Opinion ID: 1128865
Heading Depth: 1
Heading Rank: 2

Heading: II. Are the landowners indispensable parties?

Text: The Department contends that it is not necessary to join the landowners as defendants in these suits. The Department forcefully argues that, if indeed the signs were unlawfully erected in violation of the statute, the landowners can have no interest in a suit by the Department against the sign-owners to remove them from their illegal placement. (If, on the other hand, the signs were lawfully placed, the Department points out, the present suits should be dismissed on their merits, and so any right of compensation to the landowners for a pre-existing or lawfully placed sign, 461.6, could not be prejudiced by these suits.) The defendants, on the other hand, suggest that the landowners may have a real and actual interest: The signs may under the terms of the agreement belong to the landowners rather than the sign-erector defendants; the removal of the signs may result in a loss of rentals to the landowners. The district court and the court of appeal concluded that the landowners are indispensable parties to this litigation. The court of appeal explained: The landowners without question have property rights of value for the outdoor advertising sites, and the law does not permit these rights to be adjudged without making the landowners parties to the litigation. The Code of Civil Procedure of 1960 adopted the concepts of indispensable and necessary parties to clarify what had proved to be a problem area for the courts. [2] The articles were essentially modeled after the Federal Rules of Civil Procedure, as those rules were then written. [3] Article 641 of our 1960 code defines indispensable parties and requires their compulsory joinder. The article provides: Indispensable parties to an action are those whose interests in the subject matter are so interrelated, and would be so directly affected by the judgment, that a complete and equitable adjudication of the controversy cannot be made unless they are joined in the action. No adjudication of an action can be made unless all indispensable parties are joined therein. Necessary parties are defined and their joinder regulated by Article 642, which provides: Necessary parties to an action are those whose interests in the subject matter are separable and would not be directly affected by the judgment if they were not before the court, but whose joinder would be necessary for a complete adjudication of the controversy. An adjudication of an action may be made even if all necessary parties are not joined therein, but when timely objection is made to the nonjoinder of a necessary party the court shall require his joinder if he is subject to its jurisdiction. The procedural consequences differ greatly according to the characterization of a party as indispensable or as necessary. The failure to join an indispensable party may be raised at any time or may even be noticed by the trial or appellate court on its own motion. Articles 645, 927. On the other hand, the failure to join a merely necessary party, See Article 642 below, must be raised by a dilatory exception, Article 645, and is waived if not timely raised in limine, Articles 926, 928. Unfortunately, this new formulation of indispensable and necessary parties has not proven a satisfactory guide for our courts in the cases decided since the adoption of the new code. To the contrary, the rigid application of the terminology by the courts has led to decisions which are apparently more dependent upon the label the court has attached to a particular party than upon the underlying factual basis for labeling a party indispensable, necessary, or merely proper. [4] Because of the great differences in the procedural rules which attach, under our Code of Civil Procedure, depending upon how a party is classified, great care must be exercised to insure a proper factual analysis of the party's interest in the case before a determination of the party's classification is made. [5] For instance, since no adjudication may be made unless an indispensable party is joined, Article 641, an appellate court's notice on appeal of the absence of an indispensable party, Article 645, after the case is fully tried, results in a remand for joinder and re-trial with the indispensable party joined. These differences in the way the absent party affects the case, and the possible harsh result if the party is ruled indispensable, mandate that such a classification be applied to a party only after the facts clearly establish that no complete and equitable adjudication of the controversy can be made in his absence. It is axiomatic that courts are without power to adjudicate the rights of a person who is not a party to the litigation or appropriately represented. Thus, if the courts below granted the relief the plaintiff Department seeks and required the removal of the defendant's signboards, such a judgment would not legally enjoin the landowner from leasing the same advertising site to another company to erect another billboard. Such a judgment would not, by itself, invalidate the landowner's lease with the defendant signowner, insofar as the landowner is concerned. In the present cases, the exceptions were decided below on the pleadings and arguments of counsel. Not even the leases, which exceptors maintained would be abrogated by an adverse judgment, were made part of the record. Clearly, no factual analysis of the rights of the parties and absent persons could have been made. Thus, it is difficult to determine how the previous courts arrived at the conclusion that the property rights of the landowners would be detrimentally affected by a judgment in these proceedings, in the absence of any evidence to support such a conclusion. The court of appeal in effect held that the courts of this state are powerless to adjudicate a controversy between parties properly before the court if such adjudication may affect contract rights one of the parties alleges he has with an absent third person. The result of such a rule, if upheld, is to permit skillful counsel, by filing conclusory pleadings and by artful argument, to convince a trial judge that property rights of an absent third person may be affected and therefore have a plaintiff's suit delayed or dismissed, without any factual determination whether these contract rights will in fact be affected by the court's action, or to what extent they will be affected. An exaggerated example from the present case will illustrate the problem such a rule would create. Suppose the judgments below were to be affirmed and the state required to conduct discovery or title examinations to learn the identity of all landowners upon whose property the signs complained of are located. Suppose further, that all such landowners were then located, properly served, and made parties defendant. There would be nothing to prevent the erectors of the advertising signs from then filing another peremptory exception alleging non-joinder of indispensable parties, i. e., the clients of the advertisers, whose products or services are advertised on these signboards. Certainly these parties may have contract rights which could be affected by a judgment of the court requiring the removal of these billboards. We do not believe that any such result is contemplated by the compulsory joinder articles of our Code of Civil Procedure. Results such as this become possible because of the unfortunate wording of the Louisiana compulsory joinder statutes. These statutes, modeled after Federal Rule 19 (1938) as in effect in 1960 when our code was enacted, place the entire emphasis upon the rights of the absent party. No mention is made of the possible hardship to the parties before the court which could result from a holding that an absent party is indispensable, although the entire tenor of the 1960 Code is to prevent defeat of substantive rights through procedural technicalities. [6] Even if the plaintiff has a far greater interest which will be irreparably damaged if no forum is provided to determine his rights, the absence of a third party characterized as indispensable leaves such a plaintiff with a right, but with no remedy if he is unable to acquire jurisdiction over the absentee. As a result of the recognition of these problems, Federal Rule 19 was amended in 1966 to add the following section: Section B Determination by court whenever joinder not feasible. If a person as described in subdivision (a)(1)(2) hereof cannot be made a party, the action should proceed among the parties before it, or should be dismissed, the absent party being thus regarded as indispensable. The factors to be considered by the court include: First, to what extent a judgment rendered when the parties absent might be prejudicial to him or those already parties; second, the extent to which, by protective provision in the judgment, the shaping of relief, or other measures, either prejudice can be lessened or voided; third, whether a judgment rendered with a person absent will be adequate; fourth, whether the plaintiff will have an adequate remedy if the action is dismissed for non-joinder. The balancing of interests which is expressly permitted to the courts under Federal Rule 19 as now written thus gives needed flexibility and prevents hardship such as could result in this case if the judgments of the court below are affirmed by an overly technical non-functional interpretation of our own Code's equivalent provision. [7] Our Code article, like Federal Rule 19 before amendment, has as its goal the prevention of injustice to absent parties resulting from litigating cases in their absence which, while not legally binding upon them, nevertheless factually affect their rights. The defect in our article, if interpreted without regard to the overall purpose of the code, is that the converse may occur. The plaintiff may be left without any remedy, although he has a valid legal right and has before the court the person against whom that right should be exercised, merely because a third party also has rights which may be affected by the judgment. We therefore conclude that parties should be deemed indispensable only when that result is absolutely necessary to protect substantial rights. A close factual analysis of the cases decided to date reveals that very few absent parties are absolutely indispensable to the litigation before the court. The court, by the shaping of its decree, may be able to avoid any possibility of prejudice to the rights of an absent party and still do justice to the parties before the court. In the case at bar, the courts below did not engage in a close factual analysis to determine whether or not the absent landowners were in fact indispensable to the litigation. The leases upon which their property rights depend are not made part of the record, for instance. In fact, there is nothing in the record, other than the conclusory allegations of counsel, to indicate that any prejudice would be suffered by the landowner as a result of allowing the state to proceed. We note that we are not hereby holding that the absent landowners are not indispensable parties. We merely hold that the courts below did not have evidence before them sufficient to find that the landowners are indispensable parties. If, on remand, the courts below find sufficient evidence to indicate that the landowners are indispensable, nothing herein is intended to preclude a judgment to that effect. If, on the other hand, the landowners are found to be merely necessary parties, the district court may still order their joinder.