Concept
Weighing the Factors Together
Required joinder and failure to join
Weighing the Factors Together
Rule 19(b) does not ask the court to answer four questions and tally the results. Once a required person cannot be joined, the court decides whether the action should go forward among the existing parties or be dismissed. The first consideration the rule lists is how far a judgment rendered in the person's absence might prejudice that person or the existing parties.1 The court reads that consideration against the other three and reaches one answer. In Provident Tradesmens Bank & Trust Co. v. Patterson, the Supreme Court said the decision must rest on factors that vary from case to case, some substantive, some procedural, some compelling by themselves, and some subject to balancing against opposing interests.2 The rule fixes no weights because the costs on each side differ in kind. Proceeding can leave an absentee's interest unprotected or expose a party to a second suit. Dismissal can strand a plaintiff or discard a completed trial. The first subsection below sorts decided cases by outcome. The second shows how the stage of the case, the court's look at the merits, and appellate review move the weights.
Patterns in the Outcomes
Provident itself let a judgment stand after a full trial. The defendants had no stake, asserted or real, in joining the absent Dutcher, and they showed no interest in joinder until the court of appeals took the matter into its own hands. The Supreme Court treated any interest of theirs as foreclosed. It added that the insurer's liability was limited to $100,000 and that it would have full opportunity to litigate each claim on that fund against the claimant involved. The insurer's only concern with Dutcher's absence was a windfall escape from its defeat at trial.3 By then the efficiency case for dismissal had also vanished, because there was no reason to throw away a valid judgment just because it did not theoretically settle the whole controversy.4 The court of appeals had reasoned that indispensable parties form a category defined by substantive law, and that such a person's right to participate is absolute. The Supreme Court answered that Rule 19 merely commands courts to examine each controversy to make certain the asserted interests really exist. A court cannot know whether a person is indispensable, it said, until it has examined whether it can proceed without him.5
Helzberg's Diamond Shops v. Valley West Des Moines Shopping Center also went forward, but on a different footing: the absentee's rights never came into play. Lord's held a leasehold in space 261 of the Valley West Mall. Even if Valley West tried to terminate that leasehold after the district court granted the preliminary injunction, Lord's would keep all its rights under its lease. None of its rights or obligations would have been adjudicated in proceedings to which it was not a party. The court of appeals therefore concluded that Lord's would not be prejudiced in a way Rule 19(b) contemplates.6 It also upheld the determinations that a judgment without Lord's would be adequate and that Helzberg's adequate remedy in the Iowa courts had no controlling significance. It agreed that equity and good conscience allowed the action to proceed.7
Makah Indian Tribe v. Verity shows that one complaint can call for more than one answer. The Makah sought primarily a reallocation of ocean-fishery quotas, a request that shifts interests among the participants. To the extent they sought to enforce the duty of the council and the Secretary to follow statutory procedures in the future, however, the claim was a public right. A claim of that kind potentially benefits everyone who participates in the fishery. The district court recognized that such a claim might be present but held the public rights doctrine misplaced because the Makah sought primarily reallocation.8 The lesson for weighing is to ask the questions claim by claim. A plaintiff who can separate a claim that the absentees' interests do not touch may keep that claim alive.
Dismissal follows when the factors line up against proceeding, and Haas v. Jefferson National Bank of Miami Beach shows the alignment in full. Haas claimed half of a block of stock and sued the bank, but all of the stock had been issued in Glueck's name, and Glueck was absent. A judgment for Haas would leave the bank exposed to a later suit, because Glueck, not being bound by res judicata, could claim the whole. It could also impair Glueck's ability to protect his interest in all of the shares.9 The adequacy factor pointed the same way. It reflects the public stake in settling disputes by wholes, and a plaintiff who chose both the forum and the defendants cannot complain about the sufficiency of relief against them. Here there was no semblance of a guarantee that a judgment on Haas's terms would settle the whole dispute.10 The Ohio state courts offered Haas a ready forum to settle title, and the court of appeals held that dismissal was no abuse of discretion.11
Torrington Co. v. Yost, a study-aid illustration of a dismissal, turned in part on the fourth factor. The commentary suggests the court might have proceeded had no alternative existed, but the availability of a remedy elsewhere also supported dismissal. Torrington could sue Yost and INA together in state court, where diversity is unnecessary and the parties can adjudicate the entire dispute in a single action.12
The estate problem shows the same factor working in the other direction. The estate of X is before the court as the representative of X's interests and can adequately defend the claim that a 1998 transfer was a completed gift. Y cannot be joined because her presence would destroy diversity, and she is not subject to personal jurisdiction in New York state court either. Dismissal would therefore leave P without an adequate alternative forum. Balancing these facts, the court should treat Y as necessary but not indispensable and let the action proceed without her.13
Republic of the Philippines v. Pimentel is the case in which one factor dominated. The dispute was an interpleader over the Arelma assets, and the absent Republic and its Commission, who claimed those assets, had been granted sovereign immunity. The Supreme Court held that the court of appeals erred in not giving the necessary weight to that assertion of immunity.14 The Court then showed that the remaining considerations confirmed the first. If the Marcos estate did not own the assets, or if the Republic owns them now, the Pimentel class's claim likely fails. If there are equally valid competing claims, they too would require adjudication in a case where the Republic and the Commission are parties.15 The court of appeals had made much of the tort victims' lack of an alternative forum. That reasoning assumed the plaintiff in the interpleader was the Pimentel class, but the stakeholder, Merrill Lynch, holds the statutory status of plaintiff.16 The Court reversed and remanded with instructions to dismiss.17
Set side by side, the cases show where the weight falls. In Haas, a judgment for half the stock collided with Glueck's claimed interest in all of it and could not settle the controversy. In Pimentel, deciding who owned the assets meant deciding the sovereign's claim. In Helzberg none of Lord's rights would be adjudicated, and in Provident the objection came after trial from a party with no interest of its own in joinder. The fourth factor shows how the considerations depend on one another. An Ohio forum for the title dispute supported dismissal in Haas, and a state forum for a suit against Yost and INA together also supported it in Torrington. The Iowa remedy carried no controlling significance in Helzberg, and in Pimentel the claimants' lack of a forum did not save the judgment.18 The factor counts only in company with the other three.
Posture, Merits, and Review
The stage of the case changes how heavily each consideration weighs. Before trial, the plaintiff's concern is only for a federal rather than a state forum. After a verdict, the plaintiff's interest in preserving a fully litigated judgment should be overborne only by rather greater opposing considerations, and the hypothetical state alternative is much less adequate.20 Efficiency moves the same way, because by the time Provident reached the court of appeals the preference for dismissal on efficiency grounds had entirely disappeared.21 The Federal Rules encourage a party to raise the absence early. A defendant may assert failure to join a party under Rule 19 by motion under Rule 12(b)(7), even before answering the complaint.22 Because proceeding without the absentee risks impairing substantive rights, a party does not waive the objection by failing to raise it at the outset, and it may still be made later in the suit.23 Lateness still costs something, as the Provident insurer learned. A defendant that showed no interest in joinder until the court of appeals acted had its late interest treated as foreclosed.24
A completed trial does not guarantee that the judgment survives. In Hearts with Haiti, Inc. v. Kendrick, the court had tried the case to completion but had no jurisdiction over Geilenfeld, whose claims were tied to the HWH judgment. The court saw a potential impact of that judgment on Kendrick's ability to defend himself in a future state case by Geilenfeld, and it found no satisfactory way to lessen or avoid the prejudice to Kendrick.25 It held Geilenfeld indispensable. It accepted the extraordinary prejudice to Geilenfeld and HWH from being deprived of the fruits of their victory as a markedly unfortunate but necessary consequence of trying a case to completion in a court without proper jurisdiction.26 Provident and Hearts with Haiti were both decided after trial and came out differently. The Provident insurer wanted only to escape its defeat, while Kendrick faced a possible later suit that the existing judgment could affect. Posture sets the starting weights, and the character of the prejudice decides whether they hold.
Weighing also requires the court to look at the absentee's claim, but only so far. Rule 19 commands courts to examine each controversy to make certain that the claimed interests really exist, and the decision must be made with enough knowledge of the facts to evaluate the exact role of the absentees.27 A court cannot weigh the harm to an absent sovereign without forming some view of whether the sovereign's claim is frivolous, but the line falls at deciding that claim. In Pimentel the court of appeals in effect decided the merits of the Republic's and the Commission's claims to the assets. The Supreme Court held that once those claims were recognized as not frivolous, addressing them on the merits was error, because considering the merits was itself an infringement on foreign sovereign immunity.28 Immunity would mean little if a court could rule on the sovereign's claim against it in its absence.
Appellate review follows from the same case-specific judgment. In Haas the court of appeals asked whether the district court abused its discretion and held that dismissal was no abuse.29 In Janney Montgomery Scott, Inc. v. Shepard Niles, Inc., the court held that its review of a district court's Rule 19(a) determination premised on a conclusion of law is plenary, while subsidiary findings of fact are reviewed only for clear error.30 Deference ends where legal error begins. The Supreme Court in Pimentel left the appropriate standard of review undecided. It found errors of law implicit in the district court's rulings and explicit in the court of appeals' opinion, and it held that the judgment could not stand whatever the standard.31 Weighing depends on facts the trial judge saw, while a rule of law applies the same way everywhere. The first earns deference and the second does not.
A dismissal under Rule 19(b) also reflects the equities at one moment. Pimentel itself said that the balance of equities may change in due course. One relevant change may occur if it appears that the Sandiganbayan cannot or will not issue its ruling within a reasonable period of time, and other changes could result when and if there is a ruling.32 A dismissal for nonjoinder answers the question for the present and leaves later circumstances free to change the answer.