Opinion
Case No.: 2:20-cv-10661-CBM-(SKx)
2022-08-04
Terri FREEMAN, et al., Plaintiffs, v. ETHICON, INC., et al., Defendants.
Alex Barlow, Pro Hac Vice, Heard Robins Cloud and Black LLP, Houston, TX, Jill K. Nicaud, Pro Hac Vice, Shrader and Associates LLP, Houston, TX, Ari Scott Friedman, Saima Khan, Robins Cloud LLP, Santa Monica, CA, Kyle A. Dingman, Pro Hac Vice, Scott and Scott LLP, Colchester, CT, for Plaintiffs. Jason Matthew Zarrow, Zachariah A. Tafoya, O'Melveny and Myers LLP, Los Angeles, CA, Joshua J. Wes, Michael Carl Zellers, Mollie Fleming Benedict, Nicholas Vaughan Janizeh, Tucker Ellis LLP, Los Angeles, CA, Chad R. Hutchinson, Pro Hac Vice, Butler Snow LLP, Ridgeland, MS, Kimberly Gustafson Bueno, Pro Hac Vice, Bulter Snow LLP, Austin, TX, Matthew P. Smith, Butler Snow LLP, Nashville, TN, Paul V. Cassisa, Jr., Pro Hac Vice, Butler Snow LLP, Oxford, MS, Stephen Eric Rumanek, Pro Hac Vice, Troutman Pepper Hamilton Sanders LLP, Atlanta, GA, for Defendants Ethicon, Inc., Johnson & Johnson.
Alex Barlow, Pro Hac Vice, Heard Robins Cloud and Black LLP, Houston, TX, Jill K. Nicaud, Pro Hac Vice, Shrader and Associates LLP, Houston, TX, Ari Scott Friedman, Saima Khan, Robins Cloud LLP, Santa Monica, CA, Kyle A. Dingman, Pro Hac Vice, Scott and Scott LLP, Colchester, CT, for Plaintiffs. Jason Matthew Zarrow, Zachariah A. Tafoya, O'Melveny and Myers LLP, Los Angeles, CA, Joshua J. Wes, Michael Carl Zellers, Mollie Fleming Benedict, Nicholas Vaughan Janizeh, Tucker Ellis LLP, Los Angeles, CA, Chad R. Hutchinson, Pro Hac Vice, Butler Snow LLP, Ridgeland, MS, Kimberly Gustafson Bueno, Pro Hac Vice, Bulter Snow LLP, Austin, TX, Matthew P. Smith, Butler Snow LLP, Nashville, TN, Paul V. Cassisa, Jr., Pro Hac Vice, Butler Snow LLP, Oxford, MS, Stephen Eric Rumanek, Pro Hac Vice, Troutman Pepper Hamilton Sanders LLP, Atlanta, GA, for Defendants Ethicon, Inc., Johnson & Johnson.
ORDER RE: PLAINTIFFS' MOTION FOR PARTIAL SUMMARY JUDGMENT (DKT. NO. 228)
CONSUELO B. MARSHALL, UNITED STATES DISTRICT JUDGE
The matter before the Court is Plaintiffs Terri and Earl Freeman's Motion for Partial Summary Judgment. (Dkt. No. 229). The Motion is fully briefed. (See Dkt. Nos. 232, 233.) The parties submitted supplemental memoranda after the Motion was fully briefed, discussing the California Supreme Court's denial of Defendants' appeal of the state court case. (See Dkt. Nos. 238, 239, 240.) This Order does not include or discuss the supplemental briefing.
I. BACKGROUND
Plaintiffs ask the Court to grant partial summary judgment in their favor on the basis of issue preclusion flowing from a recent California Court of Appeal decision, People v. Johnson & Johnson et al., 77 Cal.App.5th 295, 292 Cal.Rptr.3d 424 (2022) ("the state case"). Specifically, Plaintiffs ask the Court to hold that five unappealed factual determinations made in that case are binding on Defendants in this litigation. Plaintiffs also ask the Court to judicially notice certain parts of the record from the state's case.
In 2016, the California Attorney General brought suit against Defendants Johnson and Johnson and Ethicon, Inc., claiming that Defendants misrepresented the risks and complications of its pelvic mesh devices to doctors and patients in violation of the Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.) ("UCL") and the False Advertising Law (Bus. & Prof. Code, § 17500 et seq.) ("FAL"). The California case did not include the following claims at issue in this case: Count I - Negligence (Negligent Failure to Warn and Negligent Design); Count III - Strict Liability - Failure to Warn; Count XI - Breach of Express Warranty; and Count XVI - Loss of Consortium. (Dkt. 217 at 5.) Nor was the evidence offered by the State limited to the Prolift + M device, the only device at issue here (instead, the state case included various devices manufactured by Defendants).
Following a nine week bench trial in 2019, the state trial judge issued a 128-page statement of decision and final judgment, finding in favor of Plaintiffs and assessing roughly $345,000,000 in penalties against Defendants. Defendants timely appealed the trial judge's decision to the California Court of Appeal. (Dkt. No. 229-4 at 48.) On March 3, 2021, Defendants filed their Opening Brief in the California Court of Appeal, followed by their Reply Brief on September 13, 2021. (Dkts. 229-8, 229-10.) The Court of Appeal issued its decision on April 11, 2022, affirming the trial court judgment with modifications. (Dkt. 229-7 at 2.) At the hearing in this case, the parties informed this Court that on July 13, 2022, the California Supreme Court denied Defendants' petition for review of the California Court of Appeal's decision, and the parties also informed the Court that Defendants intend to appeal the state case to the United States Supreme Court.
Plaintiffs contend that the exact mesh device implanted in Plaintiff's body was one of the mesh units at issue in the state case and about which the state trial judge made findings. Furthermore, Plaintiffs state that the state trial judge was required to decide many of the factual and scientific issues that are in contention and set to be tried in this case. Defendants contend here that their pelvic mesh does not degrade, and that it poses few additional risks compared to traditional pelvic organ prolapse procedures. In the state case, however, the Court found that Johnson & Johnson's Prolene mesh (the mesh used in the devices in this case) degrades. The state court also held that "the Court concludes that the greater weight of the evidence" indicates that the mesh causes or poses additional dangers aside from vaginal exposure and erosion. (Statement of Decision - Dkt. No. 229-1 at 29.)
Plaintiffs contend that, in light of the recent conclusion of the Court of Appeal proceedings, combined with Defendants' election not to appeal those findings, they are entitled to issue preclusion.
II. STATEMENT OF THE LAW
On a motion for summary judgment, the Court must determine whether, viewing the evidence in the light most favorable to the nonmoving party, there are any genuine issues of material fact. Simo v. Union of Needletrades, Indus. & Textile Employees, 322 F.3d 602, 609-10 (9th Cir. 2003); Fed. R. Civ. P. 56. Summary judgment against a party is appropriate when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56. A factual dispute is "material" only if it might affect the outcome of the suit under governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). An issue is "genuine" only if there is a sufficient evidentiary basis on which a reasonable jury could find for the non-moving party. Id. at 249, 106 S.Ct. 2505. The evidence presented by the parties must be admissible. Fed. R. Civ. P. 56(e). In judging evidence at the summary judgment stage, the Court does not make credibility determinations or weigh conflicting evidence. T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987). Rather, "[t]he evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in [the nonmovant's] favor." Anderson, 477 U.S. at 255, 106 S.Ct. 2505. But the non-moving party must come forward with more than "the mere existence of a scintilla of evidence." Id. at 252, 106 S.Ct. 2505.
III. DISCUSSION
1. Requests for Judicial Notice ("RJN")
The parties each request that the Court judicially notice various documents.
"In determining whether issue preclusion exists, a court may take judicial notice of all relevant facts that are shown by the court's own records, as well as public records from other proceedings." Galen Hosp. Alaska, Inc. v. Azar, 474 F. Supp. 3d 214, 227 (D.D.C. 2020).
1.1. Plaintiffs' Request
Plaintiffs request that the Court judicially notice the Statement of Decision and other documents (including the Complaint, Answer, Judgment, and subsequent appeals) from the state court case. (Mot. - Dkt. No. 229 at 20.) Defendants did not object to the request.
The Court grants Plaintiffs' request and judicially notices the requested documents because they are relevant to this Motion and otherwise comply with Federal Rule of Evidence 201. See U.S. Bank, N.A. v. Miller, No. CV 12-05632-MMM-MANx, 2013 WL 12114100, at *4 (C.D. Cal. Sept. 30, 2013) ("Court orders and filings are the type of documents that are properly noticed under [Fed. R. Evid. 201]. Notice can be taken, however, only for the limited purpose of recognizing the judicial act that the order represents on the subject matter of the litigation.") (internal quotation marks and citations omitted).
1.2. Defendants' Request
Defendants request that the Court judicially notice sixteen exhibits filed concurrently with their Opposition to Plaintiffs' Motion and Response to Plaintiffs' RJN. The sixteen exhibits consist of trial transcripts, jury verdict forms, charges of court, jury interrogatories, and court orders from various cases in other courts involving claims against Defendants for injuries caused by their mesh products. Plaintiffs did not oppose Defendants' request.
The Court grants Defendants' RJN as to all sixteen exhibits because the documents meet the requirements of Federal Rule of Evidence 201 and are relevant to this Motion.
2. Timeliness
Defendants contend that Plaintiffs' Motion, which was filed on June 23, 2022, was untimely because Defendants filed their opening brief for their appeal before the California Court of Appeal on March 3, 2021, and thus Plaintiffs were put on notice about their theory of issue preclusion on that date. (Opp'n - Dkt. No. 232 at 31.) Plaintiffs contend that the Motion was timely filed because, at a hearing held on April 19, 2022, the parties agreed that the matter of issue preclusion should be heard in a motion for summary judgment.
Therefore, the Court finds that the Motion was timely filed.
3. Issue Preclusion
Plaintiffs move for partial summary judgment on the grounds that the Court should find that the five "unappealed" factual findings in the underlying state case have issue preclusive effect in this case.
As a threshold matter, Plaintiffs contend that the law of preclusion is substantive (rather than procedural), and therefore California law controls because the Court's jurisdiction in this case is based on diversity of the parties. Priest v. Am. Smelting & Ref. Co., 409 F.2d 1229, 1231 (9th Cir. 1969) (substantive law of a state "include[s] the law pertaining to collateral estoppel."); Giles v. Gen. Motors Acceptance Corp., 494 F.3d 865, 884 (9th Cir. 2007) ("[I]n this diversity case where only substantive state law is at issue we apply the preclusion law that the Nevada courts would apply.")
Defendants agree that California law applies. They contend, however, that the Court must analyze issue preclusion under the following two-step process. First, the Court must analyze whether permitting offensive issue preclusion is fair under Parklane Hosiery Co. v. Shore, 439 U.S. 322, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979), a Supreme Court case requiring district courts to analyze the fairness of allowing nonmutual offensive issue preclusion. Second, the Court must determine whether the state that rendered the underlying judgment (in this case, California) would give the underlying judgment preclusive effect under its own laws. In re Bugna, 33 F.3d 1054, 1057 (9th Cir. 1994) ("[i]n determining the collateral estoppel effect of a state court judgment, federal courts must, as a matter of full faith and credit, apply that state's law of collateral estoppel.").
Therefore, the Court analyzes issue preclusion in this case under the two-step process proposed by Defendants. See Robi v. Five Platters, Inc., 838 F.2d 318, 322 (9th Cir. 1988) (analyzing issue preclusion under Parklane and holding that "[u]nder the Full Faith and Credit Act [28 U.S.C. § 1738], federal courts must give state judicial proceedings 'the same full faith and credit . . . as they have by law or usage in the courts of [the] State . . . from which they are taken . . . This Act requires federal courts to apply the [preclusion] rules of a particular state to judgments issued by courts of that state." (citations omitted).)
3.1. Parklane Analysis (Step One)
Parklane analyzed non-mutual "offensive issue preclusion": "when the plaintiff seeks to foreclose the defendant from litigating an issue the defendant has litigated unsuccessfully in an action with another party." Parklane Hosiery Co., Inc. v. Shore, 439 U.S. 322, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979). The Supreme Court recognized that offensive issue preclusion can present unique fairness concerns because it can incentivize plaintiffs to wait on the sidelines "in the hope that the first action by another plaintiff will result in a favorable judgment." Id. at 330, 99 S.Ct. 645. To address this concern, the Supreme Court explained that rather than "preclude the use of offensive [issue preclusion]," "the preferable approach" is "to grant trial courts broad discretion to determine when it should be applied." Id. at 331, 99 S.Ct. 645.
Furthermore, the Ninth Circuit has held that "[t]he Supreme Court's grant of "broad discretion" to trial courts provides those courts the authority to take potential shortcomings or indices of unfairness into account when considering whether to apply offensive nonmutual issue preclusion . . . ." Syverson v. Int'l Bus. Mach. Corp., 472 F.3d 1072, 1078-79 (9th Cir. 2007). Parklane outlined the following factors for Courts to consider when evaluating fairness: (1) whether "the plaintiff had the incentive to adopt a 'wait and see' attitude in the hope that the first action by another plaintiff would result in a favorable judgment"; (2) whether the defendant had the incentive to defend the first suit; (3) whether one or more judgments entered before the one invoked as preclusive are inconsistent with the latter or each other, suggesting that reliance on a single adverse judgment would be unfair; and (4) whether the defendant might be afforded procedural opportunities in the later action that were unavailable in the first "and that could readily cause a different result." Parklane, 439 U.S. at 330-31, 99 S.Ct. 645. However, "neither the Supreme Court nor the Ninth Circuit has held that these equitable factors are exhaustive." TCL Commc'ns Tech. Holdings Ltd. v. Telefonaktenbologet LM Ericsson, 2016 WL 6662725, at *4 (C.D. Cal. May 26, 2016) (citing Syverson, 472 F.3d at 1078.)
Defendants contend that Plaintiffs' Motion should be denied (and issue preclusion should not be permitted) on the grounds that (1) other juries can (and have) decided differently than the state trial judge's bench opinion, (2) there are procedural differences between the state court bench trial and a federal jury trial that make the application of preclusion unfair and (3) a bench trial ruling would violate Defendants' Seventh Amendment Rights.
3.1.1. Inconsistent Jury Results
"The existence of inconsistent prior judgments is perhaps the single most easily identified factor that suggests strongly that neither should be given preclusive effect." Wright & Miller, 18A Fed. Prac. & Proc. § 4465.2 (3d ed. Apr. 2022 Update); Restatement (Second) Judgments § 29(4). "Countless courts have refused to apply issue preclusion in situations where there were inconsistent judgments on the books," particularly "where different juries reach contradictory verdicts." Grisham v. Philip Morris, Inc., 670 F. Supp. 2d 1014, 1033 (C.D. Cal. 2009).
Defendants cite various district court cases within the Ninth Circuit that have rejected a plaintiff's request to give preclusive effect to an inconsistent judgment. See, e.g., Lavetter v. Int'l Playtex, 706 F. Supp. 722, 723 (D. Ariz. 1988) ("In view of the fact of prior inconsistent verdicts, this is not an appropriate instance for offensive use of collateral estoppel."); accord Pooshs v. Philip Morris USA, Inc., 904 F. Supp. 2d 1009, 1033-34 (N.D. Cal. 2012) (court was "not persuaded that it would be fair to give preclusive effect to the findings of the court in the DOJ case, given the numerous other inconsistent judgments, with some favoring tobacco defendants and some favoring plaintiffs—or to apply a preclusive effect based on a single adverse judgment"); Hynix Semiconductor Inc. v. Rambus Inc., 2009 WL 292205, at *4 (N.D. Cal. Feb. 3, 2009) (declining to grant preclusive effect to a judgment that involved a "subjective determination . . . on which reasonable minds can differ" because "the issue's 'slippery' nature suggest[ed] it would be unfair to preclude [the defendant] from relitigating it").
Defendants contend that there are inconsistent jury results here because, "[s]ince 2013, 24 product liability lawsuits involving Defendants' polypropylene pelvic mesh products have been tried to verdict in federal and state courts." (Opp'n - Dkt. No. 232 at 13-14.) The cases involved similar product liability claims brought by various plaintiffs, and the cases had varying results (the plaintiffs won in some, Defendants won in others). In support of this argument, and as discussed above, Defendants requested that the Court judicially notice various jury verdict forms and sheets and charges of court from the various cases. (See Exs. 1-16 to Tafoya Decl.)
None of the exhibits, however, demonstrate that the jury made factual findings related to the factual findings made by the state court judge at issue in this case. As their primary example, Defendants cite to the jury verdict in Shears v. Ethicon, Inc. (from the Northern District of West Virginia), which concerned whether Defendants' mesh degrades. In the jury's special interrogatories form, because the jury decided that the plaintiff did not "prove by a greater weight of the evidence that Defendants negligently designed the TVT," the jury did not proceed to questions concerning whether the mesh degrades or caused any injuries, which are the findings at issue here. (Ex. 2 to Tafoya Decl.) Thus, the jury verdicts do not show inconsistent jury results because the jury did not expressly make a contrary finding to the state trial judge's findings in this case. Furthermore, none of the additional cases that Defendants request the Court judicially notice include any jury findings contrary to the state trial judge's five findings at issue in this case.
The state trial judge's findings at issue here were specific, and none of the other cases cited by Defendants include any specific findings about the issues of mesh degradation and the safety of the Prolift + M. Accordingly, the Court find that the jury verdicts submitted my Defendants are not inconsistent with the state trial judge's findings.
3.1.2. Procedural Differences
The Supreme Court noted in Parklane that it "might be unfair to apply offensive estoppel [ ] where the second action affords the defendant procedural opportunities unavailable in the first action that could readily cause a different result." 439 U.S. at 330-31, 99 S.Ct. 645. Defendants contend the procedural differences between federal district courts and California state courts render issue preclusion unfair in this case for three reasons.
First, Defendants contend that the standards governing the admissibility of expert testimony — the Kelly-Frye standard in California, and the Daubert standard in federal courts — can lead to the "different results" contemplated in Parklane. Id. In support of this argument, Defendants cite to Plaintiffs' "Unappealed Finding 4" on mesh degradation. (Appendix One - List of Unappealed Findings - Dkt. No. 229-2 at 2-3). To support this finding, the state trial judge cited to the expert witness testimony of Vladimir Iakovlev's, which concerned the "bark theory" of degradation. (Statement of Decision - Dkt. No. 229-1 at 26-27.) In contrast to the state trial judge's decision, Defendants cite to multiple federal cases that rejected the "bark theory" as unreliable and inadmissible under Daubert. See, e.g., Cutter v. Ethicon, Inc., 2020 WL 2060342, at *6 (E.D. Ky. Apr. 29, 2020) (excluding Dr. Iakovlev's bark degradation testimony to the extent it is based on his "bark theory"); Salinero v. Johnson & Johnson, 2019 WL 7753453, at *8-10 (S.D. Fla. Sept. 5, 2019) (similar); Kaiser v. Johnson & Johnson, 2018 WL 739871, at *3 (N.D. Ind. Feb. 7, 2018) (allowing Dr. Iakovlev "to testify regarding his degradation opinions generally" but finding "no evidence . . . to demonstrate that Dr. Iakovlev's 'degradation bark theory' [wa]s the product of reliable principles and methods"); Enborg v. Ethicon, Inc., 2022 WL 800879, at *6 (E.D. Cal. Mar. 16, 2022) (excluding "Dr. Iakovlev's 'bark theory' of degradation").
The Court finds that the differences between the Kelly-Frye and Daubert standards do not rise to the level of procedural differences contemplated under this Parklane factor. Neither party has cited to any case — state or federal — that has found unfairness in the issue preclusion context based upon the difference between the two standards. Furthermore, the overlap of the two standards generally results in the same evidence being admitted.
Second, Defendants contend that permitting issue preclusion here would unfairly allow Plaintiffs to rely on evidence that would not be admissible in this case. Plaintiffs originally brought design and warning-based claims regarding two separate polypropylene devices: the TVT-O and Prolift + M. By stipulation, however, Plaintiffs "withdrew all claims related to TVT-O, including the expert designation of Prof. Dr. Med. Uwe Klinge." (Stip. - Dkt. 179 at 2.) Defendants have since withdrawn many of their motions in limine based on the narrowed set of evidence resulting from Plaintiffs' dismissal of their TVT-O related claims. Thus, Defendants contend that permitting issue preclusion here would give Plaintiffs an "end-run around" the relevancy inquiry as to other mesh products, because the evidence before the state trial judge was not limited to the Prolift + M, but rather multiple mesh devices Defendants sold. The Court finds that this argument is moot because the Court limits any finding of issue preclusion to facts only pertaining to the Prolift + M and does not grant preclusive effect to evidence concerning other products not at issue in this case, such as the TVT-O.
Third, Defendants contend that permitting issue preclusion would unfairly deprive them of the ability to offer evidence at trial that has developed since the state court trial that took place between July and September 2019. In support of this argument, Defendants cite two scientific studies which generally found that Defendants' mesh products do not cause the injuries alleged by Plaintiffs (which contradict Plaintiffs' Unappealed Findings Nos. 1, 2, and 5 that concern the dangerous properties of the mesh):
(1) a study published in April 2022 by Kowalik et al. (Ex. 17 to Tafoya Decl. at 1, 4, 6.); andDefendants also cite two additional scientific studies that purportedly contradicts Plaintiffs' Unappealed Finding No. 4 regarding mesh degradation:
(2) a study published in March 2022 by Mueller et al. (Ex. 18 to id. at 1, 3, 5).
(1) a study published in February 2020 by Thames et al., (Ex. 19 to id.)
(2) a study published in October 2021 by the American Urogynecologic Society (AUGS) and the Society of Urodynamics, Female Pelvic Medicine and Urogenital Reconstruction (SUFU). (Ex. 20 to id. at 2.)
Under California law, "even if . . . new evidence was not previously available, . . . collateral estoppel will still apply if the new evidence goes only to the weight of the evidence in support of the party who opposes preclusion." Khanna v. State Bar of Cal., 505 F. Supp. 2d 633, 650 (N.D. Cal. Sept. 10, 2007) (citing Roos v. Red, 130 Cal. App. 4th 870, 888, 30 Cal.Rptr.3d 446 (Ct. App. 2005) ("the existence of 'new evidence' normally does not bar the application of collateral estoppel.")). Additionally, the October 2021 study published by AUGS is verbatim to an identical version of the report originally published in 2015 (prior to the state court trial). Furthermore, the theories discussed in the February 2020 study published by Thames were considered by the state court trial judge. (See Statement of Decision - Dkt. No. 229-1 at 63.)
In sum, the Court finds that there are no procedural differences between California and federal courts that render issue preclusion unfair in this case.
3.1.3. Defendants' Seventh Amendment Rights
Courts interpreting the Parklane factors have cautioned that permitting collateral estoppel can implicate a defendant's Seventh Amendment right to have factual issues tried to a jury. See S.E.C. v. Monarch Funding Corp., 192 F.3d 295, 304 (2d Cir. 1999) (recognizing that, because "collateral estoppel may have a devastating impact on a civil litigant's constitutional right to a jury trial," Parklane permits collateral estoppel only "where the issue was 'fully and fairly' adjudicated in the prior proceeding") (quoting Parklane, 439 U.S. at 325, 99 S.Ct. 645); see also McCook v. Standard Oil Co., 393 F. Supp. 256, 258-59 (C.D. Cal. 1975) ("[T]he strong public policy favoring jury trials precludes the court from applying the doctrine of collateral estoppel in this case because [defendant] did not have a right to try its case before a jury in the prior government action . . . .").
Defendants contend that, because the state case was a bench trial, allowing issue preclusion would violate their Seventh Amendment rights, and they cite multiple cases within the Ninth Circuit that have declined to permit issue preclusion to findings made in prior bench trials. See Pooshs v. Philip Morris USA, Inc., 904 F. Supp. 2d 1009, 1034 (N.D. Cal. 2012) (declining to permit issue preclusion in a products liability case because the prior case "was a RICO case tried to the court . . . and was not a product liability case tried to a jury."); Shaffer v. R.J. Reynolds Tobacco Co., 860 F. Supp. 2d 991, 998 (D. Ariz. 2012) ("[t]he lack of a jury trial in the DOJ case and special concerns pertaining to damages weighs against applying offensive nonmutual issue preclusion in this case."); Grisham v. Philip Morris, Inc., 670 F. Supp. 2d 1014, 1037 (C.D. Cal. 2009) ("procedural fairness considerations would ultimately weigh against allowing issue preclusion in the present case. The Court is wary of depriving Defendants of their Seventh Amendment interest in having a jury decide the factual basis for Plaintiff's claim.") In these cases, however, the findings were made in prior federal court cases; whereas in this case, the findings were made in state court. "[T]he Seventh Amendment is not applicable to the states." Andrakin v. S.F. Parking & traffic Com'n, 26 F.3d 129 (9th Cir. 1994) (citing Minneapolis & St. L.R.R. v. Bombolis, 241 U.S. 211, 216-17, 36 S.Ct. 595, 60 L.Ed. 961 (1916)).
Here, the Court has diversity jurisdiction over California state claims. The Court thus finds that Defendants' Seventh Amendments would not be violated by allowing issue preclusion in this case because California law (which substantively applies here) does not deny preclusive effect to prior decisions because they were made by a judge rather than a jury. See Roos, 30 Cal. Rptr. 3d at 453 (finding that "the lack of a jury trial on contested factual issues in one proceeding does not preclude application of collateral estoppel in a subsequent proceeding.").
* * *
In sum, the Court finds that issue preclusion in this case is fair under the Parklane factors.
3.2. Whether California Law Would Allow Issue Preclusion (Step Two)
California permits application of issue preclusion (1) after final adjudication of a prior proceeding, (2) of an identical issue, (3) actually litigated in the former proceeding, (4) necessarily decided in the former proceeding, and (5) asserted against a party in the former proceeding or someone in privity with a party. DKN Holdings LLC v. Faerber, 61 Cal. 4th 813, 825, 189 Cal.Rptr.3d 809, 352 P.3d 378 (Cal. 2015).
Defendants contend that the Motion should be denied because Plaintiffs cannot establish that the state court decision is final (element one) or that the issues are identical (element two).
3.2.1. Finality
Under California's finality rule, the judgment must be "final in the sense that no further judicial act remains to be done to end the litigation." People v. Cooper, 149 Cal.App.4th 500, 57 Cal. Rptr. 3d 389, 405 (2007). Furthermore, under California law, "an unsatisfied trial court judgment has no preclusive effect until the appellate process is complete." Samara v. Matar, 5 Cal. 5th. 322, 325, 234 Cal. Rptr.3d 446, 419 P.3d 924 (2018).
Defendants contended that the state trial court's Statement of Decision is not final because it is still being appealed (at the time the Motion was fully briefed, Defendants' appeal to the California Supreme Court was pending). But neither of Defendants' appeals (to the California Court of Appeal or California Supreme Court) included the five factual findings to which Plaintiffs seek issue preclusion. Defendants thus do not — and at this point cannot — challenge these findings in their appeals. Accordingly, because Defendants are unable to appeal the five factual findings, the Courts find that the finality requirement is met.
3.2.2. Identical Issue
Defendants contend that the issues are not identical because the claims in the state court case were for unfair competition and false advertising against Defendants, both of which depended on Defendants' marketing materials and Instructions for Use for their products; whereas in this case Plaintiffs' claims are for negligent design and product liability. Under California law, however, "[t]he 'identical issue' requirement addresses whether 'identical factual allegations' are at stake in the two proceedings, not whether the ultimate issues or dispositions are the same." Hernandez v. City of Pomona, 46 Cal. 4th 501, 94 Cal.Rptr.3d 1, 207 P.3d 506 (2009) (citation omitted); Hardwick v. Cty. of Orange, 980 F.3d 733, 740 (9th Cir. 2020) (same). Here, Plaintiffs' list of the five unappealed factual findings made in the state court case are issues in the present case: they all concern whether the Prolift + M had "dangerous properties," and whether Defendants' mesh degrades. Accordingly, the Court finds that the issues are identical.
* * *
In sum, the Court finds that California law would permit issue preclusion under the facts of this case because the finality and identical issue requirements are met (the only two requirements that Defendants challenge).
IV. CONCLUSION
Accordingly, the Court permits issue preclusive effect to the state trial judge's five factual findings, and therefore GRANTS Plaintiff's Motion for Partial Summary Judgment.
IT IS SO ORDERED.