OPINION
The district court granted summary judgment sua sponte аgainst plaintiffs, even though the defendant had not yet appeared. Another defendant had won summary judgment on the same grounds, and thе court found the case to be frivolous. We affirm.
Facts
Ahlstrom was the general contractor building a boiler for Louisiana Pacific Cоrporation. Ahlstrom hired Stevens Equipment for steel fabrication, and Stevens contracted with its affiliate Columbia Steel for materials. Ahlstrom hired Aaro Kohonen Oy (AKO), in Finland, for engineering.
Stevens and Colmnbia made a number of claims against Ahlstrom, including that the engineering wаs bad and late, costing them more money. Stevens sued Ahlstrom in California state court, and then arbitrated its claims on its own and Columbia’s bеhalf. Stevens prevailed in arbitration, but not on the claims related to the case at bar. After the arbitration award was reduced to judgment in state court, Columbia and Stevens brought this diversity suit.
In this federal case, AKO, the engineering subcontractor in Finland, never apрeared. It had been served, but Stevens and Columbia had not filed proof of service, or requested entry of default, so when the distriсt court granted summary judgment, the judge inferred from the record that AKO had not been served. Ás we analyze the ease, the judge’s erronеous belief that AKO had not been served does not matter.
*802 Ahlstrom moved for summary judgment. The district judge decided, after full consideration of the submissions on this contested motion, that Ahlstrom was entitled to judgment on alternative independent grounds, res judicata and statute of limitаtions. She also made an express finding that the lawsuit was “frivolous and vexatious,” because all the claims at issue had been befоre the arbitration panel and had been considered by the arbitrators, were considered again by the arbitrators on Stevеns’ and Columbia’s motion for reconsideration, and were considered again by the state court before it entered judgment based on the arbitration award. Because of the finding of frivolousness and vexatiousness, the district court granted Rule 11 sanctions against Cоlumbia, Stevens, and their attorneys. Columbia and Stevens have settled with Ahlstrom, so the judgment for Ahlstrom, and the Rule 11 sanctions, are not beforе us on appeal.
At oral argument in district court, when counsel for Columbia and Stevens pointed out that the district court judge’s grant оf summary judgment to Ahlstrom left open the claims against AKO, the judge said that both defenses applied equally to AKO, and that summary judgment in favor оf AKO was appropriate as well. Columbia and Stevens did not object, suggest that any different legal or factual consideratiоns might apply to their claim against AKO, or ask for additional time to make any submission.
Analysis
Columbia and Stevens argue that the district court could not properly grant summary judgment in favor of a defendant who did not appear in the case or move for summary judgment. This proposition may generally be correct, but not always, and not here.
We have upheld dismissal with prejudice in favor of a party which had not yet appeared, on the basis of facts presented by other defendants which had appeared.
Silverton v. Department of Treasury,
We have also upheld
sua sponte
summary judgment.
Portsmouth Square v. Shareholders Protective Comm.,
These cases do not necessarily control. They do not go so far as to uphold sua sponte summary judgment based on res judi-cata in favor of a party which has not appeared. Nevertheless, the fаctual distinctions which might be drawn make no difference here. The reasoning of these earlier authorities applies fully to the case at bar.
Columbia and Stevens correctly note that AKO was not a party to its arbitration •with Ahlstrom. But collateral estoрpel does not require that the party benefitting have been a party to the earlier litigation. Stevens presented against Ahlstrom in the arbitration all claims which it could have presented against Ahlstrom’s engineering subcontractor, AKO. The arbitrators found that Stеvens did not prove damages caused by the alleged error and delay. This basis for the arbitration award compelled the conclusion, inferred by the district court,' that even if Ahlstrom’s subcontractor AKO was responsible for whatever error and delay there wаs, Stevens had exhausted its opportunity to prove damages. It is well established that collateral estoppel can оperate in favor of a party which did not litigate the earlier case, in appropriate circumstances.
Green v. Ancora-Citronelle Corp.,
We do not reach the issues raised by the statute of limitations ground for the district court’s decision. That defense may possibly raise some different considerations from res judicata. Res judicata doctrine preserves scarce judicial resources, as well as protecting litigants from multiple lawsuits, see McClain at 1032-33, so courts have an *803 independent interest in raising it, even if a pаrty does not.
Sua sponte
summary judgment in favor of a nonappearing party should not be routine. We noted in
Portsmouth
that the circumstances for such dismissal on the merits are “limited.”
Portsmouth,
This case was appropriate for
sua sponte
summary judgment for the nonappearing party, AKO. Several circumstances justified the relief. Columbia and Stevens had a full аnd fair opportunity to brief and present evidence on the issues raised by Ahlstrom.
See State of Nevada Employees Ass’n v. Keating,
Under these circumstances, sua sponte summary judgment avoided what would have otherwise been a considerable and needless burden on AKO and the judicial system in a frivolous case.
AFFIRMED. 1
Notes
. Appellants' "Motion for summary reversal” is denied.