United States District Court, W.D. Wisconsin
D. PETERSON, DISTRICT JUDGE
plaintiff Timothy Schulenburg alleges that defendant Navient
has wrongfully refused to separate his consolidated spousal
loan. Dkt. 1. Plaintiff asks me to order Navient to split the
loan into two loans or, in the alternative, to discharge the
loan entirely. This case has a complicated procedural
history, which I have already discussed in prior orders and
will not rehash here.
final pretrial conference on August 15, 2016, I explained
that plaintiff would need to join his ex-wife as a required
defendant in this case because the relief that he seeks will
directly affect her rights and responsibilities under the
consolidated loan. But upon further consideration, I conclude
that joining plaintiff’s ex-wife will deprive this
court of subject matter jurisdiction. Because “equity
and good conscience” would not allow the case to
continue without plaintiff’s ex-wife, I will dismiss it
without prejudice. Fed.R.Civ.P. 19(b).
why. Federal Rule of Civil Procedure 19 governs joinder of
required parties. “The purpose of Rule 19 . . . is
‘to permit joinder of all materially interested parties
to a single lawsuit so as to protect interested parties and
avoid waste of judicial resources.’” Davis
Cos. v. Emerald Casino, Inc., 268 F.3d 477, 481 (7th
Cir. 2001) (quoting Moore v. Ashland Oil, Inc., 901
F.2d 1445, 1447 (7th Cir. 1990)). Plaintiff’s ex-wife
is a required party because she has an interest in the
subject matter of this action-the consolidated loan-and
disposing of this action may “as a practical matter
impair or impede [her] ability to protect [her]
interest[.]” Fed.R.Civ.P. 19(a)(1)(B)(i); see also
U.S. ex rel. Hall v. Tribal Dev. Corp., 100 F.3d 476,
479 (7th Cir. 1996) (“A judicial declaration as to the
validity of a contract necessarily affects, ‘as a
practical matter, ’ the interests of both parties to
the contract.”). If plaintiff gets what he wants, his
ex-wife will be stuck with sole responsibility for at least
part of the loan, and perhaps all of it.
this creates a problem: plaintiff cannot join his ex-wife
because her joinder-although required-would destroy this
court’s subject matter jurisdiction over
plaintiff’s claims. Plaintiff’s claims in this
case arise under state law. But I have jurisdiction over
state law disputes only if the opposing parties are citizens
of different states. 28 U.S.C. § 1332(a)(1). Plaintiff
is a citizen of Wisconsin. And based on publicly available
information, plaintiff’s ex-wife appears to be a
citizen of Wisconsin as well. Because plaintiff and his ex-wife
are both citizens of Wisconsin, I do not have jurisdiction
over the dispute between them.
19(b) tells me how to proceed when I determine that it is not
possible to join a required party. Specifically, I
“must determine whether, in equity and good conscience,
the action should proceed among the existing parties or
should be dismissed.” Fed.R.Civ.P. 19(b). When
determining whether the case should proceed without a
required party, courts consider several factors, on a
case-by-case basis: (1) the extent to which a judgment
rendered in the person’s absence might prejudice that
person or the existing parties; (2) the extent to which any
prejudice could be lessened or avoided by protective
provisions in the judgment, shaping the relief, or other
measures; (3) whether a judgment rendered in the
person’s absence would be adequate; and (4) whether the
plaintiff would have an adequate remedy if the action were
dismissed for nonjoinder.
the final pretrial conference, I discussed the first factor
and the potential prejudice that plaintiff’s ex-wife
would suffer if this case proceeded without her. This
prejudice is considerable: a judgment in plaintiff’s
favor would impose significant financial obligations on his
ex-wife. Basic fairness requires giving her an opportunity to
participate in a case that could affect these obligations.
This factor weighs in favor of dismissing the case.
second factor also weighs in favor of dismissing the case.
“The second factor requires the court to consider
whether it could shape its ultimate ruling so as to mitigate
its effect on the absent party.” Burger King Corp.
v. Am. Nat. Bank & Trust Co. of Chi., 119 F.R.D.
672, 680 (N.D. Ill. 1988). I cannot conceive of a way to
shape the judgment in this case in a way that protects
plaintiff’s ex-wife from potential prejudice.
Plaintiff’s request for relief reveals that this case
is essentially a zero-sum game: if he prevails on his fraud
allegations and I determine that he is not responsible for
the entire consolidated loan, then plaintiff’s wife
incurs additional obligations. In fact, any judgment
in this case will be a judgment concerning the nature of the
consolidated loan, to which plaintiff’s ex-wife is a
party. There is no way around that fact.
third factor weighs in favor of continuing this action
without joining plaintiff’s ex-wife. Her absence does
not affect my ability to enter a judgment that will address
plaintiff’s injuries. But even though this factor
weighs in favor of continuing the case, the other factors
weigh strongly in favor of dismissal.
fourth factor is particularly important here: whether
plaintiff will have an adequate remedy elsewhere. “A
critical consideration under Rule 19(b) is the availability
or unavailability of an alternative forum.” Pasco
Int’l (London) Ltd. v. Stenograph Corp., 637 F.2d
496, 500 (7th Cir. 1980). As I discussed at the final
pretrial conference, plaintiff’s fundamental complaint
is with his ex-wife, who has refused to pay her share of
their consolidated student debt. Plaintiff can pursue a claim
against his ex-wife-and against Navient, too-in state court.
This final factor weighs in favor of dismissing the case.
to Rule 19, I will dismiss this case because it would not be
equitable to proceed without joining plaintiff’s
ex-wife. If plaintiff’s ex-wife is not a
citizen of Wisconsin, or if the parties disagree that Rule 19
requires dismissing this case, then they may file a motion
case is DISMISSED without prejudice, pursuant to Federal ...