Multiple parties

Question 1

Joinder of Parties

Answer 1

The Federal Rules of Civil Procedure provide for joining parties to existing litigation, generally for reasons of efficiency and economy. Joinder may be permissive (pursuant to Rule 20) or compulsory (pursuant to Rule 19).

Question 2

Permissive joinder of parties

Answer 2

Rule 20 sets forth the circumstances in which a plaintiff may join other plaintiffs in an action or in which defendants may be joined in the same action.

Question 3

Establishing permissive joinder of plaintiffs

Answer 3

Pursuant to Rule 20(a)(1), persons may join in one action as plaintiffs if:

i) They assert any right to relief jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences; and
ii) Any question of law or fact common to all plaintiffs will arise in the action.

Question 4

Establishing permissive joinder of defendants

Answer 4

Pursuant to Rule 20(a)(2), persons may be joined in one action as defendants if:

i) Any right to relief is asserted against them jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences; and
ii) A question of law or fact common to all defendants will arise in the action.

Question 5

Relief when parties have been joined

Answer 5

The same relief need not be demanded among the joined plaintiffs or against the joined defendants. Rule 20(a)(3).

Question 6

SMJ and joinder of parties

Answer 6

A plaintiff or defendant sought to be joined must also meet the requirements of federal subject matter jurisdiction.

Question 7

SJ and joinder of defendants

Answer 7

Under 28 U.S.C. § 1367(b), supplemental jurisdiction does not apply to defendants sought to be joined under the permissive joinder rule in a case based exclusively on diversity jurisdiction in which exercising jurisdiction would destroy diversity. Thus, if the claims are made solely on the basis of diversity jurisdiction, then there must be complete diversity between the plaintiffs and the defendants, and each claim must exceed the jurisdictional amount in controversy of $75,000.

Question 8

SJ and joinder of plaintiffs

Answer 8

If multiple plaintiffs, however, join together under Rule 20, then supplemental jurisdiction can exist for a claim that does not meet the statutory jurisdictional amount, provided the parties still meet the requirement of complete diversity.

Question 9

PJ and the joinder of defendants

Answer 9

If a defendant is joined pursuant to Rule 20, then the court must have in personam jurisdiction over the defendant in order for joinder to be proper.

Question 10

Venue and the joinder of defendants

Answer 10

Joinder under Rule 20 also is subject to any applicable venue requirements.

Question 11

Compulsory joinder

Answer 11

Rule 19 specifies circumstances in which additional parties must be joined. Note that the requirements of jurisdiction (both subject matter and personal) and venue must still be met in order for compulsory joinder to occur. Under certain circumstances, if compulsory joinder cannot occur because of jurisdictional or venue issues, Rule 19(b) may require the action to be dismissed from federal court.

Question 12

When must a party be joined?

Answer 12

Under Rule 19(a), a person who is subject to service of process and whose joinder will not deprive the court of subject matter jurisdiction or destroy venue must be joined as a party if:

i) Complete relief cannot be provided to existing parties in the absence of that person; or
ii) Disposition in the absence of that person may impair the person’s ability to protect his interest; or
iii) The absence of that person would leave existing parties subject to a substantial risk of multiple or inconsistent obligations.

Question 13

SMJ and compulsory joinder

Answer 13

A plaintiff or defendant to be joined under Rule 19 must meet the requirements of federal subject matter jurisdiction. Thus, if the exclusive basis for the court’s subject matter jurisdiction is diversity jurisdiction, and a party sought to be joined would destroy diversity, joinder is not permitted.

Question 14

SJ and compulsory joinder

Answer 14

supplemental jurisdiction does not apply to the claims of a party sought to be joined under Rule 19 in a case based exclusively on diversity jurisdiction if the exercise of jurisdiction would be inconsistent with the diversity requirements.

Question 15

PJ and compulsory joinder

Answer 15

There must be personal jurisdiction over the required party. A required party may be served within 100 miles from where the summons was issued, even if the service is outside of the state and beyond its long-arm statute jurisdiction.

Question 16

Venue and compulsory joinder

Answer 16

If a joined party objects to venue and the joinder would make venue improper, the court must dismiss that party.

Question 17

Indispensable parties: when joinder is not feasible

Answer 17

Under Rule 19(b), if a necessary party cannot be joined because of jurisdictional or venue concerns, then the court must determine whether, in equity and good conscience, the action should proceed among the existing parties or be dismissed.

Question 18

Factors courts counter to determine whether or not a party is indispensable

Answer 18

Among the factors for the court to consider are:

i) The extent to which a judgment rendered in the person’s absence might prejudice that person or the existing parties;
ii) The extent to which any prejudice could be reduced or avoided by protective provisions in the judgment, shaping the relief, or other measures;
iii) Whether a judgment rendered in the person’s absence would be adequate; and
iv) Whether the plaintiff would have an adequate remedy if the action were dismissed for nonjoinder.

Question 19

Effect of dismissing an action for not joining a party

Answer 19

When the court dismisses an action because of the inability to join a necessary party, the party is said to be “indispensable.”

Question 20

Intervention

Answer 20

Rule 24 governs the circumstances under which a nonparty may join in a lawsuit. In some circumstances, the nonparty may intervene as of right. In other circumstances, the nonparty must have the permission of the court. Note that in either case, a motion to intervene must be timely.

Question 21

Intervention as of right

Answer 21

Under Rule 24(a)(1), a nonparty has the right to intervene in an action when a federal statute confers the right, and the nonparty timely moves to intervene.

Question 22

circumstances when intervention as of right is permissible

Answer 22

under Rule 24(a)(2), upon a timely motion, a nonparty has the right to intervene when:

i) The nonparty has an interest in the property or transaction that is the subject matter of the action;
ii) The disposition of the action may, as a practical matter, impair the nonparty’s interest; and
iii) The nonparty’s interest is not adequately represented by existing parties.

The criteria for intervention as of right under Rule 24(a)(2) are similar to the criteria for compulsory joinder under Rule 19(a).

Question 23

Permissive Intervention

Answer 23

Under Rule 24(b), the court may allow intervention, upon timely motion, when either:

i) The movant has a conditional right to intervene under a federal statute; or
ii) The movant’s claim or defense and the original action share a common question of law or fact.

In exercising its discretion, the court must consider whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties.

Question 24

Interpleader

Answer 24

Interpleader allows a person holding property (traditionally known as the “stakeholder”) to force all potential claimants to the property into a single lawsuit to determine who has a right to the property.

Question 25

When is interpleader appropriate

Answer 25

Under Rule 22, persons with claims that may expose a plaintiff to double or multiple liability may be joined as defendants and required to interplead.
Such joinder is proper even though the claims of the claimants, or the titles on which their claims depend, lack a common origin or are adverse and independent rather than identical, or even though the plaintiff denies liability in whole or in part to any or all of the claimants.

A defendant who is exposed to similar liability may seek interpleader through a cross-claim or counterclaim. Rule 22(a).

Question 26

The standard for determining the propriety of an interpleader

Answer 26

The primary standard for determining the propriety of an interpleader action under Rule 22 is whether the party bringing the action legitimately fears multiple claims against the property.

Question 27

SMJ of interpleader action

Answer 27

Rule 22 does not create subject matter jurisdiction in interpleader actions. Rather, the court must already have jurisdiction over all parties. Thus, a plaintiff will need federal question jurisdiction or, for diversity jurisdiction, the citizenship of the party bringing the action must be completely diverse from that of the claimants, and the statutory amount in controversy must be met. While the stakeholder needs to be diverse from the claimants, the claimants need not be diverse among themselves.

Question 28

PJ of interpleader action

Answer 28

An interpleader action is an action against the claimants, so the general requirements of in personam jurisdiction in federal court must be met.

Question 29

Venue of interpleader action

Answer 29

Federal venue requirements must also be met in interpleader actions under Rule22.

Question 30

Federal Statutory Interpleader

Answer 30

For statutory interpleader, diversity jurisdiction is met if any two adverse claimants are citizens of different states. With regard to the amount in controversy in a statutory interpleader action, the property at issue must merely exceed $500 in value, not meet the $75,000 threshold required for regular diversity matters.

Question 31

Statutory interpleader

Answer 31

Statutory interpleader provides for nationwide personal jurisdiction and service of process and permits the federal court to enjoin other federal and state proceedings that may affect the property that is subject to dispute. § 2361.

Question 32

Venue and statutory interpleader

Answer 32

Venue is proper in any federal judicial district where one of the claimants resides. § 1397.

Question 33

Depositing property or posting bond

Answer 33

For statutory interpleader, unlike for federal rule interpleader, the stakeholder is required to either deposit with the court the property at issue or post a bond in an appropriate amount.