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Legal Memorandum: Collateral Estoppel in Unemployment Claims

Issue: Does collateral estoppel apply to unemployment claims?

Area of Law: Employee Law, Litigation & Procedure
Keywords: Collateral estoppel; Unemployment claims
Jurisdiction: Federal, Virgin Islands
Cited Cases: 456 U.S. 461; 993 F.2d 1058; 478 U.S. 788; 458 F.3d 244; 493 U.S. 342; 420 F.3d 243
Cited Statutes: None
Date: 06/01/2007

Collateral estoppel or issue preclusion is a well-known but unevenly applied doctrine.  Under the doctrine of collateral estoppel, or issue preclusion, “when an issue of ultimate fact has once been determined by a valid and final judgment, that issue cannot again be litigated between the same parties in any future lawsuit.”  Dowling v. United States, 493 U.S. 342 (1990).  Essentially, collateral estoppel “bars [the] relitigation of questions distinctly put in issue and directly determined adversely to the party against which the estoppel is asserted.”  Carteret Sav. Bank v. Pelican Beach Props., Ltd., 27 V.I. 285, 290 (D.V.I. 1992).

The court has instructed that in the federal courts, when collateral estoppel is asserted offensively or defensively, the sitting court must apply the state’s law regarding its application.  Roth v. Koppers Indus., Inc., 993 F.2d 1058 (3d Cir. 1993).  The question whether preclusive effect should be given to a particular decision is a question of state law, such that the federal court should apply collateral estoppel only if the state from which the judgment emerged would do so.  Id. at 1061 (quoting Kremer v. Chem. Constr. Corp., 456 U.S. 461 (1982)).  Accord Kelley v. TYK Refractories Co., 860 F.2d 1188, 1193-94 (3d Cir. 1988). 

Under Virgin Islands law, “[f]or the collateral estoppel doctrine to apply four factors must be satisfied:

(1) the prior determination was necessary to the decision;

(2) the identical issue was previously litigated;

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