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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.
(5) The controlling facts and applicable legal rules
must remain unchanged from those in the prior
litigation. [Citations omitted.]
Even if the Peck requirements are satisfied, however, we
have broad discretion to determine when issue preclusion should
apply, and we may refuse to apply it where, for instance, it is
to be applied offensively, and the party against whom it is to be
applied had little incentive to defend in the first action or
where the second action affords the party procedural
opportunities unavailable in the first action that could readily
cause a different result. See Parklane Hosiery Co. v. Shore, 439
U.S. 322, 330-331 (1979); see also McQuade v. Commissioner, 84
T.C. 137, 143 (1985).
In considering respondent’s position that preclusive effect
attaches to the findings of the State court, we inquire whether
the courts of Montana would accord such findings preclusive
effect. See 28 U.S.C. sec. 1738 (2000) (the records and judicial
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