What is collateral estoppel (issue preclusion), and when does it apply?

• A. It prevents relitigation of an issue already decided, but only when the same party was a party to the prior action.
• B. It prevents relitigation of an issue already decided; applies when the issue was actually litigated, necessary to the judgment, and fully and fairly litigated.
• C. It allows relitigation of issues that were previously decided in another case.
• D. It applies only in criminal cases to issues decided by plea bargains.

Answer: (B)

Collateral estoppel, or issue preclusion, bars re-litigation of a specific issue that was actually litigated and determined in a prior case when that determination was essential to the outcome and the party against whom it is invoked had a full and fair opportunity to litigate. This means the issue must have been genuinely contested, the court’s decision on that issue must have been necessary to the judgment, and the litigants had a fair chance to present evidence and arguments.

The best choice captures these elements: the issue was actually litigated, is essential to the prior judgment, and was litigated fully and fairly. The other options are incorrect because they either misstate who can be bound (it isn’t limited to the same party), claim that relitigation is allowed, or restrict collateral estoppel to criminal cases or plea bargains, which it is not.