a matter that has been actually litigated.” 18 CHARLES A. WRIGHT, ARTHUR R. MILLER & EDWARD H. COOPER, FEDERAL PRACTICE AND PROCEDURE § 4416 (1981) [hereinafter WRIGHT & MILLER]. This doctrine ensures that “once an issue is actually and necessarily determined by a court of competent jurisdiction, that determination is conclusive in subsequent suits based on a different cause of action involving a party to the prior litigation,” Montana v. United States, 440 U.S. 147, 153, 99 S.Ct. 970, 973, 59 L.Ed.2d 210 (1979). The prerequisites for the application of issue preclusion are satisfied when: “(1)3
Complete identity of parties in the two suits is not required for the application of issue preclusion. Here Hyundai, which was not a party to the first suit (the Atlantic Mutual action), attempts to use issue preclusion offensively against Burlington, which was a party in the first action. Such an application of issue preclusion is referred to as offensive4 non-mutual5 collateral estoppel,6 which has been recognized as proper by the Supreme Court in Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326, 99 S.Ct. 645, 649, 58 L.Ed.2d 552 (1979). The Court in Parklane concluded that “a litigant who was not a party to a prior judgment may nevertheless use that judgment ‘offensively’ to prevent a defendant from relitigating issues resolved in the earlier proceeding,” id. at 326, 99 S.Ct. at 649, subject to an overriding fairness determination by the trial judge.7
In this action, the parties did not dispute (with one exception detailed in the margin) that all of the primary requirements for application of non-mutual offensive collateral estoppel were satisfied,8 and the sole basis of the district court‘s decision not to apply issue preclusion in this action was based on an exception for “unmixed question[s] of law.” In this appeal, Hyundai contends that the district court erred in applying this exception, and in refusing to grant issue preclusive effect to the decision of the United States District Court for the Western District of Washington in Atlantic Mutual. The viability and/or proper scope of the exception for “unmixed questions of law” is an issue of first impression in this Circuit.
The
§ 28. Exceptions to the General Rule of Issue Preclusion
Although an issue is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, relitigation of the issue in the subsequent action between the parties is not precluded in the following circumstances:
(2) The issue is one of law and (a) the two actions involve claims that are substantially unrelated, or (b) a new determination is warranted in order to take account of an intervening change in the applicable legal context or otherwise to avoid inequitable administration of the laws.
This exception to the doctrine of issue preclusion has its roots in a statement made
In Moser, the Court addressed, and rejected, the contention that issue preclusion should not apply on the ground that a pure question of law was involved:
The contention of the Government seems to be that the doctrine of res judicata does not apply to questions of law; and, in a sense, that is true. It does not apply to unmixed questions of law. Where, for example, a court in deciding a case has enunciated a rule of law, the parties in a subsequent action upon a different demand are not estopped from insisting that the law is otherwise, merely because the parties are the same in both cases. But a fact, question or right distinctly adjudged in the original action cannot be disputed in a subsequent action, even though the determination was reached upon an erroneous view or by an erroneous application of the law. That would be to affirm the principle in respect of the thing adjudged but, at the same time, deny it all efficacy by sustaining a challenge to the grounds upon which the judgment was based.
Id. at 242, 45 S.Ct. at 67. Thus the Court concluded that “[t]he question expressly and definitely presented in this suit is the same as that definitely and actually litigated and adjudged in favor of the claimant in the three preceding suits, viz: whether he occupied the status of an officer who had served during the civil war.” Id. at 242, 45 S.Ct. at 67. For this reason, the Court concluded issue preclusion was proper.
The Supreme Court next addressed the possible application of this exception some fifty-five years later in Montana v. United States, 440 U.S. 147, 99 S.Ct. 970, 59 L.Ed.2d 210 (1979), a case of mutual defensive collateral estoppel which involved successive Supremacy Clause challenges to Montana‘s imposition of a one percent gross receipts tax on public, but not private, construction projects. In the initial action, a public contractor, financed by the federal government, litigated the constitutionality of the tax in state court. The Montana Supreme Court unanimously upheld the tax. Instead of seeking certiorari, the government, acting on its own behalf, brought a similar challenge in the federal district court in Montana, and that case reached the Supreme Court.
The Supreme Court determined that, under these circumstances, mutuality of parties existed since the government, which directed the litigation on behalf of the public contractor in the first action, was, for all practical purposes, the party in the first action. The Court affirmed the defensive use of mutual collateral estoppel against the federal government since the issue sought to be litigated was identical to the issue already litigated in the state court action and no change in controlling facts or legal principles had occurred. Id. at 155-62, 99 S.Ct. at 974-78. The Court rejected the contention that issue preclusion should not apply under an exception for “unmixed question of law“:
Of possible relevance is the exception which obtains for “unmixed questions of law” in successive actions involving substantially unrelated claims....
... [W]hen issues of law arise in successive actions involving unrelated subject matter, preclusion may be inappropriate. This exception is of particular importance in constitutional adjudication. Unreflec-
tive invocation of collateral estoppel against parties with an ongoing interest in constitutional issues could freeze doctrine in areas of the law where responsiveness to changing patterns of conduct or social mores is critical. To be sure, the scope of the Moser exception may be difficult to delineate, particularly where there is partial congruence in the subject matter of successive disputes. But the instant case poses no such conceptual difficulties. Rather, as the preceding discussion indicates, the legal “demands” of this litigation are closely aligned in time and subject matter to those in [the previous litigation].
Id. at 162-63, 99 S.Ct. at 978 (citations omitted).
The Supreme Court most recently addressed the proper scope of this exception in United States v. Stauffer Chemical Co., 464 U.S. 165, 104 S.Ct. 575, 78 L.Ed.2d 388 (1984), which involved successive actions brought by the EPA against Stauffer in response to the company‘s refusal to submit to inspections by private contractors hired by the EPA. At issue was whether private contractors were “authorized representatives” under § 114(a)(2) of the Clean Air Act. In the initial action, which involved an attempt by the EPA to inspect Stauffer‘s Wyoming plant, the Tenth Circuit held for Stauffer, concluding that private contractors were not “authorized representatives” under the statute. The identical question then arose with regard to an EPA inspection of Stauffer‘s Tennessee plant, leading the Sixth Circuit to conclude, inter alia, that the federal government was estopped from relitigating the question whether private contractors constituted authorized representatives under the Clean Air Act.
The government appealed and the Supreme Court affirmed, concluding “that the doctrine of mutual defensive collateral estoppel is applicable against the Government to preclude relitigation of the same issue already litigated against the same party in another case involving virtually identical facts.” Id. at 169, 104 S.Ct. at 578. In so doing it rejected the government‘s reliance on an exception for “unmixed questions of law” and expressed serious doubt regarding the proper scope of the exception:
While our discussion in Montana indicates that the exception is generally recognized, we are frank to admit uncertainty as to its application. The exception seems to require a determination as to whether an “issue of fact” or an “issue of law” is sought to be relitigated and then a determination as to whether the “issue of law” arises in a successive case that is so unrelated to the prior case that relitigation of the issue is warranted. Yet we agree that, for the purpose of determining when to apply an estoppel, when the claims in two separate actions between the same parties are the same or are closely related it is not ordinarily necessary to characterize an issue as one of fact or of law for purposes of issue preclusion. In such a case, it is unfair to the winning party and an unnecessary burden on the courts to allow repeated litigation of the same issue in what is essentially the same controversy, even if the issue is regarded as one of “law.”
Id. at 171, 104 S.Ct. at 579 (internal quotation marks and citations omitted). The Court further explained that “[a]n exception which requires a rigid determination of whether an issue is one of fact, law, or mixed fact and law, as a practical matter, would often be impossible to apply because the journey from a pure question of fact to a pure question of law is one of subtle gradations rather than one marked by a rigid divide.” Id. at 171 n. 4, 104 S.Ct. at 579 n. 4.
Hyundai contends that given these statements, the Stauffer Court effectively overruled the issue preclusion exception for “unmixed questions of law.” We disagree. Despite its diffidence and ruminations, we do not believe that the Court‘s decision in Stauffer overruled the exception for unmixed questions of law as set forth in the Restatement and by Wright & Miller. See 18 WRIGHT, MILLER & COOPER, supra, § 4425, at 198 (1994 Supp.) (“The approach suggested in the main volume is supported by the result reached in United States v. Stauffer Chem. Co.” (footnote omitted)).10
Admitting that “the purpose underlying the exception for ‘unmixed questions of law’ in successive actions on unrelated claims is far from clear,” id., the Court concluded: “whatever its purpose or extent, we think that there is no reason to apply it here ... [and doing so] would substantially frustrate the doctrine‘s purpose of protecting litigants from burdensome relitigation and of promoting judicial economy.” Id. Moreover, the Court rejected the government‘s argument that “two cases presenting the same legal issue must arise from the very same facts or transaction before an estoppel can be applied.” Id. at 172 n. 5, 104 S.Ct. at 579 n. 5. “Whatever applicability that interpretation may have in the tax context, see Commissioner v. Sunnen, 333 U.S. 591, 601-602, 68 S.Ct. 715, 92 L.Ed. 898 (1948) (refusing to apply an estoppel when two tax cases presenting the same issue arose from ‘separable facts‘), [the Court] reject[ed] its general applicability outside of that context.” Id. (Parallel citations omitted).12
In sum, the Stauffer opinion is consistent with the approach codified in the Restatement. See Clark-Cowlitz Joint Operating Agency v. F.E.R.C., 775 F.2d 366, 375 (D.C.Cir.1985) (recognizing, after the Court‘s decision in Stauffer, that “the test for the exception seems to be ... whether ‘the issue of law arises in a successive case that is so unrelated to the prior case that relitigation of the issue is warranted.‘” (quoting Stauffer, 464 U.S. at 171, 104 S.Ct. at 579)); see also 18 WRIGHT, MILLER & COOPER, supra, § 4425, at 199 (Supp.1994) (“The reasons for caution are sufficiently strong ... to rely on the opinion [Stauffer] as a possibly appropriate response to the specific case without reading it as establishing a new general poli-
C. Application of the Unmixed Questions of Law Doctrine
The exception to the application of issue preclusion for unmixed questions of law is satisfied, as we have explained, only when the previously determined issue is one of law, and either (1) “the two actions involve claims that are substantially unrelated” or (2) “a new determination is warranted in order to take account of an intervening change in the applicable legal context or otherwise to avoid inequitable administration of the laws.”
1. Substantial Relationship
In determining whether two cases involve claims that are “substantially unrelated,” we must assess whether the two cases involve the same application of law. A party cannot satisfy the “substantially unrelated claim” test where “the same general legal rules govern both cases and ... the facts of both cases are indistinguishable as measured by those rules.” 18 WRIGHT, MILLER & COOPER, supra, § 4425, at 253-54 (footnotes omitted). As the Supreme Court recognized in Stauffer, issue preclusion does not require that the “two cases presenting the same legal issue must arise from the very same facts or transaction before an estoppel can be applied.” Stauffer, 464 U.S. at 172 n. 5, 104 S.Ct. at 579 n. 5. In fact, estoppel will be applied unless “the ‘issue of law’ arises in a successive case that is so unrelated to the prior case that relitigation of the issue is warranted.” Id. at 171, 104 S.Ct. at 579 (emphasis added).
The Atlantic Mutual case, like this one, involved the denial of an indemnity claim by Burlington based solely on a Burlington contention that the claim was time barred because the claimant, in that case OOCL, had failed to provide notice of its claim within a time period specified in Burlington Rules Memorandum 2-C. And, like the provision in this action, the provision in Atlantic Mutual measured the limitations period from the date of delivery.13 Like Hyundai‘s claim here, the viability of OOCL‘s claim in the Atlantic Mutual action turned on the question whether the general rule for indemnity accrual and the concomitant commencement of limitations periods should apply regardless of a contractually defined period. As we have stated, the Atlantic Mutual court, relying on Ninth Circuit precedent, concluded that a “[] claim for indemnification is not barred by the limitations period in Burlington Northern‘s Rules Memorandum 2-C,” Atlantic Mutual at *4, 1992 U.S.Dist. Lexis 13284 at *12, since “an action for indemnification accrues at the time of the indemnitee‘s payment despite a shorter contractual time limitations period applying to claims between the parties,” id. (citing States S.S. Co. v. American Smelting & Refining Co., 339 F.2d at 70 (9th Cir.1964)).
In our view, the issue of law arising in this action is not “so unrelated” to the decision of the court in Atlantic Mutual “that relitigation of the issue is warranted.” Stauffer, 464 U.S. at 171, 104 S.Ct. at 579. Indeed, the issue and its application are identical. Hyundai, like OOCL, seeks to recover in indemnity from Burlington on the grounds that a limitations period prohibiting shipment damage claims presented beyond a specified time cannot start running until the time that liability is determined or a cognizable loss is incurred, since actions in indemnity do not accrue until such time. If this rule for the accrual of actions in indemnity were applied in the present action, Hyundai‘s claim would have been timely presented, like OOCL‘s claim against Burlington in the Atlantic Mutual action.
While, as Burlington points out, the contractual limitations provision in this case provides for a shorter period of time (nine months as opposed to one year), and applies to the presentation of “claims” as compared to the filing of “suits,” these distinctions are of no legal significance to the issue decided in
2. Intervening Change and Inequitable Administration
When two actions involve claims that are not “substantially unrelated,” issue preclusion still does not apply to an issue of law if a new determination of the legal issue is warranted “in order to take account of an intervening change in the applicable legal context or otherwise to avoid inequitable administration of the laws.” See Haitian Ctrs. Council, Inc. v. McNary, 969 F.2d 1350, 1356 (2d Cir.1992) (quoting
Burlington does not point to, and we are unaware of, any intervening change in the applicable legal context which would warrant new consideration of the issue decided against Burlington in Atlantic Mutual. Moreover, application of issue preclusion in this case would not constitute an inequitable administration of the laws. Burlington was aware of Hyundai‘s claim at the time of the Atlantic Mutual litigation, and it had a full and fair opportunity to litigate the legal issue in the U.S. District Court for the Western District of Washington.
We also believe that application of issue preclusion is particularly appropriate in this case, given that reconsideration of the issue already addressed in Atlantic Mutual would reward Burlington‘s attempt to forum shop. See Fulani v. Bentsen, 862 F.Supp. 1140, 1151 (S.D.N.Y.1994) (“To rule otherwise would encourage the parties to forum shop, thereby undermining the purpose of collateral estoppel in promoting the finality of judgments.“). By instituting this action for declaratory judgment in New Jersey, Burlington seeks to avoid the result that would have been reached in a court within the Ninth Circuit, where this case would more properly have been brought since the facts and parties to this action have virtually no connection to New Jersey.15
Having already litigated and lost this issue within the Ninth Circuit in Atlantic Mutual, Burlington now attempts to institute another action raising the same issue within another federal circuit in the hopes that this court would reach a conclusion different from that previously reached. But, as we have stated,
III. CONCLUSION
For the foregoing reasons, we will reverse the order of the district court granting summary judgment to Burlington, and remand the case with the direction to grant issue preclusive effect to the applicable legal issue resolved by the District Court for the Western District of Washington in the Atlantic Mutual litigation.
Present: SLOVITER, Chief Judge, BECKER, STAPLETON, MANSMANN, GREENBERG, HUTCHINSON, SCIRICA, COWEN, NYGAARD, ALITO, ROTH, LEWIS, McKEE, SAROKIN, and WOOD,* Circuit Judges.
SUR PETITION FOR PANEL REHEARING WITH SUGGESTION FOR REHEARING IN BANC
Sept. 20, 1995
The petition for rehearing filed by Appellees, having been submitted to the judges who participated in the decision of this Court and to all the other available circuit judges in active service, and no judge who concurred in the decision having asked for rehearing, and a majority of the circuit judges of the circuit in regular active service not having voted for rehearing by the court in banc, the petition for rehearing is DENIED.
Notes
The general principle announced in numerous cases is that a right, question, or fact distinctly put in issue, and directly determined by a court of competent jurisdiction, as a ground of recovery, cannot be disputed in a subsequent suit between the same parties or their privies; and, even if the second suit is for a different cause of action, the right, question, or fact once so determined must, as between the same parties or their privies, be taken as conclusively established, so long as the judgment in the first suit remains unmodified. This general rule is demanded by the very object for which civil courts have been established, which is to secure the peace and repose of society by the settlement of matters capable of judicial determination. Its enforcement is essential to the maintenance of social order; for the aid of judicial tribunals would not be invoked for the vindication of rights of person and property if, as between parties and their privies, conclusiveness did not attend the judgments of such tribunals in respect of all matters properly put in issue and actually determined by them.
Southern Pacific R.R. v. United States, 168 U.S. 1, 48-49, 18 S.Ct. 18, 27, 42 L.Ed. 355 (1897).Following Parklane, the Court in United States v. Mendoza, 464 U.S. 154, 104 S.Ct. 568, 78 L.Ed.2d 379 (1984), limited the application of offensive non-mutual collateral estoppel by concluding that it could not be applied against the federal government. The Court reasoned that such a policy “would substantially thwart the development of important questions of law by freezing the first final decision rendered on a particular legal issue.” Id. at 160, 104 S.Ct. at 572. The Court explained that “[a]llowing one final adjudication would deprive this Court of the benefit it receives from permitting several courts of appeals to explore a difficult question before this court grants certiorari.” Id. “Indeed,” the Court observed, “if nonmutual estoppel were routinely applied against the Government, this Court would have to revise its practice of waiting
As we recognized in In re Brown, 951 F.2d 564, 569 (3d Cir.1991), the concept of finality for purposes of “collateral estoppel does not require the entry of a judgment final in the sense of being appealable.” Instead, “the doctrine of collateral estoppel applies whenever an action is sufficiently firm to be accorded conclusive effect.” Id. (internal quotation marks omitted). We concluded there that “[t]he wisest course [was] to regard the prior decision of the issue as final for the purpose of issue preclusion without awaiting the end judgment.” Id. Brown held that “[i]n determining whether the resolution was sufficiently firm, the second court should consider whether the parties were fully heard, whether a reasoned opinion was filed, and whether that decision could have been, or actually was, appealed.” Id. (We admitted, however, that “[f]inality ‘may mean little more than that the litigation of a particular issue has reached such a stage that a court sees no really good reason for permitting it to be litigated again.‘” Id. (quoting Dyndul v. Dyndul, 620 F.2d 409, 412 n. 8 (3d Cir.1980)).)
This finality requirement is satisfied in this case. Burlington “w[as] represented by counsel (in this case two separate firms), ... [t]he issues were genuinely contested, and the court gave no indication that the summary judgment was tentative or likely to be changed.” See Brown, 951 F.2d at 569. Moreover, the Atlantic Mutual court did not summarily deny Burlington‘s summary judgment motion on (for example) grounds that there were material factual disputes; rather, it ruled in a reasoned opinion that Burlington‘s timeliness defense was unsuccessful as a matter of law. Under all these circumstances, the fact that the decision was not actually appealable is of little consequence in this action. See Dyndul, 620 F.2d at 412 (“‘[F]inality’ for purposes of issue preclusion is a more ‘pliant’ concept than it would be in other contexts.“). Accordingly, we conclude that the denial of summary judgment in Atlantic Mutual is sufficiently final to be given issue preclusive effect in this action.
it remains unclear just where the Court‘s opinion will lead. It is confessed that there is no clear sense of the purposes that may limit preclusion as to matters of law. No attempt is made to work through the different policies that may apply in different settings, so as to push preclusion closer to abstract issues of law or to confine it closer to commingled issues of law and common fact. The result might be a broad expansion of preclusion. The reasons for caution are sufficiently strong, however, to rely on the opinion as a possibly appropriate response to the specific case without reading it as establishing a new general policy.
18 WRIGHT, MILLER & COOPER, supra, § 4425, at 198 (1994 Supp.).Both Stauffer I and Stauffer II arose as a result of EPA‘s overview inspection program for supervising state efforts to enforce national air quality standards. In both cases private contractors, in addition to EPA and state employees, tried to inspect plants owned by respondent. The inspections occurred just over two weeks apart, and in each case, Stauffer refused to allow the private contractors to enter its plant.
Id. at 172, 104 S.Ct. at 579.Extending preclusion to circuits that have adopted a contrary rule on the merits would be acceptable were it supported by any affirmative policy. It is not. Judicial economy is not served for the simple reason that no litigation is prevented; the prior litigant is subject to one black-letter rule rather than another.
Stauffer, 464 U.S. at 178, 104 S.Ct. at 582.