United States District Court, M.D. Georgia, Macon Division
T. TREADWELL, JUDGE.
Citizen's Bank and Trust Company, Inc. has filed a
three-part pre-answer motion. Doc. 4. For the reasons that
follow, it is DENIED.
MOTION TO DISMISS COMPLAINT FOR FAILURE TO JOIN RULE 19
Bank moves to dismiss the complaint for failure to join a
Rule 19 party-N.D. Horton, Jr.-pursuant to Federal Rule of
Civil Procedure 12(b)(7). Doc. 4 at 7-12. The complaint is
premised on the Bank making false representations to the U.S.
District Court for the Northern District of Georgia that it
had The Putnam Group, LLC's consent to sell certain of
its assets and apply the proceeds to an outstanding judgment
held by the Bank against several related third parties.
See generally Doc. 1. The Bank argues that it cannot
be liable because Horton purported to consent to the sale on
Putnam's behalf. Doc. 4 at 9-10. Accordingly, a key
question in this case will be whether Horton had actual or
apparent authority to act for Putnam in this matter. If
Horton did not, the Bank and/or Putnam almost certainly have
claims against him. The Bank accordingly begins with the
assumption that Horton is jointly liable for any of its
wrongdoing,  and concludes that Horton's intimate
involvement in the underlying transactions renders him a
required party under Rule 19(a).
19(a) provides that certain persons are required to be joined
where feasible. The rule gives three circumstances in
which a person will be a required party:
[I]f (A) in that person's absence, the court cannot
accord complete relief among existing parties; or (B) that
person claims an interest relating to the subject of the
action and is so situated that disposing of the action in the
person's absence may: (i) as a practical matter impair or
impede the person's ability to protect the interest; or
(ii) leave an existing party subject to a substantial risk of
incurring double, multiple, or otherwise inconsistent
obligations because of the interest.
Fed. R. Civ. P. 19(a)(1). The Court “must base its
decision on the pleadings as they appear at the time of the
proposed joinder; it is only after the party has been joined
that claims can be asserted against the party that are
unrelated to the issues for which joinder was
necessary.” Charles Alan Wright, Arthur R. Miller &
Edward H. Cooper, 7 Federal Practice and Procedure
§ 1604 (3d ed. Apr. 2017 update). If Putnam's
prosecution of its claims against the Bank in Horton's
absence does not implicate these concerns, the Bank's
Bank does not rely on any of these reasons. Rather, the Bank
puts forward a confusing argument based on an apparent
misunderstanding of Eleventh Circuit case law addressing
joint tortfeasors. Before diving into the Bank's
argument, some background is necessary. There is a
bright-line rule that joint tortfeasors are not required
parties under Rule 19(a). Temple v. Synthes Corp.,
498 U.S. 5, 7 (1990); Fed.R.Civ.P. 19(a) advisory committee
notes to 1966 amendments (“[A] tortfeasor with the
usual ‘joint-and-several' liability is merely a
permissive party to an action against another with like
liability.”). But the Eleventh Circuit has made some
exceptions to this rule, such as in Laker Airways, Inc.
v. British Airways, PLC, 182 F.3d 843, 848 (11th Cir.
1999), relied on by the Bank.
Bank, quoting Laker Airways, argues that
“‘a joint tortfeasor will be considered a
necessary party when the absent party emerges as an active
participant in the allegations made in the complaint that are
critical to the disposition of important issues in the
litigation' and ‘under the circumstances . . . are
more significant than those of routine joint
tortfeasor.'” Doc. 4 at 8 (quoting Laker
Airways, Inc., 182 F.3d at 848). The Bank continues by
asserting that the quantum of Horton's factual
involvement in the events underlying the complaint makes him
an active participant in the critical alleged events within
the Laker Airways exception and thus a required
party. Id. at 8-10.
doing this, the Bank has put the cart before the horse.
Without showing a valid Rule 19(a) consideration, there is no
need to address the Temple rule. This is confirmed
by Laker Airways and the cases it relies on, as well
as the subsequent case law cited by the Bank.
Rule 19(a) offers three, and only three, considerations, the
Court notes two considerations that are not on that list: (1)
the absentee's usefulness as a fact witness (even if the
absentee “emerges as an active participant in the
allegations made in the complaint that are critical to the
disposition of important issues in the
litigation”);and (2) considerations stemming from the
nature of joint-and-several liability, such as contribution
or indemnity rights by the named defendant against the
Bank does not explain why the Court cannot accord complete
relief to Putnam on its claims against the Bank if it
prevails. The Bank does not offer any competing claims as to
any existing property interests. The Bank does not explain
how proceeding in Horton's absence could subject it or
Horton to inconsistent obligations. The Bank does not
demonstrate any practical prejudice to either it or Horton.
Rather, the Bank's arguments demonstrate that Horton is a
material-perhaps key-fact witness. Docs. 4 at 9-10; 8 at 3-7.
Further, the Bank offers many practical reasons why joining
Horton could be convenient and otherwise a good idea.
Id. But all this has nothing to do with Rule 19(a).
The Bank's motion under Rule 12(b)(7) for failure to join
Horton as a Rule 19 party is accordingly DENIED.
MOTION TO TRANSFER
Bank seeks transfer of the case to the Northern District,
citing inconvenience to itself and its witnesses, the
Northern District's involvement in several related
actions by the Bank against Horton and Horton entities, as
well as the Northern District's involvement in the
consent orders at issue here. Doc. 4 at 12-17. But, as Putnam
notes, it brought the action in this District, its
documentary evidence and its witnesses are located in this
District, the auction occurred in this District, and it was
not a named party in the previous Northern District action.
Doc. 7 at 12-14. Putnam does not appear to be named in the
other Horton actions noted by the Bank. See Doc. 4
at 5. The Court is accordingly not convinced that ...