You all will recall the following hypothetical from law school: A train wreck occurs in which 50 passengers are injured. If the first plaintiff sues the train company for negligence and wins, then later plaintiffs theoretically can use that finding to preclude the company from contesting negligence in later lawsuits. But if the first plaintiff sues and loses, the other plaintiffs are not bound because they were not parties to the first plaintiff’s suit. We see that as sort of a “heads I win, tails you lose” proposition. If the first plaintiff sues and loses, as do the next 24 plaintiffs, what happens if plaintiff number 26 sues and wins? Should the remaining injured passengers be allowed to preclude the train company from contesting its negligence? Granted, the negligence issue has been determined in a lawsuit in which the train company had every incentive to defend itself, but should an equitable doctrine like collateral estoppel (aka issue preclusion) lend itself to a result that seems so unfair?
This hypothetical, first posed by Professor Brainerd Currie in 1957, piques the interest of attorneys in our line of work because our clients get sued time and again by different plaintiffs who claim to have been injured by the same or similar products. Sometimes hundreds of plaintiffs, or even thousands, and as much as we believe in our clients and their life-saving and life-improving innovations, we sometimes get results we do not want. There are infinite numbers of reasons why that might happen, and when it does, some forward-thinking attorney always asks, “Can this result be used to estop us in future cases?”
The fact is that product manufacturers are rarely precluded from defending their products in litigation. Years ago we represented the plaintiff (yes, the plaintiff) in a product liability lawsuit involving industrial-grade plastic. A jury in a prior lawsuit had found the same product to be defective in design, so it occurred to us forward-thinking attorneys that we ought to be able to exploit that earlier judgment and preclude the manufacturer from contesting that its plastic was defective.
We were somewhat surprised that our research turned up very slim results, and that collateral estoppel almost never operates to preclude re-litigation of product defect in successive product liability claims. Generally speaking, we like the concept of collateral estoppel (and its jurisprudential cousin res judicata) when properly applied because litigation should provide a semblance of finality. But it seems that the ghost of Professor Currie hovers over the shoulders modern day jurists to remind them that equity should not resemble a roulette wheel, and one plaintiff’s success should not relieve others of their burdens of proof.
The recent order in Eggerling v. Advanced Bionics, LLC, No. C 11-4104-MWB, 2013 U.S. Dist. LEXIS 103366 (W.D. Iowa July 24, 2013), provides a good example, although in a slightly unusual context—federal preemption. In Eggerling, the plaintiffs sued over a cochlear implant, a medical device used to treat profound hearing loss. The FDA approved the device under its rigorous pre-market approval (“PMA”) process, which to our ears means that federal regulation preempts state law product liability claims. The device’s manufacturer thought so too, and it moved for summary judgment on both implied and express preemption grounds.
That is where collateral estoppel came into play. The plaintiffs’ lawyers—thinking like we did when we were up to our ears in the aforementioned industrial plastic case—argued that the defendant was precluded from asserting preemption because another district court had already rejected the argument. Same defendant, same product, same issue, already determined. It certainly sounds like collateral estoppel. But as is typical when preemption is involved, it was not that simple, and the district court had no difficulty seeing through this creative, but ultimately meritless argument. The court began by setting forth the rule (under the applicable Iowa law) that the party asserting issue preclusion must establish that (1) the issue in the present case is identical, (2) the issue was raised and litigated in the prior action, (3) the issue was material and relevant to the disposition of the prior case, and (4) the determination of the issue in the prior action was essential to the resulting judgment. Id. at *6.
The court, however, was equally careful in laying out the doctrine’s limitations. For instance, “[e]ven when the requirements of the general issue preclusion rule are present, courts are required to consider if special circumstances exist that make it inequitable or inappropriate to prevent relitigation of the issue previously determined in the prior action.” Id. at *8 (emphasis added). Moreover, collateral estoppel generally will not preclude litigation where “[t]he issue is one of law and . . . the two actions involveclaims that are substantially unrelated.” Id. (emphasis added).
The plaintiffs’ novel application of collateral estoppel to preemption failed on numerous counts. To begin with, although the plaintiffs asserted collateral estoppel in opposing the defendant’s summary judgment motion, they did not move for summary judgment themselves on the defendant’s preemption defense. Perhaps the plaintiffs’ lawyers understood they were on shaky ground and did not want to press the argument too far. In any event, the district court found that the issues were not identical because the prior case was decided under a different state’s law. Fair enough. But the court went on to rule that collateral estoppel would not apply even if the issues were identical, using language that we really like:
Now, while we celebrate that the manufacturer was allowed to assert preemption on the merits, we are dismayed that the motion was largely denied. Parts of the plaintiffs’ negligence and strict liability claims survived, based mainly on the allegation that the device was not manufactured in compliance with the FDA-approved design. We have seen similar results in connection with this device. The fight, however, will continue because the manufacturer has the equities on its side, and we think the law, too. You heard it here first.