Fireman's Fund Insurance Company, a California Corporation v. International Market Place, a Limited Partnership, in Intervention v. Frank M. Reed, Jr.

Reed was convicted in federal court of destroying a building with the use of an explosive, in violation of 18 U.S.C. § 844 (i). His conviction was reversed because the government had failed to show that Reed used an explosive, as required under the statute. Fireman’s Fund, the insurer of the building, brought this civil action against Reed for restitution. The district court granted summary judgment for Fireman’s Fund. The court held that Reed was collaterally estopped from challenging his liability because the reversal of the conviction did not affect the validity of the jury’s determination that Reed had destroyed the building. Reed appeals the district court’s application of collateral estoppel. We REVERSE and REMAND.

Federal law governs, the collateral estoppel effect of a federal case decided by a federal court. Blonder-Tongue Laboratories v. University of Illinois Found., 402 U.S. 313 , 324 n. 12, 91 S.Ct. 1434 , 1440 n. 12, 28 L.Ed.2d 788 (1971).

A determination adverse to the winning party does not have preclusive effect. United States v. Cheung Kin Ping, 555 F.2d 1069, 1076 (2d Cir.1977); cf. Ornellas v. Oakley, 618 F.2d 1351 , 1356 (9th Cir.1980) (the determination…