In many lawsuits, the plaintiffs have to contend with and the Courts have to decide on Collateral Estoppel. Gurumurthy Kalyanaram discusses and reports how materiality is one of the necessary conditions for collateral estoppel.

1. Gurumurthy Kalyanaram Reports on Collateral Estoppel And Materiality of
The Finding
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In many lawsuits, the plaintiffs have to contend with and the Courts have to
decide on Collateral Estoppel. Many substantive lawsuits are quite often dismissed
on Collateral Estoppel and/or Res Judicata. One of the elements of Collateral
Estoppel is materiality of the finding in the lower court/proceeding. Gurumurthy
Kalyanaram discusses and reports how materiality is one of the necessary
conditions for collateral estoppel.
A long line of decisions (after many lawsuits) by the U.S. Supreme Court,
U.S. Court of Appeals (Second Circuit), and New York Court of Appeals, have
held that, where a decision-maker makes a finding, the finding is not collateral
estoppel in a subsequent proceeding unless the finding was material and decisive to
the decision, even if it was raised and litigated, particularly where the decisionmaker himself explicitly states that the issue was “immaterial” to his decision, and
that if there is any uncertainty at all, collateral estoppel shall not apply.
U.S. Supreme Court Decisions
Partmar Corp. v. Paramount Pictures Theatres Corp., 347 U.S. 89, 100
(1954) (“if this finding were not material to the principal action, the doctrine of
collateral estoppel would not apply”).
U.S. Court of Appeals (Second Circuit) Decisions
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2. Proctor, supra, at 414 (“necessary”); Kotler, supraat *5 (“material in the first
action”); McGuinn, supra, at *2 (“necessarily decided and material”); Beechwood
Restorative Care Ctr. v. Leeds, 436 F.3d 147, 152-153 (2d Cir. 2006) (“necessarily
decided and decisive”); BBS Norwalk, supra, at 677 (“decisive”); Louis Ender,
Inc. v. General Foods Corp., 467 F.2d 327, 330 (2d Cir. 1972) (court’s finding as
to fraud not collateral estoppel because was“not material to its decision”), cert.
denied, 410 U.S. 930 (1973); Smith v. Mosier, 169 F. 430, 446 (2d Cir. 1909) (no
preclusion if it was “immaterial or unessential to the determination of the real issue
in the prior action, even if put in issue, tried. and decided”).
New York Court of Appeals Decisions
Silberstein v. Silberstein, 218 N.Y. 525, 528 (1916) (“judgment does not
work an estoppel as to unessential facts, even though put in issue by the pleadings
and directly decided”); Stokes v. Stokes, 172 N.Y. 327, 341 (1902) (“It is well
settled . . . although a decree in express terms purports to affirm a particular fact, or
rule of law, yet if such fact or rule of law was immaterial to the issue, and the
controversy did not turn upon it, the decree will not conclude the parties thereto”);
House v. Lockwood, 137 N.Y. 259, 268 (1893) (“A judgment does not operate as
an estoppel in a subsequent action between the parties as to immaterial or
unessential facts, even though put in issue by the pleadings and directly decided”);
Liddle, Robinson & Shoemaker v. Shoemaker, 768 N.Y.S.2d 183, 187 (1st Dept.
2003) (no collateral estoppel where court said it was not material to its
determination); White v. Frize, 827 N.Y.S.2d 302, 304 (3d Dep’t 2006) (same).
Burden of proof in these lawsuits generally rests with the party that is
moving for Collateral Estoppel consideration.
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