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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Petitioners do not cite cases under New Jersey law which hold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.
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