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b. The Doctrine of Issue Preclusion
The doctrine of issue preclusion, or collateral estoppel,
provides that, once an issue of fact or law is “actually and
necessarily determined by a court of competent jurisdiction, that
determination is conclusive in subsequent suits based on a
different cause of action involving a party to the prior
litigation.” Montana v. United States, 440 U.S. 147, 153 (1979)
(citing Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326 n.5
(1979)). Issue preclusion is a judicially created equitable
doctrine whose purposes are to protect parties from unnecessary
and redundant litigation, to conserve judicial resources, and to
foster certainty in and reliance on judicial action. See, e.g.,
id. at 153-154; United States v. ITT Rayonier, Inc., 627 F.2d
996, 1000 (9th Cir. 1980). This Court in Peck v. Commissioner,
90 T.C. 162, 166-167 (1988), affd. 904 F.2d 525 (9th Cir. 1990),
set forth the following five conditions that must be satisfied
prior to application of issue preclusion in the context of a
factual dispute (the Peck requirements):
(1) The issue in the second suit must be identical
in all respects with the one decided in the first suit.
(2) There must be a final judgment rendered by a
court of competent jurisdiction.
(3) Collateral estoppel may be invoked against
parties and their privies to the prior judgment.
(4) The parties must actually have litigated the
issues and the resolution of these issues must have
been essential to the prior decision.
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