Joinder Flashcards
FRCP 19: Compulsory Joinder
Deals with the situation where a lawsuit has been filed, there is a person or entity (the “absentee”) that has not been joined to the lawsuit as a party, and failure to join the absentee may adversely affect him and/or a party (or parties) to the lawsuit (“existing parties”). The issue is usually raised by a defendant via a “motion to dismiss for failure to join a necessary party” [FRCP 12(b)(7)], but could be raised sua sponte by the court.
Compulsory Joinder: Step 1
STEP 1:
Is the absentee a “necessary” or “required” party? YES, if absentee falls into one or more of the following categories:
- The court cannot grant complete relief to one or more of the existing parties without joining the absentee to the lawsuit.
- The absentee has a significant interest in the subject matter of the lawsuit AND that interest may be impaired or impeded if the absentee isn’t joined to the lawsuit.
- The absentee has a significant interest in the subject matter of suit AND one or more of the existing parties may be subject to double, multiple, or inconsistent obligations if the absentee isn’t joined to the lawsuit.
Compulsory Joinder: Step 2
STEP 2: If the absentee is found to be a “required party” under 19(a) – i.e., falls into one or more of the above three categories – then he MUST BE JOINED to the lawsuit … if FEASIBLE (i.e., possible).
- Joinder of the absentee is “feasible” if the court has personal jurisdiction over the absentee, AND if joining the absentee won’t destroy subject matter jurisdiction over the lawsuit (which could happen if jurisdiction is based on diversity, and the absentee is a non-diverse party).
- You need to know the rules governing personal jurisdiction and subject matter jurisdiction that you learned in Civil Procedure I to do this analysis!
- (Note: If joinder is feasible and absentee is joined, he may raise a venue objection at this point, and, if venue is lacking, he may be dismissed from the case.)
FRCP 19 Step 3
STEP 3: If joinder of the required party is NOT FEASIBLE, then the court has two choices. It must decide “in equity and good conscience” whether:
- The required party is SO IMPORTANT that the case can’t go on without him and must be dismissed (i.e., the required party is INDISPENSABLE to the case); OR
- The required party is not THAT important, and the case can go on WITHOUT him.
- NOTE: Joining the absentee to the litigation is NOT AN OPTION at this stage – you have already determined that joinder is not possible for jurisdictional reasons.
- The court’s only choices at this stage are to (1) dismiss the lawsuit, or (2) go on without the absentee.
In determining whether to dismiss the case or go on without the required party in Step 3 of FRCP 19, the court must consider the following four factors:
- The adverse consequences of proceeding without the absentee, on both the absentee and existing parties – how bad are the consequences, really?
- Is there anything the court can do through court order or judgment that would minimize the adverse consequences?
- Will a judgment in this case in the absence of the absentee be adequate? Focuses on the efficiency of continuing the suit without the absentee – will judgment in the case without the absentee fully resolve disputed issues?
- If this case is dismissed, will the plaintiff have an adequate remedy through other means, such as a lawsuit filed somewhere else? Is there another forum available where EVERYONE can be joined?
Intervention
Provides an opportunity for an absentee to an existing lawsuit to seek joinder to the lawsuit as either a plaintiff or a defendant.
There are two types:
Intervention of Right [Rule 24(a)]
Permissive Intervention [Rule 24(b)]:
Intervention of Right [Rule 24(a)]
Provided the absentee makes a timely motion to intervene and there are no jurisdictional impediments to intervention, a person has a right to intervene where:
- A federal statute confers an unconditional right to intervene
** OR **
- The absentee can satisfy all three of the following requirements:
- The absentee has a significant interest in the subject matter of the litigation; and
- There is a substantial risk that absent joinder, the litigation will impair or impede the absentee’s ability to protect that interest; and
- Existing parties do not adequately protect the absentee’s interest.
NOTE: The burden in meeting these three requirements is minimal.
Permissive Intervention [Rule 24(b)]
Provided the absentee makes a timely motion to intervene and there are no jurisdictional impediments to intervention, the absentee may be permitted to intervene (i.e., this is discretionary with the court) under FRCP 24(b) where:
- A federal statute confers a conditional right to intervene
** OR **
- The absentee’s claim or defense and the main action have a question of law or fact in common.
NOTE: Court has discretion to deny a motion for leave to intervene under 24(b) – unlike motion for intervention of right under 24(a).
Court will deny intervention under 24(b) if the intervention would unduly delay or prejudice the pending litigation.
Motion to Intervene must be timely
Timeliness requirement applies to BOTH intervention of right and permissive intervention.
- Rule doesn’t spell out actual time limits, which gives the courts considerable discretion in deciding if motion is timely.
- Factors courts consider in assessing timeliness of motion:
- Length of delay in seeking to intervene (how long did the absentee know of his interest in the litigation before moving to intervene?);
- Prejudicial impact of such delay on existing parties;
- Prejudice to the proposed intervenor if intervention is denied;
- Other factors affecting fairness
Intervention Jurisdictional Considerations
The court can’t permit intervention of right or permissive intervention if doing so would destroy subject matter jurisdiction.
No problem with personal jurisdiction, since by seeking to intervene, the absentee is consenting to the personal jurisdiction of the court.
Intervention as plaintiff or defendant?
- A person seeking to intervene must file a motion requesting leave to intervene with the court, accompanied by a proposed pleading in which he indicates which side of the litigation he thinks he should be on.
- BUT the proposed intervenor’s motion and pleading are not determinative of the side on which the intervenor belongs in the litigation – the court has an obligation to look beyond the pleadings and arrange the parties according to their collision of interests.
- The court looks for the strongest collision of interest between the proposed intervenor and the existing parties to determine the side of the dispute on which the proposed intervenor belongs. Parties with clearly opposing interests should be aligned as opposing parties in the case (e.g., plaintiff vs defendant).
Interpleader:
FRCP 22 and
Statuor Interpleader
Interpleader addresses the situation where one person or entity (the “stakeholder”) is in possession of property to which multiple other persons (claimants) are asserting inconsistent claims.
There are more claims than there is property (stake) to go around, leaving the stakeholder at risk of incurring multiple liability exceeding the value of the stake.
• Interpleader permits the stakeholder to join all claimants together in a single lawsuit where they will compete with one another to establish the validity and priority of their claims to the stake.
NOTE: The interpleader plaintiff may also have a claim to the stake.
Basic Requirement for Use of Either Rule Interpleader or Statutory Interpleader
- Stakeholder must assert in its pleading that there are multiple, competing claims to the stake, leading to a risk of multiple liability because the stake cannot fully satisfy all the claims.
- NOTE: Interpleader may be initiated as an original suit (with the stakeholder as plaintiff) or, if the stakeholder has already been sued by a claimant in federal court, it may be possible to initiate an interpleader action through a counterclaim or crossclaim, joining the other claimants to the action through use of FRCP 13(h).
Rule 22 Interpleader requires satisfaction of normal jurisdictional rules.
o Subject matter jurisdiction must be established through 28 USC 1331(fed question) or 1332 (“complete diversity across the ‘v’”), or it could be established through 28 USC 1367 (supplemental) if asserting interpleader as a counterclaim.
NOTE: Must look to basis of the claimants’ claims against the stakeholder to determine whether the lawsuit is based on state law or federal law.
NOTE: When determining whether “amount in controversy” is satisfied for both Rule Interpleader AND Statutory Interpleader, the total value of the stake = amount in controversy (and not the value of each claimant’s individual claim).
o Personal jurisdiction is established over claimants through the multiple approaches learned in Civ Pro I.
o Venue – the lawsuit must satisfy the requirements of 28 USC 1391(the general federal venue statute).
Statutory interpleader has different jurisdictional rules.
o Subject matter jurisdiction is satisfied where there is
(1) minimal diversity among the claimants (at least one claimant must be a citizen of a different state from one other claimant),
AND
(2) the amount in controversy (i.e., value of the stake) is $500 or more.
Thus, if all claimants are from the same state, no SMJ under statutory interpleader (but see Note below); COULD be diversity jurisdiction under Rule 22.
NOTE: If stakeholder is NOT asserting a claim to the stake, then stakeholder’s citizenship DOESN’T COUNT for purposes of determining if the necessary minimal diversity among claimants exists.
BUT if the stakeholder IS asserting a claim to the stake, then some jurisdictions DO consider the stakeholder’s citizenship when determining if there is the necessary minimal diversity; other jurisdictions still don’t consider the stakeholder’s citizenship.
o Personal Jurisdiction – §2361 provides for nationwide PJ and service of process. As long as the claimants are anywhere in the United States, there is PJ in any court for statutory interpleader.
o Venue – §1397 provides that venue may be found in any judicial district in which any one of the claimants resides. “Reside” is defined the same way as in the general federal venue statute (28 USC 1391) – i.e., domicile for an individual; PJ for a corporate entity.
