Opinion ID: 773661
Heading Depth: 4
Heading Rank: 2

Heading: Necessary to the outcome of the prior proceeding

Text: 41 The district court held that Time Warner failed to establish that NSS's lack of standing under § 605 was necessary to the grant of summary judgment for Time Warner in Coach's Corner. It determined that the Coach's Corner decision was instead primarily based on the conclusion that NSS was contractually barred from pursuing an action against Time Warner because of the particular language in the license agreements involved in that case. As such, it held that the alternative ground in Coach's Corner for granting Time Warner's motion for summary judgment - namely, that NSS was not a person aggrieved under § 605 - was not necessary to that court's judgment. 42 Time Warner argues that the district court erred in reaching this conclusion. It notes that Coach's Corner is a case in which two alternative but independent grounds support the court's ultimate judgment. Time Warner claims that under the weight of federal authority, a plaintiff is precluded from relitigating an issue actually decided against it in a prior case, even if the court in the prior case rested its judgment on alternative grounds. It cites the Second, Seventh, Ninth, and D.C. Circuits as upholding this general principle of issue preclusion. See Williams v. Ward, 556 F.2d 1143, 1154 (2d Cir. 1977); Magnus Elecs., Inc. v. La Republica Argentina, 830 F.2d 1396, 1402 (7th Cir. 1987); In re Westgate-California Corp., 642 F.2d 1174, 1176 (9th Cir. 1981); Yamaha Corp. of America v. United States, 961 F.2d 245, 255 (D.C. Cir. 1992). 43 This principle of issue preclusion, however, is counterbalanced by courts and commentaries that have adopted the opposite conclusion. For example, the American Law Institute (ALI) endorses NSS's position that [i]f a judgment of a court of first instance is based on determinations of two issues, either of which standing independently would be sufficient to support the result, the judgment is not conclusive with respect to either issue standing alone. Restatement (Second) of Judgments § 27 cmt. i (1980). Furthermore, one leading commentary describes the Restatement's view as the new and modern rule. See 18 James Wm. Moore et al., Moore's Federal Practice ¶ 132.03[4][b] at 132-111 to 132-113 (3d ed. 1997). At least four circuits (the Third, Fourth, Eighth, and Tenth) have adopted this modern rule. See Arab African Int'l Bank v. Epstein, 958 F.2d 532, 535 (3d Cir. 1992); Ritter v. Mount St. Mary's College, 814 F.2d 986, 993-94 (4th Cir. 1987); Baker Elec. Co-Op v. Chaske, 28 F.3d 1466, 1475-76 (8th Cir. 1994); Turney v. O'Toole, 898 F.2d 1470, 1472 n.1 (10th Cir. 1990). In addition, the Seventh Circuit has embraced the modern rule in the context of the Black Lung Benefits Act in Peabody Coal Co. v. Spese, 117 F.3d 1001, 1008 (7th Cir. 1997) (en banc), without citing its contrary holding inMagnus Electronics, 830 F.2d at 1402. 44 The issue is a close one given the policy implications involved. Time Warner argues that by not recognizing Coach's Corner as precluding relitigation of whether NSS has standing to sue under §605, NSS is free to relitigate the same issue again. NSS counters by arguing that because the Coach's Corner court decided that NSS was contractually barred from pursuing a claim against Time Warner, NSS had no incentive to appeal that court's secondary decision that NSS failed to state a claim under § 605. 45 We find NSS's point persuasive because, while it might have won the battle over §605, NSS would almost surely have lost the war in being unable to overcome the contractual prohibition on commencing litigation against Time Warner. Furthermore, the district court's oral ruling in Coach's Corner transcribes into only a two-paragraph conclusory statement regarding NSS's claim under § 605, which was far overshadowed by the balance of its three-page discussion outlining the contractual obstacles that prevented NSS from suing Time Warner. 46 This circuit has not decided whether alternative grounds for a judgment are each necessary to the outcome for the purposes of issue preclusion in a subsequent case involving only one of the grounds. Based on the actual decision inCoach's Corner, we do not find it necessary to fully resolve this issue at the present time. We do hold, however, that where, as in Coach's Corner, one ground for the decision is clearly primary and the other only secondary, the secondary ground is not necessary to the outcome for the purposes of issue preclusion. Coach's Corner's secondary holding that NSS failed to state a claim under § 605 was thus not necessary to the granting of Time Warner's motion for summary judgment.