Filing a Missing Persons Report

• Pages: 22-22
• Date: 01 October 2024
• Author: Daniel P. Elms
• Subject Matter: Civil Law

ederal Rule of Civil Procedure 12(b) is mostly intui-

tive. It provides for the early dismissal of cases that

lack a baseline level of factual or legal support, that

are led in the wrong court or venue, or that fail to

give the defendant proper notice of the nature of the suit

that has been led against it. But Rule 12(b)(7) provides a

basis for dismissal with different stripes. That rule requires

dismissal of a case for failure to join a party as required by

Federal Rule of Civil Procedure 19—the so-called “necessary”

or “indispensable” party rule.

Rule 12(b)(7) is unique in at least two respects. First, it

is the only Rule 12(b) provision that expressly incorporates

another procedural rule to guide its operation. This means

that the jurisprudence for dismissal based on failure to join

a necessary party has evolved under two separate, if overlap-

ping, procedural rules. Second, while all the other Rule 12(b)

provisions are concerned about the parties in the case, Rule

12(b)(7) and Rule 19 are more worried about persons who are

not involved in the case. Indeed, the core purpose of Rule 19

is to protect the legitimate interests of absent parties and to

discourage duplicate litigation.

The Case of the M issing Defen dant

Rule 19 provides that a person must be joined as a party if:

“(A) in that person’s absence, the court cannot accord com-

plete relief among existing parties; or (B) that person claims

an interest relating to the subject to the action and is so situ-

ated that disposing of the action in that person’s absence

may: (i) as a practical matter impair or impede that person’s

ability to protect that interest; or (ii) leave an existing party

subject to a substantial risk of incurring double, multiple, or

otherwise inconsistent obligations because of the interest.”

Predicate to all of this, however, Rule 19 says never mind if

it is not “feasible” to join the missing party—that is, if the

person is not subject to service of process (i.e., beyond the

personal jurisdiction of the court), would deprive the court of

subject matter jurisdiction, or has a valid objection to venue.

If a plaintiff fails to include a party to a case that Rule 19

would require, then the defendant can seek dismissal of the

case under Rule 12(b)(7).

But failure to join a necessary party is not the end of the

story. Rule 19 further provides that if a party who is required

to be joined if feasible cannot be joined, the court then must

determine “in equity and good conscience” whether the case

should nevertheless proceed without that party. Rule 19 pro-

vides several factors for the court to consider in making this

determination, focusing on the risk of prejudice to the missing

party if the case proceeds, the adequacy of a judgment entered

without the missing party, and whether the plaintiff would

have an adequate remedy if the case were dismissed.

This Was No Accident

For most plaintiffs and their lawyers, the typical path is to

include every possible defendant in a case. But there are stra-

tegic reasons why a plaintiff might instead decide to omit a

seemingly necessary party. For example, the plaintiff might

exclude a defendant that is not completely diverse, thereby

preserving the right to federal court jurisdiction. Or the omit-

ted defendant might by hyper-litigious, with deep pockets, and

known for scorched-earth litigation tactics—an adversary the

plaintiff might prefer to avoid. In some instances, a plaintiff

might leave a party out of the lawsuit in hopes of creating or

keeping an ally against the parties who are sued. But motiva-

tions aside, when a plaintiff fails to include a necessary party,

Rule 12(b)(7) becomes a defendant’s weapon.

Don Your Detective Hat

Unfortunately (or not), Rule 19 does not lend itself to uniform

application across diverse types of cases. In Provident Bank v.

Patterson, the U.S. Supreme Court reminded that “whether a

person is ‘indispensable,’ that is, whether a particular lawsuit

must be dismissed in the absence of that person, can only be

determined in the context of particular litigation.” Thus, prac-

titioners looking for hard and fast rules about who are and

are not necessary parties will be frustrated. But examples may

shed some light.

Circumstances found to warrant Rule 12(b)(7) and Rule 19

dismissal for failing to join a necessary party include:

• The plaintiff sued its contracting counterparty’s direc-

tors and ofcers for alleged breach, but failed to sue

the contracting party itself;

• A patent infringement suit that did not include as a

plaintiff the co-owner of the patent;

• The plaintiff brought fraud claims relating to the issu-

ance of a life insurance policy, but failed to include as

a party the subsequent assignee of that policy.

Other courts, by contrast, have refused to dismiss cases,

even when persons who could have an interest in the outcome

of the litigation were omitted:

• The plaintiff sued the manufacturer of an allegedly

defective spinal implant, but did not include as defen-

dants the hospital or the surgeon who implanted it;

• The plaintiff sued the driver and insurance carrier of a

vehicle involved in a fatal crash, but did not include as

a defendant the owner of the car and policyholder;

• The plaintiff failed to include all of its insurance carri-

ers in a declaratory judgment claim against just one of

those carriers regarding coverage.

If a plaintiff fails to include all necessary parties to a suit,

Rule 12(b)(7) provides a mechanism to dismiss it. This rst

question to ask is, broadly speaking, whether there are per-

sons or entities who should be party to this case but are not.

And does the absence of those parties create or exacerbate any

potential risk to the parties who are in the case? If yes, or even

if maybe, a careful study of Rule 19 is warranted.

Filing a Missing Persons Report

By Daniel P. Elms, Litigation News Immediate Past Editor-in-Chief

FALL 2024 • VOL. 5 0 NO. 1

22 | ABA LITIGATION SECTIO N

CIVIL PROCEDURE UPDATE

Published in Lit igation News Volume 5 0, Number 1, Fall 2024. © 2 024 by the America n Bar Associati on. Reproduced wi th permission. A ll rights reserv ed. This informati on or any portion t hereof may not be copi ed or

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