## Facts

- A trade association of electrical contractors and a union entered a nationwide agreement creating an industry fund financed by a 1% gross-payroll contribution.
- The agreement required the union to seek the same 1% contribution in collective bargaining agreements with contractors that were not association members.
- Nonmember contractors challenged the arrangement as an anticompetitive scheme and brought an antitrust class action in federal court; the court found the contribution requirement unlawful under Sherman Act § 1.
- While appeals were pending, the class case settled; contractors were given an opportunity to participate in the settlement or opt out.
- Premier, a nonmember contractor, opted out because it wanted to pursue a different damages theory, and continued its separate antitrust action in federal court in Illinois against the association and the fund.
- In the Illinois action, Premier sought to bind defendants to the prior liability findings using offensive nonmutual collateral estoppel (issue preclusion); the district court accepted that approach and entered judgment for Premier on liability, leaving damages for later proceedings.

## Issues

1. Whether a plaintiff who opted out of a class settlement may invoke offensive nonmutual collateral estoppel to bind defendants to liability findings from the earlier class action.
2. Whether discretionary fairness considerations bar offensive issue preclusion when the plaintiff could have pursued its theories in the prior class litigation but instead declined the class resolution.
3. Whether issues such as antitrust injury, causation, and any asserted immunities must be litigated in the later action without importing the earlier court’s findings as binding.

## Decision

- The Seventh Circuit reversed the district court’s use of offensive nonmutual collateral estoppel and remanded.
- The court held Premier could not, after opting out of the class settlement, use the earlier liability determinations to bind defendants in its separate suit.
- Premier was required to litigate liability, causation, and damages in the Illinois case on its own record rather than treating the earlier findings as conclusive.

## Legal Principles

- Offensive nonmutual collateral estoppel is discretionary; courts may deny it when its use would be inequitable or would encourage “wait-and-see” tactics.
- A class member who had an opportunity to participate in and influence prior class litigation, but then opts out of the settlement, may be barred from using favorable liability findings from that case against the same defendants in a later action.
- Fairness to defendants and the finality function of class actions weigh against allowing plaintiffs to reject a class resolution while selectively taking advantage of prior adjudicated issues.
- Antitrust claims still require proof of antitrust injury, causation, and damages in the plaintiff’s own action unless issue preclusion is properly available; questions about any asserted immunities must be addressed in the later proceedings on remand.

## Conclusion

The Seventh Circuit held that an opt-out plaintiff could not use offensive nonmutual issue preclusion to lock in liability findings from earlier class litigation, and it remanded for the parties to litigate antitrust liability and damages in the separate action without treating the earlier findings as binding.


Premier Elec. Constr. Co. v. Nat’l Elec. Contractors Ass’n, Inc., 814 F.2d 358 (7th Cir. 1987)