Why Nonmutual Collateral Estoppel Rules Don’t Work in the Taxpayer Standing Context
By Joshua Urquhart on October 21, 2013
This recent article notes litigation that claims Colorado illegally provides millions of dollars to Planned Parenthood. I’m a bit familiar with this sort of lawsuit, which generally alleges that the state is violating the abortion funding ban in Article V, Section 50 of the Colorado Constitution. The basic theory is that although the funds in question pay for cancer screening or checkups for pregnant women or some other non-abortion service, the state is nonetheless “indirectly” subsidizing abortion because money is fungible, and those expenditures “free up” funds to be used for abortion. I’ll refrain from evaluating the merits of the claim, though if the theory is correct, all sorts of government-affiliated hospitals in Colorado (e.g., Denver Health, University of Colorado, etc.) could be barred from performing abortions – which is what opponents of the provision warned about back in 1984 when it passed, and what proponents specifically disclaimed.
Instead, I’m going to focus on a different issue – how completely unsuited traditional collateral estoppel rules are in this context. First, a quick primer. Collateral estoppel refers to the series of rules designed to prevent parties from relitigating an issue decided in a prior case. There are generally two types – mutual and nonmutual. Mutual collateral estoppel prevents the same parties from fighting over the same previously resolved issue. That makes sense for obvious reasons.
Nonmutual collateral estoppel prevents a party from one case from using an issue resolved in that case to preclude the litigation of it in another case involving another party – for example, X and Y litigated an issue, it was resolved against Y, and then in a subsequent lawsuit, Z (an unrelated third party) argues that Y should be precluded from relitigating it. This doctrine is far more controversial. See here for a fuller academic discussion. In general, when a party in a new case argues that nonmutual collateral estoppel bars the litigation of an issue, (1) the issue must be identical to one that was resolved in previous litigation; (2) the issue must have been necessary to resolve the earlier lawsuit; and (3) the party against whom collateral estoppel is being asserted must have had a fair opportunity to litigate the issue, or be in privity with one who did. A party that prevailed in a prior case generally cannot use that victory against a new party in a subsequent lawsuit who did not have the opportunity to argue the issue in question.
Now on to taxpayer standing. I’ve written a lot about this. The long story short is that at the state (but generally not federal) level, taxpayers can contest government action with some connection to state taxpayer dollars. (There are subtle variations among states, but the general theory holds.) See the problem? Even if the government wins in one taxpayer lawsuit, another taxpayer can bring the exact same claim under traditional collateral estoppel rules, then another, and another and another. The same attorney can even represent each successive taxpayer-plaintiff (indeed, that’s what is happening in the linked lawsuit). It’s basically a case of try, try again until you succeed. And because the requested relief is usually “stop the government from doing what I don’t like,” only one taxpayer-plaintiff needs to win.
I may write more on this later. For now, I’ll just say that I have a theory — this is what happens when you try to use rules designed to apply to private disputes between two adversarial parties to what is essentially a public action by an aggrieved citizen who doesn’t like what the government is doing. It’s one of the reasons judicial systems should be very careful about authorizing these sorts of lawsuits – and perhaps one of the reasons federal courts generally close the door to taxpayer-plaintiffs.