Civ Pro 2 Notes 9/22/04


We left off with Rule 19 and “necessary and indispensable parties”.  Rule 19(a) says they must be someone you can’t go without.  If they meet this category and can be joined, they are joined, as long as there is no jurisdiction problem.  But the problem is what happens if they destroy jurisdiction.  In the first case, the court skipped over the (a) inquiry altogether and went to the (b) inquiry.  That’s wrong, and we learn this from the Court of Appeals, which tells us that joint tortfeasors are never indispensable parties.  But we know that a husband and wife would be indispensable parties for this purpose.


Another example would be when there is a dad who set up a trust for himself and his kids, and the dad wants to sue the trustee for trust abuse.  Are the kids Rule 19 parties?  What if the kids are already adults?  Can complete relief be given in the kids’ absence?  Sure.  Will there be multiple or inconsistent obligations without the kids?  No.  What about impeding the kids’ interests?  It may depend on how we classify the various interests.  The kids are Rule 19 parties, because the dad could ask for some kind of relief that would affect the income stream at the expense of the remainder of the corpus of the trust, which would in turn affect the kids’ remainder.


We ended up with Helzberg’s.  There was no question that its interests would be impeded if Lord’s was in the case.  They sue the mall, not the other jewelry store.  There is no question that the other jewelry store is a necessary party, but, in equity, should the action proceed or be dismissed?  You could also transfer to another venue that would be more appropriate.  The court could allow the lawsuit to go forward if it could cobble together ways to limit the prejudice against the parties.  In this case, the court decided that the mall got itself into its own mess, and it can sort it out itself.  The conclusion is that Lord’s is a Rule 19 party that can’t be joined, however, the lawsuit is allowed to go forward.


Intervention – Rule 24


Rule 19 has to do with what we do with parties who somebody wants to bring in from outside.  Rule 24 has to do with outsiders butting in to a lawsuit where nobody wants them.  The Rule has two parts: a mandatory part and a permissive part.  There’s 24(a), intervention of right.  If you’re timely, you shall be allowed to intervene where you claim an interest such that if you’re left out that interest could be impaired, unless you’re already adequately represented by someone who is already there.  To intervene permissively under Rule 24(b) when your claim has a question in common with the main action (a very soft standard!).


If a court wants someone to intervene, they can almost always create a justification under Rule 24(b), because there will almost always be some common question of law or fact.  The district court will almost never be reversed on appeal because the standard of review is abuse of discretion.  There is not a whole lot of litigation activity in the 24(b) area that’s helpful to understand the Rule.  You have a relatively soft standard that is efficiency-driven and is very hard to overturn.  So much of the litigation activity is in 24(a): what happens if someone wants to intervene as of right and is denied, and then argues on appeal that they were wrongly kept out?


Natural Resources Defense Council v. United States Nuclear Regulatory Commission


Here the activity is in Rule 24(a).  What happened?  There are lots of potential parties here.  The NRDC (an environmental group) is suing to keep the NRC from issuing licenses to run uranium mills without first preparing environmental impact statements.  The NRDC also sues the New Mexico equivalent agency.  The group tells them that they have to do their job!  Kerr-McGee is a uranium miner.  There’s also the American Mining Congress, United Nuclear, and a bunch of other companies.  They want licenses!  They want to intervene!  They argue that the people who will be affected by the decision don’t have their interests represented.  The district court says yes to United Nuclear, but they keep everyone else out.  Kerr-McGee and the American Mining Congress appeal, and the others don’t.


What’s different about United Nuclear than the other parties?  The district court only let that one party in.  They are the company that already was granted a license before the suit started.  The court argues that the other companies are adequately represented by United Nuclear.  The NRDC is trying to enjoin the issuance of that license because it was issued without an environmental impact statement.  That was the event that led to the lawsuit in the first place!  So United Nuclear could really be affected!  It’s no wonder they’re included.


Why was Kerr-McGee rejected?  As a practical matter, their interests must be impaired.  It was argued that Kerr-McGee wasn’t a party to the lawsuit, therefore they wouldn’t be bound by any decisions made in the lawsuit.  They would arguably be free to litigate the same issue in their own suit.  The district court accepts this argument, and the Court of Appeals rejects it.  The Court of Appeals notices that, as a practical matter, even though Kerr-McGee isn’t bound, it’s unlikely that the Tenth Circuit would come to a different conclusion in a similar lawsuit as to a different company.  The Tenth Circuit will use stare decisis to decide the subsequent cases!  That’s the sort of “practical” impairment courts look for.  But why isn’t Kerr-McGee adequately represented by United Nuclear?  They’re different because one has a license and the other is only a prospective licensee.  Maybe United Nuclear would be willing to settle the other mining companies out for their own benefit.  The divergence of interest need not be great to say that one party doesn’t represent the other.  The court doesn’t seem to put a lot of weight on this prong, according to Fairman.


So why wasn’t the American Mining Congress allowed to intervene?  They’re the trade association for all the mining companies.  Don’t they have the most interest involved here?  It doesn’t matter if the court says environmental impact studies are required!  They’re not a business, they’re a trade association.  They do have some interest, and it may be more broad-based than the other potential parties.  Will that interest be impaired?  Sure, to the extent that they are the representatives of a constituency.  Are they adequately represented in the suit?  The district court says no way, but the Tenth Circuit brings them in to represent all kinds of mining companies.


Gulf, Anaconda, and Phillips didn’t appeal.  If they had appealed, what would the Tenth Circuit have done?  It would depend on whether they were adequately represented because there’s no question that they have an interest that could be impaired.  We have a big company, a small company, a company with a license, a company without a license, and a trade association to represent all the others.  But why not just bring them all in?  The other companies are defendant interveners who are trying to prevent the environmental impact studies from having to be performed.  The most entities you get, the more likely you’ll get extraneous issues creeping into your lawsuit.  So it’s not surprising that Gulf, Anaconda and Phillips don’t appeal, because Kerr-McGee or the trade association could represent their interests.  They’re better off taking the free ride!


This is typical of Rule 24(a) action in public law.  What if someone is hurt at a stadium fireworks show and sues the stadium, and then another person wants to intervene as a plaintiff?  The second person won’t be bound by the first lawsuit.  But if the outcome of the first lawsuit was that the stadium wasn’t negligent, it could have implications for the second, third and fourth lawsuits.  But no judge would allow the second person to intervene in the lawsuit because it’s private litigation!  The courts are much less likely to allow intervention by strangers in private lawsuits than in public lawsuits.


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