Montana v. United States

Brief Fact Summary.

Montana appealed a judgment that rendered a tax on contractors unconstitutional that was previously deemed constitutional in a state court case. 

Synopsis of Rule of Law.

Preclusion is appropriate where consecutive cases address the same issue.

Facts.

The government brought suit against Montana for charging a tax on contractors who worked on public constructions projects. The continuation of the case was dependent on the outcome of Peter Kiewit Sons’ Co. v. State Board of Equalization (1973),that tried the same issue in state court. The Montana Supreme Court ruledin favor of the tax andKiewit filed another complaint requesting refunds of taxes that were not at issue in the original lawsuit. The court dismissed the complaint on the basis of res judicata. In the case against Montana, the court held that Kiewit was not binding and struck the tax down as unconstitutional. 

Issue.

Whether preclusion is appropriate where consecutive cases address the same issue?

Held.

Yes. The issues raised in Kiewit were issues already concerning the government and the same issues that the government sought to resolve in the federal court case. The context of Kiewit did not change in the immediate case to render a different outcome between the state court and federal court. The holding of the district court is reversed because Kiewit precluded the government from litigating the gross receipts tax and the government had the opportunity to challenge the constitutionality of Kiewit.

Discussion.

Collateral estoppel and res judicata prevent parties from litigating on issues that have been previously resolved in other court cases. Collateral estoppel and res judicata prevent parties form litigating issues that have already been resolved and have received final judgments.