Civ Pro 2 Notes 9/17/04

You must read the supplemental jurisdiction statute very carefully. Who makes the claim and who is brought in makes a difference as to whether the court has jurisdiction. This will very likely be on the exam.

Compulsory joinder – Rule 19

This has also been described as joinder of “necessary and indispensable parties”. Rule 20, permissive joinder, allows you to bring in essentially everybody. Rule 19 is talking about when people have to be brought in, and if they can’t be brought in, what the court should do. Rule 19(a) determines whether they’re a party that is necessary for complete adjudication. If complete relief can’t be given to the people who are already parties without another person, or the person could be subjected to multiple or inconsistent obligations in their absence, then they had better be brought in. If their relationship to the lawsuit is so important that the people in the lawsuit can’t get relief or they would be hurt if they’re not brought in, then they’re necessary parties.

In Rule 19(b), the court has to decide whether the action should proceed or be dismissed. Do we have to dismiss the lawsuit when we lack a person? There are certain factors the court considers: (1) the extent to which a judgment will be prejudicial to parties already involved in the lawsuit, (2) whether the judgment will be adequate without that person’s interest being represented, and (3) whether the person will still have a good remedy if you dismiss them for non-joinder.

Temple v. Synthes Corp.

This case is trying to tell us that the Rule has two parts in a sequence. If you don’t fit in part (a), you never get to part (b). The plaintiff has spine surgery. There is a plate and screw device implanted that broke. The guy with the hurt back is a Mississippi resident and the hospital is in Louisiana. Synthes is a Pennsylvania company. Who do we sue? The plaintiff sues the manufacturer in federal court, and sues the doctor and hospital in state court. The plaintiff chose to have two different lawsuits going on about the same subject matter in different forums!

There’s no problem with personal jurisdiction for filing both suits in state court in Louisiana. There’s a Rule 12(b)(7) motion to dismiss! This tells you something about Rule 19. It’s a joinder of parties rule, but it’s used by defendants to get lawsuits dismissed. The defendant says that the lawsuit must be dismissed because there aren’t enough defendants to sue! The motion to dismiss is based on non-joinder of the hospital and doctor, who arguably must be joined. Could Temple have brought everyone into one lawsuit? Sure! It’s the same transaction or occurrence. There’s personal jurisdiction in Louisiana because the state and federal court cases are filed there. Subject matter jurisdiction would be diversity: Mississippi versus Pennsylvania and Louisiana. This lawsuit could go forward.

But if Synthes wanted the doctor and hospital in the suit so bad, why didn’t they just implead them under Rule 14(a)? Because impleader must be based on derivative liability. If there was a contract between Synthes and the doctor and hospital, then there might be a chance to implead them, but there’s no basis for derivative liability on the facts that we know them. So why does Synthes want them involved in the lawsuit? If the plaintiff loses the federal suit, he doesn’t necessarily lose the state suit. We have to think about strategy here. What’s the risk that the defendants are facing when they’re separated? They could both get hit because it’s two different causes of action! Typically, as a plaintiff, you would want both defendants in the same lawsuit because they’ll make your case for you. Factually, it turns out that Synthes had such a close relationship with the doctor and hospital that they thought it was unlikely they would point the finger at each other.

How does the Supreme Court deal with this issue? Are the hospital and doctor, as the manufacturer claims, parties that have to be joined? It’s not even a close case! The district court went immediately to Rule 19(b) to look at the prejudice factors, but they failed to make a determination under Rule 19(a) that they were necessary to begin with. By avoiding the threshold question, they circumvented the Rule, according to the Supreme Court. You need to find a “home” for yourself in Rule 19(a) before you get to the balancing test in Rule 19(b). The Fifth Circuit was so careful in its analysis that it didn’t even read the notes to the Rule! Joint tortfeasors are not necessary and indispensable parties! There aren’t that many parties that are truly indispensable.

Let’s say for example, a husband and wife own land a buyer wants to buy it. He enters into a contract with the husband only. There is a breach, and the buyer wants specific performance. Is the wife going to be a Rule 19 party? Is the wife a necessary and indispensable person? There’s no way on these facts that the buyer can get specific performance of the land contract if it’s jointly owned by the husband and wife. Without the wife being there, the court can’t adjudicate the wife’s half-interest in the land. This is something brought up by the defendant trying to get out of the lawsuit rather than the plaintiff trying to join other parties. Other examples would include people with joint interests in property, joint obligors/obligees, represented parties and limited pools/multiple claimant.

Helzberg’s Diamond Shops v. Valley West Des Moines Shopping Center

Helzberg’s made a lease with the shopping center that provided that only three full-line jewelry stores can be in the shopping center. Lord’s gets a lease as a specialty jewelry store, but then it turns out that they intend to be full-line in breach of the lease with Helzberg’s. What does Helzberg’s do? They go for an injunction in federal court to keep the shopping center from breaching the lease. The basis for subject matter jurisdiction is diversity. The shopping center moves to dismiss because they think under Rule 19 Lord’s is an indispensable party. The motion is denied. It does seem like this case has a lot to do with Lord’s. This was an appeal of the grant of an injunction. We don’t know what the result will be on the merits. The Court of Appeals is taking up an appeal under a special interlocutory appeal statute. So is Lord’s a Rule 19(a) party? Do they clear the first part of the Rule? Sure. They’re a Rule 19(a) party…more specifically, Rule 19(a)(2)(i). But they are considered necessary, but not indispensable. It’s not necessary to dismiss the lawsuit under Rule 19(b).

The contract between Helzberg’s and the shopping center cannot adjudicate all of Lord’s rights. If the injunction holds, Lord’s will have to file their own suit against the shopping center. Is the shopping center hurt? The opinion says that it’s their fault for getting into two contracts that appear to be inconsistent. They basically say: “tough luck”. With the Helzberg’s judgment in hand, Lord’s would sue the shopping center for breach.

Are there other things the court could do? They could have dismissed the lawsuit. Is there a place where this whole lawsuit could go on? It could maybe go on in Iowa. The mall is physically located here. There is a transfer of venue statute that allows them to pack up the case and move it to Iowa district court instead of Missouri.

Let’s change the situation, and make Lord’s from Missouri. The shopping center wanted to exercise supplemental jurisdiction over this claim against Lord’s. Could they do so? § 1367(a) tells us that there is supplemental jurisdiction over the same case or controversy, but the case is basely solely on diversity. This doesn’t come under the technical language of the rule. Helzberg’s can’t exercise a claim against Lord’s. But the shopping center is okay.

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