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UNITED STATES COURT OF APPEALS Filed 8/26/96 TENTH CIRCUIT

MAX LEE RISHELL, Curator of the person and estate of Kathleen Lacey, an incapacitated person, Plaintiff-Appellant, and MARRIOTT CORPORATION, as Plan Fiduciary of the Marriott Corporation Multi-Med Health Plan, Plaintiff-Intervenor,

v. JANE PHILLIPS EPISCOPAL MEMORIAL MEDICAL CENTER; JANE PHILLIPS EPISCOPAL HOSPITAL, INC., formerly Jane G. Phillips Memorial Hospital, Inc., doing business as Oklahoma Medical Collection Services; CHARLES WELLSHEAR, M.D., Defendants-Appellees. No. 95-5034

Appeal from the United States District Court for the Northern District of Oklahoma (D.C. No. 94-C-636-B)

Larry Alan Tawwater (Ben T. Lampkin and Jo L. Slama , with him on the brief),-2-

of Lampkin, McCaffrey & Tawwater, Oklahoma City, Ok lahoma, for PlaintiffAppellant. Inona Jane Harness (Haven Tobias, with her on the b riefs), of Pierce, Couch, Hendrickson, Baysinger & Green, Oklahoma City, Oklahoma, for DefendantAppellee Charles Wellshear, M.D. Stephen J. Rodolf (Barry L. Smith and Leslie C. Wee ks, with him on the briefs), of Barkley & Rodolf, Tulsa, Oklahoma, for Defendant -Appellee Jane Phillips Episcopal Hospital.

Before SEYMOUR , Chief Judge, PORFILIO , and TACHA , Circuit Judges.

SEYMOUR , Chief Judge.-3-

This case is before us a second time for review of a pretrial ruling. In the previous appeal, we reversed the district court’s d etermination that diversity jurisdiction was lacking and remanded for further p roceedings on the jurisdictional issue. Rishell v. Jane Phillips Epi scopal Memorial Medical Ctr. , 12 F.3d 171 (10th Cir. 1993). On remand the district court overruled defendants’ motion to dismiss for lack of diversity jurisdictio n, but dismissed the action under Fed. R. Civ. P. 19 for failure to join indispensabl e parties. Plaintiff again appeals and we reverse.

I Plaintiff Max Lee Rishell is the curator of the per son and estate of Kathleen Lacey. Mrs Lacey exists in a permanent vegetative state as a result of her failed attempt to commit suicide while she was hospitalize d in defendant institution and under the care of defendant Dr. Charles Wellshear. Mr. Rishell brought this negligence action to recover damages resulting fromMrs. Lacey’s injuries. This case has already had a tortuous procedural his tory. It was originally filed in the Western District of Oklahoma. After t hat court dismissed for lack of diversity jurisdiction, Mr. Rishell filed this appe al and, together with Mrs. Lacey’s husband and children, also filed an action in state court to prevent perceived statute-of-limitations problems. Defendants filed a motion with this court to dismiss the appeal, arguing for the first time that Mrs. Lacey’s husband-4-

and children are indispensable parties whose joinde r would destroy diversity jurisdiction. We summarily denied the motion and d irected the parties to proceed with the oral argument scheduled some ten days late r. After we reversed and remanded, defendants moved in district court to dis miss for failure to join indispensable parties. While this motion was pendi ng, the court transferred the action to the Northern District of Oklahoma, which granted the motion. In this appeal, Mr. Rishell contends that this court’s order denying defendants’ motion to dismiss for lack of indispens able parties constitutes the law of the case, and that the district court therefore had no authority to consider the merits of that issue. Mr. Rishell argues in the al ternative that Mrs. Lacey’s husband and children are not indispensable parties and that the lower court abused its discretion in holding to the contrary. We conc lude that the doctrine of the law of the case does not apply in the circumstances her e. We further hold, however, that Mrs. Lacey’s husband and children are not indi spensable parties. Accordingly, we again reverse and remand for further proc eedings.

II We first address and reject Mr. Rishell’s assertionthat the district court was precluded by the law of the case from consideri ng the indispensable party issue. As we have noted, defendants’ motion filed in this court seeking dismissal for failure to join indispensable parties was summarily denied without discussion.1 In rejecting Mr. Rishell’s argument on this issue, the district court pointed

to the fact that defendants’ motion was filed less than two weeks before oral argument was scheduled. The court concluded that this “eleventh hour” motion was not well received on the basis of timing ratherthan on the basis of substance. -5- “Law of the case principles do ‘not bar a district court from acting unless an appellate decision has issued on the merits of the claim sought to be precluded.’” Wilmer v. Board of County Comm’rs , 69 F.3d 406, 409 (10th Cir. 1995) (quoting United States v. Caterino , 29 F.3d 1390, 1395 (9th Cir. 1994)). Mr. Rishell correctly argues that law of the case applies to issues that are resolved implicitly as well as to those decided exp licitly. We have articulated three circumstances in which an issue will be consi dered implicitly decided for purposes of the law of the case. See Guidry v. Sheet Metal Workers Local No. 9 , 10 F.3d 700, 707 (10th Cir. 1993), modified on othe r grounds , 39 F.3d 1078 (10th Cir. 1994), cert. denied , 115 S. Ct. 1691 (1995). The doctrine applies whe n: (1) resolution of the issue was a necessary step inresolving the earlier appeal; (2) resolution of the issue would abrogate the prior decision and so must have been considered in the pr ior appeal; and (3) the issue is so closely related to the earlier appeal its resolution involves no additional consideration and so might h ave been resolved but unstated. Id. The district court determined that our summary de nial did not fall within any of these circumstances and that we therefore did no t implicitly decide the

indispensable party issue. 1-6-

Mr. Rishell does not argue that the district court applied these factors incorrectly. He contends instead that our summary denial implicitly decided the issue because it was presented in the motion we den ied. Although we acknowledge that the three factors set out above ar e not exhaustive, see id. at 707 n.5, we nevertheless rejected an analogous argumentin Wilmer . There the defendant argued that because a court must always s atisfy itself of its jurisdiction, a decision on the merits is an implicit ruling thatjurisdiction is present. We disagreed, holding that even though the jurisdictio nal issue had been recognized by the dissenting opinion, “such a theoretical cons ideration should not be confused with the implicit but actual determination necessary to invoke the law of the case doctrine.” Wilmer , 69 F.3d at 409 (emphasis in original). Here, as in Wilmer , the fact that a court of appeals should raise the issue of indispensable parties sua sponte does not in and of itself requir e the imputation of an implicit determination of the issue. We conclude that the d istrict court was not barred from addressing the indispensable party issue on re mand, and we therefore turn to the merits of that issue.

III “We review a district court’s decision as to whethe r a party is indispensable for an abuse of discretion.” Resolution Trust Corp . v. Stone , 998 F.2d 1534, 1549 (10th Cir. 1993). In so doing, we “must consider ‘ whether the decision maker-7-

failed to consider a relevant factor, whether he [o r she] relied on an improper factor, and whether the reasons given reasonably support the conclusion.’” Kickapoo Tribe of Indians in Kansas v. Babbitt , 43 F.3d 1491, 1497 (D.C. Cir. 1995)(quoting Johnson v. United States , 398 A.2d 3654, 365 (d.C. 1979)) (alteration in original). The standards set out in Rule 19 for assessing whether an absent party is indispensable are to be applied “ina practical and pragmatic but equitable manner.” Francis Oil & Gas, Inc. v. Exxo n Corp. , 661 F.2d 873, 878 (10th Cir. 1981). See also Provident Tradesmens Bank & Trust Co. v. Patterson , 390 U.S. 102, 106-07 (1968). “The moving party has the burden of persuasion in arguing for dismissal.” Makah Indian Tribe v. Veri ty , 910 F.2d 555, 558 (9th Cir. 1990). Determining whether an absent party is indispensabl e requires a two-part analysis. See id. ; Francis Oil & Gas , 661 F.2d at 877-78. The court must first determine under Rule 19(a) whether the party is nec essary to the suit and must therefore be joined if joinder is feasible. If the absent party is necessary but cannot be joined, the court must then determine und er Rule 19(b) whether the party is indispensable. If so, the suit must be di smissed. Whether Mrs. Lacey’s husband and children are neces sary parties under Rule 19(a) requires assessment of three factors. T he court must consider (1) whether complete relief would be available to the p arties already in the suit, (2) whether the absent party has an interest related to the suit which as a practical2 Rule 19(a) provides in pertinent part :

A person who is subject to service of process and w hose joinder will not deprive the court of jurisdiction over the subj ect matter of the action shall be joined as a party in the action if (1) in the person’s absence complete relief cannot be accorded among th ose already parties, or (2) the person claims an interest relat ing to the subject of the action and is so situated that the disposition of the action in the person’s absence may (i) as a practical matter impa ir or impede the person’s ability to protect that interest or (ii) l eave any of the persons already parties subject to a substantial risk of in curring double, multiple, or otherwise inconsistent obligations by reason of the claimed interest. Fed. R. Civ. P 19(a). We consider parts 2(i) and 2 (ii) separately in our analysis.

3 The district court relied on Aguilar v. Los Angele s County , 751 F.2d 1089 (9th Cir. 1985), and Lopez v. Martin Luther King, J r. Hosp. , 97 F.R.D. 24 (C.D. Cal. 1983), in finding prejudice to the absent part ies. To the extent that those cases are contrary to the authorities and analysis we have set out in the text on this issue, we do not find them persuasive. Indeed, the dissenting opinion in Aguilaris more convincing and in keeping with the weight of authority. -8- matter would be impaired, and (3) whether a party a lready in the suit would be subjected to a substantial risk of multiple or inco nsistent obligations. 2 In ruling that the absent parties here are necessary, the dis trict court concluded that a disposition in this action might impair or impede their ability to protect their own interests. See Aplt. App. vol. III, at 594. 3 We are not convinced that, as a practical matter, t he interests of the absent parties will be impaired by this suit. It is true that under Oklahoma law the interest of the husband in recovering damages for l oss of consortium arising from injuries to his wife is derivative of the wife’s ri ght to recover, and that the4 The Oklahoma courts have consistently described a spouse’s loss of

consortium as a derivative interest. See, e.g., Walker v. City of Moore , 836 P.2d 1289, 1292 n.4 (Okla.1992). Those courts have also held that children may maintain a cause of action for loss of parental con sortium which contains many of the same elements that make up the spousal claim. See Williams v. Hook , 804 P.2d 1131, 1132 n.1 (Okla 1990). Although the Oklahoma courts have not directly addressed the issue, we presume that the c hildren’s claim is derivative as well. -9- husband would therefore be barred in the state court action by an adverse determination here. See Laws v. Fisher , 513 P.2d 876 (Okla. 1973). 4 However, the prejudice to the relevant party’s interest “may be minimized if the absent party is adequately represented in the suit.” Makah Indi an Tribe , 910 F.2d at 558. See also Wichita & Affiliated Tribes of Oklahoma v. Hodel , 788 F.2d 765, 774-75 (D.C. Cir. 1986); Heckman v. United States , 224 U.S. 413, 444-45 (1912); 3A James Moore, Moore’s Federal Practice ¶19.07[2.-1], at 19-106 (2d ed. 1995) (“the fact that the absent person may be bound by t he judgment does not of itself require his joinder if his interests are fully repr esented by parties present”). Mr. Rishell, as Mrs. Lacey’s curator, has an intere st in establishing a right to recover for her injuries that is virtually ident ical to the interest of her husband and children in establishing their derivative claim . Indeed, Mr. Rishell presented an affidavit to the district court executed by Mr. Lacey in which Mr. Lacey acknowledges and agrees to the likely impairment of his interest and that of the children. The district court discounted the affidavit because Mr. Lacey had not signed a waiver agreeing to drop the state court cl aim, relying on Saratoga Dev.5 The district court did not directly address the af fidavit in the context of assessing prejudice to defendants. As we discuss i n reviewing the court’s Rule 19(b) analysis, however, the court was clearly conc erned with prejudice to the defendants arising from their need to defend two su its, and accordingly gave primary emphasis to the judicial economy of decidin g all claims in one action. As we set out in text, this concern cannot be made dis positive under the circumstances here. -10- Corp. v. United States , 777 F. Supp. 29 (D.D.C. 1991). The court’s reliance upon Saratogawas unwarranted in two regards. First, the court in that case did not require a waiver; the court merely observed that the execu tion of a waiver eliminated any possible prejudice. Id. at 34. Second and more significantly, in requiring a written waiver here the district court applied a mechanical approach rather than assessing the circumstances pragmatical ly. If, as a practical matter, the interests of the absent parties will be adequat ely represented, their interests will not be impaired and a waiver becomes a mere te chnicality. 5 Consequently, we are not persuaded defendants carried their burde n of persuasion on the necessary party issue. Even assuming they did, however, we do not agree wi th the district court that the absent parties are indispensable under Rul e 19(b). Determining whether an absent party is indispensable requires a court t o consider: first, to what extent a judgment rendered in the pe rson’s absence might be prejudicial to the person or those alreadyparties; second, the extent to which, by protective provisions in th e judgment, by the shaping of relief, or other measures, the prejudice can be lessened or avoided; third, whether a judgment rendered in the person’s absence will be adequate; fourth, whether the plaintiff wil l have an adequate6 We reject as sheer speculation and otherwise inapp ropriate defendants’

argument that a state court jury would award damage s to the husband and children separately in an amount greater than would be award ed in a single action. We likewise reject plaintiff’s argument that a state c ourt jury would be more sympathetic to defendants. See Walsh v. Centeio , 692 F.2d 1239, 1244 n.5 (9th Cir. 1982) (loss of the benefit of diversity jurisd iction will not alone prevent a dismissal under Rule 19(b)). -11- remedy if the action is dismissed for nonjoinder. Fed. R. Civ. P. 19(b). The district court based it s decision to dismiss primarily on the fourth factor, the availability of an alternati ve forum. In so doing, it misperceived the circumstances in which this factormay be viewed as dispositive. Rule 19(b) analysis requires that the factors be ev aluated in a practical and equitable manner, and be given the appropriate weig ht. As we have discussed above, prejudice to the absent parties is not a con cern here because of the identity of interests between Mr. Rishell and those parties. Moreover, prejudice to defendants is minimized due to the likelihood that a verdict in their favor in this action would bar recovery by the absent parties in the state action, while a verdict against them would not itself increase their exposu re. 6 The first factor therefore weighs against dismissal. Because prejudice here i s minimal, we need not be concerned with the second factor, which addresses the availability of means for lessening or avoiding prejudice. The third factor requires consideration of whether an adequate remedy can be awarded without t he absent party. Mr. Rishell, should he prevail, would be able to recove r damages on behalf of Mrs.-12-

Lacey for her injuries despite the lack of her husb and and children as parties. The third factor therefore also counsels against dismis sal. We turn then to the fourth factor and assess whethe r the fact that Mr. Rishell may have an adequate remedy in state court requires dismissal of this action. The district court gave this factor dispo sitive weight, observing that some courts have viewed this consideration as the m ost important one of the four. Most courts have done so, however, only when an alt ernative forum is not available. “The availability of an alternative for um is primarily of negative significance under Rule 19. The absence of an alte rnative forum would weigh heavily, if not conclusively against dismissal whil e the existence of another forum would not have as significant an impact in favor of dismissal.” Pasco Int’l (London) Ltd. v. Stenograph Corp. , 637 F.2d 496, 501 n.9 (7th Cir. 1980). Hence, courts “‘do not view the availability of an alternative remedy, standing alone, as a sufficient reason for deciding that the action should not proceed among the parties before the court.’” Id. at 501 (quoting Bio-Analytical Servs., Inc. v. Edgewater Hosp., Inc. , 565 F.2d 450, 453 (7th Cir. 1977), cert. denied , 439 U.S. 820 1978)). “[T]he potential existence of ano ther forum does not, in and of itself, outweigh a plaintiff’s right to the forum o f his or her choice. Some additional interest of either the absent party, the other properly joined parties or entities, or the judicial system must also be prese nt.” Local 670, United Rubber Workers v. International Union, United Rubber Worke rs , 822 F.2d 613, 622 (6th-13-

Cir. 1987), cert. denied , 484 U.S. 1019 (1988). AccordPasco , 637 F.2d at 501. “[J]udicial economy and convenience do not in thems elves provide grounds for dismissal.” Boone v. General Motors Acceptance Corp. , 682 F.2d 552, 554 (5th Cir. 1982). We agree with these courts. The district court sho uld not have given dispositive weight to the availability of an altern ative forum. Mr. Rishell, as plaintiff, has an interest recognized by federal law in the forum of his choice, which is not outweighed here by the interests of th e absent parties, defendants, or the judicial system. Accordingly, we conclude the district court abused its discretion in dismissing Mr. Rishell’s action underRule 19.
We REVERSE the judgment of the district court and REMAND for further proceedings.