- 84 -
if the party against whom it is asserted did not have a full and
fair opportunity to litigate the issue in the earlier proceeding.
See Meier v. Commissioner, 91 T.C. at 286 (citing Allen v.
McCurry, 449 U.S. 90 (1980)). To determine whether the issue to
be precluded in case 2 was identical to an essential issue
actually litigated in case 1 (Peck requirements 1 and 4), early
cases disagreed over whether the facts found in case 1 had to be
ultimate facts or instead, included both ultimate and evidentiary
facts. See Meier v. Commissioner, 91 T.C. at 284 (citing The
Evergreens v. Nunan, 141 F.2d 927, 928-929 (2d Cir. 1944)
(Evergreens)). In Amos v. Commissioner, 43 T.C. 50 (1964), affd.
360 F. 2d 358 (4th Cir. 1965), this Court adopted the Evergreens
“ultimate facts” test, which limited the use of collateral
estoppel to ultimate facts found in the second case. However,
more recent cases and commentators have criticized the Evergreens
approach and its limitation of collateral estoppel to ultimate
facts. In Meier v. Commissioner, supra at 284-286, we abandoned
the Evergreens approach and adopted the rationale of Comment j,
Restatement, Judgments 2d, section 27 (1982), which focuses not
on whether the facts to be precluded from being relitigated were
evidentiary or ultimate, but on whether the parties recognized
the issue as important and necessary to the first judgment.39
39The Restatement reads as follows:
(continued...)
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