Multiple Parties and Claims

Joinder of parties - Permissive joinder

• Plaintiffs and defendants may join or be joined in one action if any right to relief is asserted jointly, severally, or regarding or arising out of same transaction, occurrence, or series of them and question of law or fact common to all plaintiffs or defendants will arise

• Subject matter jurisdiction—need subject matter jurisdiction:

• In personam jurisdiction—court needs in personam personal jurisdiction over defendant for proper joinder

• Venue—joinder subject to applicable venue requirements

Joinder of parties - Permissive joinder (SMJ) - for Defendants

—supplemental jurisdiction does not apply, so there must be complete diversity between plaintiffs and defendants, and each claim must exceed $75,000

Joinder of parties - Permissive joinder (SMJ) - for Plaintiffs

—supplemental jurisdiction is permitted for jurisdiction amount less than or equal to $75,000, but there must still be complete diversity

Compulsory joinder - Necessary parties

Necessary parties—necessary for just adjudication:

o Complete relief cannot be provided to existing parties in absence of that person

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

Compulsory joinder - SMJ

—need subject matter jurisdiction, so if exclusive basis for jurisdiction is diversity jurisdiction, party cannot be added if it would destroy diversity

Compulsory Joinder - In personam jurisdiction

—court needs in personam personal jurisdiction over defendant for proper joinder

Compulsory Joinder - Venue

—if joined party objects to venue and joinder would make venue improper, court must dismiss that party

Compulsory Joinder - Indispensable parties

Indispensable parties—if parties cannot be joined because of jurisdiction or venue, court may dismiss case and will consider:

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

o Whether plaintiff would have adequate remedy if action were dismissed

Intervention as of right (if not through federal statute)

• Nonparty has interest in property or transaction that is subject matter or action

• Disposition of action may impair nonparty’s interest

• Nonparty’s interest not adequately represented by existing parties

Permissive intervention

—court must consider undue delay and prejudice to rights of original parties

• Movant has conditional right to intervene under federal statute or

• Movant’s claim or defense and original action share common question of law or fact

Intervention - Timeliness

—court will consider:

• Length of time movant knew or reasonably should have known that his interest was threatened before moving to intervene

• Prejudice to existing parties if intervention is permitted

• Prejudice to movant if intervention is denied

Intervention - SMJ

—cannot be joined as plaintiff in case based exclusively on diversity jurisdiction if exercise of jurisdiction inconsistent with requirements of diversity jurisdiction

Interpleader

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

• Venue—interpleader subject to venue requirements

Federal interpleader rule - Plaintiffs

—persons with claims that may expose plaintiff to multiple liability may be joined as defendants and required to interplead claims though they lack common origin or are adverse and independent rather than identical or plaintiff denies liability

Federal interpleader rule - Defendants

—exposed to similar liability may seek interpleader through a crossclaim or counterclaim

Federal interpleader rule - SMJ

—court must already have jurisdiction over all parties, and for diversity jurisdiction, only stakeholder needs to be diverse from claimants (claimants need not be diverse among themselves)

Federal interpleader rule - In personam jurisdiction

—court needs in personam personal jurisdiction over claimants to join them

Federal statutory interpleader - SMJ

—diversity jurisdiction met if any two adverse claimants are citizens of different states and property at issue must be $500 or more

Federal Statutory Interpleader - In personam jurisdiction

—nationwide personal jurisdiction and service of process permitted

Federal Statutory Interpleader - Venue

Venue—proper in any district where claimant resides

Joinder of claims - Permissive Joinder

• Party may join independent or alternative claims of whatever nature against opposing party

• Venue—joinder subject to venue requirements

Joinder of claims - Permissive Joinder SMJ - DJ

Diversity jurisdiction—plaintiff may aggregate all claims to satisfy amount-incontroversy requirement

Joinder of claims - Permissive Joinder SMJ - FQ

Federal question—nonfederal claims can be joined only if diversity jurisdiction exists or if claims are part of same case or controversy as federal claim so supplemental jurisdiction applies

Counterclaims

(must be answered within 21 days of service)

Compulsory Counterclaims

At time of service, counterclaim is compulsory if it arises out of same transaction or occurrence that is subject matter of opposing party’s claim and does not require adding another party over whom court has no jurisdiction

• Subject matter jurisdiction—by definition, court will have supplemental jurisdiction, so independent subject matter jurisdiction from original claim not needed

Permissive Counterclaims

• Party has discretion if counterclaim is not compulsory

• Subject matter jurisdiction—need diversity jurisdiction or federal question

Counterclaims - Third Parties

—can assert counterclaims against original plaintiff or defendant and governed by requirements for counterclaims and joinder

Crossclaims

(must be answered within 21 days of service)

• Claims 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

Crossclaims - SMJ

—by definition, court will have supplemental jurisdiction, so independent subject matter jurisdiction from original claim not needed

Crossclaims - In personam jurisdiction and venue

—personal jurisdiction satisfied because parties are already before court; proper venue over original claim, party cannot object to venue over crossclaim

Third-party claims (impleader)

Definition—defending party (third-party plaintiff) can implead nonparty (third-party defendant) for liability on original claim

Third-party claims (impleader) - Timing

Timing—can be asserted any time after complaint is filed, but third-party plaintiff must get court permission if filed more than 14 days after service of original answer

• DE Distinction—third-party plaintiff must get court permission if filed more than 10 days after service of original answer

Third-party claims (impleader) - SMJ

Subject matter jurisdiction—by definition, court will have supplemental jurisdiction, so independent subject matter jurisdiction from original claim not needed, but if original claim is based only on diversity jurisdiction, claims by plaintiff against third-party defendant must meet diversity jurisdiction or federal question jurisdiction requirements on its own

Third-party claims (impleader) - In personam Jurisdiction

In personam jurisdiction—court needs in personam personal jurisdiction over third parties

Class actions - Basic requirements

• Numerosity—class is so numerous that joinder of all members is impracticable

• Commonality—must be questions of law or fact common to class

• Typicality—claims or defenses of representatives must be typical of class

• Adequacy—representatives must fairly and adequately protect interests of class

Three situations when class can be certified:

1. Risk of prejudice

2. Final equitable relief

3. Common legal or factual questions

Risk of prejudice

—separate actions would create risk that class opponent would be subject to inconsistent adjudications or if separate actions would impair interests of class members

Final equitable relief

—class shares general claim and injunctive or declaratory relief is sought; single, indivisible remedy would provide relief to each class member (therefore monetary damages not available)

Common legal or factual questions

—must predominate over questions affecting individual members and class action is superior method for bringing about fair and efficient adjudication of controversy; class representatives need not establish likelihood of success on common question of law

Class action - Subject matter jurisdiction

—federal question, diversity jurisdiction (class representatives must be diverse from class opponents, and at least one plaintiff must meet $75,000 jurisdictional amount), or Class Action Fairness Act of 2005

Class action - Venue

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

Class action- Settlement or dismissal

—claims, issues, or defenses of the certified class may be voluntarily settled, compromised, or dismissed only with approval of court; court must direct notice to all class members bound by proposed settlement or dismissal

Class action - Judgment

—valid judgment generally binds all members of class except those who opted out