Issue Preclusion

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7^th Circuit Court of Appeals

Case Name: United States of America ex rel. Kenneth J. Conner v. Amrish K. Mahajan, et al.

Case No.: 17-1162

Officials: POSNER, KANNE, and SYKES, Circuit Judges.

Focus: Issue Preclusion

After losing his job at Mutual Bank, Kenneth Conner brought this qui tam action claiming that the defendants, most of them directors or officers of the bank, had defrauded the government in violation of the False Claims Act, 31 U.S.C. §§ 3729–3733. The United States declined to take over the qui tam action, which Conner eventually settled. But the Federal Deposit Insurance Corporation filed its own lawsuit against many of the same defendants. That case also settled, and Conner thinks he is entitled to a share of the settlement proceeds the FDIC received from the defendants. To that end Conner tried to intervene in the FDIC’s case, and after being rebuffed he filed a motion in this action demanding part of the FDIC’s recovery. The district court denied that request on the ground that, because Conner’s attempt to intervene in the FDIC’s case was rejected, he is barred by the doctrine of issue preclusion from litigating in this suit the question whether he has a cognizable interest in the settlement proceeds. Conner challenges that ruling in this appeal. We agree with the district court’s bottom line but conclude that claim preclusion, rather than issue preclusion, explains this outcome.

Affirmed

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.