An incorrect conclusion of the court in the first suit does not cause defendant to forsake the protection of res judicata (and by extension, of CE).
Collateral estoppel cases raise constitutional due process problems, particularly when it is applied to a party that did not participate in the original suit.
In this situation, note that the defendant did not have the opportunity to use the nine judgments in its favor as collateral estoppel against subsequent plaintiffs, because that would violate their right to a day in court.
As suggested by the U.S. Supreme Court in Parklane Hosiery Co, Inc. v. Shore,[4] to allow a subsequent plaintiff to use the tenth, negative judgment as collateral estoppel against the defendant may seem unjust.
The California Supreme Court case of Bernhard v. Bank of America,[5] authored by justice Roger J. Traynor, began a movement away from the application of mutuality in collateral estoppel.
The precedent of Bernhard holds that collateral estoppel may be used as defense against any party who has fully and fairly litigated an issue in a previous action.
Collateral estoppel may be used either defensively or offensively; mutually or non-mutually: Collateral estoppel may be avoided as a defense if the claimant did not have a full and fair opportunity to litigate the issue decided by a state court, which means he may file suit in federal court to challenge the adequacy of state procedures.
[9] Collateral estoppel is an efficiency rule that is meant to save judicial resources by avoiding the relitigation of issues of fact that have already been litigated.
Collateral estoppel is closely related to the concept of claim preclusion, which prevents parties relitigating the same cause of action after it has been decided by a judge or jury.
In 1970 in Ashe v. Swenson,[11] the United States Supreme Court applied it to double jeopardy to limit prosecution for crimes committed at the same time.