Opinion ID: 210864
Heading Depth: 2
Heading Rank: 2

Heading: Defaulting Defendants

Text: 41 The trial court granted judgment in favor of Transclean and against the Defaulting Defendants at a time before the 42 [474 F.3d 1308] 43 merits of the suit had been aired, and before the claim preclusion issues had been fully litigated. The trial court subsequently applied issue preclusion to limit the award of damages against the Defaulting Defendants, awarding an amount lower than Transclean believed it was entitled to. That issue is before us on appeal. We need not decide the measure of damages issue, however, because we believe that Transclean's claims against the Defaulting Defendants should be barred by claim preclusion just as Transclean's claims against the Participating Defendants were barred. 44 Although the Defaulting Defendants did not plead claim preclusion as an affirmative defense, preclusion issues may be raised by a court sua sponte. This is precisely what the trial court in this case did when it raised the defense of issue preclusion on behalf of the Defaulting Defendants in determining the damages award against them. Although the general rule is that claim preclusion and issue preclusion must be pleaded, an exception exists where all relevant data and legal records are before the court and the demands of comity, continuity in the law, and essential justice mandate invocation of preclusion principles. Damages Opinion, 2005 WL 2406036, at  (citing Warnock v. Pecos County, Tex., 116 F.3d 776, 778 (5th Cir.1997)). The trial court found that these interests weighed in favor of applying issue preclusion to the Defaulting Defendants. 4 45 We conclude that claim preclusion should be invoked in favor of the Defaulting Defendants for essentially the same reasons the trial court invoked issue preclusion on their behalf. See Columbia Steel Fabricators, Inc. v. Ahlstrom Recovery, 44 F.3d 800, 802-03 (9th Cir.1995) (applying claim preclusion sua sponte to non-appearing defendant). Transclean admitted that all the defendants in this case were in privity with Bridgewood because they purchased T-Tech machines from Bridgewood. Transclean never distinguished between the Participating Defendants and the Defaulting Defendants when it conceded privity; its later statements about privity focused on the Participating Defendants only because the trial court had already entered default judgment against the Defaulting Defendants. Transclean had a full and fair opportunity to present its arguments on privity and claim preclusion, and those arguments would not be any different with respect to the Defaulting Defendants than they are with respect to the Participating Defendants. It would be anomalous to preclude Transclean's claims against one group of defendants while allowing recovery from a second group of defendants when, as a result of Transclean's admission regarding privity, the elements of claim preclusion are satisfied for both groups. Under these circumstances, we believe that as a matter of law and fairness claim preclusion should bar Transclean's infringement claims against the Defaulting Defendants as well as those against the Participating Defendants. 5 Accordingly, the judgment against the Defaulting Defendants is reversed. COSTS 46 Each party shall bear its own costs. 47 [474 F.3d 1309] 48 AFFIRMED-IN-PART and REVERSED-IN-PART.