Federal Rule of Civil Procedure 19
Rule 19. Required Joinder of Parties
(a) PERSONS REQUIRED TO BE JOINED IF FEASIBLE.
(1) Required Party. A person who is subject to service of process and whose joinder will not deprive the court of subject-matter jurisdiction must be joined as a party if:
(A) in that person’s absence, the court cannot accord complete relief among existing parties; or
(B) that person claims an interest relating to the subject of the action and is so situated that disposing of the action in the person’s absence may:
(i) as a practical matter impair or impede the person’s ability to protect the interest; or
(ii) leave an existing party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations because of the interest.
(2) Joinder by Court Order. If a person has not been joined as required, the court must order that the person be made a party. A person who refuses to join as a plaintiff may be made either a defendant or, in a proper case, an involuntary plaintiff.
(3) Venue. If a joined party objects to venue and the joinder would make venue improper, the court must dismiss that party.
(b) WHEN JOINDER IS NOT FEASIBLE. If a person who is required to be joined if feasible cannot be joined, the court must determine whether, in equity and good conscience, the action should proceed among the existing parties or should be dismissed. The factors for the court to consider include:
(1) the extent to which a judgment rendered in the person’s absence might prejudice that person or the existing parties;
(2) the extent to which any prejudice could be lessened or avoided by:
(A) protective provisions in the judgment;
(B) shaping the relief; or
(C) other measures;
(3) whether a judgment rendered in the person’s absence would be adequate; and
(4) whether the plaintiff would have an adequate remedy if the action were dismissed for nonjoinder.
(c) PLEADING THE REASONS FOR NONJOINDER. When asserting a claim for relief, a party must state:
(1) the name, if known, of any person who is required to be joined if feasible but is not joined; and
(2) the reasons for not joining that person.
(d) EXCEPTION FOR CLASS ACTIONS. This rule is subject to Rule 23.
- When a case starts we have at least one plaintiff and at least one defendant. Rule 19 governs when another party or parties must be added (joined) as an additional plaintiff or defendant. The absent party that must be joined is called a “Required Party” in the Rules but you will see courts refer to the Required Party as a “necessary party”. If there is a necessary party outside the court’s jurisdiction, then the case might have to be dismissed. You will often see courts refer to a necessary party that is outside the cout’s jurisdiction as “indispensable”. How could a necessary party be outside the court’s jurisdiction?
- A party could be outside the court’s personal jurisdiction if located in a state or country beyond the court’s territorial reach.
- Also, if joining an indispensable party would defeat diversity (for example if a party that would need to be joined as a defendant is a citizen of the same state as the plaintiff), then the federal court may have to dismiss the case because it would not have subject matter jurisdiction over the case.
- Looking back at Rule 12(b)(7), a party can raise as a defense that a pleading failed to include an indispensable party. This defense can be waived, however, a court may raise the issue of an indispensable party on its own. Parties can also move to dismiss a case for failure to join an indispensable party.
- Courts conduct a two step analysis upon a motion to dismiss for failure to join an indispensable party. First, as provided by 19(a), the court must determine whether the absent party is a necessary party. Second, if the absent party is necessary, the court must decide whether to dismiss the case pursuant to 19(b) because the necessary party is outside the court’s jurisdiction.
- Let’s start with our fist step under 19(a). When is an absent party a required or necessary party?
- First, under 19(a)(1)(A), an absent person is a necessary party if in that person’s absence the court can’t provide relief among the parties currently in the case.
- Alternatively, under 19(a)(1)(B), a court may find that an absent party is necessary if (i) the absent party has an interest in the case and its rights would be impaired or impeded if the case proceeded; or (ii) a decision without the absent party would leave an existing party subject to incurring multiple or inconsistent obligations.
- After a court decides that an absent party is a necessary under 19(a), it must compel the party to join the case. If it is not feasible to join the absent party, the court must determine pursuant to 19(b) whether to dismiss the case. 19(b) lists several factors for courts to consider when determining whether to dismiss the case or not. These factors include:
- prejudice to the absent party if the case proceeded;
- the extent to which prejudice could be lessened;
- whether the court can render an adequate judgment without the absent party; and
- prejudice to the plaintiff if the case were dismissed.
- By way of example, let’s say plaintiff sues a defendant bank in federal court for breach of contract because the bank allegedly failed to return plaintiff’s money. The bank raises as a defense that (i) the defendant’s subsidiary in a foreign country has the money; and (ii) it was the subsidiary’s responsibility under the contract to return the money. However, the subsidiary bank is not subject to personal jurisdiction in the United States. We’ll say the defendant moves to dismiss for failure to join an indispensable party.
- A court is likely to grant the motion. First, a court would probably determine that the subsidiary is a necessary party under Rule 19(a) because the subsidiary’s rights under the contract will be affected by the litigation.
- Second, if the federal court lacks personal jurisdiction over the subsidiary, then the subsidiary could not be joined. The court would then have to weigh 19(b)’s factors to determine whether to dismiss the case or not. The court would likely dismiss the case, meaning the plaintiff would have to file a lawsuit in a foreign country against the subsidiary.