Concept
Dismissal Under Rule 19(b)
Required joinder and failure to join
Dismissal Under Rule 19(b)
When a person who is required to be joined if feasible cannot be joined, Rule 19(b) directs the court to decide whether, in equity and good conscience, the action should proceed among the existing parties or be dismissed.1 That decision is the last step of a three-step inquiry. The court asks first whether the absentee is required under Rule 19(a), next whether joinder is feasible, and finally whether the absentee is indispensable under Rule 19(b). A finding of indispensability ends the case, though courts are frequently reluctant to dismiss because joinder is not feasible.2
The rule introduces its factors with the word include and lists four: how far a judgment entered without the absentee might prejudice the absentee or the existing parties; how far shaping the relief could lessen that prejudice; whether a judgment entered without the absentee would be adequate; and whether the plaintiff would have an adequate remedy if the action were dismissed for nonjoinder. The rule assigns the factors no weights, and the Supreme Court has refused to treat the decision as a formula. In Provident Tradesmens Bank & Trust Co. v. Patterson, the Court said the decision whether to dismiss must be based on factors that vary with the case, some substantive, some procedural, some compelling by themselves, and some subject to balancing against opposing interests.3 Rule 19 does not prevent a party from asserting compelling substantive interests; it commands courts to examine each controversy and make certain those interests really exist.4 The breadth of the inquiry matches the stakes, because the decision about who may or must be a party affects the persons bound by the judgment, the judicial system and the respect accorded its decrees, and society's interest in the fair and prompt resolution of disputes.5
For that reason the word indispensable records the outcome of the balance and supplies no reason for it. A court does not know whether a person is indispensable until it has examined the situation to see whether it can proceed without that person; to say that a court must dismiss in the absence of an indispensable party puts the matter the wrong way around.6 In Republic of the Philippines v. Pimentel, the Court added that the word carries an unforgiving connotation that fits poorly with a system letting some actions proceed without persons who otherwise should be parties, and it creates the verbal anomaly of an indispensable person who turns out to be dispensable after all.7 Absentees fall along a continuum measured by the significance of their interests in the litigation, from those whose nonjoinder will not result in dismissal to those whose joinder is compelled even at the cost of dismissing the action.8
The four sections below take the factors in the order the rule states them. The first measures how much harm going forward would do. The second asks how much of that harm a decree can remove. The third asks whether the judgment would still serve the public interest in settling the dispute. The fourth asks what the plaintiff would have left if the case were dismissed.
Prejudice From Proceeding
The first factor asks the court to consider the extent to which a judgment rendered in the person's absence might prejudice that person or the existing parties.9 By the time a court reaches this question it has found the absentee required and joinder infeasible, so it already knows the person belongs in the case. The question now is how much damage the case will do if it goes forward without that person. The text names two possible victims. The absentee is one: not bound by the judgment, it may still feel its effects. The other is the parties already in court, who may face a fresh suit or conflicting orders because someone is missing. These are the harms that made the person required under Rule 19(a)(1)(B): the absentee's ability to protect its interest may be impaired or impeded as a practical matter,10 and an existing party may face a substantial risk of double, multiple, or otherwise inconsistent obligations because of that interest.11 At this stage the court measures how far those harms extend, and does not stop at asking whether they exist.
The Supreme Court described the defendant's side of the factor in Provident. A defendant may properly wish to avoid multiple litigation, inconsistent relief, or sole responsibility for a liability it shares with another.12 Each is a separate harm. Multiple litigation means defending the same controversy twice because the absentee was never bound by the first judgment. Inconsistent relief means that two courts may issue commands that cannot both be obeyed. Sole responsibility means that the defendant may pay all of a liability that someone outside the case also owes.
The absentee's side calls for a different kind of care. Because the absentee is not before the court, the judgment cannot bind it, and that means only that the judgment is not res judicata as to, or legally enforceable against, a nonparty.13 It does not mean that a court may never issue a judgment that in practice affects a nonparty, and it does not mean that a court may always proceed without considering that effect simply because nonparties are not bound in the technical sense.14 The court must consider the extent to which the judgment may, as a practical matter, impair or impede the absentee's ability to protect its interest in the subject matter.15 Practical harm runs from trivial to overwhelming, so the factor carries very different weight from case to case. The decisions below run from the heaviest weight to the lightest.
Sovereign immunity gave the factor its heaviest weight in Pimentel. The case was an interpleader over the Arelma assets, in which a class holding a damages judgment sought the assets and the Republic of the Philippines and its Commission claimed them for themselves. The Republic and the Commission had asserted sovereign immunity and were absent, yet the court of appeals went forward and ruled on the merits of their claims.16 The Supreme Court held that the court of appeals erred by not giving the necessary weight to the absent entities' assertion of immunity, and that its consideration of the merits was itself an infringement on foreign sovereign immunity.17 The Court then explained that the remaining factors confirmed the outcome the first one suggested.18
Comity explains the weight. An assertion of foreign sovereign immunity implicates important comity concerns, and a court that decides the sovereign's claim without the sovereign, over its objection, takes back what the immunity was meant to give.19 The Court drew a working rule from the cases. Where sovereign immunity is asserted and the sovereign's claims are not frivolous, dismissal must be ordered where there is a potential for injury to the absent sovereign's interests.20 A frivolous claim is different, because the court may then have leeway under Rule 19(a)(1) and Rule 19(b) to disregard it.21 The Court did not discount the class's interest in recovering its damages. The error lay in failing to give proper weight to the compelling claim of sovereign immunity.22
Haas v. Jefferson National Bank of Miami Beach put the prejudice on the existing defendant, with the absentee's own stake pointing the same way. Haas sued the bank over stock whose title was in dispute between him and Glueck, who was not before the court. Glueck would not be bound by a judgment in a suit he was not part of, so nothing guaranteed that a judgment on Haas's terms would settle the whole dispute.23 The court of appeals treated the first factor as tracking its earlier Rule 19(a) analysis and held that it supplied weighty reason to find Glueck indispensable.24 The exposure came from the absence itself, because joining Glueck would have bound him to a single ruling on title.
Torrington Co. v. Yost put harm on both sides. Torrington sued its former employee, Yost, for an injunction limiting his employment at INA, his new employer, for eighteen months and for damages from the alleged use of its trade secrets. Yost moved to dismiss for failure to join INA, arguing that INA's absence would prejudice him and impair INA's interests.25 The court dismissed. Deciding the claim without INA would not resolve the dispute, because INA might still use trade secret information it got from Yost. Yost could end up whipsawed, subject to inconsistent obligations to his former and current employers, and the judgment would not bind INA.26
Helzberg's Diamond Shops v. Valley West Des Moines Shopping Center sits at the other end of the range. Helzberg obtained a preliminary injunction against its landlord, Valley West, and Lord's, a tenant under a separate lease, was absent. The court of appeals found no prejudice to Lord's. Even if Valley West tried to end Lord's tenancy because of the injunction, Lord's would keep all its rights under its own lease, and none of its rights or obligations had been adjudicated in a proceeding to which it was not a party.27 Valley West's claim of prejudice failed too. Lord's had filed no suit, nothing showed that another court would read the two leases differently, and any inconsistency in Valley West's obligations would come from its own execution of two leases imposing inconsistent obligations and not from the proceeding in Lord's absence.28
Torrington and Helzberg show how one question yields opposite answers on facts that look alike. In both, the absentee held a contract with a party. In Helzberg the decree enforced a lease between the two parties already in court, none of the absentee's rights were adjudicated, and the landlord's conflict existed from the moment it made two promises, with or without the absentee in the case. A person does not become indispensable to an action over one contract merely because its rights or obligations under an entirely separate contract will be affected by the result.29 In Torrington the injunction sought would limit the employee's work at the absentee's own business, and the court found that the employee could be whipsawed between two employers by a judgment that would not bind the new one.30 A fact pattern that gives the absentee a separate contract with a party therefore raises two questions: whether the judgment will adjudicate or restrict the absentee's rights under that contract, and whether the party's exposure comes from the absence or from its own commitments.
Timing can reduce a defendant's side of the factor to nothing. After trial, if the defendant failed to assert its interest in avoiding multiple litigation, inconsistent relief, or shared liability, it is quite proper to consider that interest foreclosed.31 In Provident the plaintiffs had won at trial and the court of appeals nonetheless set the judgment aside because the insured, Dutcher, was absent. The Supreme Court held that the defendants' failure to assert an interest in joinder properly foreclosed any interest of theirs.32 It added that the insurer, whose liability was limited to $100,000, would have full opportunity to litigate each claim on that fund against the claimant involved, and that its only concern with Dutcher's absence was to obtain a windfall escape from its defeat at trial.33
The absentee's side of the factor survives the verdict but is judged differently. The judgment on appeal may not in fact affect any outsider's interest, even though before trial a judgment affecting it was possible, and an appellate court should when necessary take steps on its own initiative to protect an absent person who had no opportunity to plead its interest below.34 The Court in Provident also found a logical flaw in the court of appeals' reasoning. That Dutcher would have benefited from a ruling for the insurer did not show that a judgment against the insurer harmed him.35
Lessening the Prejudice
The first factor measures harm, and the second asks whether the court must accept that harm as found. The court considers the extent to which the shaping of relief might avoid or lessen the prejudice to existing or absent parties.38 Provident read Rule 19(b) as directing the court to consider shaping relief to accommodate the interests at stake, and as making explicit that a court should consider modifying a judgment as an alternative to dismissal. A court of appeals may likewise require a suitable modification as a condition of affirming.39 The order of the inquiry follows from what dismissal costs. It takes away the plaintiff's chosen forum and leaves the controversy undecided, and an action may be abated only if, in equity and good conscience, it cannot proceed without the absentees.40 A court should hesitate to pay that price for a harm that a carefully drafted decree could prevent. The second factor is a search for a version of the judgment narrow enough to go forward while still protecting the people who are missing.
Provident supplies the clearest example of tailoring that works. Tort plaintiffs had won a judgment on an insurance policy after trial, and the court of appeals refused to let it stand because Dutcher, the insured, had not been joined. The Supreme Court held that a court unconvinced that the threat to Dutcher was trivial could still have avoided all difficulties by proper phrasing of the decree.41 Payment could have been withheld pending the suits against Dutcher and any relitigation by him, and counsel represented that the tort plaintiffs would accept a limit on all claims to the amount of the policy.42 Each measure keeps the verdict and changes only what it does to the fund the absentee shares. Delayed payment keeps a finite policy from being drawn down before the absentee's own litigation is resolved, and a cap holds all claims to the policy amount. The Court said that a compromise of this kind could have been reached below had the court of appeals been willing to abandon its rigid approach and seek ways to preserve a valid judgment.43 Where the plaintiffs are a certified class, accepting such a limit compromises the class's claims, which Rule 23(e) permits only with the court's approval, after notice to the class members who would be bound.44
A second family of tools changes the form of the relief instead of its timing. Pimentel pointed to decisions that granted money damages rather than specific performance, used declaratory judgments, and directed that payment be withheld pending suits against the absent party.45 Different remedies reach different things. A decree compelling performance acts on the property or transaction at issue, and so on everyone who holds an interest in it, while a damages judgment runs against the defendant and leaves the property where it was.
A decree can also be confined to the people who are actually in the case. In one illustrative problem, an absent Y has interests that are clearly implicated, yet the court can shape relief by declaring only the rights as between the plaintiff and the estate of X and by making clear that the judgment does not bind Y personally. The estate, as representative of X's interests, is before the court and can adequately defend the claim that the 1998 transfer was a completed gift.46 The limit works in practice and not in law, because a judgment is not res judicata as to, or enforceable against, a nonparty in any event.47 What the limit accomplishes is to keep the decree from deciding anything that belongs to Y, so Y's own claim waits for a later proceeding.
A court can also rely on the absentee's own ability to protect itself. In Helzberg, Lord's had the chance to intervene and chose not to, and the court of appeals concluded that, in light of that decision, the district court had acted in a way that sufficiently protected Lord's interests.48 An absentee that can step in and declines is hard to describe as defenseless, which is why the refusal counts in the second-factor analysis.
Every measure so far works on the consequences of the judgment: when money is paid, how much can be claimed, what form the decree takes, or whether the absentee can appear. None of them changes what the court must decide to reach judgment, and that marks the line between cases where tailoring succeeds and cases where it fails. In Haas, the court found that title to the stock certificates, although not the immediate issue, assumed such commanding importance that it was difficult to conceptualize a form of relief or protective provisions that would not require, as a preliminary matter, a determination of title with all the resulting potential for prejudice.49 Delaying payment or capping the amount would have done nothing, because deciding who owned the shares was itself the source of the prejudice. In Provident the harm lay in what the verdict would do to a fund, and regulating that effect managed it. In Haas the harm lay in the decision of the ownership question.
Pimentel shows the failing side at its starkest. No alternative remedies or forms of relief had been proposed to the Court or appeared to be available.50 The dispute explains why. If the Marcos estate did not own the assets, or if the Republic owned them now, the class's claim likely failed, and any equally valid competing claims would have to be adjudicated in a case where the Republic and the Commission were parties.51 A decree that could not avoid ruling on the absent sovereigns' claims left nothing to tailor. The contrast with Provident is practical as well. In Provident counsel put a concrete limit on the table, and in Pimentel nobody proposed anything.
A sovereign's absence does not always end the case. In a 2020 decision, a court found that Hungary, a necessary party, could not be joined because of its sovereign immunity, yet it declined to dismiss a suit seeking relief in connection with artwork seized during the Holocaust, because it could still fashion appropriate relief and protect Hungary's interests in its absence.52 The decision fits Pimentel only because the court found that appropriate relief could protect Hungary's interests, which removed the potential for injury. The second factor therefore turns on whether a decree can protect the absent sovereign, and the sovereign's identity does not answer that question.
The factor thus turns on where the prejudice comes from. When it flows from the consequences of the judgment, such as the timing of payment, the amount claimed, the form of relief, or the absentee's lack of a chance to appear, a decree or an invitation to appear can often remove it and the case proceeds. When it flows from the need to decide the absentee's own right, as with title to the shares in Haas or the sovereigns' claim to the assets in Pimentel, no redrafting helps and the factor points toward dismissal. Students sometimes treat this factor as a repeat of the first, but the first asks how serious the prejudice is and the second asks how much of it can be removed. Because the factor looks to prejudice to existing and absent parties alike, a measure that shields the absentee and leaves an existing party exposed, or the reverse, removes only half of it.53
Adequacy of the Judgment
The third factor asks whether a judgment entered without the absent person would be adequate, and Pimentel gives adequate a specific meaning: the public stake in settling disputes by wholes whenever possible.55 The Court took the idea from Provident, which described the interest of the courts and the public in complete, consistent, and efficient settlement of controversies.56 Illinois Brick lists the social interest in the efficient administration of justice and the avoidance of multiple litigation among three interests that traditionally support compulsory joinder of absent and potentially adverse claimants, alongside the defendant's interest in avoiding multiple liability and the absentees' interest in protecting their right to recover.57 Adequacy therefore describes what a judgment does to the controversy as a whole. It does not ask whether the plaintiff finds the result satisfying.
Provident explains why the factor looks to the public and leaves the plaintiff's satisfaction aside. The plaintiff, who chose both the forum and the defendants, will not be heard to complain about the sufficiency of the relief obtainable against them.58 A plaintiff who sues only some of the people who could be sued has accepted the limits of what those defendants can provide, so the plaintiff's disappointment says nothing about whether the case should be dismissed. What matters is whether the judgment, once entered, will close the dispute, because a judgment that leaves the controversy open invites more suits over the same events.
In Pimentel, going forward without the Republic and the Commission would not have furthered the public interest in settling the dispute as a whole, because neither would be bound by a judgment in an action to which it was not a party.59 The structure of the dispute shows why. The class's claim likely failed if the Marcos estate did not own the assets or if the Republic owned them now, and any equally valid competing claims would have to be adjudicated in a case where the Republic and the Commission were parties.60 A judgment awarding the assets to the class in their absence would leave open the question who owned them, free to be raised again by the very entities the judgment could not reach.
Haas shows the same defect in an ordinary dispute over property. Quoting Provident's reading of the third criterion, the court of appeals concluded that Glueck's absence would of necessity result in less than a complete settlement of the controversy, because there was no semblance of a guarantee that a judgment on Haas's terms would settle the whole dispute generated by the facts.61 The facts that made Glueck's absence prejudicial under the first factor reappear here as a public problem, since a decision that resolves part of the ownership question and leaves the rest open settles little. Torrington reached the same conclusion about the absent new employer. Deciding the claim without INA would not really resolve the dispute, because INA might still use trade secret information it got from Yost, and the judgment would not bind INA.62 In each case the person left out held a stake that the judgment could not touch, and that is what makes a judgment inadequate in the sense the rule uses.
The definition also marks the limit of the factor. An absentee that holds a competing claim to the subject of the case keeps the controversy open, as the Republic did in Pimentel and Glueck did in Haas. An absentee that claims nothing the judgment awards or takes away does not keep it open, even if that person might also owe the plaintiff something, because a judgment against the existing defendant that gives the plaintiff the relief claimed ends the plaintiff's controversy. A corporate employer that can provide every remedy a plaintiff seeks for a supervisor's tort illustrates the point: any dispute between employer and supervisor over reimbursement is a separate matter that does not reopen the plaintiff's claim.
Timing also changes the weight of the factor. After trial, considerations of efficiency include the fact that the time and expense of a trial have already been spent.63 In Provident the Court found that, by the time the case reached the court of appeals, there was no reason to throw away a valid judgment just because it did not theoretically settle the whole controversy.64 The threatened relitigation by Dutcher also depended on there being judgments against him and on the size of the insurance fund, which had not been revealed to the district court, so the risk was possible and not probable.65 Provident thus shows that a theoretical possibility of relitigation carries little weight against a complete judgment that already exists. Because Rule 19(b) also directs the court to consider shaping relief to accommodate these same interests,66 the second and third factors are best read together.
Plaintiff's Alternative Remedy
The first three factors measure the cost of going forward; the fourth measures the cost of stopping. Pimentel framed it as the question whether the plaintiff would have an adequate remedy if the action were dismissed for nonjoinder.68 The factor traces to Provident, which counted the plaintiff's interest in having a forum among the interests a court must weigh and said that, before trial, the strength of that interest depends on whether a satisfactory alternative forum exists.69 The word satisfactory sets the standard. A forum that exists only on paper does not count if the plaintiff could not use it to obtain relief, and a claim already barred by a limitations period has no remedy waiting in any court. The factor thus measures what dismissal takes from the plaintiff. A plaintiff who can sue elsewhere gives up a preferred courthouse, and a plaintiff with nowhere to go gives up the claim itself.
The usual alternative is the same suit in state court, where the obstacle that kept the absentee out of federal court may disappear. In Torrington, the plaintiff 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.70 In Haas, the Ohio state courts offered Haas an opportunity to adjudicate his rights against Glueck and provided a ready forum to settle title to the stock. Once title was decided there, a second action against the bank, in which the problem of nonjoinder would not be so acute, was not difficult to conceptualize.71 The two alternatives differ in shape. Haas's takes the dispute in sequence, title first and the bank second, while Torrington's recreates the whole case with every interested party present.
Because dismissal sends the plaintiff to another court, a nonjoinder motion can also serve a defendant's preference for that court. Rule 12(b)(7) lets a defendant move to dismiss for failure to join a party under Rule 19.72 Yost may have made his motion because he and INA preferred to litigate in state court; by convincing the court that INA was indispensable, he got the case dismissed from federal court for lack of jurisdiction and left Torrington to sue in state court instead.73 That observation is context and not doctrine. A movant's motive and the court's factors can diverge, and the court decides the motion by applying the factors to the facts before it.
The factor points the other way when the alternative is theoretical and not practical. A state action that a statute of limitations would bar leaves the plaintiff with nothing to refile, and a forum of that kind is not a satisfactory alternative. The same claim can land on either side of the line depending on the calendar.
Dismissal can still follow when no alternative forum exists, and Pimentel is the leading example. The court of appeals there had made much of the tort victims' lack of an alternative forum if the interpleader were dismissed. The Supreme Court answered that this assumed the Pimentel class was the plaintiff, when the interpleader statute gives that status to Merrill Lynch, the stakeholder.74 It added that the class's interests are not irrelevant to the Rule 19(b) balance, but that the other provisions of the rule are the ones to consult.75 The Court held that any prejudice to Merrill Lynch was outweighed by the prejudice to the absent entities invoking sovereign immunity. It observed that dismissal will in some instances leave plaintiffs without a forum for definitive resolution of their claims, a result contemplated under the doctrine of foreign sovereign immunity.76 The doctrine contemplates that result because immunity would mean little if the loss of a forum always defeated dismissal, since someone will always have a claim to press against the sovereign. The Court also left room for change. If Merrill Lynch or other parties commence further litigation in light of changed circumstances, the new action need not be filed in the district court where this one arose, provided venue and jurisdictional requirements are satisfied elsewhere.77
Timing changes how much the factor weighs. On appeal, a plaintiff who has won has a strong additional interest in preserving the judgment.78 In Provident, after trial, the adequacy of the hypothetical alternative was obviously greatly diminished from the plaintiffs' point of view. Their interest in preserving a fully litigated judgment should be overborne only by rather greater opposing considerations than would be required earlier, when the plaintiffs' only concern was for a federal rather than a state forum.79 A refiled action would start over and waste the time and expense of the first trial, so after a verdict the real alternative to keeping the judgment is a worse position than the plaintiff held before filing. The interest has limits, however. In Hearts with Haiti, Inc. v. Kendrick, the court acknowledged an extraordinary prejudice to the prevailing parties from being deprived of the fruits of their victory. It called that result markedly unfortunate but a necessary consequence of trying a case to completion in a court without proper jurisdiction, and it concluded that the nondiverse party, Geilenfeld, was indispensable under Rule 19(b).80
An available alternative forum does not decide the question by itself. In Helzberg, the court of appeals upheld the district court's finding that the fact that Helzberg would have an adequate remedy in the Iowa courts had no controlling significance, because the other factors favored proceeding and the conclusion that in equity and good conscience the action should go forward was correct.81 In Haas and Torrington the state forum arrived with the other factors already favoring dismissal. The fourth factor therefore carries real weight only when read with the other three, and the absence of any forum does not keep a case in federal court, as Pimentel shows.