Issue preclusion, also called collateral estoppel, means that a valid and final judgment binds the plaintiff, defendant, and their privies in subsequent actions on different causes of action between them (or their privies) as to same issues actually litigated and essential to the judgment in the first action. The four essential elements to decide if issue preclusion applies are: 1) the former judgment must be valid and final; 2) the same issue is being brought; 3) the issue is essential to the judgement; 4) the issue was actually litigated.
Issue preclusion is an important legal doctrine. Similar to the doctrine of res judicata, which is also called claim preclusion, issue preclusion aims to preserve the longer term stability and reliance on the law. But different from claim preclusion, which bars the relitigating of all issues of a claim, issue preclusion bars only relitigating of the issues that are actually litigated. This gives issue preclusion a much longer arm to reach than claim preclusion. For example, if the plaintiff brought claim A in case 1, and claim B in case 2, res judicata would not prohibit the litigation of claim B. But if claim B contains a same issue that has been actually litigated in case 1, issue preclusion can prohibit this issue being relitigated. A real example is that in Little v. Blue Goose Motor Coach Co., 346 Ill. 266, the plaintiff sued the defendant for damages of medical expenses. The court ruled that the relitigating of the issue of negligence, which was actually litigated in a former case brought by Blue Goose against Little for damages in a car accident, was precluded by issue preclusion.
Issue preclusion can also bind alternative judgments (if the parties raise alternative pleadings, and the jury find for one party in general verdict, there are alternative judgments). Different jurisdictions have different opinions regarding alternative judgments. In most U.S. jurisdictions, alternative judgments are preclusive as long as the issues are resolved in the former case. In some jurisdictions, neither judgement is preclusive. And in some other jurisdictions, both judgments can be preclusive, depending on if the former court has carefully considered the issues.
Issue preclusion usually has a doctrine of mutuality, meaning it only binds the parties of the former litigation. But there are exceptions. In Taylor v. Sturgell, 553 U.S. 880 (2008), Justice Ginsburg listed the 6 categories of exceptions of the doctrine of mutuality. This expands the reach of issue preclusion even more.
[Last updated in June of 2020 by the Wex Definitions Team]