Tell v. Trustees of Dartmouth College, 97-2098
| Decision Date | 06 February 1998 |
| Docket Number | No. 97-2098,97-2098 |
| Citation | 145 F.3d 417 |
| Parties | 127 Ed. Law Rep. 48 William K. TELL, et al., Plaintiffs, Appellants, v. TRUSTEES OF DARTMOUTH COLLEGE, Defendant, Appellee. . Heard |
| Court | U.S. Court of Appeals — First Circuit |
W. Wright Danenbarger with whom Thomas W. Aylesworth and Wiggin & Nourie, P.A. were on brief, for appellants.
Sean M. Gorman, Associate College Counsel, Dartmouth College, for appellee.
Before TORRUELLA, Chief Judge, BOUDIN and LYNCH, Circuit Judges.
This suit was brought in the federal district court by William Tell and six other alumni of Dartmouth College against the Trustees of Dartmouth College (the corporate name of Dartmouth College). Appellants claimed to represent Dartmouth's alumni as a class and challenged certain changes in the arrangements for the election of trustees. The district court dismissed the case for lack of an indispensable party, and this appeal followed.
Because the district court did not reach the merits, a condensed version of the dispute will suffice. Under an 1891 understanding between Dartmouth and its alumni--which appellants claim to have been a contract--the alumni effectively choose a certain number of the trustees; the Dartmouth College Alumni Association, an unincorporated association comprising all Dartmouth alumni, conducts an election if there is any contest among nominees. Prior to 1990, this process was used to fill both a trustee's initial term and any subsequent terms.
In or about 1990, Dartmouth's Board of Trustees and the Alumni Association modified this arrangement in one respect: it was agreed that the Board of Trustees would have the power to reseat a trustee, originally chosen by the alumni, for an additional term without obtaining the alumni's further approval. The Alumni Association amended its constitution in September 1990 to reflect this change. Some of the alumni, of whom the appellants are examples, fiercely oppose the change as a surrender of the alumni's power.
Appellants brought suit in state court, arguing that the change in the Alumni Association's constitution was unlawful. The case was dismissed, and the appeal was declined by the New Hampshire Supreme Court. Appellants then brought the present suit against the Trustees in federal district court. The suit alleges that the Board of Trustees violated its fiduciary duties and its contractual obligations under the 1891 agreement by modifying alumni rights as to the election of trustees. There were additional claims of breach of fiduciary duty largely ancillary to the main challenge.
On motion by the Board of Trustees, the district court dismissed the case, without prejudice, under Fed.R.Civ.P. 19. It held that the Alumni Association was a necessary party under Rule 19(a); that it could not be joined without undermining diversity (the original basis for federal jurisdiction); and that without the Alumni Association, the action could not proceed "in equity and good conscience ... among the parties before [the court]" and should therefore be dismissed, "the absent person being thus regarded as indispensable." Fed.R.Civ.P. 19(b).
There is apparently some difference among the circuits as to standard of review of decisions as to necessary joinder under Rule 19(a). Compare, e.g., Keweenaw Bay Indian Community v. Michigan, 11 F.3d 1341, 1346 (6th Cir.1993), with Hellebust v. Brownback, 42 F.3d 1331, 1335 (10th Cir.1994). Normally, abstract issues of law are reviewed de novo, and judicial findings of fact for clear error. See Sacramona v. Bridgestone/Firestone, Inc., 106 F.3d 444, 446 (1st Cir.1997). The dispute, if any, is usually about the extent to which the reviewing court should defer to the district judge's application of a general standard ("prejudice," "equity") to specific facts. Strictly speaking, this is an issue of law, but one where the appeals courts often give the trial judge latitude, 1 but not always. See, e.g., Ornelas v. United States, 517 U.S. 690, 699-700, 116 S.Ct. 1657, 134 L.Ed.2d 911 (1996).
If it mattered, this panel would be inclined to apply an abuse of discretion standard to such application-of-law decisions under Rule 19(a). See Travelers Indem. Co. v. Dingwell, 884 F.2d 629, 635 (1st Cir.1989) (). However, the outcome would be the same even if we decided the application issues afresh. The district court has lucidly explained why the Alumni Association is an indispensable party, and we affirm primarily on the basis of the district court's decision, adding these further comments to address specific points raised by appellants.
First, appellants say that the Alumni Association has been silent and therefore cannot be a person who "claims an interest relating to the subject of the action and is so situated that the disposition of the action in the person's absence" may have the prejudicial effect described in Rule 19(a). But "claims an interest" in this context means nothing more than appears to have such an interest. 2 The situation would be different if the allegedly necessary party disclaimed an interest. See Northrop Corp. v. McDonnell Douglas Corp., 705 F.2d 1030, 1044 (9th Cir.), cert. denied, 464 U.S. 849, 104 S.Ct. 156, 78 L.Ed.2d 144 (1983).
Appellants next say that the Alumni Association was not a "party" to the 1891 understanding and is therefore unaffected by a determination as to rights under the alleged contract. The district court said that the Alumni Association was a party to the 1891 understanding, but we need not resolve the issue. It is enough that the Alumni Association has long administered contested elections under the 1891 understanding, has changed its constitution to conform to the 1990 modification, and would assuredly have to alter its conduct and its constitution if appellants showed that the modification was unlawful.
Appellants next urge that even if the Alumni Association does have an interest in the case, its interest is adequately represented by the Board of Trustees. If an absent party's interests are the same as those of an existing party, and the existing party will adequately protect those interests, this bears on whether the absent party's interest will be impaired by its absence from the litigation. See Pujol v. Shearson/American Express, Inc., 877 F.2d 132, 135 (1st Cir.1989). But without a perfect identify of interests, a court must be very cautious in concluding that a litigant will serve as a proxy for an absent party. See 4 R.D. Freer, Moore's Federal Practice § 19.03[f], at 19-56 to 19-57 (3d ed.1998).
In this instance, the interests of the Alumni Association and the Board of Trustees were not shown to be precisely the same; indeed, an obvious potential exists for conflict about the binding effect of the 189...
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