Civil Procedure Notes Page 6

LAW 5301 (4 credits)
Professor Pedro A. Malavet

Civil Procedure Notes: Part Six

IV. Establishing the Structure and Size of the Dispute [Joinder of Claims and Parties]

Once again, the relevant question is "what constitutes a single case or litigation?" (Or, in Constitutional terms, a single case or controversy). In order to determine this, the rules have established a series of tests that I generally refer to as "transaction and occurrence" tests. Another way of looking at these tests is to ask "what is the required or allowable level of commonality between the parties and/or claims?"

CAVEAT: However, it is important to understand that while the rules allow and often encourage the parties to resolve as many disputes with as many parties as reasonably possible within a single litigation, they often do not require this to occur. To the extent that they are not required to join certain claims or individuals, the parties are given the discretion to decide how to to resolve their disputes, and they may very well refuse to choose the most efficient system.

Placeholder

1. Parties:

a. Real Party in Interest:Virginia Electric v. Westinghouse, FRCP 17(a), 19, 211-217 [Focus mostly on VEPCO]

Casebook:

[CB-211]A proper party to a suit should have a sufficient relationship to the dispute that it may appropriately be brought into the litigation.

[211]Rule 17(a) provides that "[e]very action shall be prosecuted in the name of the real party in interest."

[212] The purpose was to alter the common-law requirement that suit must be brought by the party who, under substantive law, possessed the right sought to be enforced, and who was not necessarily the person who would ultimately benefit from the recovery.

[212]This makes explicit the fact that the real party in interest need not have a beneficial interest in order to sue so long as it has sufficient interest in the outcome.

VIRGINIA ELECTRIC & POWER COMPANY v.WESTINGHOUSE ELECTRIC CORPORATION

United States Court of Appeals, Fourth Circuit, 1973.

[212]Virginia Electric and Power Company (VEPCO) brought this action on April 16, 1969, on its own behalf and on behalf of its insurer and partial subrogee, Insurance Company of North America (INA)

[212]The defendants moved to dismiss the action urging that INA, by virtue of the subrogation, was the real party in interest under Fed.R.Civ.P. 17 and must prosecute the action as plaintiff. Since INA is a Pennsylvania corporation, its joinder as party plaintiff would destroy diversity jurisdiction [Jurisdiction] [Corporation] and require dismissal because defendant Westinghouse is also a Pennsylvania corporation.

[213] In consideration of the settlement, VEPCO and INA agreed that INA would furnish counsel and have exclusive control over the present action and that INA would prosecute VEPCO's claims for the remaining uninsured loss. Additionally, VEPCO executed a subrogation agreement whereby INA was subrogated to the rights of VEPCO against Westinghouse and Stone and Webster.

[213] "that VEPCO has retained a pecuniary interest and that standing is retained by virtue of its intent to recover the uninsured loss." This finding is not contested on appeal.

[213] About the best that can be said for Fed.R.Civ.P. 17 is that it conveys a certain amount of correct information about naming plaintiffs.

[214] The meaning and object of the real party in interest principle embodied in Rule 17 is that the action must be brought by a person who possesses the right to enforce the claim and who has a significant interest in the litigation. Whether a plaintiff is entitled to enforce the asserted right is determined according to the substantive law.

[214] In addition to having a sufficient interest in the litigation, [because of the portion of their damages not covered by insurance] VEPCO, as subrogor, is entitled under the substantive law to bring suit for its entire loss. VEPCO, being entitled to enforce the right, may bring this action even though INA will ultimately receive the major portion of any recovery.

[214] The permissive function of Rule 17 has been accomplished, and Rule 17 now serves primarily a negative function. It is to enable a defendant to present defenses he has against the real party in interest, to protect the defendant against a subsequent action by the party actually entitled to relief, and to ensure that the judgment will have proper res judicata effect.

[214] Even without joinder the partial subrogee is generally precluded from bringing a subsequent action [215] against the defendants where a judgment has been rendered in a suit by the subrogor for the entire loss.

[215] Under the cooperation agreement between VEPCO and INA filed with the court, INA has full and exclusive control of the litigation. It is settled under the applicable substantive law that any judgment will have full res judicata effect as to INA in these circumstances.

[215] That an absent person who cannot be joined is a real party in interest does not conclude the matter--the court must determine whether, in equity and good conscience, the action should proceed without the person.

Keep in mind that the move to require joinder of INA was intended to get the Federal case dismissed. INA went to great lenghts to stay out of the litigation, nominally, in order to ensure federal jurisdiction. Why? I mentioned many possible reasons in class. Consider as well Fed. Rule of Evidence 411, you cannot mention insurance coverage to the jury. Perhaps fear of anti-insurance company bias?

[THE RULE 19 analysis was not transcribed].

RULE 19 should be applied in the following way:

RULE 19 ANALYSIS:

STEP 1: Is the non-party "Necessary"? FRCP 19(a)

NO: Joinder and Dismissal Denied; case proceeds as filed.

YES: Joinder Should be ordered; BUT go to step 2.

Joinder Will be Ordered IF the answer to BOTH questions is YES:

STEP 2: Is there Personal Jurisdiction over the non-party? AND

Will the court retain Subject Matter Jurisdiction if joinder is ordered? FRCP 19(a)

YES to both? Joinder is ordered and Dismissal denied.

NO to either? Proceed to step 3.

STEP 3: If the party cannot be joined, is the party "Indispensable" as defined in 19(b)?

NO: Joinder and dismissal denied, the case proceeds as filed.

YES: Motion Granted, Case Dismissed

 

2. SMU Association of Women Law Students v. Wynne and Jaffe, FRCP 10(a), 217-20

SOUTHERN METHODIST UNIVERSITY ASSOCIATION OF WOMEN LAW STUDENTS v. WYNNE AND JAFFE

[217] In these companion Title VII sex discrimination suits, the Southern Methodist University (SMU) Association of Women Law Students (Association) and Lawyers A, B, C and D [218] (A-D), four female lawyers seeking to proceed anonymously, allege that defendants, two Dallas law firms, discriminated against women in hiring summer law clerks and associates and request injunctive relief.

[218] Neither the Federal Rules of Civil Procedure nor Title VII itself make provision for anonymous plaintiffs. The rules require that "[i]n the complaint the title of the action shall include the names of all the parties." Fed.R.Civ.P. 10(a), and the language of Title VII establishes no exception to the general principle that "the identity of the parties to a lawsuit should not be concealed."

[218] Under certain special circumstances, however, courts have allowed plaintiffs to use fictitious names.

[218] The plaintiffs in those actions, at the least, divulged personal information of the utmost intimacy; many also had to admit that they either had violated state laws or government regulations or wished to engage in prohibited conduct. Here, by contrast, to prove their case A-D need not reveal facts of a highly personal nature or express a desire to participate in proscribed activities.

[218] Plaintiffs argue that disclosure of A-D's identities will leave them vulnerable to retaliation from their current employers, prospective future employers and an organized bar that does "not like lawyers who sue lawyers."

[219] Because we find neither an express congressional grant of the right to proceed anonymously nor a compelling need to "protect privacy in a very private matter," Doe v. Deschamps, supra, 64 F.R.D. at 658, we hold that these Title VII plaintiffs may not sue under fictitious names

NOTES:

[220,N.6]dealing with problems of standing, the Supreme Court has said that "the association may assert the rights of its members, at least so long as the challenged infractions adversely affect its members' associational ties." Warth v. Seldin.

PERMISSIVE JOINDER OF CLAIMS [226]

[226] Rule 18(a), in contrast[ to the common law], is completely permissive as to joinder of claims against the same party in a single suit.

This liberal rule of joinder of claims does not, however, mean that unrelated claims will necessarily be tried together. [Rule 42(b)].

[227] C. PERMISSIVE JOINDER OF PARTIES (RULE 20)

[227] KEDRA v. CITY OF PHILADELPHIA United States District Court, Eastern District of Pennsylvania, 1978.

[227] This civil rights action arises out of an alleged series of brutal acts committed by Philadelphia policemen against the plaintiffs. The events set forth in the complaint span one and one-half years, from December 1975 to February or March 1977.

[227] *** The defendants are the City of Philadelphia, the Police Commissioner, and various police officials and officers. ***

[228] Defendants[Def.] contend that there has been an improper joinder of parties under Federal Rule of Civil Procedure 20(a). * * * Defendants argue that plaintiffs' claims against them do not "aris[e] out of the same transaction, occurrence, or series of transactions or occurrences" because they stem from events spanning a fourteen or fifteen month period.

[228, N.6] *** some of the claims by or against each party arise out of common events and contain common factual or legal questions. *** Once parties are joined under Rule 20(a), Rule 18(a)'s allowance of unlimited joinder of claims against those parties is fully applicable.

[228] The reason for the liberality is that unification of claims in a single action is more convenient and less expensive and time-consuming for the parties and the court.

[228] *** [Reasonably Related:] "systematic pattern." There is no logical reason why the systematic conduct alleged could not extend over a lengthy time period and, on the face of these allegations, there is nothing about the extended time span that attenuates the factual relationship among all of these events.

[229] Apart from the procedural propriety of the joinder under Rule 20(a), however, there is a question whether a single trial of all claims against all defendants will prejudice some of the defendants. [Rule20(b)]

[229] *** I therefore shall defer decision of this aspect of the case. I shall retain flexibility to sever portions of it or to take other remedial actions, if necessary, once the prejudice issue is more clearly focused. [Rule 42(b)]

[229] Insolia v. Phillip Morris, Inc.

[229] This is a civil action for money damages brought by three former smokers and their spouses against the country's major cigarette manufacturers and two tobacco industry trade organizations. *** The case is back before the court on defendants' motion to sever the claims of the three sets of plaintiffs into three separate actions pursuant to Fed.R.Civ.P. 21. According to defendants, these claims have been joined improperly under Rule 20 because they do not arise from the same transaction or series of transactions and because they do not share a common question of fact or law. Plaintiffs contend that their claims arise from an industry-wide conspiracy to deceive consumers about the addictive, deadly characteristics of cigarettes. * * * Even under the less stringent requirements of Rule 20, plaintiffs' claims are not sufficiently similar to warrant joining them in a single proceeding.

[230] Evidence presented by the plaintiffs in support of a class action showed that the tobacco companies had worked together for many years to counteract emerging scientific evidence that smoking was harmful and tobacco was addictive. ***

[230] I conclude that plaintiffs' claims do not arise from the same transaction or series of transactions, as they must in order to satisfy Rule 20. On an abstract level, dissimilarities in the claims brought by plaintiffs suggest that these claims are not related logically to one another. [Note the court's factual analysis that follows]. ***

[231] *** In the face of this evidence, plaintiffs' argument that causation and other medical issues can be resolved without engaging in highly individualized inquiries is even less persuasive here than it was in their briefs in support of class certification.

[231] *** Specifically, the circumstances under which the company hired, employed and fired each plaintiff bore sufficient similarity to one another, even if they were not identical; the company engaged in all of the fraudulent conduct within a discrete two and one-half year time period; at least one material aspect of this conduct applied uniformly to all of the plaintiffs; and the plaintiffs had sustained similar damages. Taken together, these considerations persuaded the court that the additional burden imposed upon the defendant and the risk of jury confusion would be "far outweighed by the practical benefits likely to accrue to all players in the conservation of judicial, prosecutorial, and defensive resources."

***
[231] In contrast to the misrepresentations at issue in Hohlbein, the life span of the alleged conspiracy perpetrated by defendants is measured in decades, not years. *** But this is not simply a matter of jury confusion. Judicial resources are wasted, not conserved, when a jury is subjected to a welter of evidence relevant to some parties but not others. Confusion can lead to prejudice when there are inadequate assurances that evidence will be weighed against the appropriate party and in the proper context.

[I asked you consider the scenarios of Note 7 at page 233 in order to apply Rule 20 in different factual contexts.]

 

RULE 19 ANALYSIS:

  1. Is the non-party "Necessary"? THREE TYPES: [1] 19(a)(1), [2] 19(a)(2)(i), [3] 19(a)(2)(ii) FRCP 19(a)
  1. NO: Joinder and Dismissal Denied; case proceeds as filed.
  2. YES: Joinder Should be ordered; BUT go to step 2.
  1. Joinder Will be Ordered IF the answer to BOTH questions is YES:
  1. Is there Personal Jurisdiction over the non-party? AND
  2. Will the court retain Subject Matter Jurisdiction if joinder is ordered? FRCP 19(a)
  3. YES to both? Joinder is ordered and Dismissal denied.
  4. NO to either? Proceed to step 3.
  1. 3. If the party cannot be joined, is the party "Indispensable" as defined in 19(b)? Factors
  1. NO: Joinder and dismissal denied, the case proceeds as filed.
  2. YES: Motion Granted, Case Dismissed. [Back]

Parties in Janney,

  • JANNEY MONTGOMERY SCOTT, INC., A
    PENN. CORP., PPB PENN.
  • UNDERWOOD, S-N's PARENT
    PENN. CORP. PPB PENN.
  • SHEPPARD NILES,
    NY CORP., PPB IN NY.
  • UNIBANK PLC & UNIBANK A/S
    AMPCO Ampco-Pittsburg Corporation

 

NECESSARY: THREE TYPES: [1] 19(a)(1), [2] 19(a)(2)(i), [3] 19(a)(2)(ii)

  1. FRCP 19(a) 19(a)(1) in the person's absence complete relief cannot be accorded among those already parties, or
  2. 19(a)(2)(i) the person claims an interest relating to the subject of the action and is so situated that the disposition of the action in the person's absence may (i) as a practical matter impair or impede the person's ability to protect that interest or
  3. 19(a)(2)(ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of the claimed interest. If the person has not been so joined, the court shall order that the person be made a party.

Placeholder

CASEBOOK EXCERPTS:

[226] 1. All persons who are interested in a controversy are necessary parties to a suit involving that controversy, so that a complete disposition of the dispute may be made. 2. Joinder of necessary parties is excused when it is impossible, impractical, or involves undue complications. 3. A person who is not a party, unless represented by one who is a party, is not bound by a decree.

"complete justice or none at all" and that if a party found to be necessary could not be joined, the suit had to be dismissed.

[226 Fallacy that:] because a court does not have jurisdiction over the absentee, it cannot act with respect to those before it.

The [227] usual reasons in a federal court are that the absentee comes from the same state as an opposing party and his joinder would destroy diversity jurisdiction, the absentee has insufficient contacts with the forum to permit personal jurisdiction, or venue would be improper. [228]

JANNEY MONTGOMERY SCOTT, INC. v. SHEPARD NILES, INC., CB-228

Case 1 Case 2 Case 3
Janney v. Underwood, ShepN and 2 Underwood subsidiaries Janney v. Unibank Janney v. ShepN
Penn. Court of Common Pleas US District Court US District court
Filed October 4, 1990 Filed Oct. 23, 1991 Filed March 17, 1992
For: Breach of K, Contingent Fee Under Contract. For: Tortious Interfereence with Contractual relation for Breach of Contract, Contingent Fee Under Contract

    • Janney Motngomery Scott, Inc. Penn. Corp. with PPB in Penn.
    • Underwood, Penn. Corp. with PPB in Penn.
    • Sheppard niles, NY Corp. with PPB in NY.

[229] [While Rule 19 decisions are usually reviewed under an abuse of discretion standard, the appellate court found a de novo review should be employed because the district court's decision was based on the legal conclusion that its decision in this case would have collateral estoppel effect against Shepard Niles, or become a precedent against Underwood, in the pending state court action. "To the extent that a district court's Rule 19(a) determination is premised on a conclusion of law, * * * our scope of review is plenary."]

[230] Fed.R.Civ.P. 19(a). Clauses (1) and (2) of Rule 19(a) are phrased in the disjunctive and should be so treated. Thus, any party whose absence results in any of the problems identified in either subsections (a)(1) or (a)(2) is a party whose joinder is compulsory if feasible. In other words, a holding that joinder is compulsory under Rule 19(a) is a necessary predicate to a district court's

discretionary determination under Rule 19(b) that the case must be dismissed because joinder of the party is not feasible and the party is indispensable to the just resolution of the controversy. [230] A Rule 19(a)(1) inquiry is limited to whether the district court can grant complete relief to the persons already parties to the action. The effect a decision may have on the absent party is not material.

[230] the specific question before us is whether a court can grant complete relief in a breach of contract action to the parties before it when only one of two co-obligors has been joined as a defendant. (FN5) The answer to this specific question depends on the law of contracts concerning the joint and several liability of persons who are co-promisors or co-obligors on one agreement.

[230,Fn.5] Thus, this case must be considered as a simple breach of contract action brought against one of two co-obligors to a contract.

[231] In Pennsylvania, (FN6) whether liability on a contract is joint or joint and several seems to be treated as a question of construction or interpretation, not as a rule of law.

[231] the district court had to review the facts and inferences to be drawn from the pleadings in the light most favorable to the nonmoving party, Janney. Therefore, because the Agreement can be construed to impose joint and several liability, Underwood is not a necessary party under subsection (a)(1), and we must affirm the district court's holding that complete relief could be granted between Shepard Niles and Janney without Underwood's presence.

Niles argues that the district court correctly held Underwood is a necessary party because any decision in the federal action in Janney's favor would be a persuasive precedent against Underwood in the ongoing state action.

[231, Fn. 7] On the other hand, if Shepard Niles is found liable, it is unlikely that Janney would need to continue the state action against Underwood. See Goldberg v. Altman, 190 Pa.Super. 495, 154 A.2d 279, 282 (1959) ("Even though [the plaintiff] has two judgments, he can only have one satisfaction.").

FN8. [232] Rule 19(a)(2)(i) only directs the court to determine whether the continuation of the action will impair or impede the absent party's ability to protect its interest. As such, the court's indication that any decision it rendered might have a collateral estoppel affect on Shepard Niles is not relevant to its 19(a)(2)(i) determination. Any adverse affect on Shepard Niles will be considered under the court's 19(a)(2)(ii) analysis.

[232]"persuasive precedent." To the extent it involves the doctrine of stare decisis, we are not inclined to hold that any potential effect the doctrine may have on an absent party's rights makes the absent party's joinder compulsory under Rule 19(a) whenever "feasible."

[The effect] must be more direct and immediate than the effect a judgment in Shepard Niles' favor would have on Underwood here. They are, after all, separate corporate entities. In any event, we do not believe any possibility of a "persuasive precedent" requires joinder under subsection 19(a)(2)(i).

[Marra, 232] The Marra court granted the brokerage firm's motion. It held that the record title holder was a "necessary party" under Rule 19(a)(2)(i) to the litigation because claims asserting misrepresentation as to ownership of property against the real estate agent applied only if the putative owner had valid title to the properties in question. Therefore, the litigation was likely to determine title to the property. That holding is unremarkable. We are unable to say with any assurance that a decision in Janney's action against Shepard Niles will be likely to impair or impede Underwood's ability to defend itself in the state action or to obtain indemnity or contribution from Shepard Niles.

[233] The court of appeals initially held that Acton's non-joinder raised a substantial question as to whether complete relief could be granted in Acton's absence under Rule 19(a)(1). In that respect, its concern centered on the ability of Acton, there a co-obligee on the [234] agreement, to bring a separate action of its own against Bachman that could subject Bachman to double liability on the same claim that ACIM was making in the federal action. Therefore, it held Acton's presence was necessary for the grant of complete relief. [234] Joint obligors thus are treated as Rule 19(a) parties, but are not deemed indispensable under Rule 19(b).... Joint obligees, on the other hand, usually have been held indispensable parties and their nonjoinder has led to a dismissal of the action. [Says professor Wright].

[HOWEVER, 234] [W]e hold instead that Underwood, a co-obligor, is not a party whose joinder Rule 19(a)(2)(i) requires because continuation of the federal litigation in Underwood's absence will not create a precedent that might persuade another court to rule against Underwood on principles of stare decisis, or some other unidentified basis not encompassed by the rules of collateral estoppel or issue preclusion.

[235] Mere presentation of an argument that issue preclusion is possible is not enough to trigger Rule 19(a)(2)(i). Rather, it must be shown that some outcome of the federal case that is reasonably likely can preclude the absent party with respect to an issue material to the absent party's rights or duties under standard principles governing the effect of prior judgments.

FN12. In Pennsylvania, a party may be precluded from relitigating an issue if: (1) the issue decided in the prior adjudication was identical with the one presented in the later action; (2) there was a final judgment on the merits; (3) the party against whom the plea is asserted was a party or in privity with a party to the prior adjudication; and (4) the party against whom it is asserted has had a full and fair opportunity to litigate the issue in question in a prior action.

[235] "the judgment would be binding as to Shepard Niles only." In this respect, the district court is correct. Its conclusion that Underwood would not be bound is a corollary of the general rule that issue preclusion applies only to persons who were either parties to the prior action or shared the same interest as the parties who were present in the prior action. Underwood does not share Shepard Niles' interest. Indeed, its interests are adverse to those of Shepard Niles with respect to any right of contribution or indemnity that may arise out of either's potential liability to Janney.

[236] [T]he plaintiff, by his judgment against one of his joint debtors, gets the relief he is entitled to.... The absent joint obligors are not injured, because their rights are in no sense affected, and they remain liable to contribution to their co-obligor who may pay the judgment by suit, as they would have been had he paid it without suit.

[237] It is, of course, possible, as the district court concluded, that if Shepard Niles is held liable in the federal action, it "may ultimately be responsible for the entire claim if Underwood is found not liable in the State Court Action." This is not, however, the double liability that Rule 19(a)(2)(ii) refers to.

[ 237] A holding that Shepard Niles is liable to Janney does not legally imply that Underwood is also liable. See Mamalis, 528 A.2d at 202 ("Each obligor under a contract has independently consented to the obligation....

[237] Inherent in the concept of joint and several liability is the right of a plaintiff to satisfy its whole judgment by execution against any one of the multiple defendants who are liable to him, thereby forcing the debtor who has paid the whole debt to protect itself by an action for contribution against the other joint obligors.

[237] Though federal civil practice, in common with other modern Anglo-American procedural systems, permits a party defendant who claims a right of contribution or indemnity from third persons to protect itself from potentially inconsistent verdicts by impleading the absent party under Federal Rule of Civil Procedure 14, it is not required to do so; and, if it does not, its right to bring a separate action for contribution or indemnity is unaffected.

[The court discusses the possibility of Impleader under Rule 14, as well as Supplemental Jurisdiction under 28 USC 1367. See footnote 15 and accmpanying text. Keep this in mind for our future discussion of the matter. Remember however, the "circles" of jurisdiction that must be present.]

[243] THE RULE 19 (b) DETERMINATION WHETHER TO PROCEED OR DISMISS

[243] should the court proceed with the suit in its piecemeal form or dismiss it in the expectation that there is some other forum where joinder of necessary parties can be better achieved?

E. IMPLEADER (RULE 14)

Rule 14(a), edited:

(a) When Defendant May Bring in Third Party. [1] At any time after commencement of the action a defending party, as a third-party plaintiff, may cause a summons and complaint to be served upon a person not a party to the action who is or may be liable to the third-party plaintiff for all or part of the plaintiff's claim against the third-party plaintiff. [2] The third-party plaintiff need not obtain leave to make the service if the third-party plaintiff files the third-party complaint not later than 10 days after serving the original answer. [3] Otherwise the third-party plaintiff must obtain leave on motion upon notice to all parties to the action. [4] The person served with the summons and third-party complaint, hereinafter called the third-party defendant, shall make any defenses to the third-party plaintiff's claim as provided in Rule 12 and any counterclaims against the third-party plaintiff and cross-claims against other third-party defendants as provided in Rule 13. [5] The third-party defendant may assert against the plaintiff any defenses which the third-party plaintiff has to the plaintiff's claim. [6] The third-party defendant may also assert any claim against the plaintiff arising out of the transaction or occurrence that is the subject matter of the plaintiff's claim against the third-party plaintiff. [7] The plaintiff may assert any claim against the third-party defendant arising out of the transaction or occurrence that is the subject matter of the plaintiff's claim against the third-party plaintiff, and the third-party defendant thereupon shall assert any defenses as provided in Rule 12 and any counterclaims and cross-claims as provided in Rule 13. [8] Any party may move to strike the third-party claim, or for its severance or separate trial. [9] A third-party defendant may proceed under this rule against any person not a party to the action who is or may be liable to the third-party defendant for all or part of the claim made in the action against the third-party defendant. [10] The third-party complaint, if within the admiralty and maritime jurisdiction, may be in rem against a vessel, cargo, or other property subject to admiralty or maritime process in rem, in which case references in this rule to the summons include the warrant of arrest, and references to the third-party plaintiff or defendant include, where appropriate, the claimant of the property arrested.

[245] CLARK v. ASSOCIATES COMMERCIAL CORP.

[245] Third-party defendants note that under the Kansas comparative fault statute, each defendant is liable only in proportion to his relative fault. Thus, because impleader is proper only if the party has a right to relief under the governing substantive law, third-party defendants contend that Associates has no valid claim for indemnity against them.

[246] no Kansas case has questioned the viability of implied indemnity based upon agency principles. Indeed, Kansas continues to recognize the right of an employer to seek indemnity against his employee for liability resulting from the employee's tortious acts. Thus, because Associates has sued each third-party defendant as a person "who is or may be liable to the third-party plaintiff for all or part of the plaintiff's claim against the third-party plaintiff," Fed.R.Civ.P. 14(a), Associates has properly impleaded third-party defendants. [246, Fn. 1] that the Kansas comparative fault statute only applies to negligent tortious conduct, and that joint and several liability remains the law as to intentional tortfeasors.

[246, Fn. 1] Kansas comparative fault statute would not allow Associates to reduce its liability for the intentional torts of its agents. Thus, not only do third-party defendants fail to recognize that Associates' indemnity claim is properly based on agency principles, third-party defendants have also proceeded from the erroneous legal premise that Associates may not be found jointly and severally liable for plaintiff's injuries

[246] Plaintiff argues that his claims against Associates are based upon duties imposed under the Uniform Commercial Code and by contract, and thus, that third-party defendants have "no duty" under the contract between plaintiff and Associates. [Next] A proper third-party complaint, however, does not depend upon the existence of a duty on the part of the third-party defendant toward the plaintiff. To the contrary, impleader is proper only if the third-party defendant "is or may be liable to the third-party plaintiff for all or part of the plaintiff's claim against the third-party plaintiff...." Fed.R.Civ.P. 14(a).

[246, Fn. 3] Fed.R.Civ.P. 14(a)[8] expressly provides that "[a]ny party may move to strike the third-party claim, or for its severance or separate trial."

[246] Thus, "[t]he third-party claim need not be based on the same theory as the main claim," and "impleader [247] is proper even though the third-party defendant's liability is not automatically established once the third-party plaintiff's liability to the original plaintiff has been determined."

[247] Whether to allow a defendant to prosecute a third-party proceeding under Rule 14 rests within the sounds discretion of the trial court.[Next] In exercising its discretion, the [247] court is mindful that the purpose of Rule 14 is [Pto accomplish in one proceeding the adjudication of the rights of all persons concerned in the controversy and to prevent the necessity of trying several related claims in different lawsuits. The rule should be liberally construed to effectuate its intended purposes.

[250] F. COUNTERCLAIMS AND CROSS-CLAIMS (RULE 13)

[250] Rule 13(a) is a sort of rule-mandated res judicata. It has the effect of barring a party from recovering on a claim "which at the time of serving the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party's claim."

[See also Rule 13(b), 13(g), 13(h)].

CLAIMANTS

  • A Driver
  • B Driver
  • C Driver
  • D Dealer who repaired A's car
  • O Owner of car driven by B
  • M Manufacturer of car driven by C

FRCP13(a); FRCP13(b); FRCP14(a)[1]; FRCP14(a)[6];

FRCP13(a); FRCP14(a)[7]; FRCP18(a); FRCP20(a);

FRCP14(b) FRCP14(a)[9] FRCP18(a);

28 USC 1332(a); 28 USC 1367(a), 1367(b)

FRCP8(c) FRCP14(a)[5]

This class was accompanied by a handout on Third-Party practice.

[SEE HANDOUT].

CLAIMS

Claim: FRCP 7(a), FRCP 8(a), FRCP 11(b)(3), FRCP 18(a)

-> "Generic" Claim or "Original" Claim

Claims: Single Party, FRCP 18(a)

Claims: Multiple Parties, FRCP 20(a)

Counter-Claim(s)

-> Compulsory Counter-Claim(s), FRCP 13(a)

-> Permissive Counter-Claim(s), FRCP 13(b)

Cross-Claim(s): FRCP 13(g)

Third-Party Claim(s): FRCP 14(a)

[Whenever you use the terms in plural, think about Rule 18(a).]

 

PARTIES

Plaintiff: FRCP 4(a), FRCP 5(a), FRCP 5(c), FRCP 12(a)(2)


Defendant: FRCP 4(a), FRCP 5(a), FRCP 5(c), FRCP 12(a)(2)


Co-Plaintiffs: FRCP 20(a)[1]


Co-Defendants: FRCP 20(a)[2]


Cross-Plaintiff(s) or Cross-Claimant(s): FRCP 13(g)


Cross-Defendant(s): FRCP 12(a)(2)


Counter-Plaintiff(s) or Counter-Claimant(s): FRCP 13(a), FRCP 13(b)


Counter-Defendant(s): FRCP 12(a)(2)


Third-Party Plaintiff(s): FRCP 14(a)[1]


Third-Party Defendant(s):FRCP 14(a)[4]

[Whenever you use the terms in plural, think about Rule 20(a).]

 

Discussion of Joinder Exercises by Prof. Malavet

Possible Parties

A Driver [Facts]
B Driver [Facts]
C Driver [Facts]
D Dealer who repaired A's car [Facts]
O Owner of car driven by B [Facts]
M Manufacturer of car driven by C [Facts]


The question posed by our casebook read:


Assume that A sues B in federal court. What claims should B assert in reply?


In turn, what claims should be made in reply to the claims asserted by B, and by any other parties brought into the action.


I asked you to assume further that this was a joint and several liability tort situation and that the accident would be considered a single transaction or occurrence.


Nightmares Disclaimer:

Keep in mind that this limited analysis applies only to the issue of Joinder of Claims and/or parties under the Federal Rules of Civil Procedure. It does not address the complex questions of Subject-Matter Jurisdiction, Personal Jurisdiction, Venue, Res-Judicata and a few other issues. Moreover, by assuming joint and several liability we avoided Rule 19 problems. By assuming same transaction or occurrence, we avoided many joinder issues. For example, is the claim against the manufacturer of the car one likely to be treated a la Wiglesworth v. Teamsters, i.e., a same-evidence test, or rather a la Swartz v. Gold Dust Casino? (Consider what might have happened in Swartz, if Mrs. Swartz was seeking to amend her complaint to include the Architects.)


Back to the Question:

Note that this scenario immediately imposes a series of temporal limitations that result in the need to use different rules to initiate or to pursue claims.


I broke the initial question down into two parts:


What claims must B assert?
->DEPENDS on the Complaint: FRCP 18(a), FRCP 20(a).
->Compulsory Counter-Claim:FRCP 13(a), FRCP 18(a)


What claims may B assert? FRCP 13(b), FRCP 18(a)


So, A sues B.

B's response? Probably, given the facts and the assumptions I asked you to make, a compulsory counterclaim against A, FRCP 13(a), although the distinction would be unimportant, from a joinder perspective, since to the extent that B wants to pursue claims against A, Rule 13(a) and 13b), together with Rule 18(a), give B ample discretion to join as many claims as he wishes to pursue against A.


In turn, what claims should be made in reply to the claims asserted by B, and by any other parties brought into the action.


Then, B has a choice. FRCP 13(h) or FRCP 14(a)[1] to add additional parties to the litigation. Rule 13(h) then refers you to Rule 20(a), with its liberal standard (remember Kedra v. City of Philadelphia) compared to the restrictive standard of Rule 14(a)[1] (remember Clark v. Associates). Under either choice, additional claims thereto can then be joined. FRCP 18(a). For example, B may file a Third-Party complaint under 14(a)[1] against a person who is or may be liable to the third-party plaintiff, i.e., contribution claims against C, D, or M. B may then use 18(a) to claim for his damages, physical injury, under the facts given.


C, M, or D must, if Impleaded by B, counterclaim against B as required by Rule 13(a), and they may counterclaim against B as allowed by Rule 13(b) and 18(a). FRCP 13(a) FRCP 14(a)[4]


C, M, D may cross-claim against each other pursuant to Rule 13(g). FRCP 13(g). Of course, the first claim is a cross-claim, and the response from the object of those claims is a counter-claim. FRCP 13(a). C has damages claims of his own. M and D only have contribution claims among joint-tortfeasors.


If C, M, or D are brought in as co-parties to a counterclaim, using FRCP 13(h), then they may initiate cross-claims against A, and A many initiate cross-claims against them, pursuant to Rule 13(g). FRCP 13(g).


If C, M, or D are brought in by B by way of Impleader, FRCP 14(a)[1], then they may pursue claims against A under FRCP 14(a)[6] if C, M, D initiate the claims. A's response, would then be a counterclaim, under Rule 13 for any claim and a compulsory counterclaim for any claims arising out of the same transaction or occurrence, i.e., contribution claims as well as claims for whatever damages that A may have suffered. (E.g., C suffered physical damages and damage to his car.) If the parties have any claims not arising out of the same transaction or occurrence, then FRCP 18(a) is available to join them.


If C, D, or M are Impleaded by B, and A strikes first using FRCP 14(a)[7], then C, D, or M may file counterclaims against A, under FRCP 14(a)[7] & Rule 13.

Interesting Question:


Interesting question 1: How would you label claims initiated by the Third-Party defendants pursuant to Rule 14(a)[6] against the Plaintiff: (a) Third-Party Claims or (b) Cross-Claims?


Interesting question 2: How would you label claims initiated by the Plaintiff pursuant to Rule 14(a)[7] against the Third-Party defendants: (a) Third-Party Claims or (b) Cross-Claims?


HINT: Note that Rule 14(a)[6] and [7] both require relation back to the original claim between the Plaintiff and the Third-Party Defendant. Likewise, Rule 13(g) requires a relationship between the cross-claims and the claim or counterclaim to the original action.

 

But what about O?


If B does not sue O, which is very likely given the facts of the case, there appears to be no claim from B against O, he can be brought in:


By A under 14(b) in response to B's counterclaim, i.e., to the extent that A might be liable to B, A can implead O for contribution, if he wants to do it the hard way. Alternatively, A could seek to amend his complaint to pursue O as a co-defendant of B, thus using Rule 15(a) and Rule 20(a).


By C, D, M, after they have been made third-party defendants, as a co-party on their counterclaim against B, using Rule 13(a) or (b) (although it is probably compulsory given our facts and assumptions) together with Rule 13(h). Alternately, they could sue for contribution under FRCP 14(a)[9]. Rule 18(a) is then available for any damages claims C, M, and D might have. Note however that M and D only have contribution claims. C and A can claim under 18(a) for their own damages.


These are only some of the possibilities under this scenario. Additionally, we only scratched the surface in our analysis of the different standards for joinder.

Intervention, FRCP 24, 268-281

[268] Intervention is a device for an outsider who has an interest in a lawsuit to voluntarily join it as a party.

[269]  Indeed, very similar language to that used in Rule 19(a) to describe parties who should be joined if feasible is used in Rule 24(a) to describe intervention of right. If such a person wants voluntarily to enter the suit, Rule 24(a) should allow that.

NATURAL RESOURCES DEFENSE COUNCIL, INC. v. UNITED STATES NUCLEAR REGULATORY COMMISSION [269]

Examine the facts at pages 269-271 with care.

Rule 24. Intervention

(a) Intervention of Right. Upon timely application anyone shall be permitted to intervene in an action: (1) when a statute of the United States confers an unconditional right to intervene; or (2) [A-interest] when the applicant claims an interest relating to the property or transaction which is the subject of the action and [B-impairment] the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant’s ability to protect that interest, [C-adequate representation] unless the applicant’s interest is adequately represented by existing parties.

Note that Part I of the opinion addresses 24(a)(2)[A-interest], Part II 24(a)(2)[B-impairment], and Part III 24(a)(2)[C-adequate representation exception].


[270] The motion of United Nuclear Corporation to intervene is not opposed by the parties and was granted. ***

[270] It was after that that Kerr-McGee Nuclear Corporation, Anaconda Company, Gulf Oil Corporation, Phillips Petroleum Company, and the American Mining Congress filed motions to intervene. These motions, insofar as they sought intervention as of right, were denied on the ground that the interests of the parties or movants would be adequately represented by United Nuclear. Permissive intervention was also denied.

[270] The district court's order denying intervention by the several corporations focused on whether the interest of the party seeking to intervene was adequately represented by a fellow member of the industry. *** The court decided that the interests of the movants were adequately protected by United Nuclear, which possessed the necessary experience and knowledge in a complex area of business, whereby the representative's capability was competent to meet the demands. The court thought that to allow the intervention would engender delay and produce unwieldy procedure; and that the movants' requirements were met by allowing the filing of amicus curiae briefs.
[271] The Supreme Court has said that the interest must be a significantly protectable interest. See Donaldson v. United States, 400 U.S. 517, 91 S.Ct. 534, 27 L.Ed.2d 580 (1971). ***

[271] Cascade Natural Gas Corp. v. El Paso Natural Gas Co., 386 U.S. 129, 135-36, 87 S.Ct. 932, 17 L.Ed.2d 814 (1967), held that the interest claimed by the applicant in intervention did not have to be a direct interest in the property or transaction at issue provided that it was an interest that would be impaired by the outcome. *** See also Allard v. Frizzell, 536 F.2d 1332, 1334 n. 1 (10th Cir.1976). In Allard it was ruled that the applicant in intervention did not have a sufficient interest. Movant's interest there was general and somewhat abstract.

[272] As already noted, the question of impairment is not separate from the question of existence of an interest. ***

[272] It should be pointed out that the Rule refers to impairment "as a practical matter." Thus, the court is not limited to consequences of a strictly legal nature. [Compare the manner in which the Third Circuit read similar languge in Rule 19].

[273] We have held in accordance with Trbovich v. UMW, 404 U.S. 528, 538 n. 10, 92 S.Ct. 630, 30 L.Ed.2d 686 (1972), that the burden continues to be on the petitioner or movant in intervention to show that the representation by parties may be inadequate. We have also recognized the holding in Trbovich that the burden is minimal; that it is enough to show that the representation "may be" inadequate.

Notes

[274] 3. ***  Consider Olympus Corp. v. United States, 627 F.Supp. 911 (E.D.N.Y.1985), in which the exclusive U.S. distributor of Olympusbrand optical products sued customs officials challenging regulations that allowed importation of "gray market" Olympus products-products imported by persons other than the manufacturer's authorized representative. 47th Street Photo, which imported a substantial quantity of Olympus "gray market" products, and K-Mart Corporation, which purchased other "gray market" goods and said it was a "potential customer" of Olympus "gray market" products, moved to intervene

[275-276] 6. Intervention must be "timely." Rule 24(a)(2). In United Airlines, Inc. v. McDonald, 432 U.S. 385, 97 S.Ct. 2464, 53 L.Ed.2d 423 (1977), an application for intervention, made only after the intervenor learned that the plaintiffs in this sex discrimination case would not appeal the denial of class certification, was found to have been made "as soon as it became clear" that her interests were no longer protected by the class representatives. Stallworth v. Monsanto Co., 558 F.2d 257 (5th Cir.1977), listed four factors for assessing timeliness: 1) when the intervenor knew or should have known of his interest in the case, 2) whether there was prejudice to existing parties.

[276] Note 7: Intevenor bound by prior rulings.

[276] Note 8. Imposing scope limitations on intervenor's right to litigate.


The Definition of "Interest" [277]

[277-278] *** Three years later, however, divestiture had not occurred, and the question before the Court was whether several would-be intervenors could intervene as of right under Rule 24(a)(2) to participate in the development of the divestiture order. One was California, the state where El Paso sold most of its gas, which sought to assure that Pacific Northwest "would be restored as an effective competitor in California." Southern California Edison, which also sought to intervene, was "a large industrial user of natural gas purchasing from El Paso sources and desirous of retaining competition in California." Cascade, a third intervenor, had used Pacific Northwest as its sole supplier of natural gas, and in the future would use its successor, after the divesti[278]ture, in the same capacity.

[278] Donaldson's only interest-and of course it looms large in his eyes-lies in the fact that those records presumably contain details of Acme-to-Donaldson payments possessing significance for federal income tax purposes.

[278] * * * This interest cannot be the kind contemplated by Rule 24(a)(2) * * *. What is obviously meant there is a significantly protectable interest.