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the previous proceeding (raised by the parties and a determination on the <br />issue was necessary ?to the judgment); (2) there was a final judgment on the <br />merits in the prior proceeding; (3) the party against whom preclusion is <br />sought was a party to the prior proceeding; and (4) the party against whom <br />issue preclusion is sought must have had a full and fair opportunity to <br />litigate the issue in the first proceeding (including .whether the remedies and <br />procedures in the first proceeding are substantially different from the <br />proceeding in which issue preclusion is asserted, whether the party in the <br />first proceeding had sufficient incentive to vigorously assert or defend its <br />position, and the extent to which the issues are identical). Elk Dance, supra. <br />i <br />In addition, offensive issue preclusion occurs when the plaintiff seeks to <br />foreclose a defendant from litigating an issue the defendant previously <br />litigated unsuccessfully in an action with another party; defensive use occurs <br />when a defendant seeks to prevent a plaintiff from asserting a claim the <br />plaintiff previously litigated and lost against another defendant. Parklane <br />Hosiery Company, Inc. v. Shore, 439 U.S. 322 (1979). Offensive claim <br />preclusion does not promote judicial economy in the same manner that is <br />promoted by defensive use, and offensive use may also be unfair to a <br />defendant in various ways. Therefore, the general rule should be that in <br />cases where the plaintiff could have easily joined in the earlier action or <br />where the application of offensive claim preclusion would be unfair to a <br />defendant, a trial court in the exercise of its discretion should not allow the <br />use of offensive issue preclusion. <br />In the Parklane case,i the respondent brought a stockholder's class action suit <br />for damages against a corporation that allegedly issued a materially false and <br />misleading proxy statement in violation of SEC law. Before this action <br />came to trial, the SEC sued the same corporation for the same proxy <br />statement. The SEC! won. The respondent in the suit for damages asserted <br />that the corporation was precluded from re-litigating the issues in the SEC <br />action including whether the proxy statement was false and misleading. <br />I <br />The U.S. Supreme Court held that offensive issue preclusion was <br />appropriate because the corporation had a full and fair opportunity to litigate <br />its claims in the SEC action, had every incentive to defend itself in that <br />action, there were no! procedural opportunities available to the corporation <br />that were unavailable in the SEC action of a kind that might be likely to <br />cause a different result, and the preclusion would not reward a plaintiff who <br />18