Opinions of the United
1994 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


9-7-1994

Collins v. Dupont De Nemours & Co.
Precedential or Non-Precedential:

Docket 93-5756




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          UNITED STATES COURT OF APPEALS
              FOR THE THIRD CIRCUIT
                  _______________

                    No. 93-5756
                  _______________

       JOHN COLLINS; SHIRLEY COLLINS, his wife;
    JOHN WOJENSKI; ROBERT AUSTIN; JUANITA AUSTIN,
         his wife; JOHN CAREW; FERDINAND PENA;
        REGINA PENAL, his wife; LOUIS MADARASZ;
BEN DAVIS; BERLINE DAVIS, his wife; CHARLES STATEN;
MARY STATEN, his wife; RUDY TROUPE; BERNICE TROUPE,
    his wife; WILFREDO RODRIGUEZ; CHARLIE DEWITT;
   JULIA DEWITT, his wife; LUIS BASADRE; RAY BUNN;
 JOYCE BUNN, his wife; CAL FAYARD; ROCHELLE FAYARD,
   his wife; ZDZISLAW KOWALSKI; JADWIGA KOWALSKI,
   his wife; ARTHUR BELL; PAT REILLY; MARY REILLY,
      his wife; EMILIO RODRIGUEZ; ELIAS TZEMOS;
     STAVROULA TZEMOS, his wife; CARLOS BARQUIN;
    MIRELLA BARQUIN, his wife; CURTIS BROWN, JR.;
    RALPH MORRELLO; CHRISTINE MORRELLO, his wife;
    REGINALD CAIN; MOSES LAVAL; OLIVIA LAVAL, his
    wife; EDWARD GOLDA; JUAN JAUME; CARMEN JAUME,
     his wife; FRANCESCO BOZZI; LAURA BOZZI, his
     wife; MICHAEL SABAT; ILENE SABAT, his wife;
      ANDRE PIERRE; EDWARD MORRIS; VIRGINIA JEAN
   MORRIS, his wife; JAMES JOHN BRADLEY; CATHERINE
  BRADLEY, his wife; MARIO SANTOS; OCTAVIA SANTOS,
   his wife; JAMES ZICARO; JAYNE ELLEN ZICARO, his
   wife; FRED SAVAGE; ALICE SAVAGE, his wife; LUIS
   ZAMORA; JUANITA ZAMORA, his wife; DAVIS THOMAS;
        MARION THOMAS, his wife; CLEMENT MARRA;
    CATHERINE MARRA, his wife; JOSEPH MCLAUGHLIN;
  GENEVIEVE V. MCLAUGHLIN, his wife; JAMES BENSON;
       JEANETTE BENSON, his wife; ALBERT BRAVO;
     TOMMYE JEAN BRAVO, his wife; ISAAC JEFFRIES;
      CAROLYN JEFFRIES, his wife; HERMAN BROWN;
   AUDREY BROWN, his wife; DEWITT CANNON; BERNICE
   CANNON, his wife; JOSE CAMACHO; CARMEN CAMACHO,
   his wife; EDWARD FIELDS; MARY FIELDS, his wife;
     SAM EDMONDS; DORIS EDMONDS, his wife; LOUIS
     CURCIO; ANGELA CURCIO, his wife; PAUL POOLE;
 KAZIMIERZ NITKOWSKI; NICEA M. NIKTOWSKI, his wife,

                                    Appellants
                        v.

  E.I. DUPONT DE NEMOURS & COMPANY, a corporation
              of the State of Delaware
                                    Appellee
    ________________________________________________________

         On Appeal From the United States District Court
                 for the District of New Jersey
                  (D.C. Civil No. 92-cv-00486)
    ________________________________________________________

                      Argued:   June 23, 1994

          Before:   BECKER, HUTCHINSON, Circuit Judges
                    and PADOVA, District Judge*

                    (Filed September 8, 1994)


                          MARC J. GORDON, ESQUIRE (ARGUED)
                          Margolis & Gordon
                          485 Morris Avenue
                          Springfield, NJ 07081

                          Attorneys for Appellants


                          ROSEMARY J. BRUNO, ESQUIRE (ARGUED)
                          MARGARET R. BENNETT, ESQUIRE
                          Carpenter, Bennett & Morrissey
                          100 Mulberry Street
                          Three Gateway Center
                          Newark, NJ 07102

                          Attorneys for Appellee




                     _________________________

                        OPINION OF THE COURT
                     _________________________


BECKER, Circuit Judge.


*
 . The Honorable John R. Padova, United States District Judge
for the Eastern District of Pennsylvania, sitting by designation.
           This appeal is from an order of the district court

dismissing with prejudice under Federal Rule of Civil Procedure

12(b)(6), the products liability personal injury complaint of

plaintiffs, some forty-nine former employees of Engelhard

Corporation's manufacturing plant in Newark, New Jersey.

Plaintiffs' complaint alleges that between 1971 and 1982, while

working for Engelhard, they contracted pulmonary injury as the

result of their exposure to hazardous "airborne silica particles"

supplied by defendant E.I. DuPont de Nemours & Company, and

released during Engelhard's metal reclamation process.   With the

exception of John Wojenski, all the plaintiffs had previously

sued DuPont, alleging that they had sustained pulmonary disease

from asbestos exposure to the same material during the same

period.1   That suit resulted in summary judgment for DuPont,

which we affirmed on appeal in an unpublished opinion.   See

Bradley v. DuPont, No. 91-5206 (3d Cir. Dec. 24, 1991) cert.

denied, 

(1992).

           The district court concluded that plaintiffs' present

lawsuit was barred by New Jersey's entire controversy doctrine,
1
 . From 1970 to 1982, DuPont sent to Engelhard the waste product
of DuPont's manufacture of hydrogen peroxide at its Memphis,
Tennessee plant, a portion of which consisted of used filter
pads. The pads were shipped to Engelhard for the recovery of
palladium, a precious metal which was used as a catalyst in
DuPont's manufacturing process. Engelhard's reclamation process
consisted primarily of the incineration of the waste product in
large furnaces, which, plaintiffs allege, released toxic smoke,
dust, ash, and soot into their working environment. In 1983,
Engelhard learned that the filter pads contained ten percent
asbestos. Three years later, plaintiffs (except for Wojenski)
initiated their first lawsuit, alleging that they had contracted
pulmonary disease due to asbestos exposure from this material.
and the doctrine of collateral estoppel.   Plaintiffs contended

that they are not bound by the prior adverse judgment because:

(1) their allegations of exposure to silica constitute a

different cause of action, which was not and could not have been

part of the earlier suit; and (2) they had brought new claims

(for fraud and misrepresentation, medical surveillance, and

emotional distress), which also were not considered in the prior

action.   The court rejected these contentions.

           The case had metamorphosed from one alleging asbestos

exposure to one alleging silica exposure based on a chemist's

report stating that asbestos decomposes after incineration into

the substances forsterite and silica.   Plaintiffs learned of this

theory during the prior proceedings in the district court,

whereupon they sought to amend their complaint to allege silica

exposure, but the district court denied their motion and our

earlier opinion affirmed that denial.

           The district court's order dismissing the complaints in

the instant case was plainly correct with respect to all the

plaintiffs but Wojenski.   Both res judicata and the New Jersey

entire controversy doctrine bar those claims, and we will affirm

that portion of the order without discussion.     However, we reach

a different result as to Wojenski, who was not a party to the

prior action.   We find defendant's contention, accepted by the

district court, that Wojenski's claim is barred because he was in

privity with the other plaintiffs, to be fatally flawed.

           None of the three potential ways in which Wojenski

might be bound by the earlier judgment applies here.    First, the
earlier plaintiffs might have been "virtual representatives" of

Wojenski, but that is not the case because no legal relationship

entitled the prior plaintiffs to represent Wojenski.    Second,

Wojenski might have controlled the prior litigation, but there is

no such evidence.     Third, the prior litigation might have been

considered a class action and Wojenski a member of the class, but

the district court did not certify the prior action as a class

action and did not provide notice to prospective plaintiffs.       We

will therefore vacate the district court's order as to Wojenski

and remand for further proceedings.



                                  I.

             Under New Jersey law, which applies here, claim and

issue preclusion only apply to parties or to those in privity

with them.    See Wunschel v. City of Jersey City, 

,

333 (N.J. 1984).    In the famous words of Judge Goodrich:

"[P]rivity states no reason for including or excluding one from

the estoppel of a judgment.    It is merely a word used to say that

the relationship between the one who is a party on the record and

another is close enough to include that other within the res

judicata."    Bruszewski v. United States, 

, 423 (3d
Cir. 1950) (Goodrich, J., concurring), cert. denied, 

, 

(1950), quoted in part in Moore v. Hafeeza, 

, 274 (N.J. Super. 1986).

          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." 

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, 

, 1174-75 (N.J. Super. 1983), aff'd, 

(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 

, 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:

               (a) The trustee of an estate or
               interest of which the person is a
               beneficiary; or

               (b) Invested by the person with
               authority to represent him in an
               action; or

               (c) The executor, administrator,
               guardian, conservator, or similar
               fiduciary manager of an interest of
               which the person is a beneficiary;
               or

               (d) An official or agency invested
               by law with authority to represent
               the person's interests; or

               (e) The representative of a class
               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., 

, 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, 

(1992); Equal Employment

Opportunity Comm'n. v. U.S. Steel Corp., 

, 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,

, 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 

("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, 

, 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 pre-

existing 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, 

, 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."    

Eatough v. Board of Medical Examiners,

, 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., 

,

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 

.
          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 

. 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., 

, 270-
71 (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.,

, 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 

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.



             B. Control



             A second reason for finding privity is if a non-party

controlled the prior lawsuit.    The Restatement (Second) of

Judgments § 39 (1982) states:    "A person who is not a party to an

action but who controls or substantially participates in the

control of the presentation on behalf of a party is bound by the

determination of issues decided as though he were a party."    See

(stating that substantial participation in

the control of a suit creates privity); United States v. Webber,

, 386-87 (3d Cir. 1968) (holding that defendants were

in privity with prior litigants because they controlled the prior

suit).   But here there is utterly no evidence that Wojenski

controlled the prior lawsuit.    In fact, Wojenski asserts that his

injuries did not even develop until after the first suit was

dismissed.    Cf. Duncan v. Blacksburg, 

, 645 (D.C.
Va. 1973) "[W]hile it may well be that 13 of the 17 plaintiffs
are bound by res adjudicata, 4 of them are not, because they were

not parties to the suit or privies.   They took no part and had no

laboring oar.").



           C. Class Action



           The last category of virtual representation listed in

the Restatement of Judgments is class representation.     If the

first action was a class action and Wojenski was a part of the

class, then he is bound by the results.   The complaint in the

original suit makes it appear that the suit was intended to be a

class action. The complaint states that
          [t]his action is brought on behalf of the
          plaintiffs, as well as on behalf of each and
          all other persons similarly situated.


JA 23.   However, the district court never held a class

certification hearing, certified a class, or made reference to a

class.   Yet, in dismissing the current action, the court

indicated that in essence it had been treating the earlier action

as a class action:
          Although the plaintiffs in Bradley were not
          certified as a class pursuant to Rule 23,
          plaintiffs' counsel in Bradley held
          themsel[ves] out as representing all present
          and former employees of Englehardt, allegedly
          exposed to the hazardous material at issue.
          This representation was acknowledged by the
          Court in its October 19th, 1990 memorandum
          and order granting DuPont's motion for
          summary judgment.


Transcript of Motion Hearing at 26 [A 78] (Nov. 15, 1993).
Thus, we are faced with the question whether a potential class

member can be bound by a prior suit that the district court later

determines was essentially a class action.

          Perhaps in some circumstances we would consider a prior

action to constitute a class action for preclusion purposes even

without formal class treatment in that action.   See Wright &

Miller, Federal Practice and Procedures § 4455, at 476 ("[t]he

most obvious limitation is that there must actually have been a

class action, although formal failure to certify an action that

is in fact treated by all parties as a class action may not

defeat class preclusion"); Johnson v. General Motors Corp., 

, 435 (5th Cir. 1979) (where the district court in the

prior action never formally certified the class but did state

that plaintiff's suit was under federal class action rules and

explained who constituted the class, and where the court of

appeals treated the prior action as a class action under Rule

23(b)(2), the prior action was a class action with res judicata

effect on class members).

          Unlike Johnson, however, the district court in the

original suit here did not suggest that it was treating the suit
as a class action.   This means that if the district court had

ruled favorably to the plaintiff, Wojenski would not have

automatically benefitted from that outcome, and hence it would be

unfair to bind him to an outcome unfavorable to him.   Moreover,

because the district court did not certify a class, it did not

delineate the boundaries of the class.   Therefore, even if the

prior suit was effectively a class action, we do not know if
Wojenski, who discovered his injury after the Bradley suit was

dismissed, would have been within the class and bound by its

results.

           Third, and most important, we do not know if the

district court would have certified the class as a Rule 23

(b)(1), (b)(2), or (b)(3) class.   Because the plaintiffs were

asking for damages rather than injunctive or declaratory relief,

we have little doubt that the appropriate type of class action

here would have been a Rule 23(b)(3) class since we have no

reason to believe that a decision with respect to some class

members would have impeded the ability of others to protect their

interests.   See Fed. R. Civ. P. 23(b).   But if the district court

had certified such a class, Wojenski would have had to receive

notice and an opportunity to opt out before he could be bound.

In Johnson, despite concluding that formal class certification

was not required to bind plaintiffs on some issues, the Fifth

Circuit held that before a class member "may be forever barred

from pursuing an individual damage claim, . . . due process

requires that he receive some form of notice that the class

action is pending and that his damage claims may be adjudicated

as part of 

(emphasis added).

           In sum, absent far greater indications that Bradley was
a mandatory class action, Wojenski is not bound by the results of

that action.   By not joining the earlier law suit, he in essence

opted for his own day in court.

           The order of the district court as to Wojenski will be

reversed, and his case remanded for further proceedings.     In all
other respects, the order of the district court will be affirmed.

Parties to bear their own costs.