Opinion ID: 2518820
Heading Depth: 4
Heading Rank: 3

Heading: Misjoinder of parties

Text: Hawai`i Rules of Civil Procedure (HRCP) Rule 21 (2004) provides: Misjoinder of parties is not ground for dismissal of an action. Parties may be dropped or added by order of the court on motion of any party or of its own initiative at any stage of the action and on such terms as are just. Any claim against a party may be severed and proceeded with separately by order of the court. (Emphases added.) In Kawamata Farms, Inc. v. United Agri Products, 86 Hawai`i 214, 948 P.2d 1055 (1997), this court stated that [a] circuit court has the discretion to realign the parties at any stage of the action and on such terms as are just. Id. at 244, 948 P.2d at 1085 (citation omitted). However, Kawamata Farms' reference to the circuit court's discretion was in the context of the appropriate number of peremptory challenges to be allocated to the parties at trial and, thus, provides little guidance with respect to the circumstances we have here. Nevertheless, inasmuch as HRCP Rule 21 is identical to Federal Rules of Civil Procedure (FRCP) Rule 21, we look to federal cases for guidance. See Pulawa v. GTE Hawaiian Tel, 112 Hawai`i 3, 20 n. 15, 143 P.3d 1205, 1222 n. 15 (2006) (noting that, [w]here a Hawai`i rule of civil procedure is identical to the federal rule, the interpretation of [that] rule by [the] federal courts is highly persuasive (citation omitted)). The historical purpose of FRCP Rule 21 was to provide[] the courts with a valuable procedural device that can be used to avoid multiple litigation and to promote liberal joinder of parties. 7 C. Wright and A. Miller, Federal Practice and Procedure, § 1681 at 473 (3d ed.2001). As explained by the United States District Court for the District of Minnesota in Stark v. Independent School District # 640, 163 F.R.D. 557 (D.Minn.1995), wherein it examined the interplay between FRCP Rules 19 (relating to joinders), 20 (allowing separate trials on separate claims), and 21 (misjoinder and nonjoinder of parties): [T]he underlying purpose of Rules 19, 20 and 21 is to allow the district court itself to exercise its power to align the parties and the issues presented in a single lawsuit in a way that will foster judicial efficiency, while protecting against prejudice. The [r]ules seek to preserve the autonomy of the parties, but that goal is not without limits. Rule 19 serves to insure the presence of an essential core of parties and issues, to avoid multiplicity of suits. Rule 20 permits the Court to add parties but to avoid unduly complicating the proceeding. Rule 21 serves both functions. The duty of the Court in considering a motion to add or drop a party is to strike a balance among these competing considerations, while following the initial mandate to secure the just, speedy and inexpensive determination of every action.  Id. at 564 (emphases added) (citations and footnote omitted). In Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 109 S.Ct. 2218, 104 L.Ed.2d 893 (1989), superseded by statute on other grounds in Singh v. Daimler-Benz AG, 9 F.3d 303, 311 (3d Cir.1993), the United States Supreme Court observed that Rule 21 invests district courts with authority to allow a dispensable nondiverse party to be dropped at any time, even after judgment has been rendered. Id. at 832, 109 S.Ct. 2218 (footnote omitted); see also Safeco Ins. Co. v. City of White House, Tennessee, 36 F.3d 540, 545 (6th Cir.1994) (same). Based on such observation, the Court examined whether a court of appeals may do what a district court can do and dismiss a dispensable nondiverse party itself, or whether a court of appeal must remand the case to the district court, leaving it to the district court's discretion to dismiss the party[.] [19] Newman-Green, 490 U.S. at 832-33, 109 S.Ct. 2218. In answering the inquiry, the Court stated that [a]lmost every modern [c]ourt of appeals faced with this issue has concluded that it has the authority to dismiss a dispensable nondiverse party by virtue of Rule 21, id. at 833, 109 S.Ct. 2218, noting that [t]he cases holding that appellate courts are powerless to remedy such jurisdictional defects are few and far between. Id. at 833 n. 7, 109 S.Ct. 2218 (citations omitted). The Court, pointing to its decision in Mullaney v. Anderson, 342 U.S. 415, 72 S.Ct. 428, 96 L.Ed. 458 (1952), further stated that, [a]lthough we did not discuss extensively Rule 21's applicability in the appellate setting, we did note that the change in the parties would not have affected the course of the litigation if it had occurred at some earlier point, and would not embarrass the defendant[] [and that] dismissing the petition and thereby requiring the plaintiffs to start over in the District Court would entail needless waste and runs counter to effective judicial administration.  Id. at 833, 109 S.Ct. 2218 (quoting Mullaney, 342 U.S. at 417, 72 S.Ct. 428) (emphases added). In holding that appellate courts have the authority to dismiss a dispensable nondiverse party, the Court emphasized that the appellate court should carefully consider whether the dismissal . . . will prejudice any of the parties in the litigation. Id. at 838, 109 S.Ct. 2218. Acknowledging that the dismissal of the nondiverse dispensable party in Mullaney represented the exercise of an appellate power that long predates the enactment of the [FRCP], id. at 834, 109 S.Ct. 2218, the Court in Newman-Green discussed several 19th-century cases generally dealing with the amendment power of the appellate courts. In so doing, the Court observed: Although these 19th-century cases were decided in a procedural era different from our own, it is apparent that the weight of authority favored the view that appellate courts possessed the authority to grant motions to dismiss dispensable nondiverse parties. Courts relied then on § 32 of the Judiciary Act of 1789 or on the inherent power of appellate courts. Today courts rely on Mullaney or Federal Rule 21. We decline to disturb that deeply rooted understanding of appellate power, particularly when requiring dismissal after years of litigation would impose unnecessary and wasteful burdens on the parties, judges, and other litigants waiting for judicial attention. Appellate-level amendments to correct jurisdictional defects may not be the most intellectually satisfying approach to the spoiler problem, but . . ., because law is an instrument of governance rather than a hymn to intellectual beauty, some consideration must be given to practicalities.  Id. at 836-37, 109 S.Ct. 2218 (emphases added) (footnotes and citations omitted). Concluding that the practicalities of the case before it weighed heavily in favor of dismissing the nondiverse dispensable party, the Court stated that parties should not be compelled to jump through . . . judicial hoops merely for the sake of hypertechnical jurisdictional purity. Id. at 837, 109 S.Ct. 2218. The Supreme Court's holding that appellate courts have the same authority as the district courts to dismiss a party from the suit under FRCP Rule 21 is consistent with Hawai`i Rules of Appellate Procedure (HRAP) Rule 2.1. HRAP Rule 2.1(a), entitled Applicability of other court rules, provides that the Hawai`i Rules of Civil Procedure [(and other court rules)] that may be adopted by the supreme court from time to time are hereby adopted as part of these rules whenever applicable. In other words, HRCP Rule 21's authority that [p]arties may be dropped . . . by order of the court . . . of its own initiative at any stage of the action and on such terms as are just is granted to the supreme court via HRAP Rule 2.1 whenever applicable. See also HRCP Rule 81(i) (providing that the HRCP shall apply . . . to all appeals to the appellate courts in all actions and proceedings of a civil nature). In the case at bar and as previously discussed in section III.A.2., plaintiff-County, by asserting that the Charter Amendment usurps the taxing authority of the County Council, has asserted an injury on behalf of the Council. A review of the first amended complaint clearly demonstrates that the entity identified as having been injured throughout the complaint is the County Council. Thus, by dropping the County Council as a defendant an actual controversy exists. The first amended complaint clearly put the parties, including the Appellants, on notice with respect to the alleged injury, i.e., usurpation of the County Council's taxing authority, and called into question the validity of the Charter Amendment. See In re Genesys Data Technologies, Incorporated v. Meindl, 95 Hawai`i 33, 41, 18 P.3d 895, 903 (2001) (stating that Hawaii's rules of notice pleading require that a complaint set forth a short and plain statement of the claim that provides defendant with fair notice of what the plaintiff's claim is and the grounds upon which the claim rests (citations omitted)). Moreover, all of the parties' legal arguments have been properly focused on the validity of the Charter Amendment. Thus, neither the remaining defendants (the Mayor and Finance Director) nor the intervenor-appellants would be prejudiced by dropping the County Council as a defendant. The County's position that the Charter Amendment is invalid because it usurps the County Council's taxing authority remains the position of the plaintiff-County as it alleged in the first amended complaint. In other words, the change in the parties would not have affected the course of the litigation if [dropping of the dispensable party, i.e., realignment] had occurred at some earlier point[.] Newman-Green, 490 U.S. at 833, 109 S.Ct. 2218 (internal quotation marks omitted) (quoting Mullaney, 342 U.S. at 417, 72 S.Ct. 428). Finally, dismissing the first amended complaint at this stage of the litigation, thereby requiring the County to start over in the circuit court would entail needless waste and runs counter to effective judicial administration. Newman-Green, 490 U.S. at 833, 109 S.Ct. 2218 (citation omitted). If this court were to remand this case with instructions that the first amended complaint be dismissed, it is highly likely that the County will simply re-file its case with the proper alignment of parties and minimal revisions to its complaint. The focus will remain the validity of the Charter Amendment, which has already been extensively briefed; nothing will have changed, except for the absence of the County Council as a defendant. Indeed, the Newman-Green Court instructs that, because law is an instrument of governance . . ., some consideration must be given to practicalities, 490 U.S. at 837, 109 S.Ct. 2218 (citation omitted), and that we should not compel litigants to jump through judicial hoops merely for the sake of hypertechnical jurisdictional purity. Id. In our view, given the recent public interest in real property taxation and the likelihood of increased litigation regarding real property taxes, the just, speedy, and inexpensive determination of this case outweighs the hypertechnical pleading defect, see Stark, 163 F.R.D. at 564 (acknowledging district court's power to align parties and issues presented in a single lawsuit that will foster judicial efficiency, while protecting against prejudice),  especially in light of the fact that the first amended complaint properly asserts the requisite injury to the proper party with the personal stake in the outcome of the litigation, i.e., the County Council. We, therefore, dismiss the County Council as a dispensable defendant in this case. [20] In so doing, we hold that the plaintiff-County, acting on behalf of the County Council, has sufficiently alleged a threatened injury, i.e., the usurpation of the Council's taxing authority. With respect to the second and third prongs of the injury-in-fact test, see Akau, 65 Haw. at 389, 652 P.2d at 1134-35, we hold that the County/Council's threatened injury is fairly traceable, id., to the Defendants' duty to enforce the Charter Amendment and that a favorable decision, id., i.e., invalidating the Charter Amendment, would likely provide relief, id., for the threatened injury. Based on the foregoing, we hold that the plaintiff-County, acting on behalf of the County Council, has standing to maintain this action. [21]