2. Helzberg v. Valley

[CIVIL PROCEDURE – SUBJECT MATTER JURISDICTION – JOINDER]

HELZBERG’S DIAMOND, INC. V. VALLEY SHOPPING CENTER, INC. - US COURT OF APPEALS / EIGHTH CIRCUIT - 564 F.2D 816

RULE OF LAW: A person does not become indispensable to an action to determine rights under a contract simply because that person’s rights or

obligations under an entirely separate contract will be affected by the result of the action.

JOINDER – RULE 19

Rule 19(a) - Persons Required to Be Joined if Feasible.

(1) Required Party. A person who is subject to service of process and whose joinder will not deprive the court of subject-matter jurisdiction must be

joined as a party if:

(A) in that person's absence, the court cannot accord complete relief among existing parties; or

If a person who is required to be joined if feasible cannot be joined, the court must determine whether, in equity and good conscience, the action should

proceed among the existing parties or should be dismissed. The factors for the court to consider include:

(1) the extent to which a judgment rendered in the person's absence might prejudice that person or the existing parties;

(2) the extent to which any prejudice could be lessened or avoided by:

(A) protective provisions in the judgment;

(B) shaping the relief; or

(C) other measures;

(3) whether a judgment rendered in the person's absence would be adequate; and

(4) whether the plaintiff would have an adequate remedy if the action were dismissed for nonjoinder.

[NOTE ON ANALYSIS: (1) is the third party required/necessary? (2) if not, is the party indispensable or the lawsuit can move forward also without this

entered a third lease agreement with a full-line jewelry store, Lord's Jewelers (Lord's), Helzberg filed a complaint in federal court based on

diversity jurisdiction seeking injunctive relief to restrain Valley West from breaching the lease agreement.

court denied the motion and granted Helzberg preliminary injunctive relief. Valley West appealed.

2. ISSUE

Does a person become indispensable to an action simply because that person’s right or obligations under a separate contract will be affected by

the result of the action?

3. HOLDING

No. Rule 19 of the Federal Rules of Civil Procedure states that when a person cannot be made a party to a lawsuit, the court must determine

whether the action should proceed without that particular party, or whether it should be dismissed.

(ii) APPLICATION TO THE CASE

[FACTORS TO BE CONSIDERED] The factors include:

1) whether a judgment rendered in that person's absence would be prejudicial to him;

Lord’s is not prejudiced by the district court’s granting of injunctive relief. Even if Valley West terminates Lord’s leasehold interest

as a result of the preliminary injunction, Lord’s still will retain all of its rights under its lease with Valley West. None of Lord’s

rights or obligations will be determined by adjudication of the present suit.

2) the extent to which the prejudice can be avoided;

District court offered to Lord’s the opportunity to join the proceeding, which Lord’s declined.

3) whether a judgment rendered in the person's absence will be adequate;

Judgment would be adequate.