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Standing Case Analysis

The decision is long on dicta, if short on binding precedent. Unless a district court grants the motion for vacatur and expresses a lack of confidence in the soundness of the judgment rendered in his own court, the case will always be at least arguably distinguishable.

The court’s recitation of the facts and procedural history is very brief. Nevertheless, it appears that the district court had legitimate concerns with the way that the jury apportioned liability.

Suppose, however, that the district judge had no concerns with the liability question; rather, the concern was that the damages were excessive. Then, the parties settle for less than the verdict, and as part of the settlement, jointly ask the court to vacate the judgment.

A plaintiff in a second suit, like Enrick, intervenes, arguing that the appropriate action is for the court to order that an accord and satisfaction be filed, rather than vacating the judgment. The district court allows intervention, but enters vacatur anyway.

Does the intervenor have standing to appeal under those circumstances?

Intervention in the district court would be permissive, and thus, there would be no Article III standing in the district court. As the court observed in the case at bar, “The opportunity to use a judgment in a suit to which one is not a party to gain an advantage in a suit to which one is a party is valuable, but the denial of the opportunity is not a sufficient injury to confer standing.”

Taking this statement to its logical conclusion, it would seem to necessarily follow that, if there is no standing in a district court action, there can be no standing in an appeal of that action.

Nevertheless, the decision, as did Transamerica Ins. Co. v. South, 125 F.3d 392, 396 (7th Cir. 1998), leaves open that it is “perhaps conceivable that a person lacking standing to bring suit below, yet properly admitted to intervene, might have standing to appeal a judgment which adversely affected him or her.”

The law is clear that a judgment should not be vacated merely because a settlement afterwards mooted the case. U.S. Bancorp Mortgage Co. v. Bonner Mall Partnership, 513 U.S. 18, 26-27 (1994). So, the intervenor in our hypothetical case is on sound legal ground that vacatur was improper. But, without standing to appeal, he cannot raise the argument.

Ultimately, if the hypothetical intervenor is to establish standing to appeal, he must find a way around the following statement by the court in the case at bar: “Considering that the use of a judgment as offensive collateral estoppel in a subsequent suit is discretionary with the court in that suit, it is hard to see why, if the precedential effect of a decision shouldn’t be a sufficiently tangible interest to confer standing, the possibility of using the decision to foreclose relitigation of a particular issue should be.”

One plausible argument is policy-based. Whether the underlying decision has precedential effect or not is something that affects not just the parties involved, but countless third parties. Where the intervenor wants to prevent vacatur for collateral estoppel purposes, and the decision is not binding precedent one way or the other, only the parties involved are affected.

The defendant in the second action has the right, if he chooses, to appeal an adverse judgment if it is insupportable.

The defendant had the opportunity to defend his rights in the first trial, and lost. If there is no question that the underlying verdict on the issue of liability was legally and factually supported by the evidence, policy considerations support allowing the intervenor to appeal.

Standard court rules lend some support to such an argument — when a court decision is unpublished, it may not be cited as precedent, but may be cited for collateral estoppel purposes.

Related Links

7th Circuit Court of Appeals

Related Article

Intervenor lacks standing to appeal

An intervenor could also attempt to distinguish between law and fact. Court decisions are published, not because of their facts, but because they establish a rule of law applicable to all within the jurisdiction. In the collateral estoppel context, only facts among discrete parties are established. There are no third parties who will be adversely affected by the court’s decision.

These are only policy arguments for distinguishing the two; they do not go to the overriding constitutional issue of Article III standing.

There is at least one argument, however, that does apply to the constitutional question: if the intervenor wishes to use the underlying judgment for collateral estoppel purposes, there will be parties on both sides of the issue with a real stake in the outcome; if the party only wishes to preserve the decision for its precedential value, there might not be any opposing party with a stake in arguing the other side.

Thus, in the collateral estoppel context, there is a case or controversy, which may or not be the case if the intervenor only wants to use the judgment for its precedential value.

– David Ziemer

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David Ziemer can be reached by email.

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