The opinion of the court was delivered by: Irma E. Gonzalez, Chief Judge United States District Court
ORDER GRANTING DEFENDANT'S MOTION TO DISMISS FOR FAILURE TO JOIN
This is a diversity action in which Plaintiffs seek recognition of a foreign judgment pursuant to California Civil Procedure Code §§ 1713 et seq. Presently before the Court is a motion to dismiss for failure to join an indispensable party brought by Defendant Darbun Enterprises, Inc. For the reasons discussed herein, the Court GRANTS Defendant's motion.
Plaintiffs are Mexican citizens seeking recognition of a foreign judgment against Defendant Darbun Enterprises LLC. On January 12, 2009, Plaintiffs filed a complaint in this Court in case number 09-cv-0044 ("original action"). The Court dismissed the original action on May 6, 2010 because it determined that Plaintiff Delores Galvez Montes was a resident of California and her presence in the action destroyed diversity for jurisdictional purposes. (Doc. No. 120.) Following dismissal, on May 21, 2010, Defendant filed a motion for sanctions, arguing that opposing counsel's bad faith in filing and maintaining the original action in federal court was in bad faith in that it recklessly multiplied the proceedings. (Doc. No. 122.) On June 25, 2010, Plaintiffs filed their opposition to Defendant's motion for sanctions in the original action. (Doc. No. 132.) In their opposition, Plaintiffs stated that the non-diverse parties would file an action in state court to enforce the judgment and then request a stay pending resolution of this action.*fn1 (See id.) On August 13, 2010, the Court granted the Defendant's motion for sanctions in the original action. (Doc. No. 138.) Plaintiffs have appealed and Defendant filed a cross-appeal as to the amount of the award. (Doc. Nos. 139, 149.)
On June 24, 2010, Plaintiffs filed the instant action. (Doc. No. 1.) The complaint in this action is substantively identical to the complaint in the original action, except the complaint in the original action included two additional Plaintiffs, Delores Galvez Montes and Luis Delgado Picasso. Defendant filed the present motion on November 10, 2010. (Doc. No. 5.) Plaintiff filed an opposition and Defendant filed a reply. (Doc. Nos. 6, 7.) The Court heard oral argument on December 13, 2010. (Doc. No. 9.)
In a motion to dismiss for failure to join and indispensable party, the Court must engage in a two-part analysis. First the Court must determine if an absent party is "necessary to the suit." Fed. R. Civ. P. 19(a). An absent party is "necessary to the suit" if:
(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 result of the claimed interest.
If an absent party is necessary, and if that party cannot be joined,*fn2 the Court must assess whether the party is indispensable so that "in equity and good conscience" the suit should be dismissed. Fed R. Civ. P. 19(b); Clinton v. Babbit, 180 F.3d 1081, 1088 (9th Cir. 1999) (quoting Makah Indian Tribe v. Verity, 910 F.2d 555, 558 (9th Cir. 1990). The moving party has the burden of persuasion in arguing for dismissal. Clinton, 180 F.3d at 1088 (citation omitted).
In deciding whether the suit should be dismissed, the Court should consider (1) the extent to which a judgment rendered in the necessary party's absence would result in prejudice to that person or the existing parties; (2) the extent to which the Court may shape relief or otherwise avoid or reduce such prejudice; (3) whether a judgment rendered in the necessary party's absence would be adequate; and (4) whether the ...