- 42 - Petitioners contend that under the precedents of the Court of Appeals for the Third Circuit a shareholder and a corporation are not in privity. Hornstein v. Kramer Bros. Freight Lines, 133 F.2d 143 (3d Cir. 1943). In Hornstein, the Court of Appeals for the Third Circuit held that under Pennsylvania law shareholders and their corporations were not in privity in a tort case for collateral estoppel purposes. Id. at 146. That interpretation does not apply here because Pennsylvania law does not apply. Petitioners do not cite cases under New Jersey law which hold that a sole shareholder and his or her corporation are not in privity for collateral estoppel purposes.4 Petitioners contend that petitioner and Resyn were not in privity because the bankruptcy court had appointed a receiver to be responsible for Resyn's operations at that time. We disagree. When a nonparty to an action has control over the conduct of the litigation, it may be in privity with the party it controls and bound by the results of the litigation. American Safety Flight Systems, Inc. v. Garrett Corp., 528 F.2d 288, 289 (9th Cir. 1975). There is no evidence that the receiver controlled, attended, or was involved in the bankruptcy litigation. We 4 In their answering brief, petitioners cite a New Jersey case involving whether the court would pierce the corporate veil and disregard the corporate form where there was no fraud or injustice. Lyon v. Barrett, 89 N.J. 294, 300, 445 A.2d 1153, 1156 (1982). That case does not hold or suggest that a sole shareholder is not in privity with his corporation for purposes of collateral estoppel.Page: Previous 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 Next
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