Ms. Bowen Ex Rel. John Doe, \"N\" v. William E. Arnold, Jr. ( 2016 )

IN THE SUPREME COURT OF TENNESSEE
AT NASHVILLE
June 2, 2016 Session1
MS. BOWEN EX REL. JOHN DOE, “N” v. WILLIAM E. ARNOLD, JR. ET
AL.
Appeal by Permission from the Court of Appeals
Circuit Court for Davidson County
No. 11C1425 Hamilton V. Gayden, Jr., Judge
___________________________________
No. M2015-00762-SC-R11-CV – Filed September 29, 2016
___________________________________
The determinative question in this appeal is whether the trial court erred in ruling that a
person convicted of rape and aggravated sexual battery is collaterally estopped in a
subsequent civil lawsuit filed by the victim of the criminal offenses from relitigating the
issue of whether he raped and sexually battered the victim. The trial court applied
collateral estoppel, explaining that, although the victim was not a party to the criminal
prosecution, the victim was in privity with the State, which satisfied the party mutuality
requirement necessary for collateral estoppel to apply. The trial court therefore granted
the plaintiffs partial summary judgment but permitted the defendant to seek an
interlocutory appeal pursuant to Tennessee Rule of Appellate Procedure 9. After the
Court of Appeals declined to accept the interlocutory appeal, the defendant filed an
application for permission to appeal in this Court, which we granted. We hereby abolish
the strict party mutuality requirement for offensive and defensive collateral estoppel and
adopt sections 29 and 85 of the Restatement (Second) of Judgments as the guidelines for
courts to follow when determining whether nonmutual collateral estoppel applies.
Having applied these guidelines to the undisputed facts in this appeal, we affirm the trial
court‘s decision granting partial summary judgment to the plaintiffs and remand this
matter to the trial court for further proceedings consistent with this decision.
Tenn. R. App. P. 11 Appeal by Permission;
Judgment of the Trial Court Affirmed
1
Oral arguments were heard on June 2, 2016, on the campus of Lipscomb University in
Nashville, Tennessee, as part of this Court‘s S.C.A.L.E.S. (Supreme Court Advancing Legal Education
for Students) project.
CORNELIA A. CLARK, J., delivered the opinion of the court, in which SHARON G. LEE,
C.J., and JEFFREY S. BIVINS, HOLLY KIRBY, and ROGER A. PAGE, JJ., joined.
Cary M. Kellar and Lance W. Thompson, Nashville, Tennessee, for the appellant,
William Edward Arnold.
Luvell L. Glanton and Herron T. Bond, Nashville, Tennessee, for the appellees, Ms.
Bowen and John Doe N.
OPINION
I. Factual Background2
In November 2010, a minor child, herein referred to as ―John Doe N,‖ reported to
his mother, Ms. Bowen,3 that William E. Arnold, Jr. had been raping and molesting him
for about eighteen months. Mr. Arnold was the child‘s mentor in a mentorship program
offered by the Boys and Girls Clubs of Middle Tennessee, in partnership with Big
Brothers Big Sisters of Tennessee. The Metropolitan Nashville Police Department
investigated the report, and on June 17, 2011, a Davidson County Grand Jury indicted
Mr. Arnold on three counts of aggravated sexual battery and three counts of rape of a
child.
Mr. Arnold‘s criminal trial commenced on July 8, 2013. John Doe N testified
extensively and was cross-examined by counsel for Mr. Arnold. At the conclusion of the
proof at trial, the trial court granted a motion for judgment of acquittal on two of the
counts of aggravated sexual battery. On July 12, 2013, the jury returned a verdict finding
Mr. Arnold guilty of the remaining count of aggravated sexual battery and of the three
counts of rape of a child. State v. Arnold, No. M2014-00075-CCA-R3-CD, 2015 WL
99272, at *1 (Tenn. Crim. App. Jan. 7, 2015). Following his conviction, Mr. Arnold
appealed to the Court of Criminal Appeals, challenging the trial court‘s denial of the
motion for judgment of acquittal as to the counts for which he was found guilty, the
2
This is an interlocutory appeal in a civil case which has not been tried; thus, the following facts
are gleaned from the documents included in the record on appeal. Additionally, the only parties to this
interlocutory appeal are Ms. Bowen, John Doe N, and Mr. Arnold. Although the technical record reflects
that much pretrial litigation has occurred involving the entity defendants, including an appeal and
appellate reversal of an order granting summary judgment to Big Brothers Big Sisters of America and an
agreed order of voluntary dismissal of the Boys and Girls Clubs of Middle Tennessee, these proceedings
are not relevant to the issue in this appeal. This opinion summarizes only the pleadings and trial court
rulings pertinent to the issue and parties in this appeal.
3
We refer to Ms. Bowen and John Doe N collectively as ―Ms. Bowen.‖ Additionally, to protect
John Doe N‘s privacy, this opinion and the public case history use only Ms. Bowen‘s surname.
-2-
denial of the motion for new trial, and the trial court‘s ruling on the admissibility of
evidence under Tennessee Rule of Evidence 412. Id. On January 7, 2015, the Court of
Criminal Appeals rejected these arguments and affirmed Mr. Arnold‘s convictions. Id.
On May 15, 2015, this Court denied Mr. Arnold‘s application for permission to appeal.
State v. Arnold, No. M2014-00075-SC-R11-CD (Tenn. May 15, 2015) (order denying
Tennessee Rule of Appellate Procedure 11 application and designating the Court of
Criminal Appeals‘ opinion as not for citation pursuant to Tennessee Supreme Court Rule
4, section E).
While the criminal proceeding made its way through the courts, this separate civil
lawsuit, filed April 8, 2011, two months before Mr. Arnold‘s indictment, remained
pending in the Circuit Court for Davidson County. The lawsuit, filed by Ms. Bowen
―individually and on behalf of‖ John Doe N, named Mr. Arnold as a defendant, along
with the Boys and Girls Clubs of Middle Tennessee, the Boys and Girls Clubs of
America, Big Brothers Big Sisters of Tennessee, and Big Brothers Big Sisters of
America. Ms. Bowen alleged that Mr. Arnold intentionally molested John Doe N and
that the entity defendants were negligent in various ways. Ms. Bowen sought
compensatory damages from the defendants of three-and-one-half million dollars.4
On January 12, 2015, one week after the Court of Criminal Appeals affirmed Mr.
Arnold‘s convictions, Ms. Bowen moved for partial summary judgment against Mr.
Arnold, arguing, based on his criminal convictions, that he was collaterally estopped
from relitigating in the civil lawsuit the issue of ―whether he raped and sexually battered‖
John Doe N. In his response in opposition to the motion, Mr. Arnold argued that
collateral estoppel did not apply because criminal and civil trials are ―wholly separate and
distinct proceedings‖ and involve different parties, interests, procedural rules, and
witnesses. Mr. Arnold supported his response with an affidavit, in which he professed
innocence of the crimes, stated that he had been falsely accused and wrongfully
convicted, and declared that he would continue to maintain his innocence of the crimes.5
He also argued that one of the elements necessary for application of the collateral
estoppel doctrine—party mutuality—was lacking because John Doe N was neither a
party to the criminal prosecution nor in privity with the State of Tennessee in the criminal
prosecution.
4
The allegations summarized in this opinion are those contained in a document titled ―Third
Amended Complaint,‖ which was filed on December 16, 2011. This document actually was the second
amended complaint.
5
Ms. Bowen and John Doe N filed a response to Mr. Arnold‘s response, and Mr. Arnold
subsequently filed a reply to their response. Both the response and the reply simply reiterated and
clarified the positions articulated in the initial motion and response.
-3-
On April 16, 2015, the trial court entered an order granting Ms. Bowen‘s motion
for partial summary judgment against Mr. Arnold. The trial court concluded that all
elements of the collateral estoppel had been established, and with respect to party
mutuality, found that John Doe N was ―in privity with the State of Tennessee from the
criminal case.‖ The trial court therefore ruled that collateral estoppel precluded Mr.
Arnold ―from raising the issue of whether he raped and sexually battered‖ John Doe N in
the civil lawsuit. By this same order the trial court granted Mr. Arnold permission to
seek an interlocutory appeal, Tenn. R. App. P. 9, and stayed further proceedings in the
trial court pending final disposition of the interlocutory appeal. On May 26, 2015, the
Court of Appeals denied Mr. Arnold‘s request for an interlocutory appeal. Mr. Arnold
then timely filed an application for permission to appeal in this Court. Tenn. R. App. P.
9(c), 11. We granted the application and set oral arguments at the Girls‘ State
S.C.A.L.E.S. project.
II. Standard of Review
The issue in this appeal—whether collateral estoppel applies—is a question of
law. Mullins v. State, 294 S.W.3d 529, 535 (Tenn. 2009). Thus, summary judgment is
an appropriate vehicle for resolving the issue. Id. (citing 18 James Wm. Moore et al.,
Moore‘s Federal Practice and Procedure § 132.05[7] (3d ed. 2009)). The party relying
upon collateral estoppel as a bar bears the burden of proof on the issue. Id.; see also State
v. Scarbrough, 181 S.W.3d 650, 655 (Tenn. 2005).
An appellate court reviews a trial court‘s ruling on a motion for summary
judgment de novo, without a presumption of correctness. Rye v. Women‘s Care Ctr. of
Memphis, MPLLC, 477 S.W.3d 235, 250 (Tenn. 2015) (citing Abshure v. Methodist
Healthcare-Memphis Hosp., 325 S.W.3d 98, 103 (Tenn. 2010); Bain v. Wells, 936
S.W.2d 618, 622 (Tenn. 1997)). This review requires the appellate court to make ―a fresh
determination of whether the requirements of Rule 56 of the Tennessee Rules of Civil
Procedure have been satisfied.‖ Id. (citing Estate of Brown, 402 S.W.3d 193, 198 (Tenn.
2013)). Under Rule 56, summary judgment is appropriate only when ―the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of law.‖ Tenn. R. Civ. P. 56.04.
III. Analysis
A. Collateral Estoppel Overview
Collateral estoppel is an issue-preclusion doctrine developed by the courts.
Mullins, 294 S.W.3d at 534 (citing Kremer v. Chem. Constr. Corp., 456 U.S. 461, 480
-4-
(1982); Morris v. Esmark Apparel, Inc., 832 S.W.2d 563, 565 (Tenn. Ct. App. 1991)).6
This doctrine ―promotes finality, conserves judicial resources, and prevents inconsistent
decisions,‖ id. (citing Allen v. McCurry, 449 U.S. 90, 94 (1980); Gibson v. Trant, 58
S.W.3d 103, 113 (Tenn. 2001); State ex rel. Cihlar v. Crawford, 39 S.W.3d 172, 178
(Tenn. Ct. App. 2000)), by barring ―the same parties or their privies from relitigating in a
later proceeding legal or factual issues that were actually raised and necessarily
determined in an earlier proceeding,‖ id. at 534-35 (citing Barnett v. Milan Seating Sys.,
215 S.W.3d 828, 835 (Tenn. 2007) superseded by statute on other grounds as recognized
in Freeman v. Gen. Motors Co., No. M2011-02284-SC-WCM-WC, 2012 WL 5197672,
at *5 n.3 (Tenn. Workers‘ Comp. Panel Oct. 22, 2012); Massengill v. Scott, 738 S.W.2d
629, 631-32 (Tenn. 1987); Blue Diamond Coal Co. v. Holland–Am. Ins. Co., 671 S.W.2d
829, 832 (Tenn. 1984)); see also Restatement (Second) of Judgments § 27 (1982) (―When
an issue of fact or law is actually litigated and determined by a valid and final judgment,
and the determination is essential to the judgment, the determination is conclusive in a
subsequent action between the parties, whether on the same or a different claim.‖). To
prevail on a claim of collateral estoppel, a party must establish:
(1) that the issue to be precluded is identical to an issue decided in an
earlier proceeding, (2) that the issue to be precluded was actually raised,
litigated, and decided on the merits in the earlier proceeding, (3) that the
judgment in the earlier proceeding has become final, (4) that the party
against whom collateral estoppel is asserted was a party or is in privity with
a party to the earlier proceeding, and (5) that the party against whom
collateral estoppel is asserted had a full and fair opportunity in the earlier
proceeding to contest the issue now sought to be precluded.
Mullins, 294 S.W.3d at 535 (emphasis added).
There are two general categories of collateral estoppel—defensive and offensive.
Trinity Indus., Inc. v. McKinnon Bridge Co., 77 S.W.3d 159, 184-85 (Tenn. Ct. App.
2001). Defensive collateral estoppel refers to a defendant seeking to prevent a plaintiff
from relitigating an issue that the plaintiff has previously litigated and lost. Id.; see also
Scarbrough, 181 S.W.3d at 655; Beaty v. McGraw, 15 S.W.3d 819, 824 (Tenn. Ct. App.
1998). Offensive collateral estoppel refers to a plaintiff attempting to prevent a defendant
from relitigating an issue that the defendant has previously litigated and lost. Gibson, 58
S.W.3d at 118 (citing Beaty, 15 S.W.3d at 824-25).
6
Res judicata and collateral estoppel are related doctrines. Res judicata bars a second suit
between the same parties or their privies on the same cause of action with respect to all issues which were
or could have been litigated in the former suit. Collateral estoppel bars a second suit between the same
parties and their privies on a different cause of action only as to issues which were actually litigated and
determined in the former suit. Goeke v. Woods, 777 S.W.2d 347, 349 (Tenn. 1989); Massengill v. Scott,
738 S.W.2d 629, 631 (Tenn. 1987).
-5-
At early common law, only defensive collateral estoppel was available, Beaty, 15
S.W.3d at 825, and the scope of the collateral estoppel doctrine was limited by the party
mutuality requirement, which meant that a prior judgment would be given preclusive
effect only if both parties had also been parties to the prior proceeding or in privity with a
party to the prior proceeding, Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326-27
(1979); Blonder-Tongue Labs., Inc. v. Univ. of Ill. Found., 402 U.S. 313, 320-21 (1971);
see also Restatement (First) of Judgments § 93 (1942) (describing the mutuality
requirement). Almost from its inception, however, the mutuality requirement was
sharply criticized by both judges and scholars because it allowed a party to relitigate an
issue against another defendant even though that same party had already once litigated
and lost on the issue. Parklane Hosiery Co., 439 U.S. at 327; Blonder-Tongue Labs.,
Inc., 402 U.S. at 322. In fact, the mutuality requirement was so much disfavored that, in
the same year it was included in the Restatement (First) of Judgments, the California
Supreme Court unanimously rejected it, finding ―no compelling reason‖ for requiring a
party asserting collateral estoppel to ―have been a party, or in privity with a party, to the
earlier litigation.‖ Bernhard v. Bank of Am. Nat. Trust & Sav. Assn., 122 P.2d 892, 894
(Cal. 1942).
Twenty years later, the California Supreme Court also abandoned the traditional
rule under which criminal convictions were deemed irrelevant for collateral estoppel
purposes in subsequent civil actions.7 In doing so, California‘s high court provided the
7
According to one commentator:
The traditional rule was that [a prior criminal] conviction was irrelevant in any
subsequent civil action. This rule gave way to decisions that permitted the conviction to
be offered in evidence. In most courts, evidentiary use of the conviction has been
transformed into preclusion, although some courts still resist preclusion. This
transformation has occurred despite partial appreciation of the dangers being courted. It
is common to recognize that conviction should not support issue preclusion if there was
little incentive to defend vigorously, particularly if the prosecution was for a trivial
offense. The fear that preclusion will encourage perjury by witnesses interested in
private litigation or diminish their credibility has been put aside. So too, a leading
decision has rejected the argument that a criminal defendant should be free to determine
whether to take the stand or offer any defense solely as a matter of criminal trial strategy
and without fear of collateral preclusion consequences in later civil litigation. Less
attention has been paid to the substantial differences in procedure that may hamper a
criminal defendant as well as the prosecution. Third-party discovery, for example, is
severely limited in federal prosecutions; if issue preclusion did not short-circuit the
process, a very different trial record might be presented in a civil action. Taken together,
these concerns might justify a flexible and substantially discretionary application of issue
preclusion following a criminal conviction. The federal cases, however, have not gone in
this direction.
18B Charles Allen Wright & Arthur R. Miller, Federal Practice & Procedure § 4474 (2d ed. 2016)
(footnotes omitted); see also Chantangco v. Abaroa, 218 U.S. 476, 481 (1910) (stating that ―[t]he general
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following concise and cogent rationale for why criminal judgments should be given
collateral estoppel effect in subsequent civil actions:
To preclude a civil litigant from relitigating an issue previously found
against him in a criminal prosecution is less severe than to preclude him
from relitigating such an issue in successive civil trials, for there are
rigorous safeguards against unjust conviction, including the requirements of
proof beyond a reasonable doubt and of a unanimous verdict, the right to
counsel, and a record paid for by the state on appeal. Stability of judgments
and expeditious trials are served and no injustice done, when criminal
defendants are estopped from relitigating issues determined in conformity
with these safeguards.
Teitelbaum Furs, Inc. v. Dominion Ins. Co., 375 P.2d 439, 441 (Cal. 1962) (citations
omitted); see also Hopps v. Utica Mut. Ins. Co., 506 A.2d 294, 297 (N.H. 1985) (―[T]here
is a stronger rationale for applying collateral estoppel against a former criminal defendant
than for applying it against a party to a prior civil case, since the criminal defendant has
had the benefit of the presumption of innocence and the State‘s obligation to prove any
fact essential to the conviction beyond a reasonable doubt.‖). Moreover, ―despite [a
party‘s] assertion that he is actually innocent of the crime for which he was convicted,
unless and until his conviction is overturned, it is deemed valid and is entitled to
preclusive effect under the collateral estoppel doctrine.‖ Stewart v. Bader, 907 A.2d 931,
941 (N.H. 2006).
In the wake of these California Supreme Court decisions, ―[m]any state and
federal courts rejected the mutuality requirement, especially where the prior judgment
was invoked defensively in a second action against a plaintiff bringing suit on an issue he
litigated and lost as plaintiff in a prior action.‖ Blonder-Tongue Labs., Inc., 402 U.S. at
324 (footnote omitted). And, twenty-nine years after California rejected the mutuality
requirement, the United States Supreme Court did as well, eliminating it for defensive
collateral estoppel. Id. at 350. Although the Supreme Court limited its decision in
Blonder-Tongue Laboratories to defensive collateral estoppel, the Supreme Court
recognized that the ―broader question‖ presented was ―whether it is any longer tenable to
afford a litigant more than one full and fair opportunity for judicial resolution of the same
issue.‖ Id. at 328. The Supreme Court stopped short of answering that broader question
in the negative—but not by much—stating:
In any lawsuit where a defendant, because of the mutuality principle, is
forced to present a complete defense on the merits to a claim which the
rule of the common law is that a judgment in a criminal proceeding cannot be read in evidence in a civil
action to establish any fact there determined‖ and identifying the primary reason for this rule as ―the
parties are not the same‖).
-7-
plaintiff has fully litigated and lost in a prior action, there is an arguable
misallocation of resources. To the extent the defendant in the second suit
may not win by asserting, without contradiction, that the plaintiff had fully
and fairly, but unsuccessfully, litigated the same claim in the prior suit, the
defendant‘s time and money are diverted from alternative uses—productive
or otherwise—to relitigation of a decided issue. And, still assuming that
the issue was resolved correctly in the first suit, there is reason to be
concerned about the plaintiff‘s allocation of resources. Permitting repeated
litigation of the same issue as long as the supply of unrelated defendants
holds out reflects either the aura of the gaming table or a lack of discipline
and of disinterestedness on the part of the lower courts, hardly a worthy or
wise basis for fashioning rules of procedure.
Id. at 329 (internal citations and quotation marks omitted).
Given these comments, it is not surprising that, only eight years later, the Supreme
Court also abrogated the mutuality requirement for offensive collateral estoppel.
Parklane Hosiery Co., 439 U.S. at 326. In that case, stockholders brought a class action
suit in the United States District Court against Parklane Hosiery Company and thirteen of
its officers, directors, and stockholders (collectively ―Parklane defendants‖), alleging that
they ―had issued a materially false and misleading proxy statement in connection with a
merger,‖ id. at 324 (footnote omitted), and that issuance of the proxy statement had
violated certain provisions of the Securities Exchange Act, as well as various rules and
regulations of the Securities and Exchange Commission (―SEC‖), id. The plaintiffs in the
class action suit sought compensatory damages, rescission of the merger, and recovery of
costs. Id.
Before the class action suit was tried, the SEC filed suit against the Parklane
defendants in the United States District Court and alleged that the proxy statement was
materially false and misleading in essentially the same respects as that alleged in the
stockholders‘ class action. The SEC sought injunctive relief. Id. After a four-day trial of
the SEC lawsuit, the District Court ruled that the proxy statement was materially false
and misleading and entered a declaratory judgment to that effect. Id. at 324-25. The
United States Court of Appeals for the Second Circuit affirmed. Id. at 325.
Thereafter, the plaintiffs in the stockholders‘ class action suit moved for partial
summary judgment, asserting that the Parklane defendants were collaterally estopped
from relitigating the issues that had been resolved against them in the SEC lawsuit. Id.
The District Court denied the motion, but the United States Court of Appeals reversed,
holding that any party who has had issues of fact determined against him after a full and
fair opportunity to litigate is collaterally estopped from relitigating the issues. Id.
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The United States Supreme Court granted certiorari and framed the question as
―whether a litigant who was not a party to a prior judgment may nevertheless use that
judgment ‗offensively‘ to prevent a defendant from relitigating issues resolved in the
earlier proceeding.‖ Id. at 325-26 (footnote omitted). The Supreme Court recognized
that, with both offensive and defensive use of nonmutual collateral estoppel, ―the party
against whom estoppel is asserted has litigated and lost in an earlier action,‖ id. at 328
(internal citation omitted), but it provided the following summary of the ―several
reasons‖ that previously had been offered to justify treating the two situations differently:
First, offensive use of collateral estoppel does not promote judicial
economy in the same manner as defensive use does. Defensive use of
collateral estoppel precludes a plaintiff from relitigating identical issues by
merely switching adversaries. Thus defensive collateral estoppel gives a
plaintiff a strong incentive to join all potential defendants in the first action
if possible. Offensive use of collateral estoppel, on the other hand, creates
precisely the opposite incentive. Since a plaintiff will be able to rely on a
previous judgment against a defendant but will not be bound by that
judgment if the defendant wins, the plaintiff has every incentive to adopt a
―wait and see‖ attitude, in the hope that the first action by another plaintiff
will result in a favorable judgment. Thus offensive use of collateral
estoppel will likely increase rather than decrease the total amount of
litigation, since potential plaintiffs will have everything to gain and nothing
to lose by not intervening in the first action.
A second argument against offensive use of collateral estoppel is
that it may be unfair to a defendant. If a defendant in the first action is sued
for small or nominal damages, he may have little incentive to defend
vigorously, particularly if future suits are not foreseeable. Allowing
offensive collateral estoppel may also be unfair to a defendant if the
judgment relied upon as a basis for the estoppel is itself inconsistent with
one or more previous judgments in favor of the defendant. Still another
situation where it might be unfair to apply offensive estoppel is where the
second action affords the defendant procedural opportunities unavailable in
the first action that could readily cause a different result.
Id. at 329-31 (footnotes, citations, and internal quotation marks omitted). The Supreme
Court concluded that ―the preferable approach‖ for dealing with the differences between
the two types of collateral estoppel was ―not to preclude the use of [nonmutual] offensive
collateral estoppel, but to grant trial courts broad discretion to determine when it should
be applied.‖ Id. at 331 (footnote omitted).
The Supreme Court adopted the following general rule: ―[W]here a plaintiff could
easily have joined in the earlier action or where, either for the reasons discussed above or
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for other reasons, the application of [nonmutual] offensive estoppel would be unfair to a
defendant, a trial judge should not allow the use of [nonmutual] offensive collateral
estoppel.‖ Id. Applying this general rule, the Supreme Court concluded that ―none of the
circumstances that might justify reluctance to allow the offensive use of collateral
estoppel‖ were present. Id. Applying offensive collateral estoppel to the Parklane
defendants would not ―reward a private plaintiff who could have joined in the previous
action,‖ because the stockholders‘ class action plaintiffs ―probably could not have joined
in the injunctive action brought by the SEC even had [they] so desired.‖ Id. at 332
(footnote omitted). ―[N]o unfairness‖ resulted from applying nonmutual collateral
estoppel offensively against the Parklane defendants, because, ―in light of the serious
allegations made in the SEC‘s complaint‖ and ―the foreseeability of subsequent private
suits that typically follow a successful [g]overnment judgment, [the Parklane defendants]
had every incentive to litigate the SEC lawsuit fully and vigorously.‖ Id. (footnote
omitted). Moreover, ―the judgment in the SEC action was not inconsistent with any
previous decision‖ and ―no procedural opportunities . . . of a kind that [would have been]
likely to cause a different result‖ were available in the stockholders‘ class action but
unavailable in the SEC action. Id. (footnote omitted). Because the Parklane defendants
had ―received a ‗full and fair‘ opportunity to litigate their claims in the SEC action,‖ the
Supreme Court held that ―the contemporary law of collateral estoppel‖ precluded them
―from relitigating the question of whether the proxy statement was materially false and
misleading.‖ Id. at 332-33.
Three years after the Supreme Court abolished the mutuality requirement for
offensive collateral estoppel, the Restatement (Second) of Judgments was published. It
also sanctioned nonmutual offensive and defensive collateral estoppel, adopted a general
approach similar to that articulated in Parklane Hosiery Co., and included a specific
provision addressing the collateral estoppel effect of criminal judgments in subsequent
civil proceedings.
Section 29 of the Restatement (Second) of Judgments deals with mutuality
generally and provides:
A party precluded from relitigating an issue with an opposing party,
in accordance with [sections] 278 and 28,9 is also precluded from doing so
8
Section 27 of the Restatement (Second) of Judgments provides: ―When an issue of fact or law is
actually litigated and determined by a valid and final judgment, and the determination is essential to the
judgment, the determination is conclusive in a subsequent action between the parties, whether on the
same or a different claim.‖ Restatement (Second) of Judgments § 27 (1982).
9
Section 28 of the Restatement (Second) of Judgments provides:
- 10 -
with another person unless the fact that he lacked full and fair opportunity
to litigate the issue in the first action or other circumstances justify
affording him an opportunity to relitigate the issue. The circumstances to
which consideration should be given include those enumerated in [section]
28 and also whether:
(1) Treating the issue as conclusively determined would be incompatible
with an applicable scheme of administering the remedies in the actions
involved;
(2) The forum in the second action affords the party against whom
preclusion is asserted procedural opportunities in the presentation and
determination of the issue that were not available in the first action and
could likely result in the issue being differently determined;
Although an issue is actually litigated and determined by a valid and final
judgment, and the determination is essential to the judgment, relitigation of the issue in a
subsequent action between the parties is not precluded in the following circumstances:
(1) The party against whom preclusion is sought could not, as a matter of law, have
obtained review of the judgment in the initial action; or
(2) The 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; or
(3) A new determination of the issue is warranted by differences in the quality or
extensiveness of the procedures followed in the two courts or by factors relating to the
allocation of jurisdiction between them; or
(4) The party against whom preclusion is sought had a significantly heavier burden of
persuasion with respect to the issue in the initial action than in the subsequent action; the
burden has shifted to his adversary; or the adversary has a significantly heavier burden
than he had in the first action; or
(5) There is a clear and convincing need for a new determination of the issue (a) because
of the potential adverse impact of the determination on the public interest or the interests
of persons not themselves parties in the initial action, (b) because it was not sufficiently
foreseeable at the time of the initial action that the issue would arise in the context of a
subsequent action, or (c) because the party sought to be precluded, as a result of the
conduct of his adversary or other special circumstances, did not have an adequate
opportunity or incentive to obtain a full and fair adjudication in the initial action.
Restatement (Second) of Judgments § 28 (1982).
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(3) The person seeking to invoke favorable preclusion, or to avoid
unfavorable preclusion, could have effected joinder in the first action
between himself and his present adversary;
(4) The determination relied on as preclusive was itself inconsistent with
another determination of the same issue;
(5) The prior determination may have been affected by relationships among
the parties to the first action that are not present in the subsequent action, or
apparently was based on a compromise verdict or finding;
(6) Treating the issue as conclusively determined may complicate
determination of issues in the subsequent action or prejudice the interests of
another party thereto;
(7) The issue is one of law and treating it as conclusively determined would
inappropriately foreclose opportunity for obtaining reconsideration of the
legal rule upon which it was based;
(8) Other compelling circumstances make it appropriate that the party be
permitted to relitigate the issue.
Restatement (Second) of Judgments § 29 (1982).
Section 85, which deals specifically with the collateral estoppel effect of criminal
judgments in subsequent civil actions, provides:
With respect to issues determined in a criminal prosecution:
(1) A judgment in favor of the prosecuting authority is preclusive in favor
of the government:
(a) In a subsequent civil action between the government and the
defendant in the criminal prosecution, as stated in [section] 27 with the
exceptions stated in [section] 28;
(b) In a subsequent civil action between the government and another
person whose claim is derivative from the defendant as specified in
[sections] 46, 48, 56(1), and 59-61, or analogous rules.
(2) A judgment in favor of the prosecuting authority is preclusive in favor
of a third person in a civil action:
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(a) Against the defendant in the criminal prosecution as stated in
[section] 29; and
(b) Against a person having a relationship with the defendant
specified in [sections] 46, 48, 56(1), and 59-61, or analogous rules.
(3) A judgment against the prosecuting authority is preclusive against the
government only under the conditions stated in [sections] 27-29.
Id. § 85.
Like the Supreme Court and the drafters of the Restatement (Second) of
Judgments, an overwhelming majority of jurisdictions have now abrogated the traditional
mutuality requirement for collateral estoppel.10 This appeal provides us with an
10
Thirty-six states and the District of Columbia have abolished the traditional mutuality
requirement for collateral estoppel. Pennington v. Snow, 471 P.2d 370, 377 (Alaska 1970); Wetzel v.
Ariz. State Real Estate Dept., 727 P.2d 825, 829 (Ariz. Ct. App. 1986); Johnson v. Union Pac. R.R., 104
S.W.3d 745, 751 (Ark. 2003); Bernhard, 122 P.2d at 894 (Cal. 1942); Cent. Bank Denver, N.A. v.
Mehaffy, Rider, Windholz & Wilson, 940 P.2d 1097, 1101 (Colo. App. 1997); Aetna Cas. & Sur. Co. v.
Jones, 596 A.2d 414, 422-23 (Conn. 1991); State Farm Fire & Cas. Co. v. Hackendorn, 605 A.2d 3, 10
(Del. Super. Ct. 1991); Exotics Haw.-Kona, Inc. v. E.I. Dupont De Nemours & Co., 90 P.3d 250, 263
(Haw. 2004); W. Indus. & Envtl. Servs., Inc. v. Kaldveer Assoc., Inc., 887 P.2d 1048, 1052 (Idaho 1994);
Preferred Am. Ins. v. Dulceak, 706 N.E.2d 529, 532 (Ill. App. Ct. 1999); Stephens v. State, 874 N.E.2d
1027, 1031 (Ind. App. 2007); Hunter v. City of Des Moines, 300 N.W.2d 121, 125 (Iowa 1981); Moore v.
Commonwealth, 954 S.W.2d 317, 319 (Ky. 1997); State Mut. Ins. Co. v. Bragg, 589 A.2d 35, 37 (Me.
1991); Aetna Cas. & Sur. Co. v. Niziolek, 481 N.E.2d 1356, 1359-60 (Mass. 1985); Aufderhar v. Data
Dispatch, Inc., 452 N.W.2d 648, 650 (Minn. 1990); In re Carey, 89 S.W.3d 477, 498 (Mo. 2002); Aetna
Life & Cas. Co. v. Johnson, 673 P.2d 1277, 1280-81 (Mont. 1984); Peterson v. Neb. Natural Gas Co., 281
N.W.2d 525, 527 (Neb. 1979); Paradise Palms Cmty. Ass‘n v. Paradise Homes, 505 P.2d 596, 599 (Nev.
1973); Aubert v. Aubert, 529 A.2d 909, 912 (N.H. 1987); N.J. Mfrs. Ins. Co. v. Brower, 391 A.2d 923,
926 (N.J. Super. Ct. App. Div. 1978); Silva v. State, 745 P.2d 380, 384 (N.M. 1987); S.T. Grand, Inc. v.
City of New York, 298 N.E.2d 105, 107-08 (N.Y. 1973); Rymer v. Estate of Sorrells, 488 S.E.2d 838,
840 (N.C. Ct. App. 1997); 533 Short N. LLC v. Zwerin, No. 14AP-1016, 2015 WL 5771924, at *7 (Ohio
Ct. App. 2015); Lee v. Knight, 771 P.2d 1003, 1005 (Okla. 1989); Bahler v. Fletcher, 474 P.2d 329, 338
(Or. 1970); In re Ellis‘ Estate, 333 A.2d 728, 730-31 (Pa. 1975); Beall v. Doe, 315 S.E.2d 186, 190 (S.C.
Ct. App. 1984); Eagle Prop., Ltd. v. Scharbauer, 807 S.W.2d 714, 721 (Tex. 1990); Richards v. Hodson,
485 P.2d 1044, 1046 (Utah 1971); Trepanier v. Getting Organized, Inc., 583 A.2d 583, 587-88 (Vt. 1990);
Club Level, Inc. v. City of Wenatchee, 189 Wash. App. 1051, 2015 WL 5138564, at *3 (Wash. Ct. App.
2015); Laney v. State Farm Mut. Auto. Ins. Co., 479 S.E.2d 902, 907 (W. Va. 1996); Michelle T. by
Sumpter v. Crozier, 495 N.W.2d 327, 331 (Wis. 1993). Additionally, federal judges deciding cases under
state law have predicted that two other states would abandon the mutuality requirement if presented with
the opportunity. Atchison v. Wyoming, 763 F.2d 388, 391-92 (10th Cir. 1985) (applying Wyoming law);
Breeland v. Sec. Ins. Co. of New Haven, Conn., 421 F.2d 918, 923 (5th Cir. 1969) (applying Louisiana
law).
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opportunity to determine whether the mutuality requirement should be abolished or
modified in Tennessee.
B. Collateral Estoppel and the Mutuality Requirement in Tennessee
Tennessee, like other jurisdictions, recognizes both defensive and offensive
collateral estoppel. Trinity Indus., Inc., 77 S.W.3d at 184-85. With respect to nonmutual
offensive collateral estoppel, the doctrine involved in this appeal, Tennessee remains
among the small minority of jurisdictions that continue to adhere to the strict mutuality
requirement. See id. at 185; Gann v. Int‘l Harvester Co. of Canada, 712 S.W.2d 100, 101
(Tenn. 1986); Cole v. Arnold, 545 S.W.2d 95, 97 (Tenn. 1977); Beaty, 15 S.W.3d at 825;
Leathers v. U.S.A. Trucking, No. 02A01-9109-CV-00198, 1992 WL 37146, at *1 (Tenn.
Ct. App. Mar. 2, 1992); Beaman Bottling Co. v. Bennett, No. 03A01-9103-CV-00091,
1991 WL 218228, at *2 (Tenn. Ct. App. Oct. 29, 1991); Carroll v. Times Printing Co.,
No. 596, 1987 WL 10332, at *3 (Tenn. Ct. App. May 5, 1987); Algood v. Nashville
Mach. Co., 648 S.W.2d 260, 262-63 (Tenn. Ct. App. 1983). Moreover, in two more
recent decisions with facts more similar to this case, the Court of Appeals has continued
to deny preclusive collateral estoppel effect to criminal judgments in subsequent civil
actions, although the intermediate appellate court has recognized that such judgments are
admissible in evidence under Tennessee Rule of Evidence 803(22). See In re James M.
Cannon Family Trust, No. M2011-02660-COA-R3-CV, 2012 WL 5993736, at *5 (Tenn.
Ct. App. Nov. 30, 2012); Wilkerson v. Leath, No. E2011-00467-COA-R3-CV, 2012 WL
2361972 (Tenn. Ct. App. June 22, 2012), perm. app. denied (Tenn. Nov. 21, 2012).
Relying on the traditional mutuality requirement, the foregoing 2012 decisions of
the Court of Appeals, and his own affidavit asserting his innocence of the criminal
offenses of which he has been convicted, Mr. Arnold argues that the trial court erred by
granting Ms. Bowen‘s motion for partial summary judgment. Mr. Arnold asserts that
applying offensive collateral estoppel in a civil case based on a prior criminal conviction
is contrary to public policy, because neither Ms. Bowen nor John Doe N were parties to
the criminal prosecution or in privity with the prosecution in the prior criminal action.
Mr. Arnold further asserts that the issues in this civil case differ from the issues decided
in the criminal prosecution. He contends as well that collateral estoppel should not apply
because it will be imputed to the other defendants in this case, none of whom were parties
to the criminal case. Mr. Arnold reiterates that he maintained his innocence throughout
the criminal proceeding, and still does, and he argues that his affidavit asserting his
innocence creates in this civil action a genuine issue of material fact as to whether he
raped or sexually battered the minor plaintiff and that this material factual dispute should
have precluded summary judgment.
In response, Ms. Bowen contends that the mutuality requirement should be
abolished entirely or, at a minimum, should be abrogated when, as here, the victim of a
criminal offense sues the person convicted of perpetrating the criminal offense and bases
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an offensive collateral estoppel claim on the prior criminal conviction. Alternatively, Ms.
Bowen contends that the mutuality requirement is satisfied in such circumstances
because, according to Ms. Bowen, victims of criminal offenses, like John Doe N here, are
in privity with the prosecution in criminal trials.
Having thoroughly considered the arguments of the parties, as well as the
historical development and current standing of the mutuality requirement in other
jurisdictions, we conclude that the traditional mutuality requirement has outlived its
usefulness and should be abandoned in Tennessee for both offensive and defensive
collateral estoppel.11 Like the California Supreme Court, we can now discern ―no
compelling reason‖ to maintain the mutuality requirement. Bernhard, 122 P.2d at 894.
―In light of the scarcity of judicial time and resources, the repeated litigation of issues
that have already been conclusively resolved by a court carries a considerable price tag in
both money and time.‖ Jones, 596 A.2d at 424.
We conclude that, when determining whether to apply offensive or defensive
collateral estoppel in a particular case, Tennessee courts should be guided by the general
approach set out in section 29 of the Restatement (Second) of Judgments. Cf. Turner v.
Turner, 473 S.W.3d 257, 260 (Tenn. 2015) (holding that section 66 of the Restatement
(Second) of Judgments describes the type of exceptional circumstances that warrant
denying relief from void judgments); Mullins, 294 S.W.3d at 535, 537-38 (referencing
sections 27, 29, and 87 of the Restatement (Second) of Judgments when determining
whether a judgment in a federal action supported a collateral estoppel claim raised in a
subsequent state action).
As already explained, section 29 generally precludes relitigation of issues decided
in prior lawsuits unless the party against whom collateral estoppel is asserted lacked a full
11
Although Tennessee courts have not expressly rejected the party mutuality requirement for
defensive collateral estoppel, it has been relaxed with respect to defensive collateral estoppel. Trinity
Indus. Inc., 77 S.W.3d at 185. This relaxation has been accomplished by defining privity as relating to
―the subject matter of the litigation not to the relationship between the parties themselves. Privity
connotes an identity of interest, that is, a mutual or successive interest to the same rights.‖ State ex rel.
Cihlar v. Crawford, 39 S.W.3d 172, 180 (Tenn. Ct. App. 2000) (citations omitted). Relying on this
definition, the Court of Appeals, in Phillips v. General Motors, 669 S.W.2d 665, 669 (Tenn. Ct. App.
1984), held that a plaintiff who had sued an automobile dealer for a defective car and lost was precluded
from bringing an identical claim against the automobile manufacturer because the judgment in the first
lawsuit resolved that the car was not defective and precluded the plaintiff from asserting that the car was
defective in a subsequent action against the manufacturer. See also Sullivan v. Wilson Cty., No. M2011-
00217-COA-R3-CV, 2012 WL 1868292, at *11 (Tenn. Ct. App. May 22, 2012) (applying defensive
collateral estoppel in the absence of strict party mutuality). Thus, as a practical matter, Tennessee, like
the Supreme Court, the Restatement (Second) of Judgments, and the majority of states, has already
implicitly abrogated the party mutuality requirement with respect to defensive collateral estoppel. Trinity
Indus., Inc., 77 S.W.3d at 185. We take this opportunity to expressly abandon it.
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and fair opportunity to litigate the issue in the first action or some other circumstance
justifies affording that party an opportunity to relitigate the issue. Section 29 enumerates
some of the circumstances courts should consider when determining if an opportunity for
relitigation should be afforded, and it also incorporates by reference section 28, which
lists additional circumstances that courts should consider when making this
determination. The circumstances enumerated in sections 28 and 29, like the analysis the
Supreme Court articulated in Parklane Hosiery Co., afford considerable discretion to
courts determining whether nonmutual collateral estoppel should apply in a particular
case.
With respect to the particular issue in this case—whether offensive collateral
estoppel should apply in a civil action based on a prior criminal judgment—we conclude
that Tennessee courts should be guided by section 85 of the Restatement (Second) of
Judgments.12 The general rule under section 85 is that ―[a] judgment in favor of the
prosecuting authority is preclusive in favor of a third person in a civil action . . . [a]gainst
the defendant in the criminal prosecution as stated in [section] 29.‖ Restatement
(Second) of Judgments § 85.13 Because section 85 incorporates section 29, which in turn
incorporates section 28, courts have considerable discretion to allow for relitigation if the
circumstances enumerated in sections 28 and 29 convince the court that religitation is
warranted.
C. Collateral Estoppel in This Appeal
Applying section 85 of the Restatement (Second) of Judgments (including the
considerations of sections 28 and 29 which it incorporates by reference) to the undisputed
facts of this case, we conclude that the trial court properly granted Ms. Bowen partial
summary judgment against Mr. Arnold on the issue of ―whether he raped and sexually
battered‖ John Doe N. Mr. Arnold had a full and fair opportunity to litigate this issue in
his criminal trial. Id. §§ 85(2)(a), 29. Treating this issue as conclusively determined in
the criminal action is not ―incompatible with an applicable scheme of administering the
remedies in the actions involved.‖ Id. § 29(1). To the contrary, allowing a civil jury
12
Our holding in this appeal should not be construed as abrogating or limiting Scarbrough, in
which this Court held that the prosecution may not use collateral estoppel offensively in a criminal case
to establish an essential element of a charged offense. 181 S.W.3d at 658-59. To the contrary, we
reaffirm our holding in Scarbrough, which was grounded upon the Tennessee constitutional right to trial
by jury and its ―special resonance in criminal matters.‖ Id. at 658 (quoting State v. Cleveland, 959
S.W.2d 548, 551 (Tenn. 1997)) (internal quotation marks omitted). Unlike Scarbrough, this appeal
involves the offensive collateral estoppel effect of a prior criminal conviction in a subsequent civil
lawsuit.
13
We note that an acquittal in a criminal proceeding does not protect the defendant from liability
in a subsequent civil action by the government related to the same misconduct. See One Lot Emerald Cut
Stones v. United States, 409 U.S. 232, 234 (1972); Helvering v. Mitchell, 303 U.S. 391, 397 (1938).
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functioning under a much lower standard of proof to relitigate and potentially contradict a
unanimous finding of a criminal jury would be ―a general indictment of the whole
American jury system.‖ Hurtt v. Stirone, 206 A.2d 624, 626 (Pa. 1965). Mr. Arnold‘s
guilt or innocence of rape and aggravated sexual battery was the central focus of the
criminal trial, and his fundamental liberty interest was at stake, giving him plenty of
incentive to mount a vigorous defense against the charges. Restatement (Second) of
Judgments §§ 85(2)(a), 29. Moreover, he obtained appellate review of the criminal
judgment, and his convictions were affirmed on appeal. Id. §§ 28 (1), 29, 85(2)(a).
Affording preclusive effect to Mr. Arnold‘s final criminal judgment in this civil action
raises no fairness or administrative-incompatibility concerns.
Furthermore, this civil forum does not afford Mr. Arnold any ―procedural
opportunities in the presentation and determination of the issue that were not available‖
in his criminal prosecution. Id. § 29(2). To the contrary, the criminal prosecution
afforded Mr. Arnold numerous safeguards, aimed at protecting his liberty interest and
reducing the potential for an erroneous judgment, which are not available to him in this
civil action. See Zinger v. Terrell, 985 S.W.2d 737, 740 (Ark. 1999); Teitelbaum Furs,
Inc., 375 P.2d at 441; Am. Family Mut. Ins. Co. v. Savickas, 739 N.E.2d 445, 450 (Ill.
2000). These safeguards include the beyond-a-reasonable-doubt burden of proof on the
prosecution, the presumption of innocence, the right to counsel, and the requirement that
prosecutors divulge exculpatory evidence. Teitelbaum Furs, Inc., 375 P.2d at 441 (―To
preclude a civil litigant from relitigating an issue previously found against him in a
criminal prosecution is less severe than to preclude him from relitigating such an issue in
successive civil trials, for there are rigorous safeguards against unjust conviction,
including the requirements of proof beyond a reasonable doubt and of a unanimous
verdict, the right to counsel, and a record paid for by the state on appeal.‖ (citations
omitted)). As a result, as we have already noted, ―there is a stronger rationale for
applying collateral estoppel against a former criminal defendant than for applying it
against a party to a prior civil case.‖ Hopps, 506 A.2d at 297; see also Niziolek, 481
N.E.2d at 1359; Restatement (Second) of Judgments §§ 28(3)-(4), 29(2).
Moreover, Ms. Bowen ―cannot properly be charged with sitting back and avoiding
the costs of participation in on-going litigation, and then reaping a benefit from the
resulting judgment.‖ Niziolek, 481 N.E.2d at 1361. Like the plaintiffs in Parklane
Hosiery Co., Ms. Bowen could not have joined the criminal prosecution against Mr.
Arnold, even if she had tried. Restatement (Second) of Judgments § 29(3).
Additionally, Mr. Arnold‘s criminal convictions are not ―inconsistent with another
determination of the same issue.‖ Nor are his criminal convictions ―based on a
compromise verdict or finding‖ or ―affected by relationships among the parties to the first
action that are not present in the subsequent action.‖ Id. § 29(5). And, the issue on
which the trial court granted partial summary judgment based on collateral estoppel—
whether the defendant raped or sexually battered John Doe N—is an issue of fact, not
- 17 -
―one of law.‖ Id. § 29(7). Treating this issue as ―conclusively determined‖ will not,
therefore, ―inappropriately foreclose opportunity for obtaining reconsideration of the
legal rule.‖ Id. Nor will applying collateral estoppel ―complicate determination of issues
in the [civil action] or prejudice the interests of another party [to the civil action].‖ Id. §
29(6). Precluding Mr. Arnold from relitigating ―whether he raped and sexually battered‖
John Doe N does not prevent any of the other defendants from contesting Ms. Bowen‘s
allegations of negligence against them. Finally, none of the other circumstances
enumerated in sections 28 and 29, or any other compelling circumstance, justifies
affording Mr. Arnold an opportunity to relitigate the issue of ―whether he raped and
sexually battered‖ John Doe N. Id. §§ 28 (5), 29 (8).
IV. Conclusion
Accordingly, for the reasons stated herein, we abolish the mutuality requirement
for defensive and offensive collateral estoppel in Tennessee, adopt sections 29 and 85 of
the Restatement (Second) of Judgments, and affirm the trial court‘s grant of partial
summary judgment against Mr. Arnold on the issue of ―whether he raped and sexually
battered‖ John Doe N. This matter is remanded to the trial court for further proceedings
consistent with this decision. Costs of this appeal are taxed to William E. Arnold, Jr., and
his surety, for which execution may issue if necessary.
_________________________________
CORNELIA A. CLARK, JUSTICE
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