When Does Offensive Non-Mutual Collateral Estoppel Apply In MDLs?

• Published date: 05 August 2022
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Corporate and Company Law, Trials & Appeals & Compensation, Diversity, Equity & Inclusion
• Law Firm: Winston & Strawn LLP
• Author: Andrew Tauber

Today's post is for procedure geeks, especially those who litigate MDLs.

Offensive non-mutual collateral estoppel prevents a defendant from relitigating an issue that it lost in earlier litigation against a different plaintiff.

The issue is when offensive non-mutual collateral estoppel applies to a case that was part of an MDL. More specifically, the issue is which state's law determines whether offensive non-mutual collateral estoppel applies in a particular case.

Before we discuss a recent case that provides a dubious (albeit helpful in the instance) answer to that question, a few words on some of the reasons why offensive non-mutual collateral estoppel is a bad idea, especially from a defense perspective.

Offensive non-mutual collateral estoppel risks perpetuating an erroneous result by preventing relitigation of issues already decided against a defendant. If the defendant loses the first case to reach final judgment, the doctrine gives disproportionate, preclusive weight to the decision of a lone judge or jury, no matter how wrong that decision.

The fact that an adverse judgment in the first case to reach final judgment can cripple a company's defense in subsequent cases has two adverse consequences apart from the danger of perpetuating error. First, it gives the plaintiff tremendous leverage in settlement negotiations. Second, it induces defendants to spend much more litigating a case than would be warranted by the amount nominally in dispute.

Because it can cripple a company's defense, offensive non-mutual collateral estoppel can be outcome determinative. Thus, the question of whether it applies in a particular case is an important question when it arises. It is especially important in MDLs (and other coordinated proceedings) given the larger number of follow-on cases in which the doctrine could theoretically be invoked.

The impetus for today's post is Dalbotten v. C. R. Bard, Inc., 2022 WL 2910125 (D. Mont. 2022), a case that had been part of the G2 IVC filter MDL in the District of Arizona but was then sent to the District of Montana for further proceedings. Asserting a failure-to-warn claim under Montana law, the plaintiff moved for summary judgment, arguing that the defendant was precluded from litigating the adequacy of its warning because a jury in a bell-weather case tried by the MDL court in the District of Arizona under Georgia law had previously found the warning inadequate. For reasons it does not adequately explain, the Dalbotten court...