Civil Procedure, A Contemporary Approach-Chapter 7-Joinder of Claims and Parties Flashcards
The State A promoter of a sporting event had a contract with ABC Clothing (a State B corporation) to supply all the shirts for people staffing the event. However, the promoter subsequently signed another agreement with a competitor of the clothing company, XYZ Clothing (a State A corporation), to supply shirts instead.
ABC initiated an action in federal court against the promoter for breach of contract, seeking to enjoin the promoter from proceeding under the contract with XYZ and requesting specific performance of its original agreement with ABC. The promoter filed a motion to dismiss for failure to join XYZ as a required party defendant in the action. How should the court rule on the motion?
Deny it, because the dispute between the promoter and ABC can be resolved completely without the presence of XYZ and no other grounds for requiring the joinder of XYZ exist.
Explanation: The court can grant complete relief to ABC in XYZ’s absence. With the promoter before the court, the court will be able to order the promoter to comply with its contract with ABC and refrain from proceeding under its contract with XYZ. None of the other requirements that would make XYZ a required party under Rule 19 are satisfied. If the promoter is under an injunction to perform under its contract with ABC and to refrain from performing under its contract with XYZ, XYZ may simply sue the promoter for a breach of its own contract with the promoter, thereby permitting XYZ to protect its interests. The promoter could comply both with an injunction in the action by ABC and with any order awarding damages to XYZ in a separate lawsuit. Fed. R. Civ. P. 19(a)(1); see also MasterCard Int’l v. Visa Int’l Serv. Ass’n, 471 F.3d 377 (2d Cir. 2006).
ABC, Inc. (a State A corporation) had an exclusive supply agreement with a retailer (a State B corporation). After the retailer entered into a contract with XYZ, Inc., (a State A corporation), ABC initiated an action in federal court against the retailer, seeking to set aside the contract between the retailer and XYZ. ABC’s basis for its lawsuit was that it believed the contract between the retailer and XYZ violated the exclusive supply agreement that ABC had with the retailer.
After filing its answer, the retailer filed a motion to dismiss the claim under Rule 12(b)(7) based on the failure to join XYZ as a necessary party defendant in the action. How should the court respond to the motion?
Grant the motion, because XYZ’s rights under its contract with the retailer will be prejudiced if the court grants the relief ABC seeks, XYZ’s joinder is not feasible because it would destroy complete diversity, and the court cannot otherwise protect XYZ’s interests.
Explanation: A judgment in this case will concern a contract to which XYZ is a party, making XYZ a necessary party. Lomayaktewa v. Hathaway, 520 F.2d 1324, 1325 (9th Cir. 1975), cert. denied, 425 U.S. 903 (1976) (“No procedural principle is more deeply imbedded in the common law than that, in an action to set aside a lease or a contract, all parties who may be affected by the determination of the action are indispensable”). Because XYZ and ABC are from the same state, complete diversity would be destroyed, making ABC’s joinder not feasible. 28 U.S.C. § 1332(a); Strawbridge v. Curtiss, 3 Cranch 267, 2 L.Ed. 435 (1806). Finally, the action should not proceed without XYZ because the prejudice to XYZ cannot be lessened, and the action could proceed with all parties joined in state court. Fed. R. Civ. P. 19(a), (b).
A developer (from State A) who claimed to possess an easement giving it access to land where a new building was to be constructed initiated a declaratory judgment action in federal court against the landowner (from State B) across which the easement traversed. The developer sought a declaration of the validity of its easement and an injunction ordering the landowner to remove a gate that was obstructing the developer’s use of the easement. The co-owner of the land (a State A citizen) was not joined as a party in this action.
The State B landowner filed a motion to dismiss for failure to join the State A co-owner as a party defendant in this action. How should the court rule on this motion?
Grant the motion, because the ability of the absent co-owner to protect its interest in the land will be impaired by a court order concerning the land and the co-owner’s State A citizenship makes joinder not feasible.
Explanation: It is likely that other courts will treat a judgment in this case as preclusive, precedential, or persuasive in the event of a future action by the absent co-owner in another court. That risk means that “as a practical matter,” the absent co-owner’s ability to protect its interest in the land “may” be impaired or impeded. See Fed. R. Civ. P. 19(a)(1)(B)(i). As such, the absent co-owner must be joined if feasible. But joinder is not feasible. The joinder of the absent co-owner would destroy complete diversity because the co-owner (defendant) and developer (plaintiff) are citizens of the same state. See 28 U.S.C. § 1332(a); Strawbridge v. Curtiss, 3 Cranch 267, 2 L.Ed. 435 (1806). Further, there would be no supplemental jurisdiction because such jurisdiction does not exist over claims by plaintiffs against non-diverse parties named as defendants under Rule 19. 28 U.S.C. § 1367(b). Because there is no way the court can protect the absent co-owner’s interests (i.e. the extent of potential prejudice is large) and because the case could be heard with all parties in state court, it should be dismissed. See Fed. R. Civ. P. 19(b)(1), (2).
A State A trust company was in possession of $70,000 in cash that had been given to it by the settlor of a trust. The settlor died, leaving three survivors (two from State A and another from State B) who each now claim entitlement to the entirety of the trust proceeds as trust beneficiaries. The two State A survivors have each sent letters to the trust company demanding immediate full payment of the $70,000; the State B survivor has sent a similar letter to the trust company.
You represent the trust company as its attorney. Is it possible to initiate an action in federal court that will permit the trust company to handle this situation?
Yes, because there is minimal diversity among the claimants and a sufficient amount in controversy.
Explanation: The federal interpleader statute, 28 U.S.C. § 1335, permits federal jurisdiction when any of the adverse claimants are of diverse citizenship and the amount in controversy exceeds $500. 28 U.S.C. § 1335(a). Both of these requirements are satisfied here.
A pesticide manufacturer (incorporated in State A) was dumping its waste products into a river adjacent to its plant. Ten State A homeowners whose houses also abutted the river were experiencing several problems from the waste that had been dumped, including experiencing a foul odor and suffering from headaches.
The homeowners wish to assert claims for nuisance and violation of state and federal environmental protection statutes as a class, seeking an injunction ordering the manufacturer to cease the dumping of its waste, compensatory damages for any loss to their property values, and medical monitoring to determine if there have been any long-term adverse health consequences from their exposure to the waste.
Is this group likely to be certified as a class?
A
No, because the group is not sufficiently numerous to make joinder of all members impracticable.
Explanation: An identifiable group of 10 plaintiffs who all reside in the same geographical area could practically be joined as co-plaintiffs under Rule 20. Thus, this group would not satisfy the numerosity requirement of Rule 23(a)(1).
A pedestrian from State A brought a negligence action in federal court against a State B motorcyclist and a State C truck driver, seeking $100,000 from each for injuries arising out of an accident. The motorcyclist responded by asserting a $50,000 claim for negligence against the truck driver.
Is the motorcyclist’s claim properly joined?
Yes, because the claim arises out of the same occurrence that is the subject matter of the pedestrian’s negligence claim.
Explanation: Joinder of the claim is permissible under Rule 13(g) as a crossclaim because the claim arises out of the same accident that is the basis for the pedestrian’s claim against the motorcyclist. Further, although the amount in controversy is insufficient, there would be supplemental jurisdiction over the motorcyclist’s claim under 28 U.S.C. § 1367(a) because it arises out of the same accident as the pedestrian’s claim; section 1367(b) does not apply because the motorcyclist was sued as a defendant; and there is no evidence for declining jurisdiction under section 1367(c).
A pedestrian from State A brought a negligence action in federal court against a State B motorcyclist and a State C truck driver, seeking $100,000 from each for injuries arising out of an accident. The motorcyclist responded by asserting a claim for negligence against the truck driver seeking $50,000 for the motorcyclist’s injuries. The motorcyclist also asserted an unrelated claim against the truck driver seeking $30,000 for an alleged breach of contract. As it turns out, the motorcyclist formerly worked as a courier for the truck driver but that arrangement was abruptly terminated several months ago; a dispute over the discontinuation of that contract is the basis for the motorcyclist’s breach of contract claim.
Is the motorcyclist’s breach of contract claim against the truck driver properly joined?
Yes, because the motorcyclist is free to join independent claims to the negligence claim it is asserting against the truck driver.
Explanation: Under Rule 18(a), a party asserting a crossclaim—which describes the motorcyclist’s related $50,000 claim—is permitted to join as many independent claims it has against an opposing party, regardless of whether they are related or unrelated to the other claims. Fed. R. Civ. P. 18(a) ; see also Fed. R. Civ. P. 13(g). Additionally, the $30,000 claim may be aggregated with the $50,000 claim to satisfy the amount in controversy requirement for diversity jurisdiction; and the motorcyclist and the truck driver are from two different states, creating diversity jurisdiction over both claims. 28 U.S.C. § 1332(a); Snyder v. Harris, 394 U.S. 332, 337 (1969).
The driver of a car and a passenger in the car initiated a products liability action in federal court against the manufacturer of the car for injuries they each sustained when the car exploded after a mild collision. The passenger subsequently asserted a negligence claim against the driver based on the driver’s actions during the same collision.
Is the passenger’s negligence claim properly joined?
Yes, because the passenger’s claim arises out of the same occurrence that is the subject matter of the claims asserted against the manufacturer.
Explanation: Rule 13(g) permits crossclaims by one coparty against another when the crossclaim arises out of the occurrence that is the subject matter of the original action. Fed. R. Civ. P. 13(g). Here, the claim against the manufacturer and the claim against the driver both arose out of the collision mentioned in the fact pattern. See, e.g., Ryan ex rel. Ryan v. Schneider Nat’l Carriers, Inc., 263 F.3d 816, 819–20 (8th Cir. 2001).
A passenger in a car initiated an action in federal court against the driver of the car based on the driver’s negligence in causing a collision. Twenty days later, the driver simultaneously filed an answer to the passenger’s complaint and a third-party claim against a pedestrian, claiming that the pedestrian was liable to the driver for recklessness based on the pedestrian’s jaywalking that led to the accident.
Is the driver’s third-party claim against the pedestrian properly joined?
No, because the claim does not assert that the pedestrian is liable to the driver for all or part of the passenger’s claim against the driver.
Explanation: Third-party claims are only proper if the third-party plaintiff is asserting a derivative liability claim, namely the original defendant is claiming a third party “is or may be liable to it for all or part of the claim against it” brought by the original plaintiff. Fed. R. Civ. P. 14(a)(1). it is insufficient for the claims to be transactionally related.
A passenger (from State A) in a car initiated an action in federal court against the driver of the car (from State B) based on the driver’s negligence in causing a collision and against a pedestrian (from State C) for recklessness based on the pedestrian’s jaywalking that contributed to the accident. The driver responded by filing a claim against the pedestrian, asserting that the pedestrian was liable to the driver for recklessness based on the pedestrian’s conduct causing to the accident. The pedestrian, in turn asserted a breach of contract claim against the driver based on an unrelated contract dispute between the pedestrian and the driver, seeking $100,000.
May the pedestrian’s breach of contract claim be joined under the Federal Rules?
Yes, because the pedestrian is free to assert any claim against an opposing party.
Explanation: Once the driver asserted a crossclaim against the pedestrian under Rule 13(g), the driver became an opposing party. At that point the pedestrian was entitled to assert any claims it had as permissive counterclaims under Rule 13(b). Fed. R. Civ. P. 13(b). Because the driver and the pedestrian are from two different states and the pedestrian’s claim is for $100,000, there is diversity jurisdiction over the claim. 28 U.S.C. § 1332(a).
Seven employees of a bank initiated an action in federal court against the bank alleging employment discrimination. Each of these employees asserted that they were passed over for promotions because of their age, although each employee worked in different departments under different supervisors. The employees further alleged that this discriminatory treatment was pursuant to the bank’s policy of preferring younger employees.
The bank moved to sever the claims of the employees, arguing that their joinder was not permitted under the Federal Rules. How is the court likely to rule?
Deny the motion, because the employees are each victims of the same policy and the court will need to determine whether that policy was discriminatory for each of the claims.
Explanation: The policy basis for each claim means that they arise from a common occurrence and the discrimination determination will be a common question of law that needs to be resolved for each claim. Fed. R. Civ. P. 20(a)(1).
A bank made a loan to a borrower at an annual interest rate of 40%. A different bank also made a loan to the same borrower at an annual interest rate of 40%. After viewing a television program about loan sharks and illegal rates of interest, the borrower initiated a declaratory judgment action against both banks in a single action in federal court seeking rescission of the loan agreements on the ground that they were usurious.
The banks objected to being joined in a single action in this fashion. Is such joinder permissible under the Federal Rules?
No, because the claims being asserted against the banks do not arise from the same transaction, occurrence or series of transactions or occurrences.
Explanation: Each loan transaction was independent of the other. Further, each claim will depend on distinct evidence specific to each defendant regarding the legality of the loan. Thus, the same transaction or occurrence requirement for permissive party joinder is not satisfied. Fed. R. Civ. P. 20(a)(2)(A).
ABC, Inc. constructed a building for XYZ, Inc. in State A. The building was completed over one year after the final completion date contractualy agreed by the parties. In light of this delay, XYZ initiated an action in federal court against ABC seeking liquidated damages under their contract.
ABC’s liability insurer, Ensure, Inc., had an agreement with ABC to indemnify it for any liability that might arise out of its construction projects. Thus, twelve days after being served with XYZ’s complaint, ABC filed a third-party complaint against Ensure, claiming that it would be liable for the entire amount claimed by XYZ were ABC found liable in the action. ABC also filed a separate third-party complaint against SubCon, Inc., the subcontractor that worked on the ABC building project for XYZ, as a defendant in this third-party complaint, asserting that its negligence was responsible for the construction delay and thus it is liable for any damages that might be assessed against ABC (Assume that in State A, joint tortfeasors may be subject to indemnification and/or contribution claims).
SubCon objects to being joined in the action in this way. Is joinder of SubCon permissible under the Federal Rules?
Yes, because ABC is claiming that SubCon is liable to ABC for the potential liability it faces on the claim by XYZ.
Explanation: ABC may implead SubCon because it seeks indemnification from SubCon for any liability ABC may be found to have toward XYZ. Fed. R. Civ. P. 14(a)(1).
A pedestrian initiated an action against a car driver in federal court seeking damages for negligence that resulted in a collision between the two. The car driver subsequently filed a third-party complaint against a truck driver seeking indemnification for the potential liability that the car driver faced in that action, alleging that the truck driver was responsible for causing the collision. Assume that under the applicable law, joint tortfeasors may be subject to indemnification claims. After the truck driver was joined in the action, the truck driver asserted a claim against the pedestrian for negligence and sought damages for injuries suffered in the accident.
Is the truck driver’s claim against the pedestrian properly joined in this action?
Yes, because the truck driver’s claim against the pedestrian arises out of the same occurrence as the pedestrian’s claim against the car driver.
Explanation: Under Rule 14(a)(2)(D), a third-party defendant may assert a claim against a plaintiff when the claim is transactionally related to the plaintiff’s claim against the original defendant (the third-party plaintiff). Here, both claims arise from the same collision, so the rule is satisfied. Fed. R. Civ. P. 14(a)(2)(D).
A car owner from State A initiated an action against a State B auto manufacturer in federal court seeking $1 million for damages for injuries suffered when the owner’s car exploded in a collision. The car owner asserts that the manufacturer was negligent in its design and placement of the gas tank.
After reading about the lawsuit in the newspaper, another owner of the same kind of car from State C, sought to intervene to assert a claim against the manufacturer for damages arising out of an explosion involving the car during a separate accident. The State C owner’s claim alleges negligent design and placement of the gas tank and seeks $80,000.
May the State C owner’s motion to intervene be granted?
Yes, because the State C owner’s claim shares a common question of law or fact with the State A owner’s claim against the manufacturer.
Explanation: There is a common question of fact between the two claims—whether the car at issue was defectively designed. Thus, permissive intervention under Rule 24(b)(1) is possible, at the court’s discretion. Fed. R. Civ. P. 24(b)(1)(B).
