Compulsory Party Joinder and Intervention

Compulsory Joinder

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.

***Supreme Court has specifically held that tortfeasors facing joint and several liability are not parties who must be joined under Rule 19.

Compulsory Party Joinder vs SMJ

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.

***under 28 U.S.C. § 1367(b), 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.

Temple v. Snythes

Facts: P had plate implanted, plate malfunctioned causing injury. P filed diversity suit against D, as well as state suit against surgeon and hospital. D moved to dismiss for failure to join surgeon and hospital under Rule 19.
Rule of Law: A plaintiff in federal court may sue one or more joint tortfeasors without joining all; dismissal for failure to join joint tortfeasors is improper. Distinguishes permissive joinder (joint tortfeasors) from indispensable non-diverse parties (as in Haas v. Jefferson National Bank).  Court emphasized flexibility and fairness in managing multiple potential defendants.

Compulsory Party Joinder vs In Personam Jurisdiction and Venue

• There must be personal jurisdiction over the necessary party. A necessary 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. Rule 4(k)(1)(B).

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

When Party Joinder is not Feasible, what to do?

Rule 19(b), if a person who is required to be joined cannot be joined because of jurisdictional or venue concerns, the court must determine whether, in equity and good conscience, the action should proceed among the existing parties or should be dismissed. 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 non-joinder. (Is there an alternative forum to which plaintiff can go and effect joinder of all interested parties, including absentee?)

Hass v. Jefferson National

Facts: P bought stocks with partner, stocks issued in partner’s name but P claimed half. D knew of P’s payment. P later wanted his stocks issued to him, but D refused because Partner had debt. P sued invoking diversity. Partner was indispensable, but would ruin diversity.
Rule of Law: Federal courts cannot adjudicate claims involving indispensable non-diverse parties under diversity jurisdiction. Rule 19 protects both absent parties’ rights and prevents inconsistent judgments. Alternative remedies in state court may preserve the plaintiff’s rights without violating federal jurisdiction requirements.

Rule 19 Steps:

1.        Court must assess whether absentee is a “required party” under rule 19 (a)(1)(A) or rule 19 (a)(1)(B).

2.        If absentee is required party, court must assess whether joinder is “feasible”, factors here are whether absentee is subject to PJ, whether venue would be proper, and whether claim asserted by or against absentee would invoke federal question

3.        If not feasible, court must assess whether it should “in equity and good conscience” proceed with litigation without absentee or dismiss pending case. Assessment is guided by four factors in Rule 19(b)

Indispensable Party

Indispensable party is one who is a required party, whose joinder cannot be effectuated (ex: no SMJX), as to whose absence the court has determined that it should dismiss the pending case rather than run risk of proceeding without her

Alternative Reasons for compelling joinder according to Rule 19

-              Rule 19a1A: Could court “accord complete relief among existing parties”

o   Two possible meanings: whether without party, court could not wrap up things or without party, court could not wrap things in some overall sense among all interested persons

-              Rule 19a1Bi: Whether or not impractical impairment of absentee’s interest

-              Rule 19a1Bii: Substantial risk of incurring double, multiple, or otherwise inconsistent obligations

Alignment

Party proposing to join absentee will suggest whether she is to join as P or D

o   Decision not binding, court always has authority to realign absentee on side dispute with which interests are most compatible, may affect SMJ

Rule 19 and Supplemental Jurisdiction

In diversity cases, Section 1367(b) specifically prohibits supplemental jurisdiction over claims by the original plaintiff against parties joined under Rule 19, as this would allow a plaintiff to destroy diversity by adding a necessary party from their own state. 

Intervention as of Right

Rule 24(a)(1), a non-party has the right to intervene in an action in which a federal statute confers the right and the non-party timely moves to intervene. Additionally, under Rule 24(a)(2), upon a timely motion, a non-party has the right to intervene when:

i) The non-party 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 non-party’s interest (avoid harm to absentee); and

iii) The non-party’s interest is not adequately represented by existing parties.

Permissive Intervention

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.

Timeliness and Subject Matter for Intervention

• The decision of whether the non-party timely moved to intervene is in the discretion of the trial court, considering factors such as:

  • 1.        How long intervenor knew of her interest before moving to intervene,

    2.        whether the interventor’s delay will prejudice an extant party

    3.        whether denial of intervention will prejudice absentee,

    4.        any unusual circumstances affecting a finding of timeliness

• A claim of an intervenor must be supported by its own jurisdictional basis, unless the claim is closely related to a federal-question claim already asserted in the action.

**§ 1367(b), supplemental jurisdiction does not apply to the claims of a person seeking to be joined under Rule 24 (either as of right or permissively) in a case based exclusively on diversity jurisdiction if the exercise of jurisdiction would be inconsistent with the requirements of diversity jurisdiction

Procedure for Intervention

-              Absentee must make motion and file appropriate pleading

-              Plaintiff-intervenor, appropriate pleading would be complaint

-              Defendant-intervenor will make motion, supported by answer in intervention

-              One absentee intervenes, all rights and responsibilities of any party

***·      Court must assess whether claim joined under federal rules support by SMJ

Supplemental Jurisdiction and Intervention

• Traditionally, supplemental jurisdiction support claims by or against intervenors of right even without independent basis of SMJ

•   For claims by permissive intervenors, tendency has been to reject supplemental jurisdiction

Jurisdictional Joinder Questions

1.        Is there an independent basis for jurisdiction over claim and the party

2.        If not, is there supplemental jurisdiction over the joined claims or parties under §1367(a) because they are part of the same “case” or “controversy

3.        If so, should the court decline supplemental jurisdiction because of the factors in §1367(c)?

4.        If there appears to be supplemental jurisdiction under §1367(a) but the underlying claim is based solely on 1332 diversity jurisdiction, do any of the exception in 1367(b) take away jurisdiction?

5.        If jurisdiction appears permissible but the plaintiff are joined under Rule 20, does it thwart complete diversity?