Friday, April 3, 2015

A Truly Indispensable Joint Tortfeasor?

Dreamweaver Andalusians, LLC v. Prudential Ins. Co. of Am., No. B253227 (D2d6 Mar. 3, 2015)

Defendants’ hillside collapsed into their neighbor’s property, allegedly because they had altered water courses and removed vegetation when they expanded their agricultural operations. Defendants were required to obtain planning approval from a Ventura County planning agency. For reasons unexplained in the opinion, the engineering work on that application was performed by an employee of Natural Resource Conservation Service, which is part of the federal government, and which was not joined as a defendant. Defendants moved to dismiss under Code of Civil Procedure § 389 for failure to join an indispensable party.

The trial court found that, under the circumstances, the United States was both a necessary and an indispensable party and that it couldn’t be joined because the federal government is not amenable to suit in state court. Plaintiffs refiled their case in federal court, adding the government as a defendant. But they also took this appeal.

The court of appeal comes out of the gate emphasizing the abuse of discretion standard of review and notes that reversal is merited only when “the ruling was arbitrary, capricious, whimsical, or exceeded the bounds of reason.” While the subject of some enlightened criticism  that is an accurate statement of the way the standard has been articulated. But there’s a key aspect of the standard missing: A trial court abuses its discretion when it errs on the law in the context of making a discretionary decision. See Linder v. Thrifty Oil Co., 23 Cal. 4th 429, 435 (2000). That error doesn’t need to be arbitrary or irrational; it just needs to be wrong. We’ll get to that in a minute.

Under § 389, the court employs a two-part test to decide whether to dismiss for failure to join an indispensable party. First, the court determines whether the absent party is “necessary.” Section 389(a) defines that as one of two things: (1) someone whose absence could prevent complete relief from being granted; or (2) someone with an interest in the subject of the litigation; and who either (i) would have that interest potentially impaired through non-joinder; or (ii) whose non-joinder could lead a current party subject to risk of multiple liability. 

If a necessary party can be joined, the court can order joinder. But if the party can’t be joined, the question is whether that party is “indispensable,” i.e., whether “equity and good conscience” make it unfair to let the litigation proceed without that party in the case. Section 389(b) has a number of factors to address that issue. If the party is truly indispensable then the case gets dismissed without prejudice.

The court here, relying on a federal case from the 11th Circuit—since § 389 was basically copied from Fed. R. Civ. P. 19, federal precedent is viewed as particularly persuasive—holds that the trial court had the discretion to decide that NRCS was necessary. There are a bunch of cases—both California and U.S. Supreme Court—that say that a joint tortfeasor is not a necessary party. But the court reads them as saying just that a trial court is not required to find that joint and several = necessary. In the court’s opinion (and in the cited 11th Cir. case) a trial court can still find a joint tortfeasor to be necessary, provided it “emerges as an active participant in the allegations made in the complaint that are critical to the disposition of the important issues in the litigation.” So as long as the allegedly joint and several tortfeasor is a really important tortfeasor, the trial court can find that it is a necessary party.

And on indispensability, plaintiff raised essentially the same argument: that NRCS wasn’t indispensable because it was just a joint tortfeasor.  Obviously, the standard for indispensability has to be higher than the standard to necessity—axiomatically, every indispensable party is necessary by virtue of the structure of the rule—so making an identical argument on the second prong was probably not the best idea.


From a practical standpoint, affirming a dismissal in this case makes a great deal of sense. Plaintiff didn’t join what was arguably the most at fault party, that party couldn’t be joined because it is a federal agency that can’t be sued in state court, and by the time this appeal was decided, plaintiff was already proceeding apace in a federal court case that joined the federal defendant. Less work for the state courts! More efficiency! No harm, no foul!

That said, it seems like the trial court applied an incorrect legal standard, which goes back to my point about the standard of review. The key cases finding that joint and several liability does not equal necessity all reverse trial courts for finding that J&S defendants are necessary. See Temple v. Synthes Corp., 498 U.S. 5, 7 (1990) (per curiam) (holding that an allegedly negligent hospital and doctor who installed a medical device were not, as a matter of law, necessary parties in a plaintiff’s case against the device manufacturer; explaining that “a tortfeasor with the usual joint-and-several liability is merely a permissive party to an action against another with like liability”); Van Zant v. Apple Inc., 229 Cal. App. 4th 965, 975 (2014) (reversing trial court determination that joint and several putative defendant was necessary party under § 389); Countrywide Home Loans, Inc. v. Superior Court, 69 Cal. App. 4th 785, 799 (1999) (granting writ reversing trial court determination that joint tortfeasor was a necessary party; noting that de novo standard applied to legal determinations interpreting the statute; holding that “a tortfeasor is merely a permissive party to an action against another with like liability”). So it shouldn’t be too controversial to say that a trial court’s erroneous legal ruling that a joint tortfeasor was a necessary party was reversible under the abuse of discretion standard.

Mind you, these cases don’t say that a joint tortfeasor can never be a necessary party. But in order to satisfy the statute, a joint tortfeasor would need to nonetheless fall into one of the categories in § 389(a). I’m not in a Visio mood right now, so I’m not going to draw you a Venn diagram. But I can agree as a conceptual matter that there are joint tortfeasors who might satisfy § 389(a). But it would be a pretty narrow slice. 

Joint tortfeasors don’t naturally fall into the categories set forth in the statute, which mostly addresses absent defendants necessary for complete non-monetary relief and absent plaintiffs who might cause double-liability. In particular, what the statute does not seem to encompass are joint and several tortfeasors who seem to be more culpable than the others—precisely the unjoined defendants that this case finds are necessary. In particular, the court here does not give a particularly satisfying explanation of why NRCS is different in kind as opposed to just degree.

Further, the practical considerations that likely motivated the court were expressly rejected by the Countrywide decision. Section 389 does not mandate joinder for the “general convenience of the courts by preventing a multiplicity of suits.” That is what seemed to happen here. None of the risks presented in § 389(a) are entailed if the court here decided the liability of the joined defendants, while a federal court determined NRCS’s liability to plaintiff. 

Finally, there’s an interesting issue in this case that was not raised by the parties or the court. The entire § 389 setup is conditioned on the proviso that joining the absent party would not “deprive the court of jurisdiction.” Generally speaking, that language was likely wholesale imported from Federal Rule 19. In federal cases, joining a non-diverse party could destroy jurisdiction under 28 U.S.C. § 1332. But California doesn’t have those limitations, so the proviso is kind of a vestigial organ. Nonetheless, there’s a 1979 per curiam Supreme Court opinion suggesting that failure to join a party over which the court does not have jurisdiction would trip the proviso and deprive jurisdiction. Citizens Task Force on Sohio v. Bd. of Harbor Comrs., 23 Cal. 3d 812, 814 (1979) (per curiam) (adding party that can’t be sued would “deprive court of jurisdiction” and thus that party could not be deemed necessary under § 389). That’s certainly worth raising if a federal party is argued to be necessary in a state court case.

And now, in honor of plaintiff, your daily moment of yacht rock....

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