“[A] nonparty’s ‘academic interest in the determination of a question of law in a prior suit, or even a substantial interest in establishing favorable precedent under the doctrine of stare decisis’ cannot preclude the nonparty from later relitigating issues determined in the prior suit.”
How later courts described this case
- “[A] nonparty’s ‘academic interest in the determination of a question of law in a prior suit, or even a substantial interest in establishing favorable precedent under the doctrine of stare decisis’ cannot preclude the nonparty from later relitigating issues determined in the prior suit.”
- collateral estoppel applies to parties to a case
Written by the judges who cited it.
The opinion
JAMES DICKSON PHILLIPS, Circuit Judge,
concurring in part and dissenting in part:
I regret that I cannot join in the majority’s disposition of this appeal. In many respects the case is an unexceptional one and the critical substantive issue a narrow one whose resolution by the majority does not finally resolve the case. But the issue, though narrow and not dispositive in this case, is, for broader precedential purposes, an important one which, for a number of reasons, I think should not be resolved summarily on the present record, as the majority here does.
The substantive issue concerns the circumstances under which associational entities and their members should be precluded from relitigating issues (or whole claims) previously litigated by one or the other. The majority opinion, applying traditional non-party preclusion principles (“privity”), has held the associational plaintiff, VHA, not precluded by its earlier participation in an action by one of its members.
This substantive holding is effected by outright reversal of a district court summary judgment finding preclusion. The practical effect of this decision to reverse outright is to award partial summary judgment rejecting the preclusion defense in favor of a party, VHA, which had neither moved for it in the district court nor sought it as appellant should it prevail on this appeal. In both courts VHA has confined its arguments to denying the state defendants’ entitlement, as sole movants for summary judgment, to that relief, on the basis that there were on the present record genuine issues of material fact respecting, inter alia, the extent of VHA’s participation, control and interest in the earlier action.
Of course there is no question of our power in appropriate cases to grant such appellate relief despite its not having been sought by the appellant at either level. Just as a district court may properly grant summary judgment sua sponte to a nonmovant (whether or not his adversary has moved for summary judgment), so may we in appropriate cases. See generally 10A Wright, Miller & Kane, Federal Practice and Procedure: Civil § 2720, pp. 28-35. But for obvious reasons of procedural fairness and regularity, the circumstances under which we should do so are rare, even if the relief may be technically warranted on the summary judgment record as composed solely on the appellee’s motion. See, e.g., E.C. Ernst, Inc. v. General Motors Corp., 537 F.2d 105 (5th Cir.1976). I do not believe those circumstances are present here, and it is for that reason that I dissent from the decision to award partial summary judgment, rejecting the preclusion defense, to VHA.
In the first place, while I agree with the majority that summary judgment for the state defendants was not proper on the present record, neither do I think it is warranted for VHA. For the same reason that genuine issues of material fact respecting the degree of VHA’s participation and control in the earlier action made summary judgment inappropriate for the defendants, so it is inappropriate on the present record in favor of VHA. That there was an appreciable measure of participation is undisputed, as is the fact of the associational relationship and mutual interests flowing from it.
The genuineness of the dispute thereby created stems from the intrinsic difficulty and still emerging state of preclusion doctrine in this type case. Successive actions by associational entities and their members present particularly difficult preclusion issues, both factual and legal. The controlling principles are still emerging as this type of entity — labor unions, trade associa *1315 tions, special interest groups — have proliferated in recent years as parties to litigation. See generally 18 Wright, Miller & Cooper, Federal Practice & Procedure: Jurisdiction and Related Matters § 4456.
The possibilities that litigation by these entities and their memberships present for contriving successive, repetitive claims (or defenses) free of the constraints of traditional res judicata “privity” requirements are obvious. For this reason, some courts may now understandably have relaxed to some extent the traditional “participation and control plus interest” requirements for binding non-parties when associational entities are involved. See id. at p. 492. Indeed, some courts, obviously concerned about the ease with which actual control and interest can be masked in associational litigation, have taken a completely different approach, finding preclusion on theories of virtual representation of a current party in the prior action rather than, or in supplementation of, participation and control notions. See id. § 4457. So far as I can tell, our court has not had the occasion to address the special problem in a definitive way.
I do not of course suggest that preclusion on either basis is now demonstrably warranted here; only that the possibility is sufficiently indicated to warrant further development of the record — both to guard against possible substantive injustice in the present case and for precedential purposes. Even where summary judgment is technically appropriate — as I think it is not here — courts (particularly appellate courts not asked for the relief) have discretion to withhold it on grounds of practicality and fairness. Forest Hills Early Learning Center, Inc. v. Lukhard, 728 F.2d 230, 245 (4th Cir.1984); see also United States v. Bachman, 601 F.Supp. 1537 (D.C.Wis.1985). Particularly where, as here, the controlling legal principles are new or newly emerging, discretion dictates caution in making a summary disposition on what may be an incomplete development of the full factual record. Cf. Shull v. Pilot Life Insurance Co., 313 F.2d 445, 447 (5th Cir.1963) (admonishing caution in granting motion to dismiss on pleading asserting new, novel theories).
Finally there is the consideration that the case must in any event now be remanded for further proceedings on all the other issues than preclusion. While the majority’s concern for expeditious final resolution of all possible issues is understandable, little in terms of judicial economy would be lost by remanding the collateral estoppel issue for further proceedings. This seems particularly appropriate when one of the unresolved issues to be addressed on remand is that of VHA’s standing to prosecute this claim. The standing issue is critically related to the collateral estoppel issue in ways that might well force VHA into somewhat conflicting positions on the nature and degree of the associational relationships here in issue. Cf. Ethnic Employees of Library of Congress v. Boorstin, 751 F.2d 1405 , 1410 (1st Cir.1985) (relationship between preclusion and possibly representative nature of action noted). Under these circumstances, it seems to me particularly unwise and unsafe to cut off at this stage further development of the collateral estoppel issue. The principles of repose at stake are obviously of great importance, particularly in the associational litigation context.
For all these reasons, I dissent from the court’s sua sponte award of summary judgment to VHA on the collateral estoppel defense. I would remand it for further proceedings along with the rest of the case.