United States v. Stauffer Chem. Co., 464 U.S. 165 (1984)

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Author: Justice White

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United States v. Stauffer Chem. Co., 464 U.S. 165 (1984)

JUSTICE WHITE, concurring in the result.

I agree with the majority that within the Tenth Circuit Stauffer is insulated from further litigation with the EPA on the private contractor issue. Though it is a harder question, I also agree that the court below correctly found that the EPA was barred from litigating this issue with Stauffer in the Sixth Circuit, which had not adopted a position on the merits. I write separately because I do not believe that estoppel should be applied any further than that.

I

Relying on Montana v. United States, 440 U.S. 147 (1979), the majority states that the limits to collateral estoppel on unmixed questions of law, whatever they may be, are not exceeded here where the Government has attempted "to litigate twice with the same party an issue arising in both cases from virtually identical facts." Ante at 172. Two cases need not arise from the very same facts or transaction to constitute the same "demand." Ante at 172, n. 5.

Any factual differences between the two cases, such as the difference in the location of the plants and the difference in the private contracting firms involved, are of no legal significance whatever in resolving the issue presented in both cases.

Ante at 172. Thus, this case falls squarely within Montana.

Montana’s relevance to this case seems to me more limited. Montana involved duplicative suits, filed a month apart and each challenging the same state tax on the same contractor working on the same project. The two suits in this case do not seem to me to be as close as those in Montana. Assuming, however, that the two "demands" here are as closely related factually as those in Montana, application of collateral estoppel is still not compelled. The majority’s reasoning would be plausible if the second attempted inspection occurred at a different plant and with a different contractor, but within the same circuit as the first. It may be of "legal significance," however, that the inspections occurred in different jurisdictions.

It is true that, in Montana, the first lawsuit was brought in state court and the second in federal. However, the two courts had concurrent jurisdiction. The Government had the initial choice of suing in either. Having made that choice, it was held to it. See 440 U.S. at 163. This case presents a different situation. The Wyoming inspection could not have been litigated in the Sixth Circuit; the Tennessee inspection could not have been litigated in the Tenth Circuit. It may be fair to say that, if the second claim could not have been brought in the same court as the first, it is a different "demand." Cf. Montana, supra, at 153 (collateral estoppel is "central to the purpose for which civil courts have been established, the conclusive resolution of disputes within their jurisdictions") (emphasis added). In addition, there are considerations of comity in the state/federal situation that are not present as between two circuits. See, e.g., Allen v. McCurry, 449 U.S. 90, 95-96 (1980).

I do not rely on this conception of the same "demand," however. For even if Montana’s delineation of the same "demand" does extend beyond jurisdictional boundaries, there is no justification for applying collateral estoppel, which is a flexible, judge-made doctrine, in situations where the policy concerns underlying it are absent. The notion of the "same demand" is, at most, a guide to identifying instances where policy does support preclusion. The Montana Court itself was very careful to examine general policy reasons for and against preclusion. 440 U.S. at 155, 158-164. Its decision was anything but an inflexible application of preclusion. Because the two suits were on the same demand, the unmixed question of law exception did not apply; but Montana neither began nor ended with this question, and neither should the Court here. Preclusion must be evaluated in light of the policy concerns underlying the doctrine.

II

Collateral estoppel is generally said to have three purposes: to

relieve parties of the cost and vexation of multiple lawsuits, conserve judicial resources, and, by preventing inconsistent decisions, encourage reliance on adjudication.

Allen v. McCurry, supra, at 94. It is plain that all three purposes are served by foreclosing further litigation on this issue between these parties in the Tenth Circuit, and that Stauffer should therefore be fully insulated against relitigation there. The Government argues that, even in the Tenth Circuit, it is entitled to attempt to inspect Stauffer with private contractors and to relitigate this issue "after an appropriate time," which it estimates at one year. Such an approach would authorize exactly the sort of duplicative litigation that collateral estoppel is designed to avoid. Cf. United States v. Moser, 266 U.S. 236 (1924). Thus, I unhesitatingly agree with the majority in its rejection of the Government’s position.

III

Outside the Tenth Circuit, the policies of judicial economy and consistency are much less compelling. At least where, as here, one party is a governmental agency administering a public law, judicial economy is not advanced; the Government can always force a ruling on the merits by suing someone else. See ante at 173. See generally United States v. Mendoza, ante p. 154. And if the circuit has ruled on the merits in another case, reliance on stare decisis is no more burdensome than reliance on collateral estoppel. The policy against inconsistent decisions is much less relevant outside the original circuit. Conflicts in the circuits are generally accepted, and in some ways even welcomed. Indeed, were consistency a compelling concern as between circuits, the decision of one circuit would bind the others even in litigation between two entirely different parties. That is not the route the federal courts have followed. However, applying collateral estoppel in other circuits would spare Stauffer the burden of fighting a battle that it has won once. In the absence of countervailing considerations, I am satisfied that this interest is adequate to support the lower court’s ruling here. See ante at 172.

IV

Preclusion was justified, however, only because the Sixth Circuit had not previously ruled on the Clean Air Act issue. Stauffer argues that Stauffer I also immunizes it in the Ninth Circuit, which has adopted a different rule than the Tenth on the merits. See Bunker Hill Co. Lead & Zinc Smelter v. EPA, 658 F.2d 1280 (1981). Under this view, private contractors may join EPA inspections of all plants in that Circuit except those owned by Stauffer. The majority does not address this contention, considering it "more than is necessary to dispose of the case before us." Ante at 174. I do address it, however, for it is only because today’s result does not afford Stauffer the blanket protection it seeks that I concur in the judgment.

A

Extending preclusion to circuits that have adopted a contrary rule on the merits would be acceptable were it supported by any affirmative policy. It is not. Judicial economy is not served for the simple reason that no litigation is prevented; the prior litigant is subject to one black-letter rule rather than another. For the same reason, there is no concern about protecting the prior litigant from repetitious, vexatious, or harassing litigation. Finally, to the extent the policy against inconsistent decisions remains relevant when a circuit conflict exists, it cuts the other way. At least some measure of consistency and certainty is obtained by evenhanded application of rules within individual circuits.

B

Not only is there no affirmative reason for preclusion in such circumstances, powerful considerations cut the other way. Cf. Standefer v. United States, 447 U.S. 10, 25 (1980). The inconsistency is more dramatic and more troublesome than a normal circuit split; by definition, it compounds that problem. It would be dubious enough were the EPA unable to employ private contractors to inspect Stauffer’s plants within the Ninth Circuit even though it can use such contractors in inspecting other plants. But the disarray is more extensive. By the same application of mutual collateral estoppel, the EPA could presumably use private contractors to inspect Bunker Hill’s plants in circuits like the Tenth, despite the fact that other companies are not subject to such inspections. Furthermore, Stauffer concedes, and today we hold in Mendoza, that the EPA can relitigate this matter as to other companies. As a result, in, say, the First Circuit, the EPA must follow one rule as to Bunker Hill, the opposite as to Stauffer, and, depending on any ruling by that Circuit, one or the other or a third as to other companies.

This confusing state of affairs far exceeds in awkwardness a normal split in the circuits. It is especially undesirable because it grants a special benefit to, or imposes a special detriment on, particular companies. In general, persons present in several circuits must conduct themselves in accordance with varying rules, just as they are subject to different state laws. Other companies with plants in several circuits do not enjoy a favorable rule nationwide, like Stauffer, nor do they have to put up with an unfavorable rule nationwide, like Bunker Hill. A split in the circuits cannot justify abandonment of all efforts at evenhanded and rational application of legal rules. Nor is the mere fact that these companies happen to have been involved in litigation elsewhere sufficient reason for uniquely favored or disfavored status.

Such misapplication of collateral estoppel has been condemned by this Court before. For example, in United States v. Stone & Downer Co., 274 U.S. 225 (1927), it had been established in a prior action that certain imports were duty free. In a later suit involving the classification of similar goods imported by the same defendant, the Court of Customs Appeals refused to apply collateral estoppel, and this Court affirmed. Application of the doctrine would mean that an importer, having once obtained a favorable judgment, would be able to undersell others, while an importer having lost a case would be unable to compete. "Such a result would lead to inequality in the administration of the customs law, to discrimination and to great injustice and confusion." Id. at 236. The same concerns were evident in Commissioner v. Sunnen, 333 U.S. 591 (1948). There the Court noted the inequality that would flow from blanket application of collateral estoppel in the tax area. A taxpayer is not entitled to the benefit of his judgment if there has been "a subsequent . . . change or development in the controlling legal principles." Id. at 599. Otherwise, he would enjoy preferential treatment. Such discrimination is to be avoided, because collateral estoppel

is not meant to create vested rights in decisions that have become obsolete or erroneous with time, thereby causing inequities among taxpayers.

Ibid.

There is no real difference between those cases and this one. In each, the prior litigant escapes strictures that apply to others solely because he litigated the issue once before and prevailed. As the Restatement points out,

[r]efusal of preclusion is ordinarily justified if the effect of applying preclusion is to give one person a favored position in current administration of a law.

Restatement (Second) of Judgments § 28, Comment c (1982).{1}

C

Cases like Sunnen and Stone & Downer merely recognize that collateral estoppel on issues of law, which is a narrow, flexible, judge-made doctrine, becomes intolerable if the rule of law at issue is too far removed from the prevailing legal rules. Even Stauffer concedes that a decision from this Court on the merits would so affect the "controlling law" that it would lose the entire benefit of the initial judgment in its favor. Similarly, no one contends that, if Congress amended the statute to make the opposite result plain, Stauffer could continue to rely on the original judgment. And presumably if the Tenth Circuit were to reverse itself, en banc, and hold that private contractors could make EPA inspections, then Stauffer would no longer be able to keep them out on the authority of Stauffer I. Finally, it is apparent that, if, for example, Stauffer has plants in Canada, it cannot impose the Tenth Circuit’s inspection requirements on the Canadian authorities. Why then should Stauffer be able to use the decisions of the Sixth and Tenth Circuits to estop the Government in the Ninth Circuit, where the opposite rule prevails? The decisions of those other Circuits are not the "controlling law" in the Ninth; the controlling law in the Ninth is exactly to the contrary. There is no difference between this situation and that where the law within a particular jurisdiction has changed since the initial decision.

V

The doctrine of collateral estoppel is designed to ensure litigants the benefit of prior litigation; this is not the same as ensuring them the benefits of a prior ruling.{2} In arguing that Stauffer I precludes the EPA nationwide from relitigating this issue against it, Stauffer stretches the doctrine beyond the breaking point. It claims a right to a unique status. Put differently, Stauffer claims immunity from a particular legal rule, not immunity from further litigation. At this point, considerations of economy are no longer involved, and Stauffer’s approach leads to results that are basically inconsistent with the principle of evenhanded administration of the laws.

In sum, I concur in the judgment of the Court. I do so with the view that preclusion is inappropriate in circuits that have adopted, or later adopt, the contrary legal rule.

1. According to the Restatement, relitigation of an issue is not precluded if

[t]he issue is one of law and (a) the two actions involve claims that are substantially unrelated, or (b) a new determination is warranted in order to take account of an intervening change in the applicable legal context or otherwise to avoid inequitable administration of the laws. . . .

Restatement (Second) of Judgments § 28 (1982). Even if part (a) is inapplicable in the circumstances of this case, it seems clear to me that both prongs of part (b) apply to litigation in a circuit where the prevailing legal rule is different from that established in earlier litigation in another jurisdiction.

2. This distinction is perhaps reflected in the "same demand" limitation on estoppel on pure issues of law. As Professor Scott wrote four decades ago,

if a court erroneously holds that a gratuitous promise is binding, that holding is not conclusive as to subsequent contracts made between the same parties.

Scott, Collateral Estoppel by Judgment, 56 Harv.L.Rev. 1, 7 (1942). See also United States v. Moser, 266 U.S. 236, 242 (1924) (res judicata "does not apply to unmixed questions of law . . . [b]ut a fact, question or right distinctly adjudged in the original action cannot be disputed in a subsequent action") (emphasis in original). The distinction is between an abstract legal proposition and the application of that proposition to particular facts.

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Chicago: White, "White, J., Concurring," United States v. Stauffer Chem. Co., 464 U.S. 165 (1984) in 464 U.S. 165 464 U.S. 175–464 U.S. 182. Original Sources, accessed September 21, 2018, http://www.originalsources.com/Document.aspx?DocID=D1R2B7IURDRTG6S.

MLA: White. "White, J., Concurring." United States v. Stauffer Chem. Co., 464 U.S. 165 (1984), in 464 U.S. 165, pp. 464 U.S. 175–464 U.S. 182. Original Sources. 21 Sep. 2018. www.originalsources.com/Document.aspx?DocID=D1R2B7IURDRTG6S.

Harvard: White, 'White, J., Concurring' in United States v. Stauffer Chem. Co., 464 U.S. 165 (1984). cited in 1984, 464 U.S. 165, pp.464 U.S. 175–464 U.S. 182. Original Sources, retrieved 21 September 2018, from http://www.originalsources.com/Document.aspx?DocID=D1R2B7IURDRTG6S.