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  1. CIVIL PROCEDURE CLASS 17 Professor Fischer Columbus School of Law The Catholic University of America Oct 3, 2003

  2. FRCP 19: COMPULSORY JOINDER • Some parties MUST be joined • Class actions are an exception: 19(d) • Old distinction: • A. Necessary parties - should join if feasible BUT failure to join will not result in dismissal of action • B. Indispensable parties - MUST join these parties. Failure to join results in dismissal of action

  3. RULE 19(a): WHO MUST BE JOINED IF FEASIBLE? • Parties w/overlapping interest in property: 19(a)(2)(ii) • Persons with an interest that the action may legally/practically impair : 19(a)(2)(i) • Persons who, if not parties to action, make it impossible for court to grant complete relief to existing parties: 19(a)(1) • As a general rule parties to a contract must be joined in an action where a contract is being construed.

  4. HOW DOES A PARTY CHALLENGE A PARTY’S ABSENCE UNDER RULE 19? • Opposing party can move to dismiss (Rule 12(b)(7) motion • Is failure to join an indispensable party under 12(b)(7) a waivable defense? • Court can also order joinder sua sponte - at trial or on appeal.

  5. CONSEQUENCES OF FAILURE TO JOIN AN ABSENT PARTY WHO SATISFIES 19(a) • Party must be joined if feasible • Court will order joinder if feasible - court will not initially dismiss action for misjoinder • What if it is not feasible to join that party?

  6. FRCP 19(b): WHERE JOINDER IS NOT FEASIBLE • Joinder might not be feasible because it would defeat diversity jurisdiction, or court can’t obtain personal jurisdiction over the absent party or absent party has a valid venue objection • In this case, what should the court do?

  7. FACTORS THE COURT TAKES INTO ACCOUNT UNDER 19(b) • 1. Potential prejudice of proceeding wihtout a person e.g. inconsistent judgments • 2. Possibility of avoiding adverse consequences by shaping relief • 3. Adequacy of judgment in person’s absence • 4. Availability of another forum where P can get relief

  8. ADDING ADDITIONAL CLAIMS BY COUNTERCLAIM/CROSS-CLAIM • SEE FRCP 13 • These are additional claims made by parties to the action

  9. COUNTERCLAIMS • What is a counterclaim? What provisions of the FRCP govern counterclaims? • What are the two kinds of counterclaims?

  10. PERMISSIVE COUNTERCLAIMS • What provision of the FRCP governs permissive counterclaims? • What is the test for when a counterclaim will be permissive? • How does a defendant assert a permissive counterclaim?

  11. COMPULSORY COUNTERCLAIMS • What provision of the FRCP governs? • A counterclaim is not compulsory UNLESS _______________ [please fill in the blank] • Different standards: significant logical relationship (broadest), overlap in evidence (less broad) • EXCEPTIONS

  12. EXCEPTIONS • 1. Party had counterclaim that would otherwise be compulsory but never filed responsive pleading (e.g. successful 12(b)(6) motion) • 2. Counterclaim doesn’t mature until after pleading served • 3. Court lacks jurisdiction over indispensable third parties that would have to be joined for counterclaim • 4. Counterclaim is subject of a pending lawsuit • 5. Where plaintiff’s complaint rests on court’s in rem or quasi in rem jurisdiction • 6. In some cases, where D who has been sued for injunction or equitable claims seeks money damages in counterclaim

  13. FAILURE TO ASSERT A COMPULSORY COUNTERCLAIM • What happens if a COMPULSORY COUNTERCLAIM is not asserted? • BUT see FRCP 13(f) and 15(a) • What happens if a PERMISSIVE COUNTERCLAIM is not asserted?

  14. BANQUE INDOSUIEZ V. TRIFINERY p. 324 CB • State or federal court? • D executed promissory note payable to P and guaranteed by B • D do not dispute liability under the note • P argues that D owes P money and seeks summary judgment • What does D argue? • What does P argue in response?

  15. BANQUE INDOSUEZ CONT’D • Why does the court hold that it is unfair to enforce a contractual waiver of D’s counterclaim IF that counterclaim is compulsory -- even where under the applicable N.Y. law such contracts of waiver are enforceable? Note that in NY all counterclaims are permissive (NY CPLR section 3019) • Does the court find D’s counterclaim compulsory or permissive? Why?

  16. CROSS-CLAIMS • What is a cross-claim? • What provision of the FRCP governs cross-claims? • Are cross-claims compulsory? • Can any cross-claim be brought? • How are cross-claims different and similar to counterclaims?