What is Collateral Estoppel? - Definition, Doctrine & Effect

Instructor: Kenneth Poortvliet

Kenneth has a JD, practiced law for over 10 years, and has taught criminal justice courses as a full-time instructor.

If one loses in court, they can't just refile and try again. In this lesson we will learn what collateral estoppel is and what it means to the finality of a judges ruling.

Deja Vu

Cindy was on her way home from a Christmas party, and fellow party goer Ted smashed into Cindy's car injuring her and sending her to the hospital. Ted's had three times the limit of a blood alcohol level. Ted sued the catering company for over-serving him and lost ruling that there was insufficient evidence that they served him too much.

Ted had no money, and had let his insurance lapse, so Cindy then sued the homeowners and the catering company instead for serving Ted too much alcohol. At their first hearing, the judge threw out the case saying the issue of the catering company serving too much alcohol to ted had already been decided. Is that right? How can Cindy get justice for her injuries?

The Judge Has Spoken

In the American judicial system, there is a principle that once a legal issue has been decided, then it's final. The simplest form of this is called res judicata which is Latin and means ''previously judged''. This prevents someone from losing a trial and then just refiling to have another crack at it.

For res judicata to be a defense, it has to be the same set of occurrences as in the first case, the same parties, and the case must have proceeded to a final judgment. For example, Harry's tree smashed Charlie's shed, and at trial, Harry's insurance lawyer convinced the judge it was an act of God, thus Harry wasn't negligent and Charlie got nothing. At this point, Charlie can't just refile and sue Harry all over again just because he didn't like the judgment.

Issue Preclusion

The same principle applies to collateral estoppel which is a doctrine that prevents relitigation of the same legal issue. Unlike res judicata, it doesn't have to be the same parties nor does have to involve the same claim. Instead, the focus in on a particular issue that has been decided.

For example, Kent bought a rare baseball card in an online auction. He paid $5k to Barry, but when Kent got the card and had it appraised, his appraiser said it was a forgery. Kent sued Barry, but the court said there wasn't enough evidence to prove it was a forgery. Barry decided to buy the card back anyway to keep his reputation. He then sued the collector who originally sold him the card, saying it was a forgery. The collector could claim collateral estoppel saying that a court had already ruled that the card was not a forgery.

Why have this rule? Otherwise there would be no end to lawsuits over an issue. One court could say it's a forgery and another could say it wasn't. To successfully claim collateral estoppel, the following must apply:

  1. The issue must be identical to the issue already litigated against,
  2. The issue must have been fully litigated at the time.
  3. The court must have decided upon the issue.
  4. The decision on the issue must have been integral to the outcome of the case.

Who Can Claim Collateral Estoppel?

Early on, the doctrine only applied if there was mutuality which means both parties had been in the first lawsuit. Today, however, one can claim collateral estoppel even if the parties are not the same. This is called non-mutual collateral estoppel, and it means that if at least one party was part of the previous ruling, then it may apply. Offensive non-mutual collateral estoppel happens when a new plaintiff claims it to keep a defendant from getting out of a previous ruling on the same issue.

For example, remember that the judge ruled that Harry's tree falling was an act of God and thus not Charlie's fault? If Charlie's other neighbor, Zeek, had left his motorcycle in Charlie's yard which was smashed by the tree, and Charlie had insurance for acts of God coverage for any damage done on his own property, Zeek could use offensive, non-mutual collateral estoppel to keep the insurance company from claiming that the tree falling wasn't an act of God because the court already said it was.

Defensive, non-mutual collateral estoppel occurs when a defendant uses it to prevent a new plaintiff (not part of the previous suit) from asserting an issue that has already been decided. For example, remember the card that the judge ruled wasn't a forgery? If Barry sued the original collector for the forgery, the collector could claim non-mutual, collateral estoppel because the judge already ruled it wasn't a forgery.

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