Opinion ID: 781246
Heading Depth: 4
Heading Rank: 3

Heading: Privity Between the Parties

Text: 50 The final element of res judicata is privity between the parties. We first note that several parties in both actions are identical, and therefore quite obviously in privity. Thirty-three of the individual California-side plaintiffs and three of the individual Nevada-side plaintiffs were also named plaintiffs in the earlier Tahoe actions. There can be no question that these parties already had a complete opportunity to litigate their claims. Similarly, the Association — the lead plaintiff in both the prior lawsuit and the current action — is unequivocally bound by its own judgment in the former suit. 51 Even when the parties are not identical, privity may exist if there is `substantial identity' between parties, that is, when there is sufficient commonality of interest. In re Gottheiner, 703 F.2d 1136, 1140 (9th Cir.1983) (citation omitted); see also Stratosphere Litigation, 298 F.3d at 1142 n. 3 (finding privity when a party is so identified in interest with a party to former litigation that he represents precisely the same right in respect to the subject matter involved) (citation omitted); Shaw v. Hahn, 56 F.3d 1128, 1131-32 (9th Cir.1995) (finding privity when the interests of the party in the subsequent action were shared with and adequately represented by the party in the former action); United States v. ITT Rayonier, Inc., 627 F.2d 996, 1003 (9th Cir.1980) ([A] `privy' may include those whose interests are represented by one with authority to do so.). We made clear, in In re Schimmels, that privity is a flexible concept dependent on the particular relationship between the parties in each individual set of cases: 52 Federal courts have deemed several relationships sufficiently close to justify a finding of privity and, therefore, preclusion under the doctrine of res judicata: First, a non-party who has succeeded to a party's interest in property is bound by any prior judgment against the party. Second, a non-party who controlled the original suit will be bound by the resulting judgment. Third, federal courts will bind a non-party whose interests were represented adequately by a party in the original suit. In addition, privity has been found where there is a substantial identity between the party and nonparty, where the nonparty had a significant interest and participated in the prior action, and where the interests of the nonparty and party are so closely aligned as to be virtually representative. Finally, a relationship of privity can be said to exist when there is an express or implied legal relationship by which parties to the first suit are accountable to non-parties who file a subsequent suit with identical issues. 53 Schimmels, 127 F.3d at 881 (citations omitted); see also Richards v. Jefferson County, 517 U.S. 793, 798, 116 S.Ct. 1761, 135 L.Ed.2d 76 (1996) (Moreover, although there are clearly constitutional limits on the `privity' exception, the term `privity' is now used to describe various relationships between litigants that would not have come within the traditional definition of that term.); Alpert's Newspaper Delivery Inc. v. N.Y. Times Co., 876 F.2d 266, 270 (2d Cir.1989) (The issue is one of substance rather than the names in the caption of the case; the inquiry is not limited to a traditional privity analysis.); ITT Rayonier, 627 F.2d at 1003 (Courts are no longer bound by rigid definitions of parties or their privies for purposes of applying collateral estoppel or res judicata.). 54 One of the relationships that has been deemed sufficiently close to justify a finding of privity is that of an organization or unincorporated association filing suit on behalf of its members. See, e.g., 18A CHARLES ALAN WRIGHT, ARTHUR R. MILLER & EDWARD H. COOPER, FEDERAL PRACTICE & PROCEDURE § 4456 (2002) [hereinafter WRIGHT & MILLER] (cataloguing cases). Of course, the organization must adequately represent the interests of its individual members if its representation is to satisfy the due process concerns articulated in Hansberry v. Lee, 311 U.S. 32, 40-43, 61 S.Ct. 115, 85 L.Ed. 22 (1940). See, e.g., Pedrina v. Chun, 97 F.3d 1296, 1302 (9th Cir.1996). However, if there is no conflict between the organization and its members, and if the organization provides adequate representation on its members' behalf, individual members not named in a lawsuit may be bound by the judgment won or lost by their organization. A finding of privity in such circumstances is particularly appropriate in cases involving interests in real property, for, as the Supreme Court has recognized, [t]he policies advanced by the doctrine of res judicata perhaps are at their zenith in cases concerning real property, land and water. Nevada v. United States, 463 U.S. 110, 129 n. 10, 103 S.Ct. 2906, 77 L.Ed.2d 509 (1983). 55 In this case, all of the remaining individual plaintiffs are members of the Association, and given the history and nature of this litigation, their membership in and close relationship with the Association is sufficient to bind them as parties in privity for res judicata purposes. In both the earlier suit and the current action, the individual plaintiffs clearly hitched their fortunes to the Association's able leadership. The Association's own description of its role is most telling: 16 56 Plaintiff TAHOE-SIERRA PRESERVATION COUNCIL, INC .... is a membership organization representing approximately 2,000 dues-paying members who own private real properties, both improved and unimproved, located in the Lake Tahoe Basin, which real properties are subject to the planning and regulatory jurisdiction of Defendant TRPA. The principal purpose of the PRESERVATION COUNCIL is to actively represent the interests of its members, individually and collectively, before the TRPA and other regulatory agencies in connection with its members' use and enjoyment of their private properties located in the Lake Tahoe Basin. All of the PRESERVATION COUNCIL'S members owning real property in the Lake Tahoe Basin have a direct interest in the planning and regulatory activities of TRPA, and particularly in the specific provisions of the TRPA regulations complained of herein.... Among the PRESERVATION COUNCIL'S members are each of the named-Plaintiffs joining in this action.... 57 We conclude that in these circumstances, the Association represented the interests of its member property owners sufficiently thoroughly to bind other members alleging similar wrongs arising from the same set of facts. 17 In its capacity as guardian and protector of the interests of the property owners of the Tahoe Basin, the Association had the authority to bring claims on behalf of its members[,] including the named Plaintiffs in both actions. Moreover, it defended its members' interests vigorously, through at least 18 years of litigation on this matter alone. There is no suggestion of any conflict between the Association and any of its members concerning the implementation of the 1987 Plan that might otherwise counsel against a finding of adequate representation, and when res judicata was asserted in the district court, no current plaintiff alleged that he was in a legal position different from either the Association or the individual named plaintiffs in the earlier litigation. 18 We therefore conclude that the interests of the individual Association members were adequately represented in the prior litigation by the Association, the same organization that they have chosen as their current lead plaintiff. 58 Allowing the earlier litigation to bind the current plaintiffs is especially appropriate in light of the only available alternative here. The Association vigorously litigated the prior action on its members' behalf. Now that a final judgment has issued, it should not be able to evade preclusion continually by averring that unidentified members are not bound and bringing successive suits by claiming injury to different identified members. 18A WRIGHT & MILLER § 4456. If the individual members of the Association were not bound by the result of the former litigation, the organization would be free to attack the judgment ad infinitum by arranging for successive actions by different sets of individual member plaintiffs, leaving the Agency's capacity to regulate the Tahoe properties perpetually in flux. Cf. Alpert's Newspaper Delivery Inc., 876 F.2d at 270 (finding privity even when the association was not itself a party, but provided substantial tactical and financial help to the parties in both actions). The Association may not avoid the effect of a final judgment in this fashion. 59 Because we find an identity of claims in the prior action resolved by Tahoe III and Tahoe IV and in the current complaint, because the prior action was resolved by a final judgment on the merits, and because there was sufficient privity between parties to bind the current parties to the result of the prior litigation, we hold that the plaintiffs claims are barred by the doctrine of res judicata.