JOINDER

1. JOINDER “Under the Rules, the impulse is toward entertaining the broadest possible scope of action consistent with fairness to the parties; joinder of claims, parties and remedies is strongly encouraged.”

2. Joinder Rules • Claims • 18 Joinder of Claims (not compulsory) • 13(a) Compulsory Counterclaims ( D vs. P) • 13(b) Permissive Counterclaims (D vs. P) • 13(g) Cross Claims (P vs. P or D vs. D) • 14 Third Party Claim (Impleader) (can be brought by a P or a D) • Parties • 19 Compulsory Joinder of Parties • 20 Permissive Joinder of Parties • 22 Interpleader • 23 Class Action • 24 Intervention

3. 2 Step Inquiry for Adding Claims and / or Parties • 1) Do the Rules allow the parties / claims to be added (e.g., 13, 18, etc . . . )? • 2) Does the addition of the parties / claims maintain personal or subject matter jurisdiction? • The answer to both inquiries must be yes to allow joinder of the party / claim.

4. Rule 18 Joinder of Claims Policy Justifications: allows a party to resolve multiple disputes against the same D in one action which is cheaper than having to bring them in a separate suit. There is no rule that compels joinder of claims; however, SOL and former adjudication operate to motivate plaintiffs to join several claims against a defendant. There is no relatedness requirement between several claims brought vs. a defendant. A party (plaintiff or defendant) can use Rule 18 to add claims to an original first party claim, to a counterclaim, to a cross-claim or a third-party claim. Rule 42(b) affords a trial court the discretion to order separate trials where the addition of claims renders a case unmanageable.

6. Plant v. Blazer4 Part O & T Test for Ctr. Claims • Similarity of factual and legal issues b/t P’s claim and D’s counterclaim • Would res judicata bar a subsequent suit on the claim (i.e., would a subsequent law suit raising the claim be precluded b/c claim should have been brought as compulsory counterclaim) • Similarity of evidence necessary to prove P’s claim and D’s counterclaim • Logical relationship b/t the P’s claim and the D’s counterclaim ( i.e., does the counterclaim arise from the same aggregate core of operative facts)

7. The Process of Asserting and Challenging a Counterclaim • P sues D (note that a x-claim D or a third party D can also assert counterclaims) • D raises a counterclaim under 13(a) asserting no independent basis for SMJ • P moves to dismiss the counterclaim for lack of SMJ under 12(b)(1) essentially arguing that the counterclaim is permissive in character • D contends that the counterclaim is compulsory and therefore satisfies 1367

8. Tricky, Tricky, Tricky!Great Lakes v. Herbert Cooper (Note 6 p. 740) • GL sues HC for state law claims • HC retaliates bringing an antitrust counterclaim asserting unjustified lawsuits • GL’s claims are dismissed pursuant to 12(b)(1) • HC claim remains in federal ct pursuant to 1331 • GL reinitiates its state law claim in the form of a counterclaim • Ct rules that GL’s counterclaim is compulsory in nature and therefore satisfies 1367

9. Practice Question • In 2003, B purchased a house from S and gave a promissory note for $50K, payable on January 2, 2004, for the unpaid balance of the purchase price. In 2003 alleging numerous defects in the house, B sued S for breach of contract and breach of warranty. Is S’s claim on the unpaid promissory note a compulsory counterclaim?

10. Practice Question • P sues automobile Dealer and Manufacturer. The complaint, which is properly before the court under 1332, alleges that P was injured in an accident caused by a defect in the vehicle’s steering mechanism. • Manu. wants to assert that the vehicle was not defective when delivered to Dealer and that any defect must have been introduced by Dealer when the vehicle was being prepared for delivery to the customer. What pleading, if any, should Manu. File?

11. Practice Question • P sues automobile Dealer and Manufacturer. The complaint, which is properly before the court under 1332, alleges that P was injured in an accident caused by a defect in the vehicle’s steering mechanism. • Manufacturer wants to assert that Dealer has failed to pay it for several vehicles it delivered to Dealer (not including the vehicle at issue in the action). Can it do so? What pleading, if any, should Manufacturer file?

12. Practice Question • P sues automobile Dealer and Manufacturer. The complaint, which is properly before the court under 1332, alleges that P was injured in an accident caused by a defect in the vehicle’s steering mechanism. • Dealer wants to assert that P owes Dealer money for breach of contract that has no relationship whatsoever to the vehicle or accident at issue in the P’s complaint. The Dealer claims damages in the amount of $75K. Can Dealer do so? What pleading, if any, should it use? What, if any, response should Dealer anticipate from P?

13. Practice Question • P sues automobile Dealer and Manufacturer. The complaint, which is properly before the court under 1332, alleges that P was injured in an accident caused by a defect in the vehicle’s steering mechanism. • Dealer and Manufacturer both want to assert that there was no defect in the vehicle and that the accident was solely the result of the P’s negligence. What pleading, if any, should Dealer and Manufacturer use?

14. Rule 20Permissive Joinder of Parties Policy Justification: to promote trial convenience and expedite the final determination of disputes, thereby preventing multiple lawsuits • Parties who join pursuant to this rule must be interested in claims that arise out of the same O & T or series of O & T’s, and share in common at least one question of law or fact. • Generally does satisfy 1367 and therefore does not require independent SMJ basis, but there are instances where a Rule 20 party is not considered to automatically satisfy 1367. • The consequence of misjoinder is severance not dismissal (Rule 21). • Court retains the discretion under Rule 42(b) to sever claims.

15. Rule 19Compulsory Joinder of Parties • Persons should be joined in an action when their absence will materially reduce the likelihood that the court can provide justice for other parties to the action or where it will be detrimental to the non-party. • Court will consider how joinder of the party will affect diversity in a case. If it cannot join the party w/o destroying diversity it will consider under 19(b) whether to proceed w/o the party. • Court has the discretion to determine whether to allow the action to proceed without the party or to dismiss the action where the party cannot be joined.

16. Rule 14Impleader Policy Justifications: efficiency, cost effective, prevents conflicting outcomes by binding impleaded party to the findings in the original case • Must be filed within 10 days of the filing of the original answer. If not leave of court is required. • Only persons not already parties may be impleaded (compare to x-claims and ctr-claims). • Under rule 14 the theory of liability is not “it was him not me” that is liable to the P but rather “if I am liable to the P then the third party D is liable to me for all or part of my liability to the P.” • Third party D’s can assert x-claims, ctr claims, and their own third party claims. • Third party D’s can also bring a permissive claim vs. the first party P; however, the claim must arise out of the same O&T that gives rise to P’s original claim.

17. Intersection between Rule 14Impleader & Jurisdiction • Subject Matter Jurisdiction: Generally Rule 14 claims automatically qualify for 1367 jurisdiction; however, when the P is asserting the third party claim and the jurisdictional basis for the original claim is 1332, 1367(b) prohibits the invocation of supplemental jurisdiction to satisfy subject matter jurisdiction. • Personal Jurisdiction: Personal jurisdiction over a third party D will usually be easy to establish b/c the D will have been substantively involved in the underlying claim in satisfaction of Shoe requirements. If not Rule 4(k)(b)(1) allows an extra 100 mile boost to the Ct’s jurisdiction which can bring some 3rd party D’s w/in the Ct’s jurisdiction who would otherwise be without it.

18. 3 Step Inquiry w/re: to Rule 14 • 1) Does the applicable substantive law afford a basis for a derivative liability action (e.g., indemnification / contribution)? • 2) Does Rule 14 permit the third party to be joined in the litigation? • 3) Are subject matter / personal jurisdiction satisfied? • The answer to all 3 inquiries must be yes to implead the party.

19. Impleader Practice Question • A sues B for assualt, in a claim arising out of a scuffle while both were waiting in line to enter a nightclub. B seeks to implead C, contending that A has mistaken the identity of his assailant, and that C, not B, was the person who struck A. Can A object to B’s impleader of B?

20. Impleader Practice Question • P sues L for defective construction of the chicken houses. L counterclaims vs. P for unpaid construction bills, alleging that P failed to pay the agreed-upon contract price for the construction. 6 months after responding to L’s counterclaim, P seeks to implead Bank, which, P alleges failed to fund the line of credit as it had agreed. Does Rule 14 permit a P to implead Bank?

21. Joinder / 1367 Practice Question • Ann, a citizen of IL, sues B, a citizen of IL, in federal district ct in IL alleging that B violated federal civil rights statutes in firing her. Ann seeks to add a state law claim alleging that her firing also violated a state wrongful discharge law. Is there supplemental jurisdiction?

22. Joinder / 1367 Practice Question • A, a citizen of IL, sues B, also a citizen of IL, alleging that B violated federal civil rights statutes in firing her. A seeks to add a state law claim that B caused her injuries when her car backed into A’s in the company parking lot after the termination. Is there supplemental jurisdiction?

23. Joinder / 1367 Practice Question • A, a citizen of IL, sues B, also a citizen of IL, alleging that B violated federal civil rights statutes by permitting co-workers to engage in sexual harassment. A seeks to join C, a co-worker, who actually engaged in the harassment. State tort law is the basis of A’s claim vs. C. Because C is not A’s employer, the claim against him does not arise under federal law. Assume that the claim vs. C present sufficiently common issues to qualify for joinder under Rule 20. Is there supplemental jurisdiction over the claim vs. C?

24. Joinder / 1367 Practice Question • A, a citizen of IL, sues B, a citizen of WI, alleging breach of an employment contract and seeking a recovery in excess of $75k. A seeks to join C, a citizen of IL; A alleges that C conspired with B to breach the employment contract. Assume that the claim vs. C presently sufficiently common issues to qualify for joinder under Rule 20. Is there supplemental jurisdiction over the claim vs. C?

25. Joinder Rules • Claims • 18 Joinder of Claims (not compulsory) • 13(a) Compulsory Counterclaims ( D vs. P) • 13(b) Permissive Counterclaims (D vs. P) • 13(g) Cross Claims (P vs. P or D vs. D) • 14 Third Party Claim (Impleader) (can be brought by a P or a D) • Parties • 19 Compulsory Joinder of Parties • 20 Permissive Joinder of Parties • 22 Interpleader • 23 Class Action • 24 Intervention

26. 28 USC 1367 • 1367(a) applies to original claims that fall within the scope of both 1331 and 1332 and articulates the relatedness requirement (“district courts shall have supp. jurisdiction over all other claims that are so related to claims in the action w/in such original jurisdiction that they form part of the same case or controversy under Art. III . . . “) • 1367(b) applies to a subset of original claims that fall within the scope of 1332 and informs that “the district courts shall not have supplemental jurisdiction over claims by P’s against persons made parties under Rule 14, 19, 20 or 24 . . . or over claims by persons proposed to be joined as P’s under rule 19 or seeking to intervene as P’s under Rule 24 . . . when exercising supp. jurisdiction over such claims would be inconsistent with the jurisdictional requirements of section 1332.”

27. Claims which generally fall w/in ancilliary jurisdiction under 1367 • compulsory ctr claims 13(a) • cross claims 13(g) • intervention of rt under 24(a) unless the intervenor is intervening as a P in a diversity case or unless the intervenor would have been an indispensable party under 19(b) • impleader claims 14(a) • 3rd party D’s claims vs. P’s under the sixth sentence of Rule 14(a)

28. Claims which generally do not fall w/in ancilliary jurisdiction under 1367 • permissive counterclaims 13(b) • permissive intervention under 24(b) unless the intervenor is a class member intervening in a class action or • plaintiff’s claims vs. 3rd party D’s under the seventh sentence of R14(a) when the main claim rests on diversity jurisdiction

29. Rule 19 Compulsory Joinder of Parties • Persons should be joined in an action when their absence will materially reduce the likelihood that the court can provide justice for other parties to the action or where it will be detrimental to the non-party. • Court will consider how joinder of the party will affect diversity in a case. If it cannot join the party w/o destroying diversity it will consider under 19(b) whether to proceed w/o the party. • Court has the discretion to determine whether to allow the action to proceed without the party or to dismiss the action where the party cannot be joined. • Courts favor continuing the litigation. • Rule 19 objections are generally raised by the D in the form of a Rule 12(b)(7) challenge to the complaint, but they can also be raised sua sponte by the court. • Rule 41(b) provides that Rule 19 dismissals are generally without prejudice.

30. Rule 19 3 Step Inquiry • Can complete relief be achieved in his/her absence or would relief adversely affect his/her interest in the case? 19(a) • Can the person be joined without subject matter, personal jurisdiction, and venue being destroyed? 19(a) • If the party cannot be joined b/c of jurisdictional or venue reasons can the case be continued (and the unjoined party’s interests protected) or should the ct dismiss the case? Will continuation of the case have a prejudicial effect? 19(b)

31. Rule 19 • Courts favor continuing the litigation. • Rule 19 objections are generally raised by the D in the form of a Rule 12(b)(7) challenge to the complaint, but they can also be raised sua sponte by the court. • Rule 41(b) provides that Rule 19 dismissals are generally without prejudice.

32. Rule 19 Practice Question • Buyer enters into a contract with husband and wife to purchase Blackacre. The sellers fail to convey the land at the appointed time, and Buyer sues Husband seeking a decree of specific performance. Assume that the jurisdiction in question requires the signatures of both Husband and Wife to convey ordinary clean title. Analyze the Wife’s status as a party under Rule 19(a).

33. Rule 19 Practice Question • Consider the question on the previous slide. Suppose the court concludes that (1) Wife should be joined; but (2) the court lacks jurisdiction over her. What should the court do?

34. Rule 19 Practice Question • WY Rancher sells interest in her herd to several parties. She also borrows from a bank, using the herd as collateral. When she can’t pay the loan the bank seeks to replevy the cattle. Rancher argues that joinder of all those claiming an interest in the herd is required, and that, because the presence of some of them would defeat diversity, the law suit must be dismissed. What result?

35. Rule 19 Practice Question • Larry is the income beneficiary of a spendthrift trust, and his children have the remainder of the interest. The trustee has a power to appoint the trust to Larry at any time. Larry, a California resident, sues the trustee, an Illinois resident, seeking a declaration that the trustee abused his power by not appointing the trust to him. Any problems?

36. Rule 19 Practice Question • Prior to 2000, Husband was married to Wife1 and procured insurance from Insco. payable to “my wife.” In 2000, Husband procures a Mexican divorce and marries Wife2. After Husband’s death in 2004, Wife1 brings an action against Insco claiming: a) Husband and she were never properly divorced; and b) even if she and Husband were divorced, his intention was to have the policy payable to her. Insco moves to dismiss for failure to join Wife2. What result?

37. Rule 24 Intervention • Rule is designed to allow those not named as parties to a lawsuit but who have interests that may be affected to join the suit • When a party attempts to intervene under Rule 24, that person submits to the jurisdiction of the court. • Special rules for Subject Matter Jurisdiction • Intervention does not implicate former adjudication (i.e., parties are not required to intervene or forfeit their right to sue on their interests in a separate law suit) • 24(a) Intervention of Right – party must be allowed to join the litigation • 24(b) Permissive Intervention – party may join the litigation subject to the judges discretion

38. 24(a) Intervention of Right • 4 Part Test for Intervention of Right under 24(a) • The intervention must be timely; intervenor may not “lay in wait” until the litigation is on the brink of resolution; and • The intervenor must have an “interest” in the property / transaction that is the subject of the law suit; and • The intervenor’s asserted interest must be in some strong way at risk; and • The intervenor’s asserted interest must not already be adequately represented by the parties to the law suit he wishes to join. • Prongs 2 and 3 of the test echo Rule 19(a) requirements.

39. Intervention Practice Q • Assume A and B are both injured in a fireworks display held at Memorial Stadium. A sues Memorial Stadium and alleges that the stadium was negligent in handling the fireworks, and, in the alternative, that the fireworks display was an extrahazardous activity for which the stadium has absolute liability. B seeks to intervene, claiming liability on similar grounds.

40. Intervention Practice Q • P sues Auto Manufacturer claiming that a defective design led to her injuries. Substantial discovery occurs, followed by a settlement agreement that includes a provision requiring that the materials uncovered by P in discovery remain confidential. 16 persons, each claiming injuries in unrelated accidents involving the same design feature, seek to intervene to challenge the protective order in the settlement. What result?

41. Interpleader • Operates to avoid duplicative litigation and inconsistent judgments • There is Statutory (Sect. 1335, Sect. 1397 & Sect. 2361) and Rule 22 Interpleader available; the Act broadens the circumstances in which Interpleader is available • A stakeholder can require competing claimants to litigate their rights to the property at issue; can be used offensively by interpleading other parties or defensively when raised as a counterclaim

42. Interpleader

43. Interpleader Cohen v. Republic of the Philippines (p. 786) gives us an opportunity to consider the factual scenario that gives rise to interpleader and test our understanding of intervention

44. A Civil Action • Assess the wisdom of the decision not to sue the City of Woburn from the P’s perspective and the D’s perspective. • Assess the wisdom of the decision to implead Unifirst from the P’s perspective and the D’s perspective. • If the P’s had not joined all of the D’s in this action would subsequent claims vs. omitted D’s have been precluded? • Assess the wisdom of the Judge’s decision to allow intervention by media outlets.

45. Joinder Review Q’s P (GA) is injured in a car accident, has retained an atty, and is considering suing D (FL) for her injuries to her car and her body. It just so happens that D is her landlord who has failed (in her opinion) to maintain the property she is leasing in a manner consistent with the lease. • Can P sue D in a GA federal court? • Can P join into the single law suit both the breach of contract claim and the negligence claim? • If P initiates a suit vs. D for both claims and the lease at issue in the breach of contract claim is signed by both D and his wife, how might he respond to the complaint? • D wants to assert that the accident was caused b/c P was speeding and failed to yield to on-coming traffic. How would you characterize these arguments and in what document would D present them?

46. Joinder Review Q’s P has failed to pay rent for the past 3 months b/c of her dissatisfaction with the condition of the apartment she is leasing. 1) Can D initiate a claim for breach of contract as part of P’s law suit against him? 2) P passed out fliers to her neighbors referring to D as a “slumlord.” Can D initiate a claim for defamation vs. P as part of her law suit against him? 3) If D decides not to initiate either claim as part of P’s suit vs him will it impact his ability to do so at a later date?

47. Joinder Review Q’s D entered into a contract with C (GA) to maintain all of his apartment buildings. C failed to visit the apartment building as required by the contract. • By what means might D bring C into the suit against him by P? • Could C respond to a suit by D with a claim based on the assertion that D failed to pay for C’s services pursuant to their contract? • If C is brought into the lawsuit could P bring a claim directly vs him?

48. Joinder Review Q’s Several of P’s neighbors, equally unhappy with the condition of the apartment building in which they live, want to join the lawsuit. They are all GA citizens. 1) Can they join the law suit?

49. Joinder Review Q’s P decides to add to her claims for breach of contract and negligence vs. D a claim for the return of her security deposit. P and her roommate E (FL) split the deposit (each paying half) and both P and her roommate are on the lease. P is requesting the return of the entire amount plus interest. • As D’s attorney what action might you suggest? • If D also wants to sue E for lease violations can he?