United States District Court, N.D. California
ORDER RE: MOTION TO COMPEL JOINDER Re: Dkt. No. 20
MARIA-ELENA JAMES, Magistrate Judge.
In this case for breach of contract, negligence, and breach of warranty, Plaintiff James Bird alleges that his marine vessel, Water Song, sustained damage as a result of improper services performed by Defendants Keefe Kaplan Maritime, Inc. ("KKMI") and Eric Koster dba J&H Marine. Pending before the Court is KKMI's Motion to Compel Joinder. Mot., Dkt. No. 20. In its Motion, KKMI seeks to compel the joinder of Underwriters at Lloyd's of London Subscribing through Premier Marine Insurance Managers Group (USA) Inc. ("Underwriters") as required parties, pursuant to Federal Rules of Civil Procedure 19 and 21. Bird has filed an Opposition (Dkt. No. 21) and KKMI filed a Reply (Dkt. No. 23). The Court previously vacated the March 5, 2015 hearing and took the matter under submission. See Fed.R.Civ.P. 78(b); Civil L.R. 7-1(b). Having considered the parties' positions, relevant legal authority, and the record in this case, the Court DENIES KKMI's Motion for the reasons set forth below.
The following factual background is taken from Bird's First Amended Complaint ("FAC"). Dkt. No. 7. Bird owns a marine vessel known as the Water Song. FAC ¶ 9. KKMI and J&H Marine performed services on the Water Song pursuant to an agreement with Bird. Id. ¶¶ 10-11. Bird alleges that on or about July 24, 2013, the Water Song sustained severe damage due to KKMI's and J&H Marine's improper services, which resulted in a loss of the vessel's use and value and caused Bird to incur significant repair costs. FAC ¶¶ 12-13.
Based on these allegations, Bird filed his initial Complaint on July 21, 2014, alleging three causes of action: (1) breach of contract, (2) negligence, and (3) breach of warranty. Dkt. No. 1. He subsequently filed his FAC on August 11, 2014, alleging the same causes of action. FAC ¶¶ 14-16.
On December 29, 2014, KKMI filed the present Motion to Compel Joinder of Underwriters, arguing that Underwriters should be compelled to join this lawsuit as plaintiffs pursuant to Federal Rules of Civil Procedure 19. Mot. at 3.
Federal Rule of Civil Procedure 19 provides for the mandatory joinder of parties, commonly referred to as "necessary" parties. Rule 19(a)(1) provides that a party must be joined if that party's absence (1) would preclude the grant of complete relief, (2) would impede that party's ability to protect its interests, or (3) would subject any party to the danger of inconsistent obligations. Fed.R.Civ.P. 19(a)(1).
A Rule 19 motion requires a three-step analysis. E.E.O.C. v. Peabody Western Coal Co., 610 F.3d 1070, 1078 (9th Cir. 2010) (" Peabody I "). First, the court must determine if the nonparty is a "person required to be joined if feasible" under Rule 19(a) and thus necessary to the action. Id. at 1078; Dawavendewa v. Salt River Project Agric. Improvement & Power Dist., 276 F.3d 1150, 1155 (9th Cir. 2002). Second, if the nonparty "meets the requirements under Rule 19(a), the court... [must] determine[s] whether it is feasible to order that the absentee be joined.'" Peabody I, 610 F.3d at 1078 (quoting E.E.O.C. v. Peabody Western Coal Co., 400 F.3d 774, 778 (9th Cir. 2005) (" Peabody II ")). "Finally, if joinder is not feasible, the court must determine at the third stage whether the case can proceed without the absentee' or whether the action must be dismissed." Id. (quoting Peabody II, 400 F.3d at 778). The case must be dismissed if the nonparty's interest in the action is "of such a nature that a final decree cannot be made without either affecting that interest, or leaving the controversy in such a condition that its final termination may be wholly inconsistent with equity and good conscience." Id. (internal quotation omitted).
Rule 19 is designed to protect absent parties as well as those before the Court from multiple litigation, inconsistent judicial determinations, or the impairment of interests or rights. CP Nat'l Corp. v. Bonneville Power Admin., 928 F.2d 905, 911 (9th Cir. 1991). Rule 19 also is designed to further the public's interest "in avoiding repeated lawsuits on the same essential subject matter." Id. at 912. The determination of whether an absent party should be joined under Rule 19 is fact and circumstance specific. N. Alaska Envtl. Ctr. v. Hodel, 803 F.2d 466, 468 (9th Cir. 1986). Finally, subject matter jurisdiction cannot be destroyed by joining the otherwise necessary party. Fed.R.Civ.P. 19(a)(2).
In its Motion, KKMI argues that Underwriters are a required party because they are a subrogee to the same claims asserted by Bird and because they have expressed an intention to recover damages from KKMI arising from those rights. Mot. at 2-3, 5. KKMI and Bird agree that Underwriters insured the Water Song at the time the vessel was damaged. Id. at 3; Opp'n at 2. However, Bird argues that Underwriters are not a required party because he has a right to recover damages from KKMI, regardless of Underwriters' right to reimbursement. Opp'n at 4-5.
The first step in a Rule 19 analysis is to determine whether Underwriters are a required party to the action. Alto v. Black, 738 F.3d 1111, 1125-26 (9th Cir. 2013). In doing so, the Court first asks whether complete relief can be afforded to Bird in Underwriters' absence. Fed.R.Civ.P. 19(a)(1)(A); N.D. ex rel. parents acting as guardians ad litem v. Hawaii Dep't of Educ., 600 F.3d 1104, 1109 (9th Cir. 2010). In the alternative, the Court considers whether Underwriters have a legally protected interest in the subject of the suit such that their absence would (1) impede their ability to protect that interest or (2) subject Bird or KKMI to the danger of inconsistent ...