Opinion ID: 163863
Heading Depth: 1
Heading Rank: 3

Heading: Judgment-Fund Claims

Text: 18 The district court dismissed Plaintiffs' judgment-fund claims because an indispensable person, the Tribe, could not be joined as a party. Federal Rule of Civil Procedure 19 requires the district court to perform a two-step analysis before dismissing a claim for failure to join an indispensable person. See Rishell v. Jane Phillips Episcopal Mem'l Med. Ctr., 94 F.3d 1407, 1411 (10th Cir.1996). First, the court must determine whether the absent person is necessary. Id. A person is necessary under Rule 19(a) if: 19 (1) in the person's absence complete relief cannot be accorded among those already parties, or (2) the person claims an interest relating 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 impair or impede the person's ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of the claimed interest. 20 Fed.R.Civ.P. 19(a). A necessary person must be joined as a party if joinder is feasible. Id. If a necessary person cannot be joined, the court proceeds to the second step, determining whether in equity and good conscience the action should proceed among the parties before it, or should be dismissed, [because] the absent person ... [is] indispensable to the litigation at hand. Fed.R.Civ.P. 19(b). 21 In Davis I we affirmed the district court's determination that the Tribe was a necessary person. We held that [t]he Tribe's claimed interest in determining eligibility requirements and adopting ordinances embodying those requirements is neither fabricated nor frivolous. The disposition of Plaintiffs' Judgment Fund Award claim in the Tribe's absence will impair or impede the Tribe's ability to protect its claimed interest. 192 F.3d at 959. 22 The Tribe's sovereign immunity prevented its joinder as a party. Thus, the district court's task on remand was to determine whether the Tribe was indispensable to this litigation or whether the case could proceed without it. In making this determination, the court was to consider, in a practical and equitable manner, Rishell, 94 F.3d at 1412, the following factors: 23 [F]irst, to what extent a judgment rendered in the person's absence might be prejudicial to the person or those already parties; second, the extent to which, by protective provisions in the 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; [and] fourth, whether the plaintiff will have an adequate remedy if the action is dismissed for nonjoinder. 24 Fed.R.Civ.P. 19(b). This list of factors is not, however, exclusive. See Wichita & Affiliated Tribes of Okla. v. Hodel, 788 F.2d 765, 774 (D.C.Cir.1986) (the four factors are not rigid, technical tests, but rather guides to the overarching equity and good conscience determination (internal quotation marks omitted)); 7 Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1608 at 91 (3d ed.2001) (the list in [Rule 19(b)] does not exhaust the possible considerations the court may take into account; it simply identifies those that will be most significant in most cases). 25 A district court's indispensability determination under Rule 19 will not be disturbed absent an abuse of discretion. See Rishell, 94 F.3d at 1410-11. Its underlying legal conclusions, however, are reviewed de novo. Davis I, 192 F.3d at 957. The court abuses its discretion in making an indispensability determination when it fails to consider a relevant factor, relies on an improper factor, or relies on grounds that do not reasonably support its conclusion. See Rishell, 94 F.3d at 1411; cf. Thunder Basin Coal Co. v. Southwestern Pub. Serv. Co., 104 F.3d 1205, 1211 (10th Cir.1997) (weight to be accorded each factor is matter for district court's discretion). 26 In Provident Tradesmens Bank and Trust Co. v. Patterson, 390 U.S. 102, 88 S.Ct. 733, 19 L.Ed.2d 936 (1968), the Supreme Court described the Rule 19(b) factors as representing four distinct interests: (1) the interest of the outsider whom it would have been desirable to join, id. at 110, 88 S.Ct. 733; (2) the interest of the defendant in avoiding multiple litigation,... inconsistent relief, or sole responsibility for a liability he shares with another, id. ; (3) the interest of the courts and the public in complete, consistent, and efficient settlement of controversies[,] ... settling disputes by wholes, whenever possible.... id. at 111, 88 S.Ct. 733; and (4) the plaintiff's interest in having a forum in which to present the claims, id. at 109, 88 S.Ct. 733. 27 In this case the district court weighed the Rule 19(b) factors and found that the Tribe was an indispensable person with respect to Plaintiffs' judgment-fund claims. It explained that while the lack of an alternate forum weigh[ed] heavily in favor of retaining the case, Davis II, 199 F.Supp.2d at 1178, the prejudice to the absent Tribe, the Court's inability to lessen the prejudice[,] and the absence of an adequate remedy without the Tribe's joinder [because of the possibility that Defendants would be subjected to repeated litigation and conflicting judgments] prevent[ed] proceeding in equity and good conscience [without the Tribe], id. In other words, the court found that the first three factors supported dismissal to such an extent that the fourth factor was overcome. 28 Plaintiffs contend that the district court erred in both its analysis of the individual Rule 19(b) factors and in its weighing of those factors. First, they argue that the district court failed to recognize that the Tribe's interest — which Plaintiffs characterize as the right to exclude its black citizens from enjoyment of the Judgment Fund, Aplt. Br. at 16 — is not a legally cognizable interest, id. Plaintiffs assert that given the absence of a legally cognizable interest, either (1) the Tribe was never a necessary person and consequently cannot be regarded as an indispensable one, or (2) in weighing the first Rule 19(b) factor — potential prejudice to the absent person or the parties — the court should have recognized that an interest that is not legally cognizable cannot be legally prejudiced. Also with respect to the first factor, they argue that the district court should not have considered potential prejudice to Defendants because such prejudice is entirely speculative. Regarding the second Rule 19(b) factor — whether prejudice can be lessened or avoided — Plaintiffs claim that the absence of prejudice moots the issue. 29 In addition, Plaintiffs take issue with the district court's analysis of the third factor — whether a judgment rendered in the person's absence will be adequate. Fed.R.Civ.P. 19(b). They contend that a judgment in the Tribe's absence would be adequate because in the event that the BIA stopped disbursing the funds to the Tribe, one of two things would happen: either the Tribe would quickly change its requirements, or it would no longer have funds to distribute in a discriminatory manner. In either event, the discriminatory disbursement would cease immediately and unequivocally. As for the fourth factor — whether adequate relief can be obtained in an alternate forum — Plaintiffs assert that while the district court correctly concluded that this factor weighed against dismissal, it placed far too little emphasis on its conclusion. Finally, they claim that the district court erroneously failed to consider equitable factors not specifically listed in Rule 19(b). We proceed to discuss each challenge. 30

31 Plaintiffs challenge the district court's conclusion that the Tribe's interest would be prejudiced if the case were to proceed in its absence. They describe the Tribe's interest as an interest in excluding the Estelusti from the Judgment Fund, Aplt. Br. at 21, and argue that such an interest is legally frivolous when evaluated in light of the district court's alleged findings that (1) Congress intended the Judgment Fund to benefit all members of the Seminole Nation, including the Estelusti, and (2) the BIA colluded with certain Tribal leaders to exclude the Estelusti from enjoyment of the Judgment Fund. Aplt. Br. at 15. They assert that the illegitimacy of the interest is significant because (1) without a legitimate interest, the Tribe is not a necessary person and thus cannot be an indispensable one; and (2) an illegitimate interest cannot be legally prejudiced under the first Rule 19(b) factor. 32 We reject the challenge. Plaintiffs' argument amounts to asking us to decide that the Tribe's interest is not worthy of consideration because its position is wrong on the merits. But Rule 19's concern is with a  claimed interest. Fed. R.Civ.P. 19(a) (emphasis added). [T]he underlying merits of the litigation are irrelevant to a Rule 19 inquiry, Citizen Potawatomi Nation v. Norton, 248 F.3d 993, 998 (10th Cir.2001), at least unless the claimed interest is patently frivolous. Davis I, 192 F.3d at 959 (internal quotation marks omitted). In Davis I we responded as follows to virtually the same argument that Plaintiffs make here: 33 Plaintiffs' narrow interpretation of the term legally protected interest inappropriately presupposes Plaintiffs' success on the merits. Under the interpretation advanced by Plaintiffs, the Tribe would have no legally protected interest in the monies used to fund Judgment Fund Programs that exclude the Estelusti Seminoles only if Plaintiffs prevail on the merits. Consequently, if this court adopted Plaintiffs' interpretation of the term legally protected interest, the district court would be required to determine the merits of Plaintiffs' Judgment Fund Award claim before ruling on Defendants' motion to dismiss. Such an approach is untenable because it would render the Rule 19 analysis an adjudication on the merits. 34 Davis I, 192 F.3d at 958. Davis I made this statement in the context of Rule 19(a). We are now addressing the issue in the context of Rule 19(b). The same reasoning applies here, however, because the prejudice inquiry under Rule 19(b) is essentially the same as the inquiry under Rule 19(a)(2)(i) into whether continuing the action without a person will, as a practical matter, impair that person's ability to protect his interest. Enter. Mgmt. Consultants, Inc. v. Hodel, 883 F.2d 890, 894 n. 4 (10th Cir.1989). Even if our prior decision on the Rule 19(a) issue is not strictly speaking the law of the case with respect to the Rule 19(b) issue, see Weston v. Harmatz, 335 F.3d 1247 (10th Cir.2003), we see no reason to abandon here the cogent reasoning in Davis I. 35 We note that in some cases the interests of the absent person are so aligned with those of one or more parties that the absent person's interests are, as a practical matter, protected. See, e.g., Sac & Fox Nation of Mo. v. Norton, 240 F.3d 1250, 1260 (10th Cir.2001); Kansas v. United States, 249 F.3d 1213, 1227 (10th Cir.2001). Here, however, the district court explicitly found that [t]he BIA is not representing the Seminole Nation's interest in this lawsuit, Davis II, 199 F.Supp.2d at 1176, and Plaintiffs do not challenge that finding on appeal.
36 Plaintiffs argue that the district court should not have considered the risk of subjecting Defendants to inconsistent legal obligations because such obligations are entirely speculative. Specifically, they point out that the BIA need not comply with a Tribal regulation that might conflict with a ruling in favor of the Estelusti. More important, however, is that the Tribe would not be bound by the judgment in this case and could initiate litigation against Defendants if the BIA withheld funds. Thus, Defendants might well be prejudiced by multiple litigation or even inconsistent judgments if this litigation were to proceed without the Tribe. See Patterson, 390 U.S. at 110, 88 S.Ct. 733 (defendant's interest in avoiding multiple litigation is proper consideration under Rule 19(b)). 37 This possibility is not speculative. Plaintiffs themselves recognize the substantial likelihood of subsequent litigation when they state (while addressing another issue): [T]he Tribe reacts swiftly when the BIA cuts off federal funding.... The notion that [the] Tribe will not react to losing access to the $56 million Judgment Fund is absurd. Aplt. Br. at 26. 38 We conclude that the district court did not abuse its discretion in determining that under Rule 19(b), both the Tribe and Defendants have interests that would likely be prejudiced by litigation in the Tribe's absence. 39
40 In their opening brief Plaintiffs raise only one challenge to the district court's analysis of the second Rule 19(b) factor — the extent to which any prejudice can be lessened or avoided. They argue that the factor is irrelevant because any prejudice to the Tribe is not legally cognizable. As previously discussed, this argument goes to the merits of their claim, rather than the potential harm to the Tribe if Defendants lose. Their challenge, therefore, must fail. We find no error in the district court's determination that this factor supports treating the Tribe as an indispensable party. (Although Plaintiffs in their reply brief also argue that any prejudice could be easily prevented by the fashioning of a decree against the BIA only, Reply Br. at 10-11, we do not address that argument because it was not timely raised. See Stump v. Gates, 211 F.3d 527, 533 (10th Cir.2000) (This court does not ordinarily review issues raised for the first time in a reply brief.).) 41
42 Plaintiffs contend that the third Rule 19(b) factor — whether a judgment rendered in the person's absence will be adequate — did not support dismissal because the court could have afforded them complete relief without joining the Tribe. Plaintiffs, however, misconstrue the nature of the adequacy inquiry. The Supreme Court has explained that Rule 19(b)'s third factor is not intended to address the adequacy of the judgment from the plaintiff's point of view. See Patterson, 390 U.S. at 111, 88 S.Ct. 733 ([T]he plaintiff, who himself chose both the forum and the parties defendant, will not be heard to complain about the sufficiency of the relief obtainable against them.). Rather, the factor is intended to address the adequacy of the dispute's resolution. See id. The concern underlying this factor is not the plaintiff's interest but that of the courts and the public in complete, consistent, and efficient settlement of controversies, that is, the public stake in settling disputes by wholes, whenever possible. Id. As previously discussed, a judgment rendered in the Tribe's absence could well lead to further litigation and possible inconsistent judgments. That judgment, therefore, would be inadequate. Consequently, the district court appropriately found that the third Rule 19(b) factor favored dismissal. 43
44 In addressing the fourth Rule 19(b) factor, the district court found that Plaintiffs would not have an adequate remedy if this case were dismissed. The court noted that Plaintiffs could pursue their claim through the Tribe's legislative or judicial bodies, [but] recogniz[ing] the reality of these options, ... it will be futile for the [Estelusti] to seek adjudication in these tribal forums. Davis II, 199 F.Supp.2d at 1180. Defendants do not challenge this finding. The issue here, then, is not whether an adequate remedy can be found elsewhere, but only the weight to be given this factor. 45 Plaintiffs assert that the fourth Rule 19(b) factor is so important that after having found that it weighed against a finding of indispensability, the district court should have retained the case despite its findings with respect to factors one through three. We have described the fourth factor as perhaps [the] most important, Sac & Fox, 240 F.3d at 1260, and have stated that [t]he absence of an alternative forum ... weigh[s] heavily, if not conclusively against dismissal, Rishell, 94 F.3d at 1413 (internal quotation marks omitted). 46 On the other hand, we have also recognized a strong policy ... favor[ing] dismissal when a court cannot join a tribe because of sovereign immunity. Davis I, 192 F.3d at 960. In fact, we have stated that [w]hen ... a necessary party ... is immune from suit, there is very little room for balancing of other factors set out in Rule 19(b), because immunity may be viewed as one of those interests compelling by themselves. Enter. Mgmt., 883 F.2d at 894 (internal quotation marks omitted). The D.C. Circuit has explained: 47 Although we are sensitive to the problem of dismissing an action where there is no alternative forum, we think the result is less troublesome in this case than in some others.... This is not a case where some procedural defect such as venue precludes litigation of the case. Rather, the dismissal turns on the fact that society has consciously opted to shield Indian tribes from suit without congressional or tribal consent. 48 Wichita & Affiliated Tribes of Oklahoma, 788 F.2d at 777. As illustrated by our decision in Sac & Fox, however, this does not mean that balancing can be completely avoided simply because an absent person is immune from suit. See Davis I, 192 F.3d at 960. What it means is that the plaintiff's inability to obtain relief in an alternative forum is not as weighty a factor when the source of that inability is a public policy that immunizes the absent person from suit. 49 Here, the district court found compelling the unavailability of an alternative forum and recognized that generally, such unavailability weigh[s] heavily, if not conclusively against dismissal. Davis II, 199 F.Supp.2d at 1178 (internal quotation marks omitted). But it found that in this case Plaintiffs' interest in having a forum was outweighed by the other interests to be considered in the Rule 19(b) analysis. When viewed in light of the Tribe's sovereign immunity and the first three Rule 19(b) factors, we do not believe that the absence of an alternative forum weighs so heavily against dismissal that the district court abused its discretion in deciding not to retain Plaintiffs' case.
50 Plaintiffs' final challenge to the dismissal of their judgment-fund claims is that in making its Rule 19(b) determination in equity and good conscience, the district court should have considered factors other than those specifically listed in Rule 19(b). See Wichita & Affiliated Tribes of Oklahoma, 788 F.2d at 774. The flaw in this challenge is that the additional factors proposed by Plaintiffs are merely recharacterizations of factors already considered. First, Plaintiffs claim that [o]nce the district court determined that the BIA had deliberately evaded Congressional intent on the basis of racial animus, the BIA's arguments for dismissal lose any remaining force ... [and] are exposed, not as legitimate Agency positions or policy arguments, but as an effort to avoid judicial scrutiny of its unlawful and inequitable conduct. Aplt. Br. at 28 (internal citation omitted). We question Plaintiffs' description of the district court's opinion. But in any event, this argument amounts to no more than a restatement of Plaintiffs' argument with respect to the legitimacy of the Tribe's interests, an argument that we have rejected because it goes to the substantive merits of the litigation. 51 Next, Plaintiffs argue that the abuses long suffered by the Estelusti at the hands of the Tribe and the BIA favor allowing them the opportunity to resolve their claims, even if the district court believed that its rulings would be ultimately ineffective against the Tribe, or that the BIA would be placed in a difficult position. Id. In essence, this is a reassertion of the argument that Plaintiffs should be afforded this forum because their interests outweigh the countervailing interests of the Tribe, Defendants, and the courts. This argument, however, has also been rejected. 52 In sum, the district court did not abuse its discretion in determining that Plaintiffs' judgment-fund claims could not, in equity and good conscience, proceed in the absence of the Tribe.