United States Court of Appeals
For the First Circuit
No. 97-1750
JULIO DELGADO,
Plaintiff, Appellant,
v.
PLAZA LAS AMERICAS, INC., ET AL.,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Salvador E. Casellas, U.S. District Judge]
Before
Torruella, Chief Judge,
Boudin and Stahl, Circuit Judges.
Jorge Miguel Suro Ballester, with whom Cherie K. Durand and Law
Offices Benjamin Acosta, Jr. were on brief for appellant.
Ivan M. Fernandez for appellees.
March 9, 1998
Per curiam. Plaintiff-appellant Julio Delgado appeals from
the district court's dismissal of his complaint against
defendants-appellees Plaza Las Americas, Inc. and Universal
Insurance Company for failure to join a party needed for just
adjudication. See Fed. R. Civ. P. 19. Because we conclude
that the court's determination was premised upon a mistaken
reading of Fed. R. Civ. P. 19(a)(2)(ii), we vacate and
remand.
I.
On August 19, 1994, Nannette Delgado Ocasio was sexually
abused and raped at gunpoint by an unidentified man on the
premises of the Plaza Las Americas shopping center in San
Juan, Puerto Rico. Subsequently, plaintiff, who is Ocasio's
father and a Florida resident, brought this diversity action
in United States District Court for the District of Puerto
Rico. The complaint sought damages for the emotional pain
and anguish plaintiff suffered as a result of the rape of his
daughter. Meanwhile, Ocasio, who is a Puerto Rico resident,
sued the same defendants in Puerto Rico Superior Court.
On February 27, 1996, acting sua sponte, the district court
directed Delgado to show cause why this case should not be
dismissed for (i) failure to meet the amount in controversy
requirement of 28 U.S.C. 1332(a); and/or (ii) nonjoinder of
a non-diverse party -- Ocasio -- needed for just
adjudication. Thereafter, the district court dismissed
Delgado's complaint without prejudice, holding that, although
a sufficient amount in controversy had been established,
Delgado had failed to join a party necessary to the lawsuit
under Fed. R. Civ. P. 19(a)(2)(ii)(an absentee may be deemed
a necessary party if nonjoinder could "leave any of the
persons already parties subject to a substantial risk of
incurring double, multiple, or otherwise inconsistent
obligations by reason of the claimed interest"), and
indispensable to the lawsuit under Fed. R. Civ. P. 19(b).
In determining that Ocasio was a necessary party, the court
reasoned that the potential for inconsistent verdicts in
Ocasio's state action and Delgado's federal action subjected
defendants to a substantial risk of incurring multiple or
otherwise inconsistent obligations. The court also observed
that allowing the two actions to proceed would be an
inefficient use of judicial resources and raised the specter
of one of the plaintiffs using "offensive collateral
estoppel" against defendants. Having determined that Ocasio
was a necessary party on these bases, the court applied the
gestalt factors set forth in Fed. R. Civ. P. 19(b) and found
that Ocasio also was indispensable to the lawsuit. Because
Ocasio was non-diverse, the court then dismissed the action
without prejudice to its being reinstated should the
Commonwealth court deny plaintiff permission to join in
Ocasio's lawsuit.
II.
Plaintiff makes three arguments on appeal. He first contends
that the district court exceeded its discretion in addressing
the issue of nonjoinder sua sponte. He also argues that the
court premised its dismissal upon an erroneous construction
of Fed. R. Civ. P. 19(a)(2)(ii). Finally, he challenges the
lower court's indispensability determination under Fed. R.
Civ. P. 19(b). For their part, defendants contend that we do
not have appellate jurisdiction over this appeal under 28
U.S.C. 1291 because the dismissal challenged here was
without prejudice and was therefore not a final judgment.
Although we accept plaintiff's second argument, we think it
important to note that his first argument is entirely
unpersuasive. We have squarely held that a district court
may raise the issue of nonjoinder sua sponte. See Gonzalezv. Cruz, 926 F.2d 1, 5 n.6 (1st Cir. 1991) (citing Fed. R.
Civ. P. 21). So too do we reject summarily defendant's
contention that we lack appellate jurisdiction over this
matter, as the effect of the dismissal without prejudice was
to oust from federal court a suit over which the court had
subject matter jurisdiction. See Moses H. Cone Hosp. v.
Mercury Constr. Corp., 460 U.S. 1, 9-10 & n.8 (1982)
(appellate court has jurisdiction where district court enters
a stay with expectation that if plaintiff does not obtain
relief in state court federal litigation may resume); Burnsv. Watler, 931 F.2d 140, 143 (1st Cir. 1991) (similar).
The primary question before us, then, is whether the district
court correctly determined that Ocasio is a necessary party
under Fed. R. Civ. P. 19(a)(2)(ii). As stated above, Fed.
R. Civ. P. 19(a)(2)(ii) provides that an absentee may be
deemed a necessary party if nonjoinder will "leave any of the
persons already parties subject to substantial risk of
incurring double, multiple, or otherwise inconsistent
obligations by reason of the claimed interest." Although the
plaintiff has the right to control his own litigation and to
choose his own forum, Fed. R. Civ. P. 19(a)(2)(ii) balances
these rights against the defendants' (and systemic) interests
in avoiding judgments giving rise to "inconsistent
obligations." See Schutten v. Shell Oil Co., 421 F.2d 869,
873 (5th Cir. 1970).
"Inconsistent obligations" are not, however, the same as
inconsistent adjudications or results. See Micheel v.
Haralson, 586 F. Supp. 169, 171 (E.D. Pa. 1983); see also 4
James Wm. Moore et al., Moore's Federal Practice 19.03 (3d
ed. 1997). Inconsistent obligations occur when a party is
unable to comply with one court's order without breaching
another court's order concerning the same incident. See 4
Moore's at 19.03. Inconsistent adjudications or results,
by contrast, occur when a defendant successfully defends a
claim in one forum, yet loses on another claim arising from
the same incident in another forum. See National Union Fire
Ins. Co. of Pittsburgh v. Massachusetts Mun. Wholesale Elec.
Co., 117 F.R.D. 321, 322 (D. Mass. 1987) (citing Bedel v.
Thompson, 103 F.R.D. 78, 81 (S.D. Ohio 1984)); see also Boonev. General Motors Acceptance Corp., 682 F.2d 552, 554 (5th
Cir. 1982)(the threat of inconsistent obligations, not
multiple litigations, informs Fed. R. Civ. P. 19(a)
considerations); Field v. Volkswagenwerk AG, 626 F.2d 293,
301 (3d Cir. 1980) (similar). Unlike a risk of inconsistent
obligations, a risk that a defendant who has successfully
defended against a party may be found liable to another party
in a subsequent action arising from the same incident --
i.e., a risk of inconsistent adjudications or results -- does
not necessitate joinder of all of the parties into one action
pursuant to Fed. R. Civ. P. 19(a). See Field, 626 F.2d at
301. Moreover, where two suits arising from the same
incident involve different causes of action, defendants are
not faced with the potential for double liability because
separate suits have different consequences and different
measures of damages. See In Re Torcise, 116 F.3d 860, 866
(11th Cir. 1997).
In this situation, defendants faced a federal action and a
state action arising from the same incident. In reasoning
that defendants could be facing "inconsistent obligations,"
the district court noted that defendants could be found
liable to Delgado in federal court, but not liable to Ocasio
in state court, or vice versa. Although the court also
looked to other factors in reaching its conclusion, it is
this determination -- which is really a determination that
defendants faced the threat of inconsistent results -- that
grounded the court's ruling that Ocasio was a necessary party
to this lawsuit. Yet as we have explained, the mere
possibility of inconsistent results in separate actions does
not make the plaintiff in each action a necessary party to
the other. And even if it did, the fact remains that Ocasio
and her father have separate causes of action based on
different theories of recovery. We therefore cannot sustain
the court's ruling that Ocasio is a party both necessary and
indispensable to this lawsuit.
III.
Although we think the district court was likely correct in
thinking that efficiency would be served if Delgado's claim
and Ocasio's claim were litigated in the same proceeding,
Fed. R. Civ. P. 19 does not permit us to treat this concern
alone as a basis for refusing to exercise diversity
jurisdiction over this case. And whether wise or not, the
lesson of the abstention cases is, of course, that federal
jurisdiction should be asserted almost all the time. We
therefore are left with no choice other than to vacate the
judgment and remand for further proceedings.
Vacated and remanded.