United States District Court, District of Columbia
MEMORANDUM OPINION RE DOCUMENT NOS.: 26, 40,
RUDOLPH CONTRERAS, UNITED STATES DISTRICT JUDGE.
Memorandum Opinion addresses whether Federal Rule 19 requires
that certain parties be joined to this lawsuit before it may
continue, and it evaluates Plaintiff's two remaining
summary judgment arguments. The lawsuit arose from a dispute
between Plaintiff Neway Alemayehu and Defendants Belay Abere,
Bekalu Bayabile, and Iyossias Tilahun regarding their
involvement in a Washington, D.C. restaurant venture. During
a recent round of briefing, the Court became aware that two
of Mr. Abere's counterclaims implicate the contractual
rights of two non-parties. Concerned that Rule 19 may require
that the non-parties be joined so that they may protect their
interests, the Court directed the parties to provide
supplemental briefing on the issue. Having reviewed the
briefing, the Court concludes that Rule 19 does not require
the non-parties to be joined, and it grants in part and
denies Mr. Alemayehu's two summary judgment arguments
implicated by the Rule 19 issue.
March 2016, Mr. Alemayehu filed the complaint initiating this
lawsuit. See generally Compl., ECF No. 1. Mr. Abere,
in turn, filed a counterclaim against Mr. Alemayehu,
triggering the briefing that precipitated the Rule 19 issue.
See generally Countercl., ECF No. 4. In his
counterclaim, Mr. Abere asserts breach of fiduciary duty and
breach of contract claims premised in part on the allegation
that Mr. Alemayehu forged Mr. Abere's signature on a
settlement agreement (the “Agreement”) with Mr.
Abere's sub-tenant, Wilson Concepts, LLC and its
proprietor, Garnell Wilson (collectively, the “Wilson
Parties”). Countercl. ¶ 30-31. The Agreement
allegedly released Mr. Abere's claims against the Wilson
Parties arising from the sub-lease. Id.
Alemayehu argues that he should be granted summary judgment
on these claims because his alleged forgery could not have
harmed Mr. Abere. Pl.'s Mot. Dismiss Alt. Summ. J.
(“Pl.'s Mot. Summ. J.”) at 8-11, ECF No. 26.
According to Mr. Alemayehu, the Agreement was conditioned on
Mr. Wilson transferring a liquor license from Wilson Concepts
to an LLC created by Mr. Abere, Belayabere Enterprises LLC,
and that transfer never occurred. Id. Because a
necessary condition of the Agreement was not met, Mr.
Alemayehu argues, it never became operative and it did not
release Mr. Abere's claims. Id. In other words,
Mr. Alemayehu's defense to these particular counterclaims
hinges on whether an agreement between Mr. Abere, a party,
and the Wilson Parties, non-parties, was fully executed.
prior Memorandum Opinion, the Court recognized the tension
created by interpreting an agreement to which a non-party is
a signatory. It noted that “the argument advanced by
Mr. Alemayehu concerns the enforceability of the Settlement
Agreement with Wilson Concepts and Mr. Wilson . . . Yet,
those contractual rights are being considered without their
participation.” Alemayehu v. Abere, No.
16-0596, 2018 WL 1129661, at *11 (D.D.C. Feb. 26, 2018).
Discharging its “independent duty to raise a Rule 19(a)
issue sua sponte, ” it declined to address Mr.
Alemayehu's summary judgment arguments related to the
Agreement and it ordered the parties to provide supplemental
briefing explaining whether Rule 19 mandates joinder of the
Wilson Parties to this lawsuit. Id. at *10 (quoting
Cook v. FDA, 733 F.3d 1, 6 (D.C. Cir. 2013)
(internal quotation and alteration omitted)). Having received
the parties' supplemental briefing, the Court takes up
Court holds that Rule 19 does not require the Wilson Parties
to be joined to the litigation. Rule 19 has three provisions
that trigger mandatory joinder of a party, but the only
relevant provision here requires that “[a] person . . .
must be joined as a party if . . . 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, as a practical matter impair or impede the
person's ability to protect the interest.”
Fed.R.Civ.P. 19(a)(1)(B)(i).0F It is intended to “promote[
] fair treatment of nonparties in certain circumstances where
their interests, and particularly their due process rights,
are at risk from litigation between others.” Nanko
Shipping, USA v. Alcoa, Inc., 850 F.3d 461, 464 (D.C.
Cir. 2017). If a required party cannot be joined, the Court
must examine the factors in Rule 19(b) to “determine
whether in equity and good conscience, the action should
proceed among the parties before it, or should be dismissed,
the absent person being regarded as indispensable.”
Fed.R.Civ.P. 19(b); see Cherokee Nation of Okla. v.
Babbitt, 117 F.3d 1489, 1495-96 (D.C. Cir. 1997). Here,
the Court need not proceed to the second step of the Rule 19
analysis because the Wilson Parties are not required parties.
parties' sparse briefing on this issue focuses on whether
the Court's interpretation of the Agreement would have
preclusive effect in subsequent litigation between Mr. Abere
and the Wilson Parties. Mr. Alemayehu argues that Rule 19
does not require joinder because “even if [Mr.
Alemayehu's] actions were unauthorized and this Court is
called upon to determine whether the settlement agreement
ever took effect, any such determination would not be binding
on the Wilson Parties.” Pl.'s Mem. P. & A.
Regarding Joinder ¶ 11, ECF No. 40. Thus, the Wilson
Parties “would not be prejudiced and their interests
would not be put at risk by any determination in this case
that the Agreement never took effect.” Id.
¶ 12. In response, Mr. Abere argues that the
“doctrine of collateral estoppel and its potential
application are not relevant to the analysis of whether [the
Wilson Parties] should be joined as necessary parties.”
Def.'s Resp. Pl.'s Mem. P. & A. Regarding Joinder
¶ 3, ECF No. 44 (citing Janney Montgomery Scott,
Inc. v. Shepard Niles, Inc., 11 F.3d 399, 409 (3d Cir.
1993)). Both parties oversimplify issue preclusion's role
in the analysis, but Mr. Alemayehu's argument is closer
to the mark.
preclusive effect of this Court's ruling is a relevant
factor in its Rule 19 analysis, and it weighs against joining
the Wilson Parties here. Mr. Alemayehu correctly asserts that
because the Wilson Parties are not participating in this
litigation, they are not bound by the Court's decisions
and will not be precluded from re-litigating the Agreement.
See In re Subpoena Issued to CFTC, 370 F.Supp.2d
201, 206 (D.D.C. 2005). The Third Circuit case Mr. Abere
cites in his Opposition Brief aptly describes the point at
which issue preclusion triggers Rule 19 joinder: “Mere
presentation of an argument that issue preclusion is possible
is not enough to trigger Rule 19(a)(2)(i). Rather, it must be
shown that some outcome of the federal case that is
reasonably likely can preclude the absent party with respect
to an issue material to the absent party's rights or
duties under standard principles governing the effect of
prior judgments.” Janney Montgomery Scott,
Inc., 11 F.3d at 409. That threshold is not met here,
because the Wilson Parties are not legally impaired from
protecting their interests in subsequent litigation.
Court's Rule 19 analysis may not stop there; a court may
not “proceed without considering the potential effect
on nonparties simply because they are not ‘bound'
in the technical sense.” Provident Tradesmens Bank
& Trust Co. v. Patterson, 390 U.S. 102, 110 (1968).
Given the opportunity, however, Mr. Abere has not described
how, in the absence of legally binding effect, the
Court's ruling may otherwise practically impair the
Wilson Parties. Further, in this District “Rule 19 does
not require joinder merely because a case calls for
interpretation of an agreement to which a non-party is a
signatory.” Saddler v. AMEC Foster Wheeler
Env't & Infrastructure, Inc., 253 F.Supp.3d 210,
218 (D.D.C. 2017) (holding non-party was not a required party
even though the case concerned breached duties allegedly
created by the non-party's contract with the defendant);
see Nanko Shipping, USA, 850 F.3d at 465 (holding
non-party signatory to the contract at issue was not a
required party because “due process protects
[non-party] from being bound”); cf. Huber v.
Taylor, 532 F.3d 237, 251 (3d Cir. 2008) (holding that
Rule 19 was not triggered where “the outcome of this
lawsuit might in some unspecified way have a preclusive
effect with respect to some issue material to [the
non-parties'] rights in some future lawsuit that may or
may not be filed”).
reasoning is dispositive here. The Wilson Parties will not be
precluded from fully litigating the Agreement in any
subsequent lawsuit with Mr. Abere. Mr. Abere has pointed to
no other practical impairment the Wilson Parties may face
should they not be joined. And the Wilson Parties have no
interest in the core subject of this action, the personal
dispute between Mr. Alemayehu, Mr. ...