Multiple parties and claims

Question 1

Joinder of parties

Answer 1

1. Permissive joinder
   • Ps and Ds may join/be joined in one action if any right to relief is asserted jointly, severally, or with respect to or arising out of same transaction, occurrence or series of them and question of law or fact common to all Ps or Ds will arise
   • SMJ—need SMJ:
   o Ds—SJ doesn’t apply so there must be complete diversity between Ps and Ds and each claim must exceed $75,000
   o Ps—SJ is permitted for JX amount less than or equal to $75,000 but there must still be complete diversity
   • In personam JX—court needs in personam PJ over D for proper joinder
   • Venue—joinder subject to applicable venue requirements
2. Compulsory joinder
   • Necessary parties—necessary for just adjudication:
   o Complete relief cannot be provided to existing parties in absence of that person, or
   o Disposition in absence of that person may impair person’s ability to protect his interest, or
   o Absence of that person would leave existing parties subject to substantial risk of multiple or inconsistent obligations
   • SMJ—need SMJ, so if exclusive basis for JX is DJ, party can’t be added if it would destroy diversity
   • In personam JX—court needs in personam PJ over D for proper joinder
   • Venue—joinder subject to applicable venue requirements
   • Indispensable parties—if parties cannot be joined because of JX or venue, court may dismiss case and will consider following factors:
   o Extent to which judgment without party would prejudice them or existing parties
   o Extent to which protective measures could prevent prejudice
   o Whether judgment rendered in necessary party’s absence would be adequate, and
   o Whether P would have adequate remedy if action were dismissed

Question 2

Intervention

Answer 2

Intervention as of right (if not through federal statute)

1. Nonparty has interest in property or transaction that is subject matter or action
2. Disposition of action may impair nonparty’s interest
3. Nonparty’s interest not adequately represented by existing parties

Permissive intervention—court must consider undue delay/prejudice to rights of original parties

1. Movant has conditional right to intervene under federal statute, or
2. Movant’s claim/defense and original action share common question of law or fact

Timeliness—court will consider following factors:
• Length of time movant knew or reasonably should have known that its interest was threatened before moving to intervene
• Prejudice to existing parties if intervention is permitted, and
• Prejudice to movant if intervention is denied

SMJ—cannot be joined in a case based exclusively on DJ if the exercise of JX inconsistent with requirements of DJ

Question 3

Interpleader

Answer 3

Allows person holding property (stakeholder) to force all potential claimants into single lawsuit

1. Federal interpleader rule
   o Ps—persons with claims that may expose P to multiple liability may be joined as Ds and required to interplead claims though they lack common origin or are adverse and independent rather than identical or P denies liability
   o Ds—exposed to similar liability may seek interpleader through a cross-claim or
   counterclaim

• SMJ—court must already have JX over all parties, and for DJ, only stakeholder needs to be diverse from claimants (claimants need not be diverse among themselves)
• In personam JX—court needs in personam PJ over claimants in order to join them
• Venue—interpleader subject to venue requirements

2. Federal statutory interpleader
   • SMJ—DJ met if any two adverse claimants are citizens of different states, and property at issue must merely exceed $500
   • In personam JX—nationwide PJ and service of process permitted
   • Venue—proper in any district where a claimant resides

Question 4

Joinder of claims

Answer 4

1. Permissive joinder
   • A party may join independent or alternative claims of whatever nature against opposing party
   • SMJ:
   o DJ—P may aggregate all claims to satisfy amount-in-controversy requirement
   o FQ—nonfederal claims can be joined only if DJ exists or if claims are part of same case/controversy as federal claim so SJ applies
   • Venue—joinder subject to venue requirements
2. Counterclaims (must be answered within 21 days of service)
   • Compulsory:
   o At time of service, counterclaim is compulsory if it arises out of same transaction/occurrence that is subject matter of opposing party’s claim and doesn’t require adding another party over whom court has no JX
   o SMJ—by definition court will have SJ so don’t need independent SMJ from original claim
   • Permissive:
   o Party has discretion if counterclaim isn’t compulsory
   o SMJ—need DJ or FQ
   • Third parties—can assert counterclaims against original P or D, and governed by requirements for counterclaims and joinder
3. Cross-claims (must be answered within 21 days of service)
   • A claim against coparty may be asserted if they arise out of same transaction or occurrence that is subject matter of original action or counterclaim and new parties subject to joinder rules
   • SMJ—by definition court will have SJ so don’t need independent SMJ from original claim
   • In personam JX and venue—PJ satisfied because parties are already before the court; proper venue over original claim, party cannot object to venue over cross-claim
4. Third-party claims (impleader)
   • Definition—defending party (third-party P) can implead nonparty (third-party D) for liability on original claim
   • Timing—can be asserted any time after complaint is filed, but third-party P must get court permission if filed more than 14 days after service of original answer
   • SMJ— by definition court will have SJ so don’t need independent SMJ from original claim, but if original claim is based only on DJ, claims by P against third-party D must meet DJ or FQ JX requirements on its own
   • In personam JX—court needs in personam PJ over third parties

Question 5

Class actions

Answer 5

Basic requirements:

1. Class is so numerous that joinder of all members is impracticable
2. Must be questions of law or fact common to class
3. Claims/defenses of representatives must by typical of class, and
4. Representatives must fairly and adequately protect the interests of class

Three situations when class can be certified:
• Risk of prejudice—separate actions would create risk that the class opponent would be subject to inconsistent adjudications or if separate actions would impair the interests of class members
• Final equitable relief—equitable relief based upon a shared general claim must be the primary relief sought
• Common legal/factual questions—must predominate over questions affecting individual members and class action is superior method for bringing about fair and efficient adjudication of controversy

SMJ—FQ, DJ (class representatives must be diverse from class opponents and at least one P must meet $75,000 jurisdictional amount), or Class Action Fairness Act of 2005

Venue—when there is a defendant class, venue requirements must be met and residence of class representatives (not class members) is what matters