Opinion ID: 74153
Heading Depth: 2
Heading Rank: 1

Heading: Georgia’s Indispensability

Text: Rule 19 provides a two-part test for determining whether an action should proceed in a nonparty’s absence. The first question is whether complete relief can be afforded in the present procedural posture, or whether the nonparty’s absence will impede either the nonparty’s protection of an interest at stake or subject parties to a risk of inconsistent obligations. See Fed. R. Civ. P. 19(a)(1)-(2). Only if we can answer this threshold question “yes,” and if the nonparty cannot be joined (say for jurisdictional reasons), do we go to step two. See Temple v. Synthes Corp., Ltd., 498 U.S. 5, 8, 111 S. Ct. 315, 316 (1990). Step two asks us to determine, “in equity and good conscience,” whether the action should go forward as cast. See Fed. R. Civ. P. 19(b). The Rule provides us four factors to consider. See id.; see also Laker Airways, Inc. v. British Airways, PLC, 182 F.3d 843, 848 (11th Cir. 1999). The Supreme Court has instructed us in this step-two analysis to eschew formalism in favor of flexible 9 practicality. See Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 118-19, 88 S. Ct. 733, 742-43 (1968). A question common to both steps of the analysis here is whether Georgia would likely be bound by a judgment declaring Dobbs and Depot Streets to be public and enjoining CSX to remove the barriers on those passageways. Because the matters at issue here primarily concern property law, which is principally a state domain, and the federal courts would not have diversity jurisdiction over an action with Georgia as a party, we expect that any future litigation over Depot and Dobbs Streets would be in Georgia courts. Georgia courts apply Georgia’s law of judgments to res judicata and collateral estoppel questions, even when the prior judgment is federal. See, e.g., Chilivis v. Dasher, 225 S.E.2d 32, 35 (Ga. 1976); Hardy v. Georgia Baptist Health Care Sys., ___ S.E.2d ___, 239 Ga. App. 596, ___ (1999); Willis v. National Mortgage Co., 509 S.E.2d 403, 405 (Ga. Ct. App. 1998). In Georgia, “[c]ollateral estoppel precludes the re-adjudication of an issue that has previously been litigated and adjudicated on the merits in another action between the same parties or their privies.” Waldroup v. Greene County Hosp. Auth., 463 S.E.2d 5, 7 (Ga. 1995). “Privies are in law so connected with a party to the judgment as to have such an identity of interest that the party to the judgment represented the same legal right.” Brewer v. Schacht, 509 S.E.2d 378, 381 (Ga. Ct. App. 1999). At first blush, one might think that a tenant has stepped into the owner’s shoes, and may 10 thus bind the owner, when the tenant defends a prescriptive easement and declaratory judgment action like this one on the grounds that his usufruct, which is coextensive with the landlord’s estate, is superior to the plaintiff’s claimed interest. But the Georgia Supreme Court has held to the contrary: When a third party sues a tenant on a claim challenging the tenant’s right to possession, and the tenant asserts a right identical to the landlord’s, the judgment between the third party and the tenant does not bind the landlord. See Mathews v. Brown, 219 S.E.2d 701, 703 (Ga. 1975). What that is likely to mean here is that any favorable judgment Marietta secures against CSX will not later preclude Georgia from asserting a right, as fee-simple owner of the railroad’s right of way, to close the same streets. Even though any judgment here will not likely bind Georgia, for two reasons the first step of Rule 19 analysis may well be satisfied, and Georgia may thus be a necessary party to this action. First, the district court in this action cannot afford complete relief to Marietta, in a temporal sense: even if Marietta succeeds in having CSX remove the barriers on Dobbs and Depot Streets, a future tenant (or the State itself) could re-erect the barriers without fear of contempt. A possibility thus lingers that this action’s end will not end the story. Second, Georgia has practical interests at stake here. Whether or not Georgia is bound by the judgment in this action, when we adjudicate CSX’s rights we may be adjudicating Georgia’s because Georgia has 11 conveyed to CSX its power to remove encumbrances. Even a nonbinding adjudication casts doubt on Georgia’s right to remove the encumbrance in question. Cf. Schutten v. Shell Oil Co., 421 F.2d 869, 874 (5th Cir. 1970) (potential creation of a mere cloud on title is sufficient prejudice to make a party’s joinder desirable). If for these reasons Georgia is a necessary party, the next question is whether this action can proceed without it. With the aid of Rule 19’s four factors, we can conclude “in equity and good conscience” here that this action may continue without Georgia. Fed. R. Civ. P. 19(b). Rule 19(b) asks first how prejudicial a judgment without Georgia will be to Georgia, Marietta and CSX. Georgia, as we have discussed, will not be bound by the judgment in this action, so this litigation will not permanently deprive Georgia of any interest. Nor would Georgia be subject, as far as we can tell, to any resulting liability. The lease provides no warranty that the W&A right of way is free of lawful encumbrances. Finally, we reject Georgia’s argument that it will be severely prejudiced if Marietta wins, because the City will have judicially bypassed the legislative route prescribed by state law for municipalities to seek access to state property. Maybe so, but the issue here is whether the public has acquired the right to cross the W&A at Dobbs and Depot Streets, under Georgia law; if Marietta wins under Georgia law, it means that Georgia law permits just this kind of bypass, and Georgia has suffered no cognizable 12 prejudice. From these points, we conclude that prejudice to Georgia is limited to the practical matters we noted above that give Georgia an interest to begin with. Those weigh light on Rule 19’s scales because of the lack of any obvious and immediate consequences to the State. With Georgia out of the picture, Marietta too will find this litigation to be less than perfect, but the deficiencies are minor. If Marietta procures a judgment requiring CSX to remove the chain-link fences from the Dobbs and Depot Street crossings, that judgment will bind only CSX. Because the lease explicitly reserves to Georgia the nonexclusive right to sue to free the W&A of adverse uses, the State itself could at some time in the future theoretically have Depot and Dobbs Streets closed. But there is no suggestion in the record or the briefs that Georgia would do such a thing. Moreover, Marietta’s failure to seek to join the State from the outset suggests that Marietta is not concerned with such an eventuality. Finally, there is CSX. Georgia argues that CSX faces the risk of conflicting obligations: if a court order forces it to remove the chain-link from Depot and Dobbs Streets, it will then violate the lease by breaching its “duty to clear obstructions to the operation of the railroad.” (Ga.’s Supp. Br. at 6.) The lease’s language does not support this assertion. The cite that Georgia provides is to CSX’s right to remove obstructions: “Lessee may remove and cause to be discontinued, as permitted by law, any or all encroachments . . . .” (R.1-4-Unnumbered Ex. art. 14.) Obviously, that 13 CSX “may” remove encroachments does not mean that it must. Georgia also asserts that CSX will be liable to the State for permitting the creation of a new crossing. The problem here is that Dobbs and Depot Streets were undisputedly open to pedestrian traffic in 1986, when Georgia and CSX entered the present lease. So it is hard to see how CSX’s loss in this litigation would improperly open a “new” crossing. Having reviewed these assertions of prejudice, we are persuaded that the possibility of prejudice alone to any interested person here is small enough that the first factor of Rule 19 does not weigh heavily against proceeding without Georgia. On the other hand, the second and third elements — whether a court may reduce prejudice with a well-crafted judgment, and whether such a judgment would be adequate —point strongly toward proceeding with the present action. What Marietta wants, as we read the complaint, is for CSX to take down its chain-link fences and not put them back up.6 A judgment ordering CSX to do that would not implicate any of Georgia’s asserted interests except in the abstract sense that along the way Georgia’s right to exclude the public from Dobbs and Depot Streets would have been adjudicated, even if not bindingly. Cf. Kentucky v. Garner, 896 S.W.2d 10, 13-15 (Ky. 1995) (applying Kentucky’s Rule 19 to determine that the United States was not an indispensable party to an action to remove gates, erected by a licensee, from 6 Puzzlingly, Marietta insists in its supplemental briefing that it seeks merely notice and a hearing before Dobbs and Depot Streets are closed for good. The complaint contains no such claim, however, and Marietta cites no Georgia cases suggesting that any of the present state-law causes of action carry such due-process rights as a remedy. 14 blocking claimed easements across U.S. property). The expected judgment would thus minimally implicate Georgia’s interests. It would, furthermore, satisfy Marietta’s immediate need to have pedestrian access across the tracks. The final factor (whether Marietta would have an adequate remedy elsewhere) is perhaps the most important factor here, and it compels going forward. While Marietta could certainly litigate this claim in the Georgia courts — as it sought to do before CSX removed the action — federal proceedings have now progressed, at CSX’s instance and without timely intervention from Georgia, from discovery through final judgment. Marietta’s quest for the simple injunctive relief it wants has so far taken more than three years, and if the action must be remanded to state court and Georgia joined (assuming it does not have sovereign immunity), we can expect further delays. Thus, while the parties’ arguments give us no reason to question the adequacy of a state-court proceeding in a strict legal sense, the delay of sending litigation that is so advanced to another forum counsels going forward. Cf. Provident Tradesmans Bank & Trust Co., 390 U.S. at 111, 88 S. Ct. at 739 (court of appeals addressing Rule 19 issue for the first time on appeal must take into account the action’s degree of progression in this forum). Three of Rule 19’s factors thus point toward proceeding without Georgia; the first factor weighs only lightly in favor of dismissal. We thus conclude that Georgia is not an indispensable party to this action. 15