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Pennsylvania International Education Service Group, LLC v. Xie

United States District Court, E.D. Virginia, Alexandria Division

May 11, 2015

PENNSYLVANIA INTERNATIONAL EDUCATION SERVICE GROUP, LLC, Plaintiff,
v.
PETER XIE, et al., Defendants.

MEMORANDUM OPINION

JAMES C. CACHERIS, District Judge.

This matter is before the Court on the collective Defendants' Motion for Joinder. [Dkt. 25.] For the following reasons, the Court will grant the motion.

I. Background

Plaintiff Pennsylvania International Education Service Group, LLC d/b/a PIESG China ("PIESG China") filed this lawsuit against Defendants Peter Xie ("Mr. Xie"), Pennsylvania International Education Service Group, LLC ("PIESG US"), and UC Educations, LLC ("UC Educations") (collectively "Defendants"), alleging, inter alia, that Defendants breached a partnership agreement with PIESG China, a Limited Liability Company, which was entered into for the purpose of operating an international exchange student program between China and the United States. (Compl. [Dkt. 1] at ¶¶ 7-10.) PIESG China claims[1] that Defendants breached the agreement when they failed to pay net profits owed, and requests monetary damages, in addition to other equitable relief. (Id. at 3, 10-12.)

On March 18, 2015, after the Court denied Defendants' motion to dismiss, Defendants filed an Answer to the Complaint with Counterclaims, [2] alleging generally that there never was a partnership agreement, but that instead, PIESG China conspired with others to interfere with Defendants' international exchange student business. (Answer & Countercl. [Dkt. 24] at 5-11.) Specifically, Defendants filed counterclaims against named-Plaintiff PIESG China and Ms. Mary Ma, a non-party. Defendants request compensatory and punitive damages and both PIESG China and against Mary Ma. (Id. at 11.)

On March 27, 2015, Defendants filed a Motion for Joinder "pursuant to Rule 19 of the Federal Rules of [Civil] Procedure... request[ing] that the Court join Mary Ma as the proper plaintiff to this action and, if Ms. Ma refuses to join the action as a party, that the Court dismiss the action because Ms. Ma is necessary and [an] indispensable party to this action." (Defs.' Mot. [Dkt. 25] at 1.) PIESG China, for reasons not clear to the Court, opposes Defendants' motion, argues that Ms. Ma is neither necessary nor indispensable, and asks that the Court deny the motion. (Pl.'s Opp'n [Dkt. 30].) Defendants filed a reply brief in support of their motion. (Defs.' Reply [Dkt. 31].) For the reasons discussed below, the Court will grant the motion because Mary Ma should be and can be joined in this action.

II. Standard of Review

"When a party to a federal lawsuit moves to join a nonparty resisting[3] joinder, the district court must answer three questions: Should the absentee be joined? If the absentee should be joined, can the absentee be joined? If the absentee cannot be joined, should the lawsuit proceed without her nonetheless?" W. Md. Ry. Co. v. Harbor Ins. Co., 910 F.2d 960, 961 (D.C. Cir. 1990) (citations omitted). Rule 19 of the Federal Rules of Civil Procedure mirrors this "analytical sequence that district courts follow in deciding a party-joinder question." 7 Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1604 (3d ed. 2015). To determine whether an absentee party is necessary and should be joined, Rule 19 provides in relevant part:

(a) Persons Required to Be Joined if Feasible.
(1) Required Party. A person who is subject to service of process and whose joinder will not deprive the court of subject-matter jurisdiction must be joined as a party if:
(A) in that person's absence, the court cannot accord complete relief among existing parties....

Fed. R. Civ. P. 19 (emphasis added). "Complete relief' is any relief that will effectively and completely adjudicate the dispute.'" Pettiford v. City of Greensboro, 556 F.Supp.2d 512, 518 (M.D. N.C. 2008) (citing Wright & Miller, at § 1604). If the party should be joined and can be joined without depriving the court of subject-matter jurisdiction, the Court must order joinder. Teamsters Local Union No. 171 v. Keal Driveway Co., 173 F.3d 915, 917-18 (4th Cir. 1999).

If the party cannot be joined, either because the absentee is not subject to service of process or because joinder would destroy complete diversity, only then must the Court determine whether the absentee party is "indispensable" under Rule 19(b). Home Buyers Warranty Corp. v. Hanna, 750 F.3d 427, 434 (4th Cir. 2014) (determining "whether the proceeding can continue in that party's absence") (quoting id.). Rule 19 also governs the joinder of additional parties to a counterclaim or crossclaim. See Fed.R.Civ.P. 13(h) ("Rules 19 and 20 govern the addition of a person as a party to a counterclaim or crossclaim."); see also. "[I]ndividuals jointly and severally liable and parties ...


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