Koch v. Consolidated Edison Co. of New York

Consolidated Edison Company of New York, Inc. (ConEd) (defendant) supplied electricity to New York City (city) (plaintiff). In July 1977, the city was engulfed in an approximately 25-hour blackout. Food Pageant, Inc. and other blackout victims sued ConEd, alleging that the blackout was caused by ConEd’s gross negligence. The court in the Food Pageant case (Food Pageant) found that ConEd’s gross negligence caused the blackout. The city, through its mayor, Edward Koch (plaintiff), and 14 public-benefit corporations (plaintiffs), also sued ConEd, alleging, among other things, that ConEd’s gross negligence caused the blackout. The city moved for partial summary judgment with respect to gross negligence, arguing that ConEd was collaterally estopped from disputing its gross negligence by the Food Pageant ruling. The supreme court agreed, and the appellate division affirmed. ConEd appealed, arguing that Food Pageant should not be given collateral-estoppel effect because (1) other courts found ConEd not guilty of gross negligence; (2) new evidence showed that ConEd was not grossly negligent; (3) collateral estoppel should require mutuality (i.e., should apply only if the party seeking preclusion was a party to the prior proceeding); (4) the Food Pageant verdict was the product of an improper jury compromise; (5) Food Pageant involved only a $40,500 verdict, but ConEd faced more than $200 million in aggregate blackout claims; (6) New York’s adoption of comparative negligence militated against third-party collateral estoppel; and (7) applying collateral estoppel would violate ConEd’s due-process rights. However, (1) the favorable court decisions ConEd cited were rendered in small-claims court, which employed less formal, simplified procedures and which, by statute, could not be given preclusive effect in any other litigation; (2) ConEd’s purported new evidence was rejected at the Food Pageant trial; (3) ConEd offered no justification for requiring mutuality; (4) ConEd offered only speculation in connection with its jury-compromise claim; (5) notwithstanding the size of the Food Pageant claims and damages award, ConEd had a full and fair opportunity to litigate gross negligence in Food Pageant, the burden of persuasion was the same in Food Pageant as in this case, and ConEd, which recognized Food Pageant’s potentially preclusive effect, was fully motivated to defend that action fully and vigorously; (6) ConEd did not assert that the city contributed to the blackout, rendering its comparative-negligence arguments irrelevant to liability (although perhaps relevant to damages); and (7) ConEd cited no authority for the proposition that due process prohibited third-party collateral estoppel against a party that had the opportunity to fully and fairly litigate the relevant issue in the prior proceeding.