VAN GRAAFEILAND, Circuit Judge:
When the first federal census was conducted in 1790, the total population of the United States was less than 4,000,000.1 New York City, the country’s largest municipality, had only 33,000 inhabitants.2 Despite these relatively small numbers, the census, which was conducted by United States Marshals, did not go smoothly. Transportation and communication were inadequate.3 Boundaries of towns and cities were often undefined.4 Cooperation by the citizenry was less than complete. Some people distrusted the newly-formed federal government; others were influenced by a [735]*735fear of increased taxation; many opposed the basic concept of a census.5
Because art. 1, § 2, cl. 3 of the then newly-enacted Constitution provided that members of the House of Representatives and direct taxes should be apportioned among the States according to population, it had been anticipated that the census would provide an accurate count. A State’s temptation to exaggerate its population count for purposes of congressional representation would be offset by its desire to reduce its apportioned share of direct taxes.6 However, when the census was finally completed in 1791, there was a fairly widespread belief that it had resulted in a substantial undercount.7
Although the mechanics of the counting process have been improved in each of the nineteen ensuing censuses, there has never been a perfect count.8 This is concededly true of the 1980 census. In keeping with the spirit of the times, States and municipalities in various parts of the country are seeking to remedy this most recent imperfection through litigation.9 Approximately fifty lawsuits have been brought by or on behalf of subordinate government bodies, in each of which the claim of a substantial local or regional undercount is made.10
[736]*736This is an appeal from a judgment of the United States District Court for the Southern District of New York, 508 F.Supp. 420, in an action alleging undercounts in the State and City of New York. The judgment orders the Census Bureau to adjust population figures for the State and City “in a reasonable and scientific manner” and to report to the court within thirty days the Bureau’s plan to effectuate the court’s ruling.11 For reasons hereafter assigned, we reverse and remand for a new trial.
Although the census is the delight of statisticians and sociologists and serves as a convenient measuring stick for the dispensing of federal funds, it was not created for those purposes. Its purpose under the Constitution was to determine the apportionment of Representatives among the States. “Representatives .. . shall be apportioned among the several States . . . according to their respective Numbers . ...”12 In reviewing the judgment on appeal, it is important that we keep this basic constitutional purpose in mind.
The House of Representatives has 435 members, and this number must be apportioned among the fifty States. If one State gains a member, another must lose one. Following the 1960 census, seven States each gained one seat, one State gained four, and one gained eight. As a result, twelve States each lost one seat, three States each lost two seats, and one State lost three seats.13 Following the 1970 census, three States each gained one seat, one gained three, and one gained five. Seven States each lost one seat, and two States each lost two seats.14 In effect, House membership is a fund in which fifty States have an interest. No State’s share can be increased without adversely affecting at least one other State. The question presented by litigation such as the one now before us is whether one State can be granted such an increase without full consideration having been given to its effect on other States.
Persons “who not only have an interest in the controversy but an interest of such a nature that a final decree cannot be made without either affecting that interest, or leaving the controversy in such a condition that its final termination may be wholly inconsistent with equity and good conscience” are traditionally considered to be indispensable parties.15 Equity suggests that a person be brought into the litigation if the case cannot be decided on its merits without prejudicing his rights.16 This not only prevents possible injury to the absent person; it avoids multiplicity of suits and the danger of inconsistent decisions.17
[737]*737Although the present action has already been before this Court on an appeal from a preliminary injunction order, we did not consider any of the factors just set forth. The panel hearing that appeal held only that plaintiffs have standing to sue and that the issue of census mismanagement is justiciable rather than political.18 The panel did not address appellants’ contention that the issuance of the preliminary injunction order was an abuse of discretion because it “overlook[ed] the impact on other cities and states.”19 The panel concluded that “[t]he argument that a court decision may provide special treatment for the parties involved is one for the ultimate trial on the merits and decision on appeal.”20 We have now reached that point in the litigation.
We think it clear beyond cavil that a statistically formulated increase in the population of only one Stete, such as New York, will have an adverse effect on other States which are entitled to, but do not receive, the benefit of a similar adjustment. Even if the increase is insufficient to change House membership, it will nonetheless increase New York’s share in the numerous revenue sharing plans that are tied into the census. The adversely affected States therefore fall within the category of parties who should be joined in the instant litigation if feasible.21 Because compulsory joinder of all fifty States was not feasible in the district court, pragmatic equitable alternatives should have been considered.22
The first alternative, which the prior panel of this Court has already rejected, would have been to substitute Bureau and congressional review for that of the court.23 This is the recommendation of the Association of the Bar’s Special Committee on Empirical Data in Legal Decision Making which concludes its report with the following observation:
The path to a better census is more likely to be found in scrutiny of Bureau procedures by the Bureau itself, Congress, other federal agencies, and interested professional groups than in litigation to compel adjustment.24
A second alternative would have been to require that notice of suit be given to all of the States, with permission to intervene given any State which felt that its interests were imperiled. Apparently, no notice was given anyone; only the County of Suffolk sought intervention, and its application was denied.
A third alternative would have been to seek multidistrict coordinated or consolidated pretrial proceedings pursuant to 28 U.S.C.
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VAN GRAAFEILAND, Circuit Judge:
When the first federal census was conducted in 1790, the total population of the United States was less than 4,000,000.1 New York City, the country’s largest municipality, had only 33,000 inhabitants.2 Despite these relatively small numbers, the census, which was conducted by United States Marshals, did not go smoothly. Transportation and communication were inadequate.3 Boundaries of towns and cities were often undefined.4 Cooperation by the citizenry was less than complete. Some people distrusted the newly-formed federal government; others were influenced by a [735]*735fear of increased taxation; many opposed the basic concept of a census.5
Because art. 1, § 2, cl. 3 of the then newly-enacted Constitution provided that members of the House of Representatives and direct taxes should be apportioned among the States according to population, it had been anticipated that the census would provide an accurate count. A State’s temptation to exaggerate its population count for purposes of congressional representation would be offset by its desire to reduce its apportioned share of direct taxes.6 However, when the census was finally completed in 1791, there was a fairly widespread belief that it had resulted in a substantial undercount.7
Although the mechanics of the counting process have been improved in each of the nineteen ensuing censuses, there has never been a perfect count.8 This is concededly true of the 1980 census. In keeping with the spirit of the times, States and municipalities in various parts of the country are seeking to remedy this most recent imperfection through litigation.9 Approximately fifty lawsuits have been brought by or on behalf of subordinate government bodies, in each of which the claim of a substantial local or regional undercount is made.10
[736]*736This is an appeal from a judgment of the United States District Court for the Southern District of New York, 508 F.Supp. 420, in an action alleging undercounts in the State and City of New York. The judgment orders the Census Bureau to adjust population figures for the State and City “in a reasonable and scientific manner” and to report to the court within thirty days the Bureau’s plan to effectuate the court’s ruling.11 For reasons hereafter assigned, we reverse and remand for a new trial.
Although the census is the delight of statisticians and sociologists and serves as a convenient measuring stick for the dispensing of federal funds, it was not created for those purposes. Its purpose under the Constitution was to determine the apportionment of Representatives among the States. “Representatives .. . shall be apportioned among the several States . . . according to their respective Numbers . ...”12 In reviewing the judgment on appeal, it is important that we keep this basic constitutional purpose in mind.
The House of Representatives has 435 members, and this number must be apportioned among the fifty States. If one State gains a member, another must lose one. Following the 1960 census, seven States each gained one seat, one State gained four, and one gained eight. As a result, twelve States each lost one seat, three States each lost two seats, and one State lost three seats.13 Following the 1970 census, three States each gained one seat, one gained three, and one gained five. Seven States each lost one seat, and two States each lost two seats.14 In effect, House membership is a fund in which fifty States have an interest. No State’s share can be increased without adversely affecting at least one other State. The question presented by litigation such as the one now before us is whether one State can be granted such an increase without full consideration having been given to its effect on other States.
Persons “who not only have an interest in the controversy but an interest of such a nature that a final decree cannot be made without either affecting that interest, or leaving the controversy in such a condition that its final termination may be wholly inconsistent with equity and good conscience” are traditionally considered to be indispensable parties.15 Equity suggests that a person be brought into the litigation if the case cannot be decided on its merits without prejudicing his rights.16 This not only prevents possible injury to the absent person; it avoids multiplicity of suits and the danger of inconsistent decisions.17
[737]*737Although the present action has already been before this Court on an appeal from a preliminary injunction order, we did not consider any of the factors just set forth. The panel hearing that appeal held only that plaintiffs have standing to sue and that the issue of census mismanagement is justiciable rather than political.18 The panel did not address appellants’ contention that the issuance of the preliminary injunction order was an abuse of discretion because it “overlook[ed] the impact on other cities and states.”19 The panel concluded that “[t]he argument that a court decision may provide special treatment for the parties involved is one for the ultimate trial on the merits and decision on appeal.”20 We have now reached that point in the litigation.
We think it clear beyond cavil that a statistically formulated increase in the population of only one Stete, such as New York, will have an adverse effect on other States which are entitled to, but do not receive, the benefit of a similar adjustment. Even if the increase is insufficient to change House membership, it will nonetheless increase New York’s share in the numerous revenue sharing plans that are tied into the census. The adversely affected States therefore fall within the category of parties who should be joined in the instant litigation if feasible.21 Because compulsory joinder of all fifty States was not feasible in the district court, pragmatic equitable alternatives should have been considered.22
The first alternative, which the prior panel of this Court has already rejected, would have been to substitute Bureau and congressional review for that of the court.23 This is the recommendation of the Association of the Bar’s Special Committee on Empirical Data in Legal Decision Making which concludes its report with the following observation:
The path to a better census is more likely to be found in scrutiny of Bureau procedures by the Bureau itself, Congress, other federal agencies, and interested professional groups than in litigation to compel adjustment.24
A second alternative would have been to require that notice of suit be given to all of the States, with permission to intervene given any State which felt that its interests were imperiled. Apparently, no notice was given anyone; only the County of Suffolk sought intervention, and its application was denied.
A third alternative would have been to seek multidistrict coordinated or consolidated pretrial proceedings pursuant to 28 U.S.C. § 1407. It appears that thirty-one of the above listed actions have been transferred to the District of Maryland for coordinated or consolidated proceedings.25 The wisdom vel non of adopting a uniform nationwide method of making statistical adjustments might perhaps be fully explored if complete multidistrict joinder were agreed upon.
[738]*738As a fourth alternative, the district court could have stayed the operation of its judgment pending a definitive appellate ruling as to whether the Census Bureau’s conduct of the 1980 census could properly be challenged in fifty separate and unrelated actions and whether the requirements imposed on the Bureau by the district court in this action were proper.26
Without passing on the wisdom or necessity of any of the foregoing alternatives, we conclude that, at the very least, the district court was required to conduct the trial in such a manner that the interests of other States and subordinate government bodies were not prejudiced by rulings that prevented a full and fair development of the facts. Because error and prejudice resulted from certain of the district court’s discovery orders and the sanctions imposed in connection therewith, for this reason, if for no other, there must be a new trial.
As part of their pretrial discovery, plaintiffs requested disclosure of the Master Address Registers for New York City and every other municipality in the State, together with a listing of all the vacant housing units in every New York State municipality. The Master Address Registers contain information based upon interviews and questionnaires and include data as to householders, house members, street names, apartments or unit numbers, descriptions of location, numbers of units, numbers of persons, etc. The Census Bureau estimated that there are more than 550,000 pages of address registers for the New York region alone. The vacant housing forms, known as D-160 Unit Status Review forms, contain information as to the vacant or occupied status of a unit, as obtained from the owner, custodian, manager, a neighbor, or another individual with knowledge. Between 500,000 and 600,000 D-160 forms are estimated to exist for the New York region. The Bureau took the position that the requested information was confidential, that its disclosure would violate 13 U.S.C. § 9 and would undermine the public confidence needed for the effective conduct of the census.27
The district court directed the Bureau to produce the documents in question, the court’s sole concession to the Bureau’s claim of confidentiality being the grant of permission to redact “only” the names of persons residing in a household. The court ordered that any person granted access to the documents should be sworn to confidentiality pursuant to 13 U.S.C. § 23(c).28 Upon the Bureau’s refusal to comply with the production order, the district court precluded the defendants from offering any evidence to prove “any fact, matter or circumstance that would be reflected in or could be derived from the [Master Address Registers or D-160 forms] or that could be contradicted or impeached by such documents.” Defendants were also precluded from “denying or offering evidence or testimony to disprove” the following allegations in plaintiffs’ complaint:
(a) that there was a disproportionate undercounting of Blacks, Hispanics, other racial and ethnic minorities, legal and illegal aliens, persons whose principal language is other than English and persons living in poverty or high-crime urban areas;
(b) that the persons above described live in New York State or New York City in substantially disproportionate numbers as compared to the nation as a whole; that [739]*739therefore the undereount for New York will be substantially higher in percentage terms than it will be for the rest of the United States and in absolute numbers it will be larger than the undercount for any other State;
(c) that the 1980 census operations in New York, and particularly in New York City, have been carried out in a manner that will greatly exacerbate the under-count in New York as compared to other parts of the nation;
(d) that the particular difficulties encountered by the Census Bureau and the poor management of census operations in New York State, and especially New York City, have made judicial relief essential;
(e) that the Census Bureau with knowledge of the difficulties it would encounter in New York State and New York City and with knowledge that under-counting would be disproportionately severe there, especially among the class described in paragraph (a) above, knowingly and intentionally failed to devote adequate resources to develop special plans and procedures, to assign the most qualified personnel and to carry out their own planned procedures in New York State, and particularly New York City;
(f) that the first follow-up operations in New York State and New York City were also seriously mismanaged (Six paragraphs, covering four printed pages in the Appendix, set forth alleged examples of mismanagement under this general allegation of wrongdoing);
(g) that the second follow-up operations were not being adequately staffed or managed in New York; they were not designed to count additional households, correct inaccuracies in the size of households, or to recheck the casual count inaccuracies;
(h) that the local review program was being improperly conducted by an inadequate staff and the City had been given neither adequate time nor adequate information to review and challenge the results.
Looking first to the discovery order, we conclude that it was improvidently granted. In McNichols v. Klutznick, 644 F.2d 844 (10th Cir. 1981), one of the actions pending in other jurisdictions, the district court had granted the identical relief ordered by the court below. The Court of Appeals reversed, stating that “[b]oth the history of the Census Act and the broad language of the confidentiality provisions of § 9 make abundantly clear that Congress intended both a rigid immunity from publication or discovery and a liberal construction of that immunity that would assure confidentiality.”29 Although the Third Circuit appears to have taken a contrary position,30 we agree with the holding of the Tenth Circuit.
Assuming for the argument, however, that the court below did not err in granting discovery, it clearly abused its discretion in the imposition of sanctions. As already pointed out, New York is seeking to gain an advantage over other States in the competition for congressional seats and federal funds. The extremely broad sanction order punished these unrepresented States by preventing full and fair disclosure of the facts and an adjudication on the merits of plaintiffs’ claims.31 The severity of sanctions should be tempered by a consideration of the equities involved.32 The equities in the instant case dictated that the unrepresented States not be penalized because the [740]*740Census Bureau was attempting to recognize the public’s interest in a confidential census.
Reversed and remanded for further proceedings consistent with this opinion.