In re: TROPICANA ENTERTAINMENT, LLC v. William J. Yung, Iii

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 25-1009
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In re: TROPICANA ENTERTAINMENT, LLC,
Debtor
LIGHTSWAY LITIGATION SERVICES, LLC, as Trustee of Tropicana
Litigation Trust,
Appellant
v.
WILLIAM J. YUNG, III; WIMAR TAHOE CORPORATION f/k/a Tropicana
Casinos and Resorts, Inc.; COLUMBIA SUSSEX CORPORATION
_______________
On Appeal from the United States District Court
for the District of Delaware
(D.C. No. 1:23-cv-00959)
District Judge: Honorable Colm F. Connolly
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Submitted under Third Circuit L.A.R. 34.1(a)
December 8, 2025
Before: KRAUSE, PHIPPS, and CHUNG, Circuit Judges
(Filed: December 23, 2025)
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OPINION*
_______________
* This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.

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2
KRAUSE, Circuit Judge.
Appellant Lightsway Litigation Services, LLC appeals the Bankruptcy Court’s
dismissal of its contract claims against Wimar Tahoe Corporation and the Columbia
Sussex Corporation (CSC). Discerning no error, we will affirm.
I. DISCUSSION1
On appeal, Lightsway argues that the Bankruptcy and District Courts erred in
(1) failing to give preclusive effect to the findings of the New Jersey Casino Control
Commission, and (2) concluding that Lightsway had failed to prove damages. We begin
and end with the first argument because we see no error in the Bankruptcy Court’s
decision to deny the Commission’s findings preclusive effect.
Under New Jersey law,2 issue preclusion applies when:
(1) the issue to be precluded is identical to the issue decided in the prior
proceeding; (2) the issue was actually litigated in the prior proceeding; (3) the
court in the prior proceeding issued a final judgment on the merits; (4) the
determination of the issue was essential to the prior judgment; and (5) the party
against whom the doctrine is asserted was a party to or in privity with a party to
the earlier proceeding.
1 The Bankruptcy Court’s jurisdiction derived from 28 U.S.C. § 157(b)(2)(B). The
District Court had jurisdiction under 28 U.S.C. § 158(a)(1), and we have jurisdiction
under 28 U.S.C. § 158(d)(1). We review the Bankruptcy Court’s factual findings for
clear error and exercise plenary review over legal issues. In re Emoral, Inc., 740 F.3d
875, 879 (3d Cir. 2014). Whether issue preclusion applies is a legal question subject to
de novo review. Home Depot USA, Inc. v. Lafarge N. Am., Inc., 59 F.4th 55, 61 (3d Cir.
2023).
2 We apply New Jersey preclusion law because Lightsway asks that we give the decision
of a New Jersey administrative agency preclusive effect. See Greenleaf v. Garlock, Inc.,
174 F.3d 352, 357 (3d Cir. 1999).

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Olivieri v. Y.M.F. Carpet, Inc., 897 A.2d 1003, 1009 (N.J. 2006) (quoting In re Est. of
Dawson, 641 A.2d 1026, 1034-35 (N.J. 1994)).
But Lightsway stumbles on the first element because “issues are not identical if
the second action involves application of a different legal standard,” B & B Hardware,
Inc. v. Hargis Indus., Inc., 575 U.S. 138, 154 (2015) (citation modified), including when
the proceedings employ different burdens of proof, see Kroy IP Holdings, LLC v.
Groupon, Inc., 127 F.4th 1376, 1380 (Fed. Cir. 2025). Specifically, when “[t]he party
against whom preclusion is sought had a significantly heavier burden of persuasion with
respect to the issue in the initial action than in the subsequent action” or when “the
burden has shifted to his adversary,” issue preclusion is inappropriate. Restatement
(Second) of Judgments § 28(4) (A.L.I. 1982); see also In re Coruzzi, 472 A.2d 546, 552
(N.J. 1984).
That is the case here. In the proceeding before the Commission, Wimar Tahoe had
the burden to show that it was entitled to a casino license “by clear and convincing
evidence.”3 J.A. 3676 (quoting N.J. Stat. Ann. § 5:12-86a). But, in the contract action
before the Bankruptcy Court, Lightsway—not Wimar Tahoe—bore the burden, and it
needed to establish each element by a preponderance of the evidence. Thus, precluding
3 Lightsway contends that it was the Commission that had the burden of “establish[ing]
by a preponderance of evidence” that an applicant is unqualified. Opening Br. 36. But
Lightsway points to the standard for disqualifying a licensee or for suspending a license,
not the standard for granting an application. Indeed, “[a]n applicant . . . shall have the
affirmative obligation to establish by clear and convincing evidence satisfaction of the
applicable affirmative standards.” N.J. Admin. Code § 19:42A-3.1 (emphasis added). In
any event, the Commission itself stated that Tropicana bore the burden of proving “by
clear and convincing evidence” that it was entitled to licensure. J.A. 3676.

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4
Wimar Tahoe and CSC from relitigating issues found by the Commission would “be both
unfair and illogical” because it would wrongly assume “that the losing party in the first
action would also have lost” under the burden in the second. O’Shea v. Amoco Oil Co.,
886 F.2d 584, 593-94 (3d Cir. 1989) (citation modified).
Lightsway resists this conclusion, urging that the burden of proof is irrelevant
because “the [Commission] affirmatively found misconduct, as opposed to denying the
license . . . because of Appellees’ failure to” carry their burden. Opening Br. 36-37. But
Lightsway does not cite any authority for this argument, and it is foreclosed by New
Jersey law. See, e.g., L.T. v. F.M., 102 A.3d 398, 404-05 (N.J. Super. Ct. App. Div.
2014); see also In re Coruzzi, 472 A.2d at 552 (“[A] judge, held liable in a civil or
administrative proceeding under facts found by a preponderance of the evidence, [should
not] be foreclosed from challenging those facts in a removal action where the same facts
have to be established beyond a reasonable doubt.”).
Notwithstanding the difference in evidentiary standards and which party bore the
burden, it is also not the case “that the same general legal rules govern both cases and that
the facts of both cases are indistinguishable as measured by those rules.” Suppan v.
Dadonna, 203 F.3d 228, 233 (3d Cir. 2000) (citation modified). On one hand, the
Commission considered whether Wimar Tahoe was entitled to a casino license under
state law and considered a range of factors, including Wimar Tahoe’s integrity and
financial stability, in doing so. The Bankruptcy Court, on the other hand, considered

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whether Wimar Tahoe and CSC breached their service contracts. Those issues, too, are
plainly substantively different.4
Finally, Lightsway attempts to establish identity of issues by arguing that it seeks
only to preclude Wimar Tahoe and CSC from litigating the Commission’s findings of
fact, not the Commission’s legal conclusions. But, even granting this framing, Lightsway
fails to explain why the evidentiary facts it seeks to preclude were “essential” to the
Commission’s judgment. See State v. Leibowitz, 123 A.2d 526, 530 (N.J. 1956).
II. CONCLUSION
For the foregoing reasons, we will affirm.
4 Lightsway also argues that, during the Commission proceedings, “Wimar acknowledged
that it had violated the requirement to timely establish an independent audit committee.”
Reply Br. 13. Yet, in contrast to the Commission proceedings, the issue in the
Bankruptcy Court was not whether Wimar Tahoe failed to timely set up an audit
committee; only whether that failure was reasonable.

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