One of many judgment articles: I am a judgment broker, not a lawyer, and this article is my opinion, please consult with a lawyer if you need legal advice.
Collateral estoppel is a form of issue preclusion, and is a common law estoppel doctrine that prevents a person from re-litigating an issue in court. Once a court has decided an issue based on the facts and/or laws necessary to render a judgment, that decision prevents re-litigation of the same issues in another lawsuit on a different cause of action involving the party in the first lawsuit case.
The rationale behind issue preclusion is to prevent legal harassment, and to reduce abuse and/or the wasting of judicial resources.
Potential parties can be prevented from litigating previous court decisions. The determinations preventing re-litigation may be issues of fact or issues of law.
Final judgments must be issued by courts having appropriate jurisdiction over the personal and subject matters. Final judgments from state courts are given a preclusive effect when brought to other state and federal courts under the Full Faith and Credit Clause of the US Constitution.
An error on a judgment does not make the court decision invalid. Reversible errors must be appealed. The legal defense of collateral estoppel applies even if there is an error on the judgment, or if there was an erroneous usage of legal principles.
Collateral estoppel does not prevent an appeal of a decision, or a party from later politely arguing to a judge, and asking for a new revised decision.
Especially in federal court, judgments on appeal are usually given preclusive status. However, if the judgment is vacated, the preclusive effect of the judgment disappears.
Most courts no longer require mutuality (both sides of the judgment want a collateral estoppel ruling) as a requirement. Without mutuality, courts are more hesitant to apply collateral estoppel for a defendant from a previous judgment, when the defendant gets sued by a new plaintiff for the same issue(s).
Collateral estoppel potentially raises constitutional due process issues, especially when it is applied to a party that did not participate in the original lawsuit. Due process requires that collateral estoppel be applied to a party that has litigated the issue(s) in dispute.
Every disputant is entitled to their day in court, and usually cannot be bound by a failure of another disputant’s lawsuit, even if that other disputant has exactly the same factual and legal arguments. Collateral estoppel may be used either defensively or offensively; either mutually or non-mutually.
Collateral estoppel can be avoided as a defense, if the claimant did not have a fair and full opportunity to litigate the issue(s) decided by a state court. If this happens, they may then file a lawsuit in federal court to challenge the adequacy of the state procedures. In this situation, the plaintiff’s lawsuit would be vs the state, not VS the other party in the prior suit.
Res judicata may be used as a defense in a second lawsuit, which involves the same claims as the prior lawsuit. Res judicata is conclusive for all matters which were litigated, as well as all matters which could have been litigated in the prior lawsuit. In collateral estoppel cases, the judgment only covers the issues that were actually previously litigated.