Opinion ID: 389221
Heading Depth: 1
Heading Rank: 1

Heading: res judicata effect of the los angeles judgment

Text: 7 The Supreme Court, in the case of Montana v. United States, 440 U.S. 147, 99 S.Ct. 970, 59 L.Ed.2d 210 (1979), recently reaffirmed the basic principles applicable to the situation at bar: 8 A fundamental precept of common-law adjudication, embodied in the related doctrines of collateral estoppel and res judicata, is that a right, question or fact distinctly put in issue and directly determined by a court of competent jurisdiction ... cannot be disputed in a subsequent suit between the same parties or their privies .... (citation omitted). Under res judicata, a final judgment on the merits bars further claims by parties or their privies based on the same cause of action. (citations omitted). Under collateral estoppel, once an issue is actually and necessarily determined by a court of competent jurisdiction, that determination is conclusive in subsequent suits based on a different cause of action involving a party to the prior litigation .... 9 These interests are similarly implicated when nonparties assume control over litigation in which they have a direct financial or proprietary interest and then seek to redetermine issues previously resolved.... Preclusion of such nonparties falls under the rubric of collateral estoppel rather than res judicata because the latter doctrine presupposes identity between causes of action. And the cause of action which a nonparty has vicariously asserted differs by definition from that which he subsequently seeks to litigate in his own right. 10 440 U.S. at 153-54, 99 S.Ct. at 973 (footnote omitted). 11 In Montana, the United States stipulated a number of facts indicating that it had controlled a lawsuit brought by a contractor to invalidate a state tax, so that the Court did not have to resolve any factual questions in finding the control necessary to trigger collateral estoppel. In the instant case, however, Quinton has not so stipulated, and has argued forcefully that its actions with respect to the Los Angeles litigation do not constitute control. 12 Whether a nonparty controlled the earlier litigation is a question of fact for the trial court. Ransburg Electro-Coating Corp. v. Lansdale Finishers, Inc., 484 F.2d 1037, 1038 (3d Cir. 1973). Factors important to a finding of control include selection and payment of counsel, payment of litigation expenses, a written indemnification agreement, participation in settlement negotiations, and control over the decision to appeal. TRW, Inc. v. Ellipse Corp., 495 F.2d 314, 318 (7th Cir. 1974); Troy Company v. Products Research Company, 339 F.2d 364, 367 (9th Cir. 1964). Quinton presented extensive factual argument in the Seattle court to the effect that it did not meet these factors, and did not occupy the close relationship to the Los Angeles litigation under which collateral estoppel principles would apply. So long as the January 1979 order stood unchallenged, however, Quinton was bound by res judicata on the finding that Quinton had substantial control over the Los Angeles litigation, and could not controvert that finding in Seattle. Given Quinton's control of the Los Angeles litigation, collateral estopped applied as to the issues determined in that litigation. Quinton's liability to Del Mar in the Seattle suit was thus properly established by summary judgment. Fed.R.Civ.P. 56; Ransburg, 484 F.2d at 1039. 13 Quinton of course could have directly challenged the validity of the Los Angeles finding of litigation control by appealing the extension of the injunction. Having failed to do so, Quinton may not relitigate the issue in the Seattle court, because it is bound by res judicata. We note that Quinton will be ultimately liable via its indemnification agreement for the damages paid by Physio-Tronics. However, Del Mar concedes that it is not entitled to double recovery and we assume that the Seattle court will insure that there is no duplication in any damages that may be awarded.