MARC T. TREADWELL, District Judge.
First Citizen's Bank and Trust Company, Inc. has filed a three-part pre-answer motion. Doc. 4. For the reasons that follow, it is
The Bank moves to dismiss the complaint for failure to join a Rule 19 party—N.D. Horton, Jr.—pursuant to Federal Rule of Civil Procedure 12(b)(7). Doc. 4 at 7-12. The complaint is premised on the Bank making false representations to the U.S. District Court for the Northern District of Georgia that it had The Putnam Group, LLC's consent to sell certain of its assets and apply the proceeds to an outstanding judgment held by the Bank against several related third parties. See generally Doc. 1. The Bank argues that it cannot be liable because Horton purported to consent to the sale on Putnam's behalf. Doc. 4 at 9-10. Accordingly, a key question in this case will be whether Horton had actual or apparent authority to act for Putnam in this matter. If Horton did not, the Bank and/or Putnam almost certainly have claims against him. The Bank accordingly begins with the assumption that Horton is jointly liable for any of its wrongdoing,
Rule 19(a) provides that certain persons are required to be joined where feasible.
Fed. R. Civ. P. 19(a)(1). The Court "must base its decision on the pleadings as they appear at the time of the proposed joinder; it is only after the party has been joined that claims can be asserted against the party that are unrelated to the issues for which joinder was necessary." Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, 7 Federal Practice and Procedure § 1604 (3d ed. Apr. 2017 update). If Putnam's prosecution of its claims against the Bank in Horton's absence does not implicate these concerns, the Bank's motion fails.
But the Bank does not rely on any of these reasons. Rather, the Bank puts forward a confusing argument based on an apparent misunderstanding of Eleventh Circuit case law addressing joint tortfeasors. Before diving into the Bank's argument, some background is necessary. There is a bright-line rule that joint tortfeasors are not required parties under Rule 19(a). Temple v. Synthes Corp., 498 U.S. 5, 7 (1990); Fed. R. Civ. P. 19(a) advisory committee notes to 1966 amendments ("[A] tortfeasor with the usual `joint-and-several' liability is merely a permissive party to an action against another with like liability."). But the Eleventh Circuit has made some exceptions to this rule, such as in Laker Airways, Inc. v. British Airways, PLC, 182 F.3d 843, 848 (11th Cir. 1999), relied on by the Bank.
The Bank, quoting Laker Airways, argues that "`a joint tortfeasor will be considered a necessary party when the absent party emerges as an active participant in the allegations made in the complaint that are critical to the disposition of important issues in the litigation' and `under the circumstances . . . are more significant than those of routine joint tortfeasor.'" Doc. 4 at 8 (quoting Laker Airways, Inc., 182 F.3d at 848). The Bank continues by asserting that the quantum of Horton's factual involvement in the events underlying the complaint makes him an active participant in the critical alleged events within the Laker Airways exception and thus a required party. Id. at 8-10.
In doing this, the Bank has put the cart before the horse. Without showing a valid Rule 19(a) consideration, there is no need to address the Temple rule.
Though Rule 19(a) offers three, and only three, considerations, the Court notes two considerations that are not on that list: (1) the absentee's usefulness as a fact witness (even if the absentee "emerges as an active participant in the allegations made in the complaint that are critical to the disposition of important issues in the litigation");
The Bank does not explain why the Court cannot accord complete relief to Putnam on its claims against the Bank if it prevails. The Bank does not offer any competing claims as to any existing property interests. The Bank does not explain how proceeding in Horton's absence could subject it or Horton to inconsistent obligations. The Bank does not demonstrate any practical prejudice to either it or Horton. Rather, the Bank's arguments demonstrate that Horton is a material—perhaps key—fact witness. Docs. 4 at 9-10; 8 at 3-7. Further, the Bank offers many practical reasons why joining Horton could be convenient and otherwise a good idea. Id. But all this has nothing to do with Rule 19(a). The Bank's motion under Rule 12(b)(7) for failure to join Horton as a Rule 19 party is accordingly
The Bank seeks transfer of the case to the Northern District, citing inconvenience to itself and its witnesses, the Northern District's involvement in several related actions by the Bank against Horton and Horton entities, as well as the Northern District's involvement in the consent orders at issue here. Doc. 4 at 12-17. But, as Putnam notes, it brought the action in this District, its documentary evidence and its witnesses are located in this District, the auction occurred in this District, and it was not a named party in the previous Northern District action. Doc. 7 at 12-14. Putnam does not appear to be named in the other Horton actions noted by the Bank. See Doc. 4 at 5. The Court is accordingly not convinced that "the convenience of parties and witnesses" or the "interest[s] of justice" dictate transfer. See 28 U.S.C. § 1404(a). The motion to transfer is accordingly
Last, the Bank moves to dismiss Putnam's RICO claim under Rule 12(b)(6). Doc. 4 at 17-20. Putnam's complaint alleges that the Bank and its agents orchestrated two consent orders, effectively committing fraud and theft of Putnam property. Doc. 1 ¶¶ 8, 15, 46. The Bank's motion rests on two grounds. Doc. 8 at 9-10 (clarifying bases for dismissing Putnam's RICO complaint).
First, the Bank argues that the orchestration of the two orders cannot constitute the two predicate acts (referred to by the parties as "indictable activities") required to establish a pattern of racketeering. Docs. 4 at 19; 8 at 9-10; see also Doc. 7 at 17-18. This question seems to boil down to whether the Bank's orchestration of the two consent orders would be separately chargeable (whether as theft or fraud or some other crime) under Georgia law.
Second, the Bank seeks dismissal of Putnam's RICO claim because Putnam has failed to allege a conspiracy. Docs. 4 at 19-20; 8 at 10. This seems to assume that Putnam asserts a RICO conspiracy claim under 18 U.S.C. § 1962(d). But Putnam never asserts a RICO conspiracy claim under 18 U.S.C. § 1962(d). Rather, Putnam seems to rely on Mohawk, which dealt with an 18 U.S.C. § 1962(c) RICO claim. Docs. 7 at 17; 8 at 9; see also Williams v. Mohawk Indus., Inc., 465 F.3d 1277, 1283-84 (11th Cir. 2006). The Court accordingly declines to dismiss on these grounds also.
That said, Putnam is responsible in part for the Bank's exercise in futility. Local Rule 33.3 directed Putnam to file RICO interrogatories with the complaint identifying which subsection (or subsections) of 18 U.S.C. § 1962 it relied on. M.D. Ga. LR 33.3. Putnam did not file the required RICO interrogatories with the complaint. Three months after filing the complaint and after a reminder by the Court, Putnam filed the interrogatories, but they still fail to identify "[w]hether the alleged unlawful conduct is a violation of 18 U.S.C. § 1962(a), (b), (c), (d), or a combination thereof." Doc. 10 at 1. Accordingly, Putnam is
The language quoted by the Bank from Laker Airways is the rule laid down in Haas v. Jefferson National Bank, 442 F.2d 394 (5th Cir.1971). Laker Airways, Inc., 182 F.3d at 848 (quoting Haas, 442 F.2d at 398). In Haas, the court expressly noted two Rule 19(a) considerations: (1) exposure of the named defendant to inconsistent obligations as to the stock at issue, and (2) the possibility of a practical impairment of the absentee's rights in the stock. 442 F.2d 394, 398; see also Laker Airways, Inc., 182 F.3d at 848 (citing Occidental Petroleum Corp. v. Buttes Gas & Oil Co., 331 F.Supp. 92, 106 (C.D. Cal. 1971), aff'd, 461 F.2d 1261 (9th Cir. 1972) (absentee's "status as a joint tortfeasor would not as a practical matter negate its status as a contractual party, with interests that are covered by Rule 19(a)" (emphasis added))).
Also, Laker Airways cites a line of cases recognizing the practical effect of adjudicating disputes that heavily impact unrepresented governmental interests (whether foreign or domestic), which is a Rule 19(a)(1)(B)(i) consideration. See Boles v. Greeneville Hous. Auth., 468 F.2d 476, 479 (6th Cir. 1972) ("In order to grant the relief sought by the appellants this court would be compelled to hold in effect that not only did HUD misinterpret its own guidelines, but that it also misconceived its function and prerogatives under the Urban Renewal Act. To make such a determination without joining HUD is to deprive it of the right to defend the integrity of its administrative decisions in these areas which so intimately affect its policies and procedures." (internal citations omitted)); Occidental Petroleum Corp. v. Buttes Gas & Oil Co., 331 F.Supp. 92, 106 (C.D. Cal. 1971), aff'd, 461 F.2d 1261 (9th Cir. 1972) ("In the present case, however, the fact that the absent co-conspirator is a foreign country could present countervailing considerations against the court's obstructing or countermanding the performance of a contract with it.").
The one additional Temple-exception case cited by the Bank (Doc. 4 at 8-9 n.4)—Geico General Insurance Company v. Gould, 595 F. App'x 901, 906 (11th Cir. 2014)—relied on the rule that "absent tort claimants [are] indispensable parties to [an] insurer's declaratory judgment action against the insured because, were the case allowed to proceed without them, "the claimants' interests would be prejudiced." 595 F. App'x at 906 (quoting Ranger Ins. Co. v. United Housing of New Mexico, 488 F.2d 682 (5th Cir.1974)). This clearly stems from Rule 19(a)(1)(B)(i).
