- 48 - Collateral estoppel should not be applied where to do so would work a “manifest injustice”. See Grantham v. McGraw-Edison Co., 444 F.2d 210, 217 (7th Cir. 1971); see also 18 Wright et al., Fed. Prac. P., secs. 4424, 4426 (2002). The determination of “‘whether or not application of collateral estoppel is fair depends upon a case by case analysis,’ and * * * courts should be sensitive to the ‘practical realities which surround the parties’.” Chicago Truck Drivers v. Century Motor Freight, Inc., 125 F.3d at 531 (quoting Butler v. Stover Bros. Trucking Co. 546 F.2d 544, 551 (7th Cir. 1977)). A situation in which the application of collateral estoppel produces an unjust result is when the party sought to be precluded did not have an adequate incentive to obtain a full and fair adjudication in the initial action. See Ferrell v. Pierce, 785 F.2d 1372, 1384-1385 (7th Cir. 1985); see also Restatement, Judgments 2d, sec. 28(5) (subsection (c)) (1980). In Ferrell v. Pierce, supra, a District Court in a class action interpreted a decree controlling HUD mortgage default relief practices to require the use of a particular rule when calculating the date of default in all pending and future cases; no appeal was taken. In a subsequent contempt proceeding, the same issue arose with respect to retroactive rather than future application of the same rule. The Court of Appeals for the Seventh Circuit ruled that issue preclusion did not foreclosePage: Previous 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 Next
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