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Parklane Hosiery Co. v. Shore

Supreme Court of the United States

October 30, 1978, Argued ; January 9, 1979, Decided

No. 77-1305

Case Summary

Procedural Posture

Certiorari was granted for a review of a judgment from the United States Court of Appeals for the Second Circuit, which reversed a denial of respondent's partial summary judgment motion where respondent sought to collaterally estop petitioner from relitigating the issues resolved in a separate action brought by the Securities and Exchange Commission.

Overview

Respondent sued, alleging misleading and material misrepresentations in petitioner's proxy statement. Before the action came to trial, the Securities and Exchange Commission (SEC) filed suit against petitioner, making essentially the same allegations, and entered a declaratory judgement after a trial. Respondent moved for a partial summary judgment to estop petitioner from relitigating the issues that had been resolved against them in the SEC action. The district court denied the motion on the ground that it violated petitioner's U.S. Const. amend. VII right to a jury trial. The court of appeals reversed. On review, the Court held that application of collateral estoppel did not violate petitioner's right to a jury trial, and mutuality was no longer required. The Court further held that the preferable approach was not to preclude the use of offensive collateral estoppel, but to grant trial courts broad discretion to determine its application. The general rule adopted by the Court was that offensive estoppel was precluded where plaintiff could have easily joined in the earlier action, or where application would be unfair to a defendant.

Outcome

The Court affirmed the judgment of the court of appeals.

LexisNexis® Headnotes

 

 

Evidence > Burdens of Proof > General Overview

Securities Law > Postoffering & Secondary Distributions > Proxies > General Overview

HN1  Evidence, Burdens of Proof

A private plaintiff in an action under the proxy rules is not entitled to relief simply by demonstrating that the proxy solicitation was materially false and misleading. The plaintiff must also show that he was injured and prove damages.

 

Civil Procedure > ... > Preclusion of Judgments > Estoppel > Collateral Estoppel

Civil Procedure > Judgments > Preclusion of Judgments > General Overview

Civil Procedure > ... > Preclusion of Judgments > Estoppel > General Overview

Civil Procedure > Judgments > Preclusion of Judgments > Res Judicata

HN2  Estoppel, Collateral Estoppel

Collateral estoppel, like the related doctrine of res judicata, has the dual purpose of protecting litigants from the burden of relitigating an identical issue with the same party or his privy and of promoting judicial economy by preventing needless litigation.

 

Civil Procedure > ... > Preclusion of Judgments > Estoppel > Collateral Estoppel

Civil Procedure > Judgments > Preclusion of Judgments > General Overview

Civil Procedure > ... > Preclusion of Judgments > Estoppel > General Overview

Civil Procedure > Judgments > Preclusion of Judgments > Res Judicata

HN3  Estoppel, Collateral Estoppel

Under the doctrine of res judicata, a judgment on the merits in a prior suit bars a second suit involving the same parties or their privies based on the same cause of action. Under the doctrine of collateral estoppel, on the other hand, the second action is upon a different cause of action and the judgment in the prior suit precludes relitigation of issues actually litigated and necessary to the outcome of the first action.

 

Civil Procedure > ... > Preclusion of Judgments > Estoppel > Collateral Estoppel

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439 U.S. 322 ; 99 S. Ct. 645 ; 58 L. Ed. 2d 552 ; 1979 U.S. LEXIS 50 ; Fed. Sec. L. Rep. (CCH) P96,713; 26 Fed. R. Serv. 2d (Callaghan) 669

PARKLANE HOSIERY CO., INC., ET AL. v. SHORE

Prior History:  [1]  CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT.

Disposition:  565 F.2d 815, affirmed.