939 F.3d 498
2d Cir.2019Background
- Plaintiffs (NYU faculty) sued NYU in Sacerdote I under ERISA for imprudent plan administration and fees; most claims were dismissed but two counts survived.
- Plaintiffs then filed Sacerdote II against NYU affiliates and Cammack Larhette Advisors (an independent investment adviser), reasserting many Sacerdote I claims and adding Cammack as a co‑fiduciary defendant.
- The district court dismissed Sacerdote II as duplicative, finding the NYU affiliates and Cammack were in privity with NYU and thus barred by the rule against duplicative litigation.
- Plaintiffs appealed only the dismissal as to Cammack. Cammack argued privity based on contract, aligned interests, and that NYU’s defenses would be dispositive for it.
- The Second Circuit held NYU and Cammack are not in privity: identical interests and a close relationship alone cannot establish privity; none of the Taylor categories (six recognized exceptions) applied; dismissal of Cammack was vacated and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the rule against duplicative litigation bars claims against Cammack as a nonparty to Sacerdote I | Sacerdote: may sue separate defendants; no privity with NYU | Cammack: in privity with NYU (contract, aligned interests, practical identity) | Vacated dismissal: Cammack not in privity; duplicative‑suit bar inapplicable |
| Whether a contractual / co‑fiduciary relationship establishes privity | Sacerdote: contract/co‑fiduciary duties do not create privity here | Cammack: contract and co‑fiduciary status show close tie to NYU | Held: Contract/co‑fiduciary status insufficient to establish privity absent a Taylor exception |
| Whether identical interests + a close relationship (virtual representation) suffice for nonparty preclusion | Sacerdote: virtual‑representation theory inadequate under Taylor | Cammack: identical interests and close relationship justify preclusion | Held: Court rejects virtual representation; identical interests/close relationship alone insufficient |
| Who bears the burden to prove nonparty preclusion/privity | Sacerdote: N/A (plaintiff challenges preclusion) | Cammack: bears burden to prove privity and requisite procedural protections | Held: Burden on party asserting preclusion; Cammack failed to meet it |
Key Cases Cited
- Curtis v. Citibank, N.A., 226 F.3d 133 (2d Cir. 2000) (rule against duplicative litigation explained)
- The Haytian Republic, 154 U.S. 118 (U.S. 1894) (early statement that duplicative suits must involve same parties or same interests)
- Taylor v. Sturgell, 553 U.S. 880 (U.S. 2008) (limits on nonparty preclusion; six recognized exceptions; rejects broad virtual‑representation theory)
- Cent. Hudson Gas & Elec. Corp. v. Empresa Naviera Santa S.A., 56 F.3d 359 (2d Cir. 1995) (privity analysis includes inquiry into control over prior litigation)
- N. Assur. Co. of Am. v. Square D Co., 201 F.3d 84 (2d Cir. 2000) (nonparty preclusion and rule against duplicative litigation principles)
- Chase Manhattan Bank, N.A. v. Celotex Corp., 56 F.3d 343 (2d Cir. 1995) (privy bound with respect to issues raised or that could have been raised)