1. CIVIL PROCEDURE CLASS 12 Professor Fischer Columbus School of Law The Catholic University of America October 2, 2001

2. WRAP-UP OF LAST CLASS We discussed Practice Exercise 11. This exercise demonstrates the type of judgments lawyers have to make in applying Rule 11 to a real live situation. We discussed the rules for joinder of claims (FRCP 18). Rule 18 permits joinder of unrelated claims. Don’t forget that rules on amendment (FRCP 15) may also be applicable! We discussed the rules for permissive joinder of parties under FRCP 20.

3. WHAT WILL WE DO TODAY? Learn the rules for joinder of parties (FRCP 19-21) Discuss counterclaims (FRCP 13) Discuss cross-claims (FRCP 13(g)) Discuss Practice Exercise 12 (CB 328) Discuss impleader under FRCP 14.

4. REVIEW: JOINDER OF PARTIES Some parties MUST be joined (FRCP 19) Other parties may be joined if permissive joinder rules apply (FRCP 20)

5. REVIEW: PERMISSIVE JOINDER: WHEN CAN Ps SUE TOGETHER? IF: 1. Claims arise out of same transaction and occurrence AND 2. Common question of law or fact subject to discretion of court to deny joinder where JURY CONFUSION or UNDUE DELAY (20(b))

6. WHEN CAN P SUE MULTIPLE Ds IN SAME ACTION? IF: 1. Claims arise out of same transaction and occurrence OR 2. Common question of law or fact subject to discretion of court to deny joinder where JURY CONFUSION or UNDUE DELAY (20(b))

7. REVIEW: RULE 20 IS PERMISSIVE Parties are not required to be joined (subject to FRCP 19) However, courts sometimes CONSOLIDATE actions (FRCP 42(a)) Courts also have discretion to deny joinder and order separate trials (FRCP 20(b))

8. FRCP 21: MISJOINDER OF PARTIES UNDER RULE 20 Misjoinder will not result in dismissal Parties can be dropped or added 1. On motion of parties 2. Or at initiative of court AT ANY STAGE OF THE ACTION COURT HOWEVER CAN ORDER SEPARATE TRIALS

9. KEDRA v. CITY OF PHILADELPHIA What are the key facts of this case (everyone’s worst nightmare, probably!) What is the procedural issue for the court? What are the defendants arguments on this issue? How does the court rule on this issue?

10. 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

11. POLICY ISSUES FOR COMPULSORY JOINDER All joinder rules attempt to render complete justice efficiently (with as little litigation as possible) But compulsory joinder rules may conflict with other policies, such as that joinder may prejudice interests of individuals sought to be joined, or of existing parties. Another issue - will court have jurisdiction over parties sought be joined? Also, what is the effect of judgment on person who might be joined?

12. RULE 19(a): WHO MUST BE JOINED IF FEASIBLE? What is meant by “feasible”?

13. RULE 19(a): WHO MUST BE JOINED IF FEASIBLE? Parties with overlapping interest in property: 19(a)(2)(ii) Persons with an interest that the action may legally or 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) Parties to a contract where a court is construing it

14. HOW DOES A PARTY CHALLENGE A PARTY’S ABSENCE UNDER RULE 19?

15. A 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.

16. CONSEQUENCES OF FAILURE TO JOIN AN ABSENT PARTY WHO SATISFIES 19(a) What are the consequences?

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

18. 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?

19. FACTORS THE COURT TAKES INTO ACCOUNT UNDER 19(b) 1. Potential prejudice 2. Shaping relief 3. Adequacy of judgment 4. Costs to plaintiff

20. PLEADING REQUIREMENT: 19(c) What does 19(c) require?

21. HYPO A & B have the same formal name, Martin Smith. Both A and B claim to be the beneficiaries of a life insurance policy issued by insurance carrier L on the life of C, who has died. A sues L. L fears that if the court orders L to pay the policy to A, B may file another suit against L and L might be again ordered to pay the policy amount to B. Can A be required to include B in his lawsuit vs. L? Why or why not?

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

23. COUNTERCLAIMS What is a counterclaim? (13(a), 13©) What provisions of the FRCP govern counterclaims? What are the two kinds of counterclaims?

24. 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?

25. 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) What, if any, exceptions are there for compulsory counterclaims?

26. Exceptions to compulsory counterclaims 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

27. 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?

28. RESPONDING TO A COUNTERCLAIM What response must a P make to a D’s counterclaim? FRCP 7(a) Does it matter whether the defendant has correctly identified the counterclaim as such in the answer?

29. HYPO Erin sues Sheila and Sheila files an answer. Sometime thereafter, events occur that are related to Erin’s claim against Sheila and that entitle Sheila to assert a claim against Erin. Must Sheila assert this claim in the lawsuit? May Sheila do so?

30. 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?

31. EXAMPLES A v. B and C B v. C (cross-claim) What if after B serves cross-claim on C, C wishes to bring a claim against B? What is that claim called? What are the prerequisites for that claim?

32. RESPONDING TO A CROSS CLAIM What response must a cross-claim defendant make to a cross-claimant’s cross- claim? Does it matter whether a cross-claimant has correctly identified the cross-claim as such in the answer?

33. JOINDER OF ADDITIONAL PARTIES BY COUNTERCLAIMANTS/CROSS- CLAIMANTS FRCP 13(h) Where counterclaimants or cross-claimants seek to join additional parties, leave is probably not required

34. SEPARATE TRIALS What does FRCP 13(i) provide?

35. BANQUE INDOSUIEZ V. TRIFINERY 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?

36. 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?

37. PRACTICE EXERCISE 12: POSSIBLE COUNTERCLAIM Shortly after the accident in which Charles was killed, Nancy calls a friend who works at Raytheon (where Randall is employed) and tells her that Randall is an alcoholic. Randall is fired from his job. Does Randall have a defamation claim against Nancy for slander? Would this be a compulsory or permissive counterclaim? Would you need to do some legal research before you could answer this question?

38. PRACTICE EXERCISE 12: CROSS-CLAIM Assume Nancy’s motion to add Ultimate Auto/City of Lowell has been granted and amended complaint filed. Also assume you represent Randall. Do you have a plausible cross-claim? Prove it. Focus on the language of Mass R. Civ. P. 13(g) which is the same as Fed. R. Civ. P. 13(g). If you do have a plausible cross-claim, how many counts would it have?

39. FRCP 14: IMPLEADER This governs the procedure whereby the court can allow a defendant to bring a third party (not already a party) into the action This is known as IMPLEADER What is the purpose of impleader?

40. FRCP 14: IMPLEADER What is the defendant called? THIRD PARTY PLAINTIFF What is the third party called? THIRD PARTY DEFENDANT

41. FRCP 14 v. 13 What is the difference between impleader and a counterclaim? What is the difference between impleader and a cross-claim?

42. Who can be joined under FRCP 14? Persons, not already parties, who, under applicable law, may be obligated to reimburse the D e.g. tortfeasor seeks contribution or indemnity from others who may be liable but who P has not sued OR someone as acted a a guarantor of a transaction MUST SUCH PERSONS BE JOINED?

43. Timing of Impleader Claims At what stage of the action can a third - party complaint be served? When is the leave of court required?

44. Relation of third-party claims to original claim Can a D make a third-party claim under FRCP 14 that is unrelated to the claims against that D? NOTE THAT LIABILITY OF THIRD- PARTY D DEPENDS ON OUTCOME OF MAIN CLAIM!

45. YET MORE PARTIES Can a third-party D implead other parties and if so, in what circumstances? Can this go on and on forever? Can a P who is a counterclaim-D implead third parties and if so, in what circumstances? What provision of the FRCP governs this?

46. HYPOTHETICAL Assume the Massachusetts contribution statute applies. Souter is involved in a car accident with two other drivers, Scalia and Rehnquist. Souter sues Scalia for negligence. Can Scalia implead Rehnquist on the basis that his negligence also caused Souter’s injuries?

47. HYPOTHETICAL Assume the Massachusetts contribution statute applies. Souter is involved in a car accident with two other drivers, Scalia and Rehnquist. Souter sues Scalia for negligence. Can Scalia implead Rehnquist on the basis that it was Rehnquist who was negligent, not Scalia?

48. PLEADING REQUIREMENTS A third-party complaint must comply with FRCP 8 and 11

49. SERVICE REQUIREMENTS What rule governs service of a third-party complaint?

50. RESPONDING TO A THIRD- PARTY COMPLAINT How does a third-party defendant respond? Can a third-party defendant move to dismiss? What rule governs counterclaims by the third-party defendant? Can third-party Ds cross-claim against each other? If so, which rule governs?

51. SEPARATE TRIALS What provision of FRCP 14 provides for separate trials?

52. PLAINTIFFS AND THIRD- PARTY Ds Can a P sue a person joined as a third party D and if so, in what circumstances?

53. THIRD-PARTY D and PLAINTIFF Can a third-party defendant claim against the original plaintiff and if so, in what circumstances?

54. SUMMARY 3d party D can implead fourth-party D 3d party D can also counter-claim, cross-claim, claim against P (if arises out of same transaction or occurrence) A P who is a counterclaim-D can implead third parties on 3d party claims related to the counterclaim under FRCP 14(b). P can also sue persons joined as third party d if claim arises out of same transaction or occurrence – then third party d can counterclaim or cross- claim

55. GROSS V. HANOVER INSURANCE CO. Federal or state court? What are the relevant facts? What is the procedural issue that the court must decide? How does the court rule on defendant’s motion? What is the court’s reasoning?

56. PRACTICE EXERCISE 13 Please see your casebook at p. 334