9.3 Parties and Third-Party Actions

A case can have the right theory and the wrong name on the caption. Domain 1 groups parties and third-party actions because both are caption-and-rule problems: who must be here, who may be here, and how the label changes when someone new is dragged in.

Real party in interest and capacity (Rule 17)

FRCP 17(a) says an action must be prosecuted in the name of the real party in interest. That is the person who, under the governing substantive law, holds the right being asserted. An assignee who owns the claim is often the real party. An executor, administrator, guardian, bailee, or trustee of an express trust may sue in that representative capacity without joining the person for whose benefit the action is brought. If the action is not brought in the name of the real party, the court may not dismiss until a reasonable time has been allowed for ratification, joinder, or substitution — and that correction then relates back.

Capacity (Rule 17(b)) is a different question: does this person or entity have the legal ability to sue or be sued? An individual’s capacity is determined by the law of the individual’s domicile. A corporation’s capacity is determined by the law under which it was organized. For other entities (partnerships, unincorporated associations), Rule 17(b) points to the law of the state where the court is located, with a special provision that a partnership or other unincorporated association may sue or be sued in its common name to enforce a federal right. Minors and incompetent persons must sue or be sued through a representative, next friend, or guardian ad litem (Rule 17(c)). The paralegal’s flag is a complaint filed in the name of a decedent, a dissolved corporation, or a child with no representative.

Joinder of claims and joinder of parties

Rule 18(a) — joinder of claims. A party asserting a claim, counterclaim, crossclaim, or third-party claim may join as many claims as it has against an opposing party. The claims need not arise from the same transaction. A plaintiff may plead a 2019 contract claim and a 2024 auto-accident claim against the same defendant in one federal action (SMJ and venue still have to work for each). Rule 18 is about claims, not about dragging in extra people.

Rule 19 — required joinder of parties. Some absentees are so tightly bound to the action that the court must, if feasible, join them. Rule 19(a) asks whether, in that person’s absence, the court cannot accord complete relief among existing parties, or whether the absentee claims an interest that the action may as a practical matter impair, or that may leave an existing party subject to a substantial risk of double or inconsistent obligations. If the person should be joined and can be joined (jurisdiction, venue, service), the court orders joinder. If the person cannot be joined, Rule 19(b) asks whether the action should proceed among the existing parties or be dismissed — the old “indispensable party” problem. A Rule 12(b)(7) motion is how a defendant raises a Rule 19 defect.

Rule 20 — permissive joinder of parties. Plaintiffs may join, or be joined as defendants, when (1) they assert (or there is asserted against them) any right to relief arising out of the same transaction, occurrence, or series of transactions or occurrences, and (2) any question of law or fact common to all of them will arise. Rule 20 is optional. Misjoinder of parties is not a ground for dismissing an entire action (Rule 21); the court may add or drop a party or sever a claim.

Intervention and interpleader

Intervention (Rule 24) is how a nonparty asks to join an existing case. Intervention of right (Rule 24(a)) is required when a federal statute confers an unconditional right, or when the applicant claims an interest relating to the property or transaction, disposing of the action may as a practical matter impair that interest, and existing parties do not adequately represent it. Permissive intervention (Rule 24(b)) is discretionary when a statute confers a conditional right or when the applicant has a claim or defense that shares a common question of law or fact. A timely motion is required. Intervention is not impleader: the outsider is knocking, not being dragged.

Interpleader is how a stakeholder facing multiple claimants to the same fund or property gets them into one case and stops double recovery. Rule 22 interpleader rides on ordinary SMJ (often diversity between the stakeholder and the claimants, with the ordinary amount-in-controversy rules). Statutory interpleader (28 U.S.C. § 1335) is friendlier: diversity among the claimants (minimal diversity), an amount of $500 or more, and nationwide service under § 2361. A stakeholder who admits the money is not theirs deposits it and often steps back. Do not call every multi-defendant case an interpleader.

Impleader / third-party practice (Rule 14)

Rule 14(a) is the blueprint’s third-party device. A defending party may, as third-party plaintiff, serve a summons and complaint on a nonparty who is or may be liable to it for all or part of the claim against it. Classic uses are indemnity, contribution, and a contractual hold-harmless. Impleader is not “anyone else the plaintiff could have sued.” A defendant who merely says “the nonparty is the real wrongdoer, so I am innocent” has stated a defense, not a Rule 14 claim, unless that nonparty may have to reimburse the defendant.

Timing. The third-party plaintiff may file the third-party complaint without leave within 14 days of serving its original answer. After that, it needs the court’s leave. The new party is served with a Rule 4 summons and the third-party complaint — original process, not a Rule 5 courtesy copy. The third-party defendant may assert defenses to the third-party claim, defenses the third-party plaintiff has to the original claim, claims against the original plaintiff (if they arise out of the same transaction), and may implead still another party.

The original plaintiff may then assert claims against the third-party defendant arising out of the same transaction (Rule 14(a)(3)). A plaintiff against whom a counterclaim is asserted may also implead (Rule 14(b)). Leave, prejudice, delay, and SMJ over the third-party claim (often supplemental jurisdiction under 28 U.S.C. § 1367) are the attorney’s call; the paralegal’s call is the 14-day leave trigger, the new summons, and the caption.

Class actions at a high level (Rule 23)

A class action lets one or more representative parties sue (or be sued) on behalf of a class. Rule 23(a) has four prerequisites, all of which must be met:

1. Numerosity — the class is so numerous that joinder of all members is impracticable
2. Commonality — there are questions of law or fact common to the class
3. Typicality — the representatives’ claims or defenses are typical of the class
4. Adequacy — the representatives will fairly and adequately protect the class

The action must also fit a Rule 23(b) type: (b)(1) incompatible standards or impairment of absentees, (b)(2) injunctive or declaratory relief appropriate to the class as a whole, or (b)(3) common questions predominate and a class action is superior (the usual damages class, with notice and opt-out). Certification is a court order, not a caption the plaintiff may award itself. Settlement or dismissal of a certified class needs court approval (Rule 23(e)). Know the four 23(a) words and that predominance/superiority live in 23(b)(3). Deep class-action practice is not the PCCE’s job.

Substitution of parties (Rule 25)

Rule 25 replaces a party when the original person can no longer proceed:

• Death. If the claim survives, a motion to substitute the proper successor or representative may be made within 90 days after a statement noting the death is served. If the claim does not survive (some personal-injury statutes), the action abates as to that party.
• Incompetency. Same 90-day substitution idea after a statement noting the incompetency.
• Transfer of interest. The action may continue by or against the original party unless the court, on motion, substitutes or joins the transferee.
• Public officers. When a public officer sued in an official capacity dies, resigns, or otherwise ceases to hold office, the successor is automatically substituted.

Substitution is not joinder and not impleader. It keeps the same claim alive in the right name.

How captions change when third-party defendants are added

Captions are a paralegal product. Get them wrong and the clerk rejects the filing or, worse, a later default is entered against the wrong label.

• Original case: Paula Plaintiff v. Dana Defendant
• Dana files a counterclaim: the caption usually stays Paula Plaintiff v. Dana Defendant. Paula is still the plaintiff; Dana is still the defendant. The body of the answer carries the counterclaim.
• Dana files a crossclaim against co-defendant Cara: Paula Plaintiff v. Dana Defendant and Cara Coparty. Cara is a defendant and a crossclaim defendant, not a third-party defendant.
• Dana impleads Theo Supplier: Paula Plaintiff v. Dana Defendant / Third-Party Plaintiff v. Theo Supplier, Third-Party Defendant. Dana now wears two hats. Theo is not automatically a defendant to Paula’s original claim unless Paula asserts a Rule 14(a)(3) claim.
• After substitution of an estate: Estate of Paula Plaintiff, by Executor Pat v. Dana Defendant.
• After a class is certified, the caption often adds “individually and on behalf of all others similarly situated,” matching the certification order.

Worked path. A retailer is sued for a burn injury from a coffee maker. Within 10 days of serving its answer, the retailer files a third-party complaint against the overseas manufacturer for contractual indemnity and serves a Rule 4 summons. That is Rule 14, filed without leave because it is inside 14 days of the original answer. The caption becomes Injured Buyer v. Retailer, Third-Party Plaintiff v. Manufacturer, Third-Party Defendant. If the retailer had waited 30 days, the same paper would need a motion for leave. If the retailer instead sued a co-defendant already in the case, that paper would be a crossclaim, and the caption would not say “third-party.” If the buyer’s parent tried to sue in the injured adult child’s name without being the real party, Rule 17(a) would require ratification, joinder, or substitution — not a Rule 14 summons.