Tell v. Dartmouth College

• Court: Court of Appeals for the First Circuit
• Decided: May 29, 1998
• Docket: 97-2098
• Status: Published

Opinion

USCA1 Opinion

                 United States Court of Appeals

                     For the First Circuit


No. 97-2098



                     WILLIAM K. TELL, ET AL.,



                     Plaintiffs, Appellants,



                                v.



                  TRUSTEES OF DARTMOUTH COLLEGE,



                       Defendant, Appellee.

                       ____________________



           APPEAL FROM THE UNITED STATES DISTRICT COURT



                FOR THE DISTRICT OF NEW HAMPSHIRE



          [Hon. Paul J. Barbadoro, U.S. District Judge]

                                 

                       ____________________



                              Before



                      Torruella, Chief Judge,



                Boudin and Lynch, Circuit Judges.



                       ____________________



     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. 


May 29, 1998


BOUDIN, Circuit Judge.  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, but not always.  See, e.g., Ornelas v. United States,

517 U.S. 690, 699-700 (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) (applying this standard in the Rule 19(b)

context).  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.  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 (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[3][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 1891 understanding, even if the Alumni Association is

content with the result in this case.  Further, appellants have

expressly claimed that the Board of Trustees has dominated and

manipulated the Alumni Association in order to enhance the Board of

Trustees' power vis-a-vis the Alumni Association, making a claim of

identity of interests even less plausible.

     Appellants separately challenge the finding that the

Alumni Association is "indispensable" or, in terms now used in the

rule, "whether in equity and good conscience the action should

proceed among the parties before [the court] or should be dismissed

. . . ."  Fed. R. Civ. P. 19(b).  Appellants say inter alia that

the district court failed to weigh "whether the plaintiff will have

an adequate remedy if the action is dismissed for nonjoinder."  Id. 

But the district court explicitly took note of the fact that

appellants had a state court forum--indeed, had already availed

themselves of it, at least as to certain of their claims--where

lack of diversity is irrelevant.

     After the district court granted the motion to dismiss,

appellants moved for reconsideration, urging that the indispensable

party problem could be remedied by resort to the supplemental

jurisdiction statute.  28 U.S.C.  1367.  The district court said

that the argument had been waived because it came too late but also

said that the supplemental jurisdiction statute would not remedy

the problem.  We review the refusal of the district court to

reconsider under an abuse of discretion standard.  See Aybar v.

Crispin-Reyes, 118 F.3d 10, 13 (1st Cir. 1997), cert. denied, 118

S. Ct. 857 (1998).

     It is questionable whether the supplemental jurisdiction

statute would apply in this case, see 28 U.S.C.  1367(b) (limiting

supplemental jurisdiction in certain Rule 19 situations), but we

need not resolve the matter.  This alternative argument should have

been proffered to the district court in response to the Board of

Trustees' motion to  dismiss for a lack of an indispensable party. 

Failure to do so waived the argument, see Clauson v. Smith, 823

F.2d 660, 666 (1st Cir. 1987), and the district court was not

obliged to consider it on reconsideration.

     Affirmed.