Court Opinion

ID: 4162596
Source: CourtListenerOpinion
Date Created: 2017-04-24 16:04:41.874633+00
Date Added: 2024-06-11T14:37:51.826923
License: Public Domain

UNITED STATES DISTRICT COURT
                             FOR THE DISTRICT OF COLUMBIA

 CAI-YEN FIRESTONE,
              Plaintiff,
         v.
                                                           Civil Action No. 16-1810 (CKK)
 FEDERAL RETIREMENT THRIFT
 INVESTMENT BOARD, et al.,
              Defendants.

                            MEMORANDUM OPINION AND ORDER
                                    (April 24, 2017)

        Plaintiff Cai-Yen Firestone brings this action against Defendants Federal Retirement Thrift
Investment Board (“FRTIB”) and the Thrift Savings Plan (“TSP”) seeking, among other remedies,
a declaration that she is the sole intended beneficiary of the “monies, assets, and investments”
currently held in the TSP account of her deceased brother, Bernard Hsieh. Compl. ¶ 16, ECF No.
1. According to the Complaint, Mr. Hsieh executed a change-of-beneficiary form (the “TSP-3
Form”) shortly before his death that allegedly made Plaintiff the sole beneficiary of the disputed
TSP account. Id. ¶¶ 10–12. Nonetheless, TSP has allegedly failed to recognize Plaintiff as a
beneficiary of her brother’s account. Id. ¶ 13.

        Pending before the Court is Defendants’ Motion to Join a Necessary Party or, Alternatively,
to Dismiss for Failure to Join a Necessary Party, ECF No. 12 (“Defs.’ Mot.”). Defendants contend
that Melissa Wang, Mr. Hsieh’s wife and “the beneficiary in whose name TSP is holding the
benefits plaintiff seeks,” is a necessary party to this action and accordingly must be joined pursuant
to Federal Rule of Civil Procedure 19(a), which provides, in pertinent part, that a

       person who is subject to service of process and whose joinder will not deprive the
       court of subject-matter jurisdiction must be joined as a party if . . . (B) that person
       claims an interest relating to the subject of the action and is so situated that
       disposing of the action in the person’s absence may: (i) as a practical matter impair
       or impede the person’s ability to protect the interest; or (ii) leave an existing party
       subject to a substantial risk of incurring double, multiple, or otherwise inconsistent
       obligations because of the interest.

The United States Court of Appeals for the District of Columbia Circuit has summarized the Rule
19 inquiry as follows: “Should the absentee be joined, i.e., is it necessary to the litigation? If so,
can the absentee be joined? And finally, if the absentee should but cannot be joined, may the
lawsuit nonetheless proceed ‘in equity and good conscience’?” Nanko Shipping, USA v. Alcoa,
Inc., 850 F.3d 461, 464 (D.C. Cir. 2017).

        Defendants represent that, although Mr. Hsieh submitted a TSP-3 Form before his death,
that form was deficient because the first page was missing the date of a witness signature. Defs.’

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Mot. at 2. Although TSP sent a notice to Mr. Hsieh to that effect, he purportedly did not correct the
form before he passed away. Id. at 3. Without a valid beneficiary designation form, Defendants
represent that “TSP determined that [Mr. Hsieh’s] wife was the proper beneficiary pursuant to the
statutory order of precedence,” and an account was created for Mrs. Wang to which the amount in
dispute, approximately $630,000, was transferred. Id. On September 1, 2016, Mrs. Wang’s counsel
sent correspondence to Defendants claiming that she “is the widow and rightful beneficiary of
Bernard Hsieh’s Thrift Savings Plan.” Reply in Supp. of Defs.’ Mot., Ex. 1, ECF No. 15. The
Court makes no findings at this time with respect to the validity of Defendants’ contentions,
other than to conclude that there is a dispute over the ownership of the TSP account.

        Based on this finding, however, the Court agrees with Defendants that Mrs. Wang is a
necessary party and must be joined to this action pursuant to Rule 19(a). First, Mrs. Wang has a
claimed interest in the subject matter of this action—the funds in the TSP account. Second,
resolution of this action in Plainitff’s favor would plainly impede Mrs. Wang’s ability to protect
that interest, as the funds at issue would be at Plaintiff’s disposal. And third, to the extent Mrs.
Wang brought claims against Defendants in a subsequent lawsuit, there is a substantial risk that
Defendants could become subject to double or inconsistent liability if that lawsuit resulted in a
favorable ruling for Mrs. Wang, while this Court ruled otherwise. In short, this is a quintessential
case where joinder is necessary because funds are held by a third-party, and only one of several
claimants to those funds brings suit against the third-party. In such a case, as here, the real dispute
is not between one claimant and the third-party, but between the competing claimants to the funds.
Wach v. Byrne, Goldenberg & Hamilton, PLLC, 910 F. Supp. 2d 162, 169 (D.D.C. 2012) (Kollar-
Kotelly, J.) (“courts in this Circuit typically require joinder of an absent party where the claims of
a party and the absent party to a common fund or asset are conflicting and mutually exclusive”)
(citing Brown v. Christman, 126 F.2d 625, 631 n.23 (D.C. Cir. 1942) (“Generally, where the action
involves a determination of conflicting interests of beneficiaries in a trust fund, the beneficiaries
are held to be necessary parties.”)). The real dispute with respect to the TSP account is between
Plaintiff and Mrs. Wang, making Mrs. Wang a necessary party to the litigation. As neither party
contends that Mrs. Wang cannot be properly served and joined, or that her joinder would deprive
this Court of subject-matter jurisdiction (which is predicated on a federal question), Mrs. Wang
must be joined as a defendant pursuant to Rule 19(a). None of Plainitff’s contentions to the contrary
are meritorious, nor does Plaintiff cite any authority to support those contentions.

         Accordingly, for the foregoing reasons, the Court ORDERS as follows: (i) Defendants’
Motion to Join a Necessary Party is GRANTED; (ii) Defendants’ Motion, in the Alternative, to
Dismiss for Failure to Join a Necessary Party, is DENIED WITHOUT PREJUDICE; and (iii)
by May 19, 2017, Plaintiff shall file an Amended Complaint with the Court, adding Mrs. Wang as
a defendant, and shall serve the Amended Complaint upon Mrs. Wang to join her as formal party
to this action.

       SO ORDERED.
                                                           /s/
                                                       COLLEEN KOLLAR-KOTELLY
                                                       United States District Judge

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