Opinion ID: 2296314
Heading Depth: 1
Heading Rank: 4

Heading: Res Judicata, Collateral Estoppel, and Finality

Text: The Town's fourth argument on appeal is that res judicata, collateral estoppel, and finality bar NextEra's application. Its basic argument is that to the extent NextEra's application requests a change in the tax exemption status, or amount, from that previously determined in [the 1984 decision], DES should have required NextEra to establish that the changes are not barred by [collateral estoppel, res judicata, or finality]. [T]he doctrine of collateral estoppel bars a party to a prior action, or a person in privity with such a party[,] from relitigating any issue or fact actually litigated and determined in the prior action. Gray v. Kelly, 161 N.H. 160, 164, 13 A.3d 848 (2010) (quotation omitted). Similarly, [r]es judicata ... bars the relitigation of any issue that was, or might have been, raised in respect to the subject matter of the prior litigation. Id. (quotation omitted). Both doctrines must be raised as affirmative defenses. Id. Thus, both doctrines operate in an adversarial setting to preclude an adverse party from rearguing certain issues of law or fact. Here, DES's investigative process was non-adjudicative. There were no hearings. The Town was not a named party to the process. Nor did the Town have a right to be a party to the process. Appeal of Town of Bethlehem, 154 N.H. at 326-27, 911 A.2d 1. Instead, at the administrative level, the Town merely had a right to receive notice and submit comments on the Application pursuant to RSA 541-A:39 (2007) and RSA 72:12-a, II. Furthermore, as we have previously recognized, [DES is] statutorily authorized to investigate and make a determination regardless of submissions made by anyone, including the applicant and the Town. Appeal of Town of Bethlehem, 154 N.H. at 330, 911 A.2d 1 (emphasis added). Thus, the proceeding has none of the hallmarks of a judicial proceeding. See Appeal of City of Keene, 141 N.H. 797, 800, 693 A.2d 412 (1997) (An act is judicial in nature if officials are bound to notify, and hear the parties, and can only decide after weighing and considering such evidence and arguments, as the parties choose to lay before them. (quotation omitted)). In light of the character of DES's investigative process, the doctrines of res judicata and collateral estoppel do not apply. Both doctrines prevent relitigation of issueshere, there was no litigation. Both doctrines must be raised as affirmative defenseshere, there was no party who had a right to raise any defenses. Both doctrines operate in an adversarial settinghere, there was no adversary who had a right to be a party to the process. Simply put, NextEra was merely seeking a determination from DES regarding RSA 72:12a tax exemptions and DES had no obligation to turn its investigatory process into a full-blown adversarial proceeding in which opposing parties may raise traditional legal defenses. Appeal of Town of Bethlehem, 154 N.H. at 326-29, 911 A.2d 1. Although we have stated that res judicata and collateral estoppel may preclude the relitigation of issues decided in prior administrative decisions, see Tyler v. Hannaford Bros., 161 N.H. 242, 246, 13 A.3d 325 (2010); Cook v. Sullivan, 149 N.H. 774, 777-78, 829 A.2d 1059 (2003), these doctrines cannot operate in RSA 72:12-a determinations because the process used has a uniquely non-adjudicative character. As to the Town's reliance on administrative finality, we note that doctrine provides for a qualified and limited preclusion, wherein a second application for [a] substantially similar outcome from an administrative agency is barred unless the applicant can demonstrate a change in material circumstances between the two applications. Johnston Ambulatory Surg. Assoc. v. Nolan, 755 A.2d 799, 809 (R.I.2000). We have not adopted this doctrine in the context of DES tax exemption investigations, but we have applied a similar doctrine in the context of zoning board of appeal decisions. See Appeal of Parkland Med. Ctr., 158 N.H. 67, 71, 960 A.2d 352 (2008). Assuming the doctrine does apply here, the Town's argument nonetheless fails. There have been material changes since the prior application and the statute itself has been modified. Cf. Brandt Dev. Co. v. City of Somersworth, 162 N.H. 553, 34 A.3d 593 (2011). Accordingly, NextEra's application would not be barred by administrative finality, and thus we need not determine whether administrative finality applies to DES decisions under RSA 72:12-a.