The Review of Litigation
Some forty years ago, in Parklane Hosiery Co. v. Shore, the United States Supreme Court held that the rule of mutuality of estoppel was no longer an absolute bar to the invocation of issue preclusion for the benefit of a plaintiff who had been a stranger to the prior (F-1) litigation against a defendant who had been party to both the F-I and present (F-2) cases. In so ruling, the Supreme Court gave its imprimatur to Judge Traynor's dramatic takedown of the mutuality rule in Bernhard v. Bank of America National Trust and Savings Association nearly four decades earlier. The outcome in Parklane was also foreshadowed by the Court's earlier ruling in Blonder-Tongue Laboratories v. University of Illinois Foundation. There, the Court rejected mutuality where the stranger to F-I invoked the F-I decision holding a patent invalid as a defense to an infringement suit in F-2 involving the same patent. Blonder Tongue was consistent with the trend in many state and lower federal court decisions that had abrogated mutuality where preclusion was interposed defensively. Parklane, of course, involved offensive non-mutual issue preclusion, and at the time of the Blonder Tongue decision, many courts drew a line distinguishing defensive and offensive non-mutual preclusion, allowing the former but not the latter. Parklane acknowledged this bright-line distinction but rejected an outright ban on offensive non-mutual issue preclusion, leaving it to the trial courts to determine on a case-by-case basis when it should be applied. The Court in Parklane thus stopped short of a blanket approval of offensive non-mutual issue preclusion, and qualified its holding in three important respects: (1) a defendant must have had a full and fair opportunity to litigate the case in F- 1; (2) invocation of non-mutual issue preclusion must not produce an unfair result; and (3) the decision of whether or not to allow offensive non-mutual issue preclusion is left to the sound discretion of the trial court and thus is not a matter of right.