Assignees in Privity Are Precluded from Relitigating Assignor’s Fully Adjudicated Claims

1. Introduction

In Olsen v. Sherry-Netherland, Inc. (2d Cir. Mar. 11, 2026) (summary order), the Second Circuit affirmed the dismissal of a pro se action brought by Rey Olsen, who sued as a partial assignee of Roque De La Fuente’s claims arising from the denial of De La Fuente’s application to purchase a cooperative apartment at the Sherry-Netherland. The core dispute traces back to De La Fuente’s earlier federal discrimination lawsuit—alleging that the Sherry’s board rejected him because he is Mexican-American—which ended in summary judgment for defendants and was affirmed on appeal.

The key issue in Olsen’s later-filed suit was whether a nonparty assignee can pursue litigation that, in substance, reasserts the assignor’s claims after those claims have already been fully adjudicated. The district court dismissed on claim and issue preclusion grounds and denied reconsideration; the Second Circuit affirmed both rulings.

2. Summary of the Opinion

The Second Circuit held that Olsen’s action was barred by preclusion principles because he sued as De La Fuente’s assignee and sought to relitigate the same discrimination-based claims already resolved against De La Fuente. Applying federal common-law preclusion (because the prior judgment was issued under federal-question jurisdiction), the court concluded that the assignee–assignor relationship constitutes a “substantive legal relationship” supporting nonparty preclusion, and that Olsen’s interests were aligned with De La Fuente’s and were adequately represented in the earlier case. The court also affirmed the denial of reconsideration, finding no overlooked controlling law, new evidence, or intervening change in law.

3. Analysis

3.1. Precedents Cited

  • De La Fuente v. Sherry Netherland, Inc., No. 17 Civ. 4759, 2019 WL 3430207 (S.D.N.Y. July 30, 2019)
    This was the underlying merits decision granting summary judgment to the Sherry and its board. It supplied the final judgment that later triggered preclusion against attempts to reassert the same claims.
  • De La Fuente v. Sherry Netherland, Inc., 845 F. App'x 29 (2d Cir. 2021) (summary order)
    The Second Circuit’s affirmance reinforced the finality of the earlier adverse judgment and supported applying preclusion to later suits seeking to re-litigate the same discrimination theory.
  • Olsen v. Sherry Netherland, Inc., No. 20 Civ. 103, 2022 WL 4592999 (S.D.N.Y. Sep. 30, 2022)
    The decision under review: dismissal with prejudice on res judicata and collateral estoppel grounds.
  • Olsen v. Sherry Netherland, Inc., No. 20 Civ. 103, 2024 WL 2054816 (S.D.N.Y. May 7, 2024)
    The reconsideration decision: no intervening law, new evidence, or overlooked controlling authority; the suit still sought relitigation.
  • Fink v. Time Warner Cable, 714 F.3d 739 (2d Cir. 2013)
    Cited for the standard of review on a Rule 12(b)(6) dismissal: de novo review, accepting pleaded facts as true and drawing reasonable inferences in plaintiff’s favor.
  • Devlin v. Transp. Commc'ns Int'l Union, 175 F.3d 121 (2d Cir. 1999)
    Cited for the standard of review of the denial of reconsideration: abuse of discretion.
  • Wyly v. Weiss, 697 F.3d 131 (2d Cir. 2013)
    Provides the governing choice-of-law principle: federal common law of preclusion controls the preclusive effect of a prior federal judgment issued under federal-question jurisdiction.
  • Taylor v. Sturgell, 553 U.S. 880 (2008)
    The opinion’s anchor precedent on nonparty preclusion. While reiterating the “general rule” against binding nonparties, Taylor identifies exceptions, including “substantive legal relationships” (such as assignor/assignee) and the “adequate representation” framework.
  • Hansberry v. Lee, 311 U.S. 32 (1940)
    Quoted in Taylor for the baseline due-process principle: ordinarily, a person is not bound by a judgment in a case where they were not made a party.
  • Montana v. United States, 440 U.S. 147 (1979)
    Cited (via Taylor) for the policy basis of preclusion: preventing re-litigation of matters already given a “full and fair opportunity” to be litigated.
  • De La Fuente v. Sherry Netherland, Inc., No. 17 Civ. 4759, 2019 WL 4409475 (S.D.N.Y. Sep. 16, 2019)
    Addressed Olsen’s belated attempt to join the original case and held he was not a required party under Rule 19(a)(1). The Second Circuit explained that this did not reserve De La Fuente’s claims for Olsen to reassert; at most, it meant Olsen could bring his own distinct claims (if any), not revive already-litigated assignor claims.

3.2. Legal Reasoning

The Second Circuit’s reasoning proceeds in three connected steps:

  1. Federal preclusion law applies.
    Relying on Wyly v. Weiss, the court treated the preclusive effect of the earlier federal-question judgment as governed by federal common-law preclusion rules.
  2. Nonparty preclusion is permissible where there is a qualifying relationship and adequate representation.
    Under Taylor v. Sturgell (quoting Hansberry v. Lee), nonparties are generally not bound. But Taylor recognizes exceptions. Central here was the exception for “substantive legal relationships,” expressly including assignee/assignor relationships, and the associated “adequate representation” requirements: aligned interests, representative capacity or court protection of nonparty interests, and sometimes notice.
  3. Olsen’s posture as an assignee meant he was asserting De La Fuente’s already-litigated interests.
    The court found the Taylor adequacy factors satisfied because (i) Olsen’s interests were directly aligned with De La Fuente’s (both sought to vindicate the same alleged discrimination in the same transaction), (ii) Olsen expressly sued in a representative capacity as assignee of De La Fuente’s “right, title and interest” in the claims, and (iii) the point of preclusion is that De La Fuente already had a “full and fair opportunity to litigate” (language drawn from Montana v. United States as quoted in Taylor). Allowing an assignee to relaunch the same claims would undermine finality and invite serial litigation through paper transfers of interests.

On reconsideration, the panel affirmed under Devlin v. Transp. Commc'ns Int'l Union, agreeing with the district court (Olsen v. Sherry Netherland, Inc., 2024 WL 2054816) that Olsen identified no new law, evidence, or overlooked controlling authority and was still attempting to relitigate resolved claims.

3.3. Impact

Although the Second Circuit’s disposition is a “SUMMARY ORDER” and “DO[ES] NOT HAVE PRECEDENTIAL EFFECT,” it is still instructive in at least four ways:

  • Assignments will not circumvent final judgments. Parties cannot evade adverse outcomes by assigning pieces of a claim to new plaintiffs who then sue to restart the dispute.
  • “Privity” remains functionally central. The court embraced Taylor’s “substantive legal relationship” exception—often described as “privity”—to justify binding an assignee to the assignor’s loss.
  • Rule 19 non-joinder does not equal claim reservation. The earlier denial of Olsen’s joinder (De La Fuente v. Sherry Netherland, Inc., 2019 WL 4409475) did not create an “express reservation” of claims for later litigation; it merely reflected that Olsen was not required for complete relief in that action.
  • Practical litigation guidance. If an assignee has genuinely independent claims (e.g., distinct injuries or distinct legal rights), those may be litigable; but repackaging the assignor’s adjudicated claims will likely be precluded.

4. Complex Concepts Simplified

  • Claim preclusion (res judicata): If a final judgment resolved a claim, the same parties (and certain closely related nonparties) generally cannot sue again over the same transaction or nucleus of facts seeking relief that could have been sought before.
  • Issue preclusion (collateral estoppel): If a specific issue (e.g., whether discrimination occurred) was actually litigated and necessarily decided, it cannot be contested again in a later suit by the same party or qualifying related party.
  • Nonparty preclusion: Usually, someone not named in the first case is not bound. But Taylor v. Sturgell recognizes exceptions, including when a nonparty has a “substantive legal relationship” (like assignee/assignor) to a party and the party adequately represented the same interests.
  • Assignment: A transfer of legal rights from one person (assignor) to another (assignee). If what is transferred is the same claim already adjudicated, the assignee generally takes it subject to the prior judgment.
  • Reconsideration: A limited procedural device, not a “second bite” at the apple; typically requires new evidence, an intervening change in law, or a clear showing that the court overlooked controlling law or facts.

5. Conclusion

Olsen v. Sherry-Netherland, Inc. reinforces a straightforward but important boundary on repeat litigation: an assignee who sues to press the assignor’s claims stands in the assignor’s shoes for preclusion purposes and cannot relitigate claims already fully and fairly adjudicated. Using Taylor v. Sturgell’s framework, the Second Circuit treated the assignee–assignor relationship as the kind of “substantive legal relationship” that justifies nonparty preclusion, preserving finality and preventing end-runs around prior judgments by re-labeling the plaintiff.