Here's another opinion that's perhaps only interesting to people with an abiding interest in sophisticated civil procedure matters. So feel free to skip it if you're not one of them. But since the panel misses the mark, in my opinion, so deeply, I feel compelled to comment.
The issue here involves collateral estoppel and virtual representation. Not the most thrilling issues to most, I admit. That said, the underlying dispute does involve an issue about which the public might be the tiniest bit interested; namely, whether James Cameron ripped off Filia and Constantinos Kourtis (and hence violated their copyright in the film treatment The Minotaur) in order to make Terminator II: Judgment Day. But I'll only talk about the boring civil procedure issue, of course, not the merits.
Here's the problem with the panel's opinion. The screenwriter for The Minotaur -- a guy named Green -- already sued Cameron (and others) for copyright infringement on the same basis and lost on summary judgment. So when Filia and Constantinos Kourtis sued, why aren't they bound to this result? Sure, they weren't parties, and the Due Process Clause generally precludes binding nonparties, since they're typically entitled to their own day in court. But why aren't the Kourtis sufficiently related to Green (whom they hired to write the screenplay) so that we bind them, either through traditional notions of privity or through the fancier doctrine of virtual representation?
Judge O'Scannlain concludes that they're not bound because they weren't adequately represented by Green, citing (among other cases) Hansberry and Martin v. Wilks. Sure, adequate representation is indeed a central limitation on the privity and virtual representation doctrines. But I don't think it at all applies here. Judge O'Scannlain holds that Green didn't adequately represent Kourtis because Green claimed that he held the copyright whereas Kourtis claimed that he owned it, so there was a conflict. But Judge O'Scannlain, with all due respect, misses the boat here. Sure, they had a conflict on this issue. So if we were trying to bind Kourtis to a finding in Green's lawsuit that Green owned the copyright, that'd be a nonstarter. But that's not what the defendants are trying to do. They're trying to bind Kourtis on the finding of infringement. And on that issue there's utterly no conflict between the interests of Green and Kourtis; they both have an interest in proving infringement and liability.
You don't fail to bind someone on adequate representation grounds because they have conflicting interests with you on a different issue. You refuse to bind them -- as in Hansberry and Wilks -- because their interests conflict with yours on the matter on which we're trying to bind the nonparty. If they adequately represent you on the issue on which you're to be bound, you can't complain just because on a different issue they might not have argued on your behalf.
It's a relatively simple -- and straightforward -- concept, albeit on an issue that admittedly confuses a lot of people. But it shouldn't have confused the panel, who should have been fairly informed about the contours of the adequate representation doctrine. As a result, the (unanimous) result here is, I think, definitely wrong.