Opinion ID: 167148
Heading Depth: 2
Heading Rank: 2

Heading: application of collateral estoppel to post-april 3, 2001, claims

Text: 20 B-S Steel next contends that the district court erred in applying the doctrine of collateral estoppel to prevent it from pursuing its post-April 3, 2001, claims against the appellees. In making this argument, B-S Steel invokes the traditional `jurisdictional competence' limitation on preclusion doctrine, suggesting that because the arbitration proceeding had no jurisdiction over claims regarding post-April 3, 2001, transactions, collateral estoppel cannot apply to bar those claims in district court. Appellant's Br. at 26. However, the cases cited by B-S Steel in support of this argument apply this limitation to the doctrine of res judicata, or claim preclusion, which normally bars not only claims that were actually raised in a prior proceeding but also claims that  could have been raised  but were not. Wolf v. Gruntal & Co., 45 F.3d 524, 527 (1st Cir.1995) (distinguishing res judicata from collateral estoppel on that basis). The concept of jurisdictional competence simply recognizes that a particular claim could not have been raised in the prior proceeding and that res judicata is therefore inapplicable. 21 In contrast to res judicata, the doctrine of collateral estoppel, also known as issue preclusion, attaches only `[w]hen an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment.' Arizona v. California, 530 U.S. 392, 414, 120 S.Ct. 2304, 147 L.Ed.2d 374 (2000) (quoting Restatement (Second) of Judgments § 27, at 250 (1982)). This circuit has previously applied collateral estoppel to a confirmed arbitration award. Coffey v. Dean Witter Reynolds Inc., 961 F.2d 922, 927-28 (10th Cir.1992); see 18B Charles A. Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice & Procedure § 4475.1, at 514-18. The doctrine precludes a court from reconsidering an issue previously decided in a prior action where 22 (1) the issue previously decided is identical with the one presented in the action in question, (2) the prior action has been finally adjudicated on the merits, (3) the party against whom the doctrine is invoked was a party, or in privity with a party, to the prior adjudication, and (4) the party against whom the doctrine is raised had a full and fair opportunity to litigate the issue in the prior action. 23 Estate of True v. C.I.R., 390 F.3d 1210, 1232 (10th Cir.2004). 24 B-S Steel concedes the second and third requirements but argues that the first and fourth requirements are not met here. Specifically, it contends that because the arbitration was restricted to B-S Steel's pre-April 3, 2001, claims, the issues before the arbitration panel and in this lawsuit are not identical. Further, it maintains that it lacked a full and fair opportunity to litigate issues critical to its post-April 3, 2001 claims. Appellant's Br. at 20. We disagree. 25 In order to satisfy the first prong, it is necessary, in the arbitration context, to determine `with clarity and certainty' that the same issues were resolved. Bear Stearns & Co., Inc. v. 1109580 Ontario, Inc., 409 F.3d 87, 91 (2d Cir.2005). B-S Steel suggests that [i]t is axiomatic that. . . issues involving conduct in one time period are different than . . . issues based on different conduct in a different time period. Appellant's Br. at 24. On the other hand, the appellees identify the issue in both the arbitration and the present lawsuit as follows: [C]ould plaintiff prove [an amount of] damages for any month between October, 1999 and December, 2001 ([under a] lost sales [theory]) or October, 1999 and October, 2002 ([under a] margin squeeze [theory]). Appellee's Br. at 30. They argue that, because B-S Steel submitted Redler's damages report as evidence in both proceedings, the arbitrators' rejection of the report makes the report inadmissible in this case. They then suggest that Redler's report is the only evidence of an amount of damages available and its exclusion thus precludes any quantification of damages. 26 The district court determined that collateral estoppel was appropriate because even though the arbitrators did not adjudicate B-S Steel's post April 2001 [Robinson-Patman] Act claim, they did decide that B-S Steel had suffered no damage[s], either before or after April 2001, from price discrimination. B-S Steel II, 327 F.Supp.2d at 1263. Indeed, the court suggested that the arbitrators had made this determination in respect to transactions occurring before or after April 3, 2001. Id. The arbitrators, however, never indicated that this was the case. Rather, they explicitly recognized that the scope of the claims before the panel [is] limited to transactions occurring between the fourth quarter of 1999 and April 3, 2001. Reasoned Award at 7, Appellant's App. Vol. IV at 859. Thus, the price discrimination to which their decisions refer must be that which occurred before April 3, 2001. In other words, the arbitrators' finding was that B-S Steel had suffered no damages after April 3, 2001, as a result of Midlothian's pre-April 3, 2001, violations, not that B-S Steel suffered no damages after April 3, 2001, as a result of any violation by Midlothian or the appellees at any time. 10 The question is whether this distinction is significant for purposes of a collateral estoppel analysis. 11 27 Other jurisdictions have recognized the principle that matters adjudged as to one time period are not necessarily an estoppel to other time periods. Int'l Shoe Mach. Corp. v. United Shoe Mach. Corp., 315 F.2d 449, 455 (1st Cir.1963); see also Harkins Amusement Enters., Inc. v. Harry Nace Co., 890 F.2d 181, 183 (9th Cir.1989) (rejecting idea that collateral estoppel barred a suit for conspiracy where the plaintiff alleges conduct that occurred in a different time period). This is particularly true when significant new facts grow out of a continuing course of conduct. Hawksbill Sea Turtle v. Fed. Emergency Mgmt. Agency, 126 F.3d 461, 477 (3d Cir. 1997). At the same time, a different time period alone does not necessarily preclude application of collateral estoppel. See Pignons S.A. de Mecanique v. Polaroid Corp., 701 F.2d 1, 2 (1st Cir.1983) (applying collateral estoppel in a false advertising case based on advertisements published after 1980 where the prior case involved nearly identical advertisements published prior to 1980). The Restatement of Judgments suggests a number of factors that are relevant in distinguishing between situations where collateral estoppel is and is not appropriate in this context: 28 Is there a substantial overlap between the evidence or argument to be advanced in the second proceeding and that advanced in the first? Does the new evidence or argument involve application of the same rule of law as that involved in the prior proceeding? Could pretrial preparation and discovery relating to the matter presented in the first action reasonably be expected to have embraced the matter sought to be presented in the second? How closely related are the claims involved in the two proceedings? 29 Restatement (Second) of Judgments § 27 cmt. c. Where these questions can be answered in the affirmative, it is likely that the issue involved in the two proceedings is the same. 30 In the present case, we are concerned with the same claims alleging the same conduct over two consecutive time periods, arbitrarily separated by the effective end date of an arbitration agreement between the parties. It is not necessarily true that the amount of damages sustained as a result of ongoing conduct must remain uniform over the entire period of time the conduct continues. Thus, conceivably, the evidence of damages may differ for different time periods. Here, however, as indicated above, B-S Steel conducted discovery simultaneously in the two proceedings at issue and submitted Redler's damages report as evidence of the amount of damages both in the arbitration and in district court. Redler's report made no attempt to disaggregate the damages that it calculated according to whether they were caused by incentive sales that occurred before or after April 3, 2001. Indeed, B-S Steel has not suggested that the damages amounts for the two claims would be different, or, if different, that the disaggregation would require anything beyond dividing the total amount among the number of months in each period. For example, B-S Steel does not contend that the cumulative impact of ongoing incentives to its competitors has exacerbated the damages that it may have sustained as a result of the defendants' post-April 3, 2001, violations, nor does it point to any specific result of post-April 3, 2001, violations that could have led to a type of injury that could not have been contemplated as resulting from pre-April 3, 2001, violations. Cf. Ritchie v. Landau, 475 F.2d 151, 154-55 (2d Cir.1973) (applying collateral estoppel to preclude the plaintiff from seeking a bonus directly from a company's president where he had failed to obtain the bonus in arbitration with the company and he sought the entire amount of the bonus in both proceedings). 31 B-S Steel does claim that the arbitration panel refused to consider evidence of transactions that occurred after April 3, 2001, arguing that [s]ubstantial evidence of injury in the post-April 3, 2001 period was not presented [in the arbitration] because of objections by Midlothian, [and] the arbitrators['] unwillingness to hear or consider it. Appellant's Br. at 29. However, B-S Steel fails to specify any excluded evidence of post-April 3, 2001, damages sustained as a result of the discriminatory pricing program in effect until December 2001, during the period B-S Steel was undisputedly a purchaser of WFB from the defendants. 12 Rather, it focuses on the arbitrators' exclusion of evidence in connection with new rebate programs that allegedly went into effect after December 2001. 32 Along the same lines, B-S Steel also argues that new evidence has become available regarding ongoing Deals between the defendants and one of its competitors. Appellant's Br. at 33. The new evidence to which B-S Steel refers in its brief all relates to post-December 2001 deals in which the defendants allegedly engaged in further discriminatory pricing. 13 B-S Steel included the claim that these new deals also violated the Robinson-Patman Act in the district court's final pretrial order. 33 However, in order to prove a violation of § 2 of the Robinson-Patman Act, 15 U.S.C. § 13, in regard to these new deals, B-S Steel would have to show that the deals granted more favorable prices than those granted to B-S Steel in its reasonably contemporaneous purchases. Motive Parts Warehouse v. Facet Enters., 774 F.2d 380, 389-90 (10th Cir.1985); see also A.A. Poultry Farms, Inc. v. Rose Acre Farms, Inc., 881 F.2d 1396, 1407 (7th Cir. 1989); Sec. Tire & Rubber Co. v. Gates Rubber Co., 598 F.2d 962, 964 (5th Cir. 1979). While B-S Steel disputes the appellees' claim that it only made a single purchase of 18.9 tons after April 3, 2001, the latest that it alleges making purchases is August 2001. B-S Steel has offered no basis for concluding that these purchases should be deemed reasonably contemporaneous with those made by B-S Steel's competitors after December 2001. See England v. Chrysler Corp., 493 F.2d 269, 272 (9th Cir.1974) (sixteen-month time span between promotional allowances for new or relocated car dealerships defeated Robinson-Patman Act claim); Atalanta Trading Corp. v. FTC, 258 F.2d 365, 371 (2d Cir.1958) (seven-month period between pork sales not contemporaneous); Maier-Schule GMC, Inc. v. Gen. Motors Corp., 780 F.Supp. 984, 989 (W.D.N.Y.1991) (no § 2(a) violation where plaintiff failed to show it made purchases in same year alleged violation occurred). But see Fred Meyer, Inc. v. FTC, 359 F.2d 351, 357 (9th Cir.1966) (concluding that there was substantial evidence supporting FTC's determination that sales over a number of years occurred during the same time period where the sales are of a single, fairly standardized item, widely sold in the area, and recur frequently during the years involved), rev'd in part on other grounds, 390 U.S. 341, 88 S.Ct. 904, 19 L.Ed.2d 1222 (1968). This new evidence thus does not add anything significant to B-S Steel's claim for damages resulting from post-April 3, 2001, transactions. 34 Based on the considerations discussed above, we conclude the issue involved here is identical to the one decided in the arbitration. B-S Steel also argues that it did not have a full and fair opportunity to litigate the issue because of its inability to present to the arbitration panel the evidence of price discrimination that B-S Steel alleges occurred after December 2001. As explained above, however, this new evidence is not significant for purposes of B-S Steel's damages claim and thus did not affect B-S Steel's opportunity to litigate the issue. 35 B-S Steel's final argument opposing collateral estoppel concerns the nature of arbitration agreements. According to B-S Steel, the contractual nature of the arbitrators' jurisdiction should prevent the arbitrators' award from having preclusive effect on issues and claims outside the Arbitration Period when such an effect was not intended by the contracting parties. Appellant's Br. at 24. It also contends that because an arbitration is a private rather than a judicial process, the application of doctrines of preclusion does not serve the same interests in judicial economy and avoidance of piecemeal litigation. We do not believe, however, that parties to an arbitration agreement could reasonably intend to allow the losing party to have a second chance to win in court on the very issue that he lost in arbitration. Such a result would undermine the legitimacy of the arbitration award itself, and of the arbitration process. Where, as here, the parties have invested considerable time and resources arbitrating an issue identical to that before a court, and the arbitration panel clearly articulates its findings on that issue, the court may consider this evidence that the parties intended the arbitration to have preclusive effect. 14 36 We therefore uphold the district court's summary judgment on B-S Steel's post-April 3, 2001, claims for damages.