Personal jurisdiction

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Parties in Privity

  • Categories:

    • 1) Relationships between owners of successive interests in real or personal property

    • 2) Relationships that intertwine the substantive legal interests of a party and nonparty (ex: indemnitor/indemnitee, vicarious liability)

      • Privity extends one way

      • Suit 1: T v. Speedy (Alvin) judgment for Speedy

      • Suit 2: T v. Alvin claim preclusion b/c Speedy and Alvin are in privity

      • Suit 1: T v. Speedy (Alvin) judgment for T in compensatory

      • Suit 2: T v. Alvin barred from asserting claim for compensatory but could bring joint negligence or punitive damages; likewise Alvin can defend on merits even though T won in earlier suit against Speedy (to hold otherwise would violate Alvin’s right to due process)

    • 3) Relationships premised on a representational relationship between a party and non-party (ex: executor, gov’t official)

    • [6] In rem

    • “Virtual representation” category:

      • Circuit court balancing test factor:

        • 6 factors:

          • 1) close relationship

          • 2) participation in prior litigation

          • 3) present party’s apparent acquiescence to preclusive effect of judgment

          • 4) deliberate maneuvering to avoid effect of judgment

          • 5) adequate representation of party by prior party

          • 6) suit raising a public law issue

      • Federal standard for virtual representation: Unless party in first case 1) knows party is suing in representational capacity OR 2) court takes special precaution that absent party is represented, due process prevents 2nd party from being precluded

        • No public law exception

        • Taylor v. Sturgell: P brought FOIA claim against FAA for not disclosing design of old airplane to him. P did not bring up two issues and P2 (Taylor, P’s friend) filed claim against FAA and FAA claimed virtual representation between parties. Held: 8th circuit test for virtual representation violtes Due Process. Not same party b/c 1) Taylor was not adequately represented in the traditional categories 2) Taylor was not Herrick’s legal representative and was not purporting to represent him in a legal capacity.

      • Applies to intersystem preclusion

  • Issue Preclusion

    • Issue Preclusion requirements:

      • 1) Same issue is involved in both actions

        • 1) Sameness of fact and law: enough overlap that it is reasonable to treat them as same issue

        • 2) Policy concerns

          • IRS v. Sunnen: 1st case issue was whether a K triggered a tax. Second case claim is based on a similar K and same tax year so issue is the same and law hasn’t changed, but claim is that the first court got the law wrong. Held: Policy reasons, if mistake was made in the first case then it could impact all other taxpayers

            • *Generally, however, the excuse that a court applied the law incorrectly is not enough to get past issue preclusion.

        • 3) Fair and efficient

          • Stauffer v. EPA (note case): Issue was whether EPA had right to demand entry into Stauffer’s chemical plant. Second case related to a different plant. Held: context is similar, law is similar so treat the same. It was fair b/c EPA could have raised the issue about the second plant in the first suit

      • 2) Issue was actually litigated in the first action

        • 1) Raised

        • 2) Contested

          • If D admits something, its not considered contested

        • 3) Submitted to court

        • *Does not have to be on the merits (as in claim preclusion, exception is CA: requires on the merits)

      • 3) Issue was decided and necessary to valid judgment in that action

        • Decided: Impliedly or expressly decided (impliedly based on verdict)

        • Necessary: If it can be excised, then not necessary.

      • 4) Both actions involve the same parties or those in privity

        • 1) Privity: [See categories of parties in privity]

        • 2) Principle of non-mutuality: court will abandon mutuality when non-party to first proceeding can benefit from it

          • Old rule- Principle of mutuality: only parties bound by precious decided issue can use issue preclusion

          • Bernhard v. Bank of America: First case was Cook (executor) vs. Beneficiaries where the issue was whether the transfer was a legitimate gift or if it should be part of the estate and held that it was a gift. Bernahrd, Cook’s successor, then in a second suit sues Bank of America stating that it breached its fiduciary duty. B of A uses issue preclusion as a defense. Ds are not the same parties b/c B of A was not party to the first suit so under principle of mutuality is not bound by the decision. Held: Abandons principle of mutuality when non party may benefit from it. BofA may benefit from the issue decided in the first case so therefore can use the defense.

        • Offensive non-mutuality estoppel:

          • When a P to a second case wants to use an issue of a case that has been adjudicated and the 1) same issue 2) actually litigated and 3) decided and necessary could be used by the P as an offensive estoppel, but the parties (Ps) to both cases are not the same parties

            • 1) Can use UNLESS opposing party could have intervened somehow in the first case (this would show party using sit-back tactic)

            • 2) Fairness: Anything unfair to the absent party benefiting? Did they have a full and fair opportunity to litigate the issue?

          • Parklane v. Shore: SC Held: Parties should be able to use offensive non-mutuality estoppel, UNLESS opposing party shoes that the party adopted it as a tactic to take advantage of the first case

          • CA and Federal courts have adopted non-mutual offensive and defensive

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