Haas v. Jefferson National Bank
442 F.2d 394 (5th Cir. 1971)
Haas made a private deal to
buy some stock with a guy named Glueck. The shares were issued in
Glueck's name and filed with the Jefferson Bank.
After a few years, Haas asked
Glueck to get his half of the shares reissued in his name. Glueck was
willing to do it, but Jefferson refused to reissue the shares.
Jefferson claimed that
Glueck was using the shares as collateral for a loan, so they couldn't be
They also claimed that they
had no evidence that Haas owned some of the shares.
Haas sued Jefferson to force them to issue him his shares.
Haas sued in Federal Court
on diversity jurisdiction.
The Trial judge ordered Haas
to amend his complaint, and join Glueck
as an indispensable party
to the lawsuit.
Then, the Trial judge
dismissed the complaint on jurisdictional grounds for incomplete
Haas and Glueck were both
Haas appealed, claiming that
he never wanted Glueck as a party to the lawsuit.
The Appellate Court affirmed
The Appellate Court noted
that under Rule 19, certain
parties must be joined if feasible:
In specific, Rule
19(a)(2)(ii) requires joining when
"disposition of the action in the person's absence may leave any of the
persons already parties subject to a substantial risk of incurring
double, multiple, or otherwise inconsistent obligations by reason of the
Basically, if Haas sued and
won, the Court would rule that Glueck should sign over his stock to
Haas. But if Glueck isn't a party to the lawsuit he can't be bound by
The Court also
ruled that without complete diversity, they had no jurisdiction to hear the
considered Haas, and pointed out that he is not barred from suing, he could
always take his to a State court, he just couldn't sue in a Federal court.
Couldn't it be argued that,
due to the diversity issue, it was not "feasible" to join Glueck, and therefore not required based on the
language of Rule 19?
Rule 19 does not allow for supplemental
jurisdiction, which might otherwise be appropriate for cases