Rishell v. Jane Phillips Episcopal Memorial Medical Center, 95-5034

• Decision Date: 26 August 1996
• Docket Number: No. 95-5034,95-5034
• Citation: 94 F.3d 1407
• Parties: Max Lee RISHELL, Curator of the person and estate of Kathleen Lacey, an incapacitated person, Plaintiff-Appellant, and Marriott Corporation, as Plan Fiduciary of the Marriott Corporation Multi-Med Health Plan, Plaintiff-Intervenor, v. JANE PHILLIPS EPISCOPAL MEMORIAL MEDICAL CENTER; Jane Phillips Episcopal Hospital, Inc., formerly Jane G. Phillips Memorial Hospital, Inc., doing business as Oklahoma Medical Collection Services; Charles Wellshear, M.D., Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1407

94 F.3d 1407

36 Fed.R.Serv.3d 203

Max Lee RISHELL, Curator of the person and estate of

Kathleen Lacey, an incapacitated person, Plaintiff-Appellant,

and

Marriott Corporation, as Plan Fiduciary of the Marriott

Corporation Multi-Med Health Plan, Plaintiff-Intervenor, v. JANE PHILLIPS EPISCOPAL MEMORIAL MEDICAL CENTER; Jane

Phillips Episcopal Hospital, Inc., formerly Jane G. Phillips

Memorial Hospital, Inc., doing business as Oklahoma Medical

Collection Services; Charles Wellshear, M.D., Defendants-Appellees.

No. 95-5034.

United States Court of Appeals, Tenth Circuit.

Aug. 26, 1996.

Larry Alan Tawwater (Ben T. Lampkin and Jo L. Slama, with him on the brief) of Lampkin, McCaffrey & Tawwater, Oklahoma City, Oklahoma, for Plaintiff-Appellant.

Inona Jane Harness (Haven Tobias, with her on the briefs) of Pierce, Couch, Hendrickson, Baysinger & Green, Oklahoma City, Oklahoma, for Defendant-Appellee Charles Wellshear, M.D.

Stephen J. Rodolf (Barry L. Smith and Leslie C. Weeks, with him on the briefs) of Barkley & Rodolf, Tulsa, Oklahoma, for Defendant-Appellee Jane Phillips Episcopal Hospital.

Before SEYMOUR, Chief Judge, PORFILIO, and TACHA, Circuit Judges.

SEYMOUR, Chief Judge.

This case is before us a second time for review of a pretrial ruling. In the previous appeal, we reversed the district court's determination that diversity jurisdiction was lacking and remanded for further proceedings on the jurisdictional issue. Rishell v. Jane Phillips Episcopal Memorial Medical Ctr., 12 F.3d 171 (10th Cir.1993). On remand the district court overruled defendants' motion to dismiss for lack of diversity jurisdiction, but dismissed the action under Fed.R.Civ.P. 19 for failure to join indispensable parties. Plaintiff again appeals and we reverse.

I

Plaintiff Max Lee Rishell is the curator of the person and estate of Kathleen Lacey. Mrs. Lacey exists in a permanent vegetative state as a result of her failed attempt to commit suicide while she was hospitalized in defendant institution and under the care of defendant Dr. Charles Wellshear. Mr. Rishell brought this negligence action to recover damages resulting from Mrs. Lacey's injuries.

This case has already had a tortuous procedural history. It was originally filed in the Western District of Oklahoma. After that court dismissed for lack of diversity jurisdiction, Mr. Rishell filed this appeal and, together with Mrs. Lacey's husband and children, also filed an action in state court to prevent perceived statute-of-limitations problems. Defendants filed a motion with this court to dismiss the appeal, arguing for the first time that Mrs. Lacey's husband and children are indispensable parties whose joinder would destroy diversity jurisdiction. We summarily denied the motion and directed the parties to proceed with the oral argument scheduled some ten days later. After we reversed and remanded, defendants moved in district court to dismiss for failure to join indispensable parties. While this motion was pending, the court transferred the action to the Northern District of Oklahoma, which granted the motion.

In this appeal, Mr. Rishell contends that this court's order denying defendants' motion to dismiss for lack of indispensable parties constitutes the law of the case, and that the district court therefore had no authority to consider the merits of that issue. Mr. Rishell argues in the alternative that Mrs. Lacey's husband and children are not indispensable parties and that the lower court abused its discretion in holding to the contrary. We conclude that the doctrine of the law of the case does not apply in the circumstances here. We further hold, however, that Mrs. Lacey's husband and children are not indispensable parties. Accordingly, we again reverse and remand for further proceedings.

II

We first address and reject Mr. Rishell's assertion that the district court was precluded by the law of the case from considering the indispensable party issue. As we have noted, defendants' motion filed in this court seeking dismissal for failure to join indispensable parties was summarily denied without discussion. "Law of the case principles do 'not bar a district court from acting unless an appellate decision has issued on the merits of the claim sought to be precluded.' " Wilmer v. Board of County Comm'rs, 69 F.3d 406, 409 (10th Cir.1995) (quoting United States v. Caterino, 29 F.3d 1390, 1395 (9th Cir.1994)).

Mr. Rishell correctly argues that law of the case applies to issues that are resolved implicitly as well as to those decided explicitly. We have articulated three circumstances in which an issue will be considered implicitly decided for purposes of the law of the case. See Guidry v. Sheet Metal Workers Local No. 9, 10 F.3d 700, 707 (10th Cir.1993), modified on other grounds, 39 F.3d 1078 (10th Cir.1994), cert. denied, --- U.S. ----, 115 S.Ct. 1691, 131 L.Ed.2d 556 (1995). The doctrine applies when:

(1) resolution of the issue was a necessary step in resolving the earlier appeal; (2) resolution of the issue would abrogate the prior decision and so must have been considered in the prior appeal; and (3) the issue is so closely related to the earlier appeal its resolution involves no additional consideration and so might have been resolved but unstated.

Id. The district court determined that our summary denial did not fall within any of these circumstances and that we therefore did not implicitly decide the indispensable party issue. ¹

Mr. Rishell does not argue that the district court applied these factors incorrectly. He contends instead that our summary denial implicitly decided the issue because it was presented in the motion we denied. Although we acknowledge that the three factors set out above are not exhaustive, see id. at 707 n. 5, we nevertheless rejected an analogous argument in Wilmer. There the defendant argued that because a court must always satisfy itself of its jurisdiction, a decision on the merits is an implicit ruling that jurisdiction is present. We disagreed, holding that even though the jurisdictional issue had been recognized by the dissenting opinion, "such a theoretical consideration should not be confused with the implicit but actual determination necessary to invoke the law of the case doctrine." Wilmer, 69 F.3d at 409 (emphasis in original). Here, as in Wilmer, the fact that a court of appeals should raise the issue of indispensable parties sua sponte does not in and of itself require the imputation of an implicit determination of the issue. We conclude that the district court was not barred from addressing the indispensable party issue on remand, and we therefore turn to the merits of that issue.

III

"We review a district court's decision as to whether a party is indispensable for an abuse of discretion." Resolution Trust Corp. v. Stone, 998 F.2d 1534, 1549 (10th Cir.1993). In so doing, we "must consider 'whether the decision maker failed to consider a relevant factor, whether he [or she] relied on an improper factor, and whether the reasons given reasonably support the conclusion.' " Kickapoo Tribe of Indians in Kansas v. Babbitt, 43 F.3d 1491, 1497 (D.C.Cir.1995)(quoting Johnson v. United States, 398 A.2d 354, 365 (D.C.1979)) (alteration in original). The standards set out in Rule 19 for assessing whether an absent party is indispensable are to be applied "in a practical and pragmatic but equitable manner." Francis Oil & Gas, Inc. v. Exxon Corp., 661 F.2d 873, 878 (10th Cir.1981). See also Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 106-07, 88 S.Ct. 733, 736-37, 19 L.Ed.2d 936 (1968). "The moving party has the burden of persuasion in arguing for dismissal." Makah Indian Tribe v. Verity, 910 F.2d 555, 558 (9th Cir.1990).

Determining whether an absent party is indispensable requires a two-part analysis. See id.; Francis Oil & Gas, 661 F.2d at 877-78. The court must first determine under Rule 19(a) whether the party is necessary to the suit and must therefore be joined if joinder is feasible. If the absent party is necessary but cannot be joined, the court must then determine under Rule 19(b) whether the party is indispensable. If so, the suit must be dismissed.

Whether Mrs. Lacey's husband and children are necessary parties under Rule 19(a) requires assessment of three factors. The court must consider (1) whether complete relief would be available to the parties already in the suit, (2) whether the absent party has an interest related to the suit which as a practical matter would be impaired, and (3) whether a party already in the suit would be subjected to a substantial risk of multiple or inconsistent obligations. ² In ruling that the absent parties here are necessary, the district court concluded that a disposition in this action might impair or impede their ability to protect their own interests. See Aplt.App. vol. III, at 594. ³

We are not convinced that, as a practical matter, the interests of the absent parties will be impaired by this suit. It is true that under Oklahoma law the interest of the husband in recovering damages for loss of consortium arising from injuries to his wife is derivative of the wife's right to recover, and that the husband would therefore be barred in the state court action by an adverse determination here. See Laws v. Fisher, 513 P.2d 876 (Okla.1973). ⁴ However, the prejudice to the relevant party's interest "may be minimized if the absent party is adequately represented in the suit." Makah Indian Tribe, 910 F.2d at 558. See also Wichita & Affiliated Tribes of Oklahoma v. Hodel, 788 F.2d 765, 774-75 (D.C.Cir.1986); Heckman v. United States, 224 U.S. 413, 444-45, 32 S.Ct. 424, 434, 56 L.Ed. 820 (1912); 3A James Moore, Moore's Federal Practice p 19.07[2.-1], at 19-106 (2d ed. 1995) ("the fact that the absent person may be bound by the judgment does not of itself require his joinder if his interests are fully represented by parties present").

Mr. Rishell, as Mrs. Lacey's...