3.2 Joinder of Claims & Parties, Intervention & Interpleader

3.2 Joinder of Claims & Parties, Intervention & Interpleader

Joinder questions on the MBE almost always have two steps. First, does a Federal Rule allow the claim or party to be added? Second, does the court have subject-matter jurisdiction over what was added, either independently or through supplemental jurisdiction under 28 U.S.C. § 1367?

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1. Joinder of Claims (Rule 18(a))

Under Federal Rule of Civil Procedure 18(a), a party asserting a claim to relief as an original claim, counterclaim, crossclaim, or third-party claim may join, as independent or alternative claims, as many claims as it has against an opposing party.

• No Transactional Nexus Required: Unlike many state practice rules, Rule 18(a) imposes no requirement that joined claims arise from the same transaction or occurrence. A plaintiff may sue a defendant for a federal antitrust violation and join an entirely unrelated state law breach of contract claim and a separate tort claim for conversion.
• Subject-Matter Jurisdiction Limitation: Rule 18 is a procedural rule of pleading only; it does not confer subject-matter jurisdiction. Each claim joined under Rule 18 must independently satisfy federal question jurisdiction (28 U.S.C. § 1331) or diversity of citizenship jurisdiction (28 U.S.C. § 1332), or fall within supplemental jurisdiction under 28 U.S.C. § 1367. Because unrelated claims do not share a "common nucleus of operative fact," an unrelated state law claim cannot invoke supplemental jurisdiction and must independently meet diversity and the >$75,000 amount in controversy requirement.

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2. Counterclaims and Crossclaims (Rule 13)

When a defendant is sued, it may possess claims of its own against the plaintiff or against a co-defendant.

Compulsory Counterclaims (Rule 13(a))

A counterclaim is compulsory if it arises out of the transaction or occurrence that is the subject matter of the opposing party's claim, and does not require adding another party over whom the court cannot acquire jurisdiction.

• The Waiver Consequence: If a defendant fails to assert a compulsory counterclaim in its answer, the claim is permanently waived and barred from being asserted in any subsequent federal or state court action.
• Supplemental Jurisdiction: Because compulsory counterclaims arise out of the same transaction or occurrence, they automatically share a common nucleus of operative fact and fall within supplemental jurisdiction under 28 U.S.C. § 1367(a). Even if the compulsory counterclaim involves state law and does not meet the $75,000 amount in controversy threshold, the federal court has jurisdiction over it.
• Exceptions: A claim is not compulsory if it was already the subject of another pending action when the lawsuit commenced, or if the opposing party's claim was brought by attachment or other process that did not confer personal jurisdiction.

Permissive Counterclaims (Rule 13(b))

A counterclaim is permissive if it does not arise out of the same transaction or occurrence as the opposing party's claim. A defendant has total discretion to plead a permissive counterclaim in the pending suit or preserve it for a separate lawsuit.

• Independent SMJ Required: Because permissive counterclaims lack a transactional relationship to the main action, they do not share a common nucleus of operative fact and cannot qualify for supplemental jurisdiction. A permissive counterclaim must independently satisfy federal question jurisdiction or diversity jurisdiction (complete diversity and >$75,000 amount in controversy).

Crossclaims (Rule 13(g))

A crossclaim is a claim asserted by one party against a co-party (e.g., plaintiff against plaintiff, or defendant against defendant). Under Rule 13(g):

• Transactional Nexus Required: A crossclaim must arise out of the transaction or occurrence that is the subject matter of the original action or of a counterclaim, or relate to property that is the subject matter of the original action.
• Always Permissive: Crossclaims are never compulsory. A co-party is never penalized for choosing not to assert a crossclaim in the current proceeding.
• Jurisdictional Treatment: Because crossclaims must satisfy the transactional nexus test, they qualify for supplemental jurisdiction under § 1367(a). However, under Rule 18(a), once a party asserts a valid crossclaim arising from the same transaction or occurrence, that party may then join any other unrelated claims it has against that co-party, provided those unrelated claims have an independent jurisdictional basis.

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3. Permissive Joinder of Parties (Rule 20)

Multiple plaintiffs may join together in one action, or multiple defendants may be joined in one action, if two conditions are met (Rule 20(a)):

1. Same Transaction or Occurrence: The claims arise out of the same transaction, occurrence, or series of transactions or occurrences; and
2. Common Question of Law or Fact: Any question of law or fact common to all plaintiffs or defendants will arise in the action.

Jurisdictional Nuances in Diversity Cases

In diversity actions, joining parties under Rule 20 creates jurisdictional complexities under 28 U.S.C. § 1367(b):

• Complete Diversity: Complete diversity must exist between all plaintiffs and all defendants. Under § 1367(b), in diversity-only cases, the court does not have supplemental jurisdiction over claims by plaintiffs against persons joined as defendants under Rule 20 if joining them would destroy complete diversity.
• Amount in Controversy (Exxon Mobil Corp. v. Allapattah Services): If at least one named plaintiff asserts a claim exceeding the $75,000 jurisdictional threshold, the court may exercise supplemental jurisdiction over co-plaintiffs joined under Rule 20 whose claims arise from the same controversy but fail to meet the $75,000 threshold, provided complete diversity is maintained.

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4. Compulsory Joinder of Parties (Rule 19)

Rule 19 addresses situations where an absent person should be forced into the litigation because their absence prevents full resolution or threatens substantial injustice. The analysis proceeds through a strict three-step framework:

+-----------------------------------------------------------------------------------+
|                         RULE 19 COMPULSORY JOINDER ANALYSIS                       |
+-----------------------------------------------------------------------------------+
| Step 1: Is the Absentee a "Required Party" under Rule 19(a)?                      |
| - Complete relief cannot be accorded among existing parties without absentee; OR   |
| - Absentee has an interest that may practically be impaired or impeded; OR        |
| - Absence leaves existing party subject to substantial risk of multiple or        |
|   inconsistent obligations.                                                       |
| [NOTE: Joint tortfeasors are NOT required parties.]                               |
+-----------------------------------------------------------------------------------+
                                     |
                                     v
+-----------------------------------------------------------------------------------+
| Step 2: Is Joinder Feasible?                                                      |
| - Can personal jurisdiction be obtained over the absentee?                        |
| - Will joining the absentee preserve subject-matter jurisdiction (diversity/venue)?|
| IF YES: Court orders the absentee joined as a party.                              |
| IF NO: Proceed to Step 3.                                                         |
+-----------------------------------------------------------------------------------+
                                     |
                                     v
+-----------------------------------------------------------------------------------+
| Step 3: Should the Action Proceed or Be Dismissed under Rule 19(b)?               |
| Court weighs four equity factors:                                                 |
| 1. Extent of prejudice to absentee or existing parties;                           |
| 2. Extent to which prejudice can be lessened by protective provisions in judgment;|
| 3. Adequacy of a judgment rendered in absentee's absence;                          |
| 4. Whether plaintiff has an adequate remedy if action is dismissed (state court).  |
| IF DISMISSED: The absentee is deemed an "INDISPENSABLE PARTY."                   |
+-----------------------------------------------------------------------------------+

Classic MBE Trap: Multiple joint tortfeasors are permissive parties, not required parties. Under Temple v. Synthes Corp. (1991), a plaintiff is not required to join all joint tortfeasors in a single action, and a defendant cannot compel the joinder or dismissal of a lawsuit under Rule 19 merely because a joint tortfeasor was omitted.

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5. Third-Party Practice / Impleader (Rule 14)

Impleader allows a defending party (acting as a third-party plaintiff) to bring a non-party (the third-party defendant) into the lawsuit. Under Rule 14(a)(1), impleader is strictly limited to non-parties who are or may be liable to the defendant for all or part of the plaintiff's claim against the defendant.

The Derivative Liability Requirement

Impleader is not a mechanism for a defendant to point at someone else and say "it was him, not me." That is a defense, not an impleader claim. Impleader requires derivative liability, meaning the third-party defendant's liability depends on the defendant being found liable to the plaintiff. The classic grounds for impleader are:

• Contribution: Right of one joint tortfeasor to recover a proportional share of damages from another tortfeasor;
• Indemnity: Complete shifting of financial responsibility by contract or operation of law (e.g., insurer indemnifying an insured, employer seeking indemnity from an employee).

Procedure and Timing

• A defendant may file a third-party complaint as of right within 14 days after serving its original answer.
• After 14 days, the defendant must obtain leave of court on motion with notice to all parties.

Subject-Matter Jurisdiction in Impleader

• Defendant v. Third-Party Defendant: Because the claim is for contribution or indemnity arising from the main claim, it falls within supplemental jurisdiction under § 1367(a). The citizenship of the third-party defendant is irrelevant to diversity between the original plaintiff and defendant.
• Plaintiff v. Third-Party Defendant (Rule 14(a)(3)): Under 28 U.S.C. § 1367(b), in a diversity-only action, supplemental jurisdiction does not extend to claims asserted by the original plaintiff against a third-party defendant. The plaintiff's claim against the third-party defendant must independently satisfy federal question or diversity jurisdiction.

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6. Interpleader: Rule 22 vs. Statutory Interpleader

Interpleader allows a person holding property or funds (the stakeholder) subject to conflicting claims by multiple adverse parties (the claimants) to force the claimants into a single proceeding, avoiding multiple liability and inconsistent judgments. Federal law provides two distinct interpleader vehicles:

+-----------------------------------------------------------------------------------+
|                    RULE 22 INTERPLEADER VS. STATUTORY INTERPLEADER                 |
+-----------------------------------------------------------------------------------+
| Feature                 | Rule 22 Interpleader          | Statutory Interpleader  |
|                         | (Rule Interpleader)           | (28 U.S.C. § 1335)      |
+-------------------------+-------------------------------+-------------------------+
| Basis of Jurisdiction   | Standard Federal Question     | Special Diversity Statute|
|                         | or Diversity (§ 1332)         |                         |
+-------------------------+-------------------------------+-------------------------+
| Diversity Requirement   | Complete diversity between    | Minimal diversity: any  |
|                         | stakeholder and all claimants | two claimants diverse   |
+-------------------------+-------------------------------+-------------------------+
| Amount in Controversy   | Exceeding $75,000             | $500 or more            |
+-------------------------+-------------------------------+-------------------------+
| Personal Jurisdiction   | Standard Rule 4 limits        | Nationwide service of   |
| & Service of Process    | (state long-arm boundary)     | process (§ 2361)        |
+-------------------------+-------------------------------+-------------------------+
| Venue                   | Standard § 1391 (residence of | District where any      |
|                         | defendant or claim origin)    | claimant resides (§ 1397|
+-------------------------+-------------------------------+-------------------------+
| Deposit Requirement     | Discretionary with court      | MANDATORY deposit of    |
|                         |                               | fund/property or bond   |
+-------------------------+-------------------------------+-------------------------+

Key MBE Distinction: In statutory interpleader, the citizenship of the stakeholder is completely irrelevant. The court looks solely at the claimants; so long as any two adverse claimants are citizens of different states, minimal diversity is satisfied.

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7. Intervention (Rule 24)

Intervention lets a nonparty ask to join a pending case.

Intervention of Right (Rule 24(a))

On a timely motion, the court must permit anyone to intervene who:

1. Is given an unconditional right to intervene by a federal statute; or
2. Claims an interest relating to the property or transaction that is the subject of the action, is so situated that disposing of the action may as a practical matter impair or impede the movant's ability to protect that interest, unless existing parties adequately represent that interest.

Permissive Intervention (Rule 24(b))

On a timely motion, the court may permit anyone to intervene who has a conditional right to intervene by federal statute or who has a claim or defense that shares a common question of law or fact with the main action. A government officer or agency may be permitted to intervene when a party's claim or defense is based on a statute or regulation it administers. In exercising discretion, the court must consider whether intervention will unduly delay or prejudice the adjudication of the original parties' rights.

Procedure and Jurisdiction

• The motion must be served on the parties, state the grounds, and be accompanied by a pleading that sets out the claim or defense for which intervention is sought (Rule 24(c)).
• Timeliness is judged by how far the case has progressed, why the movant waited, and whether delay prejudices existing parties.
• In a case founded solely on diversity, § 1367(b) withholds supplemental jurisdiction over claims by persons seeking to intervene as plaintiffs under Rule 24 when exercising jurisdiction would be inconsistent with § 1332. Such an intervenor needs complete diversity and the amount in controversy on its own.

8. Misjoinder, Consolidation, and Separate Trials

• Misjoinder (Rule 21): Misjoinder of parties is not a ground for dismissing an action. On motion or on its own, the court may add or drop a party on just terms and may sever any claim against a party.
• Consolidation (Rule 42(a)): When actions before the court involve a common question of law or fact, the court may join them for hearing or trial, consolidate them, or issue other orders to avoid unnecessary cost or delay.
• Separate trials (Rule 42(b)): For convenience, to avoid prejudice, or to expedite and economize, the court may order a separate trial of one or more issues or claims, while preserving any federal right to a jury trial.
• Additional parties to counterclaims and crossclaims (Rule 13(h)): Rules 19 and 20 govern adding a person as a party to a counterclaim or crossclaim.

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Summary Table: Joinder Mechanisms: Rules, Requirements, and SMJ Implications