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Essentials and Interlopers

  • Haas and Glueck buy 250 shares of stock in Acme Corporation. The shares are held in Haas’s name, but Glueck claims that they were to be jointly owned by the two investors. Later, Haas gets in financial difficulties and threatens to use the stock to pay some of his creditors. Glueck sues Acme Corporation to get the stock reissued jointly to himself and Haas.

— In this situation, if the court concludes that the stock is jointly owned and orders it reissued, that order would clearly affect Haas’s interest—especially if he disagrees about the nature of his agreement with Glueck. Thus, Haas is a person whose interest in the subject matter of the dispute—the stock—may be impaired if the court enters an order without his participation. Under Rule 19(a)(1)(B)(i), he should be joined in the case if it is feasible to do so.[2]

  • Pursuant to a treaty, a federal agency allocates fishing quotas in a river basin among twenty-three Indian tribes. The Makah Tribe, one of the tribes that signed the treaty, sues the federal agency, claiming that its quota is inadequate under the standards in the treaty.

— In this case, an increase in the Makah’s allotment will automatically decrease the allotments of the other tribes. Since an order in the Makah Tribe’s suit might, as a practical matter, impair the other tribes’ ability to protect their interests in their fishing rights, they should be joined in the initial action if feasible.[3]

An Early Question

  1. In cases like these, in which an absentee should be made a party to effectively adjudicate a case, why might it not be “feasible” to join the absentee in the case? (The explanations begin on p. 297.)

Parties to Be Joined under Rule 19(a)(1)(B)(ii)

Rule 19(a)(1)(B)(ii) provides for joinder of an absentee if adjudicating the case without her would expose one of the original parties to a risk of multiple or inconsistent obligations. The Makah Tribe case illustrates a situation in which this provision might apply. If the court orders the federal agency to increase the Makah’s fishing allotments in the tribe’s action, the other tribes’ allotments would be reduced. The agency might then be sued by other tribes claiming that their allotments were inadequate. In those cases, the court might order increased allotments inconsistent with the judgment in the Makah’s action. Thus, the agency would be whipsawed, subject to conflicting orders in two actions that could not both be implemented.

[2]. See Haas v. Jefferson National Bank of Miami Beach, 442 F.2d 394 (5th Cir. 1971).
[3]. See Makah Indian Tribe v. Verity, 910 F.2d 555 (9th Cir. 1990).

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