Opinion ID: 3009595
Heading Depth: 3
Heading Rank: 1

Heading: 2d 271, 274 (N.J. Super. 1986).

Text: A relationship is usually considered close enough only when the party is a virtual representative of the non-party, or when the non-party actually controls the litigation. As the New Jersey Superior Court explained in Moore: Generally, one person is in privity with another and is bound by and entitled to the benefits of a judgment as though he was a party when there is such an identification of interest between the two as to represent the same legal right, or if a person who is not a party controls or substantially participates in the control of the presentation on behalf of a party, Restatement, Judgments 2d, § 39, or if a person who is not a party to an action is represented by a party, including an official or agency invested by law with authority to represent the person's interests. Id. § 41(d). 515 A.2d at 273 (citation omitted). The scope of privity, while largely freed from the very constrictive common law mutuality anchor, remains small. See generally Romano v. Kimmelman, 464 A.2d 1170, 1174-75 (N.J. Super. 1983), aff'd, 474 A.2d 1 (N.J. 1984). A. Virtual Representation Virtual representation does not mean merely that someone in the suit serves the interests of the person outside the suit. It requires a relationship by which the party in the suit is the legally designated representative of the non-party, as is made clear from the examples in the Restatement (Second) of Judgments. Restatement (Second) of Judgments § 41 (1982), which has been followed by the New Jersey Superior Court, see Moore, 515 A.2d at 273, reads: A person who is not a party to an action but who is represented by a party is bound by and entitled to the benefits of a judgment as though he were a party. A person is represented by a party who is:
interest of which the person is a beneficiary; or
authority to represent him in an action; or
guardian, conservator, or similar fiduciary manager of an interest of which the person is a beneficiary; or
by law with authority to represent the person's interests; or
of persons similarly situated, designated as such with the approval of the court, of which the person is a member. Applying § 41(d), some New Jersey Superior Court cases, as well as some of our own cases, find privity situations where a government agency is the designated representative of a group of individuals. See E.I.B. v. J.R.B., 611 A.2d 662, 663 (N.J. Super. 1992) (an unsuccessful paternity action brought by a mother bars a subsequent action brought by the child because, under a New Jersey statute, the mother represents the child), certification denied, 617 A.2d 1223 (1992); Equal Employment Opportunity Comm'n. v. U.S. Steel Corp., 921 F.2d 489, 495-96 (3d Cir. 1990) (under the statutory scheme, the Equal Employment Opportunity Commission is the legal representative of the private individuals, and where an individual sues first and has his or her day in court, his or her representative cannot sue later on the same claim). Like § 41(c) of the Restatement, our cases also include fiduciary managers of organizations of which an individual is a member. See Bolden v. Pennsylvania State Police, 578 F.2d 912, 918 (3d Cir. 1978) (members of a labor organization are bound by a consent decree when the organization adequately represented them). Thus, all of the Restatement (Second) of Judgments examples, New Jersey cases, and our cases finding privity have done so when there is a pre-existing legal relationship by which a party represents a non-party. A pre-existing legal relationship is not only a sufficient condition for privity to exist, but it is also a necessary one. See E.I.B., 611 A.2d at 663 (Privity generally involves a party to earlier litigation so identified with a party to later litigation that they represent the same legal right.); cf. Rutgers Casualty Ins. Co. v. Dickerson, 521 A.2d 373, 376 (N.J. Super. 1987) (privity in this context [of claim preclusion] requires some legal connection between the parties such as succession to the same rights to property). No preexisting legal relationship existed here. Wojenski had no relationship with the plaintiffs in the first suit other than the fact that they all worked at the same place. The fact that Wojenski has the same interest as the prior plaintiffs and is joined in a suit with those plaintiffs is insufficient to create privity between Wojenski and the prior plaintiffs. In In Re Dawson, 641 A.2d 1026, 1036 (N.J. 1994), the New Jersey Supreme Court held that the rule governing accounting of a particular trust, a rule established in prior intermediate accountings of the same trust, could be relitigated because the unborn beneficiaries, who were parties to this accounting, had not been parties to the prior accountings. The court explained, [a]lthough other beneficiaries were represented by a guardian ad litem and were parties to those prior accountings, that those beneficiaries may have had interests similar to the interests of the unborn beneficiaries does not establish privity between them for purposes of collateral estoppel. Id. Similarly, in Eatough v. Board of Medical Examiners, 465 A.2d 934, 939 (N.J. Super. 1983), the New Jersey Superior Court held that where Dr. Eatough, one of four plaintiffs, had litigated the same issues previously, preclusion did not apply to the remaining three plaintiffs. The court stated: [T]heir rights do not derive from [Dr. Eatough's] in any way. While there may be an identity of interests between the four plaintiffs here, the record does not permit the conclusion that Dr. Eatough was the representative of the other plaintiffs in the [prior] litigation. Id.2 Thus, as a leading treatise summarizes, [t]he 2 . One New Jersey Superior Court case implies that an identity of interests may suffice in certain contexts to create privity. In Moore, the court held that it appears to be the modern rule that privity should be applied when: 1. The claim of the nonparty is based on the same transaction or occurrence, 2. The interests of both claimants are similar and no adverse interests exist, 3. The nonparty had notice of the earlier action, and 4. The bare fact that one plaintiff is joined with others who were parties and who can properly be bound by a prior proceeding does not justify preclusion of the nonparty plaintiff as well. Wright & Miller, Federal Practice and Procedure § 4449, at 416 (1981). Nor does the fact that Wojenski had the same attorney as the plaintiffs in the first suit make preclusion appropriate. In Benson & Ford, Inc. v. Wanda Petroleum Co., 833 F.2d 1172, 1174-76 (5th Cir. 1987), for example, the fact that plaintiffs in the second suit were represented by the same attorney as plaintiffs in the first suit and that one of the plaintiffs had testified in the first suit was not enough to establish privity. In the court's view, the plaintiffs in the second suit must have exercised control in the first suit or been virtually represented in the first suit; the latter theory requires an express or implied legal relationship in which parties to the first suit were accountable to non-parties who file the second suit.3 (..continued) nonparty did or had an opportunity to participate or intervene in the earlier case. 515 A.2d at 274. But this statement is in significant tension with the New Jersey cases holding that similarity of interests do not create privity. Moreover, the statement is dicta because in Moore, privity existed as a result of the fact that the county board of social services, which had lost a paternity suit, was the statutory representative of the mother who now wanted to sue. 515 A.2d at 274. Finally, we note that even if the Moore rule were the law, Wojenski's suit would not be barred, because, not having discovered his injury until the earlier suit was dismissed, Wojenski did not have an opportunity to participate in the earlier Bradley case. 3 . Some courts seemingly have taken a broader view of virtual representation, although we think that these cases can be explained as consistent with the general pattern. In Alpert's Moreover, allowing Wojenski to continue his suit is the right result -- every individual is entitled to his or her day in court. See 18 Charles Alan Wright, Arthur R. Miller, and Edward M. Cooper, Federal Practice and Procedure § 4449, at 417 (1981) (Our deep-rooted historic tradition that everyone should have his own day in court draws from the clear experience with the general fallibility of litigation and with the specific distortions of judgment that arise from the very identity of the parties.) Unless the individual chose another party to (..continued) Newspaper Delivery Inc. v. New York Times Co., 876 F.2d 266, 27071 (2d Cir. 1989), a number of independent newspaper delivery companies, which were members of a trade association, sued the New York Times. The Times prevailed, and then other independent companies, also members of the trade association, sued. The Second Circuit held that the suit was barred by collateral estoppel because the association, which had financed both suits and provided litigation strategies for the complaints, was the ultimate force behind the litigation. In short, the court found that the second set of plaintiffs had been previously adequately represented by another who had been vested with the authority of representation. And in Ruiz v. Commissioner of Dep't of Transp., 858 F.2d 898, 903 (2d Cir. 1988), the court held that where two groups of truck drivers filed suits with identical allegations, the attorney was the same, and there was evidence of a strategy coordinated by an Industry Fund, preclusion applied. The court reasoned that [a]lthough not conclusive on the issue of privity, the fact that the parties in Manno and in this case had the same attorney in actions brought at about the same time is of `singular significance'. However, in these cases, especially in New York Times, the Second Circuit essentially held that the Trade Association and Industry Fund had been parties to the first suits, and that these organizations were virtual representatives of the plaintiffs, who had pre-existing relationships with these organizations, in the second suit. And in Ruiz, the common attorney filed the two lawsuits at roughly the same time, and there was significant evidence that the plaintiffs in the second suit controlled the first suit as part of an overarching litigation strategy. See id. 1 y represent him or her in the prior suit or a law designated an agent as his or her representative, the outcome of a prior lawsuit in which the individual did not take part should not bind him or her. The fact that the plaintiff's attorney took part in a prior, similar action is irrelevant unless there is evidence that the plaintiff was, through his or her attorney, actually participating in the prior suit. Otherwise, we will inhibit the free choice of attorneys and prevent attorneys from developing an expertise through concentration in certain types of litigation.