F R D, .
FREE JOINDER OF PARTIES, CLAIMS, AND COUNTERCLAIMS By William Wirt Blume, Professor of Law and of Legal Research, University of Michigan Major Reform Movements For a third time within a century civil procedure based on the English common law has entered a period of extensive reform. The first of these major reform movements began in New York with the formulation of the Field Code of 1848. The second originated in England and is usually dated from the passage of the Judicature Act in 1873. The third, or present, movement got under way with the adoption of the Federal Rules and the recommendations of the Section of Judicial Administration of the American Bar Association in 1938.
Principles of Reform
(a) The reform program of 1848 was bottomed on the principle of "unity in all civil judicial procedure" and was accomplished by a detailed procedural statute, that is, by an application of the principle of legislative control. According to Pomeroy, the "fundamental principles" of the code of 1848 were as follows: "(1) The abolition of the distinction between suits in equity and actions at law, and the distinctions between legal and equitable procedure, so far as such an amalgamation or consolidation is possible with the judicial institutions which have been retained; (2) The abolition of all common-law forms of action, and the establishment of one ordinary, universal means by which rights are maintained and duties enforced in a judicial controversy, called a `civil action'; (3) The application to this `civil action' of the familiar equitable rather than legal rules, methods, and principles, so far as practicable, and especially in reference to the parties, the pleadings, and to the form and character of the judgment."
Pomeroy on Code Remedies, 3rd ed., 1893, sec. 44. p. 48.
Ibid., sec. 28, p. 27.
(b) The principles of the English reforms have been summarized by Charles H. Hartshorne of the New Jersey bar as follows:
1. The principle of unified jurisdiction.
2. The principle of unified procedure.
3. The principle of judicial control over procedure.
4. The principle of completely settling the controversy in one proceeding:
(1) Parties.
(2) Causes of action.
(3) Counterclaims.
(4) Third parties.
5. The principle that the action shall proceed by short and direct steps.
Courts and Procedure in England and in New Jersey (1905), p. 162.
(c) In the present reform movement the principle of judicial control over procedure by means of rules of court is being followed in preference to the principle of legislative control. The principle of unified procedure has led to an amalgamation of legal and equitable procedure in the federal courts and may lead to similar amalgamations in other jurisdictions which escaped the reforms of 1848. The principle of completely settling the controversy in one proceeding is leading to greater freedom in the joinder of parties, claims, and counterclaims. It is with this principle that the present monograph is chiefly concerned.
Joinder of Plaintiffs
(a) Under the codes. In practically all of the codes patterned after the New York code of 1848 the following provisions will be found:
"Of the parties to the action, those who are united in interest must be joined as plaintiffs or defendants."
"All persons having an interest in the subject of the action and in obtaining the relief demanded, may be joined as plaintiffs."
These provisions embody rules which were being followed in the earlier procedure at law or in equity. Aside from the attempt to extend the permissive joinder of equity to all civil actions — legal and equitable — no new principle is involved. Even this one attempt at reform has been largely unsuccessful. As interpreted by the courts, joinder in equity is permitted much the same as before the codes. In actions at law permissive joinder is rarely allowed because of the supposed necessity of finding that each plaintiff has an interest in the whole subject of the action and in all the relief demanded.
Clark on Code Pleading (1928), p. 253.
ILLUSTRATIONS:
(1) At different times D cut timber on separate tracts claimed by Pa, Pb, and Pc, who join in an action for damages.
(2) By the erection of a dam D caused the overflow of separate tracts claimed by Pa, Pb, and Pc, who join in an action for damages.
(3) By the erection of a dam D is causing the overflow of separate tracts claimed by Pa, Pb, and Pc, who join in an action for an injunction.
Ordinarily, joinder is not permitted in (1) or (2) but is allowed in (3). For these and similar cases the codes have not changed the common law. At this point the reform has failed.
(b) Under the English rules. Rule 1, Order XVI (as amended in 1896), reads in part:
"All persons may be joined in one action as plaintiffs, in whom any right to relief in respect of or arising out of the same transaction or series of transactions is alleged to exist, whether jointly, severally, or in the alternative, where, if such persons brought separate actions, any common question of law or fact would arise. . . . . ."
Coupled with this provision is another which authorizes the trial judge to order separate trials if it shall appear that such joinder "may embarrass or delay the trial of the action".
It has been said that the reason equity seeks to avoid a multiplicity of suits "is the common sense of it, viz., convenience." Will it be convenient to permit two or more plaintiffs, each having a cause of action against one defendant, to join their causes in one proceeding? The English rule gives the following answers: (1) If the causes arise out of the same transaction or series of transactions and will present any common question of law or fact, joinder will be convenient. (2) If the causes are unrelated, that is, do not arise out of the same transaction or series of transactions, joinder will be inconvenient even though a common question may be involved. (3) If the causes are related but do not present a common question of law or fact, joinder will be inconvenient and should not be allowed.
ILLUSTRATIONS (See supra.):
(1) As D cut the timber on separate tracts at different times, the causes of action are unrelated and cannot be joined.
(2) As the overflow of the separate tracts was caused by one wrongful act and the causes joined present common questions of law and fact, joinder is permitted.
(3) Same as (2).
An examination of the cases will reveal that the English attempt to extend to actions at law equity principles governing the joinder of plaintiffs was largely successful. In this country, prior to the present movement for reform, similar provisions were adopted in New Jersey (1912), New York (1920), California (1927), Illinois (1933).
(c) Under the federal rules. Section (a) of Rule 20, 28 U.S.C.A. following section 723c provides:
"All persons may join in one action as plaintiffs if they assert any right to relief jointly, severally, or in the alternative in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences and if any question of law or fact common to all of them will arise in the action. . . . A plaintiff or defendant need not be interested in obtaining or defending against all the relief demanded. . . ."
As in the case of the English rule there is a provision for separate trials where the court finds that a party will be embarrassed, delayed, etc.
In a note to this rule the report of the Advisory Committee says:
"The provisions for joinder here stated are in substance the provisions found in England, California, Illinois, New Jersey, and New York. They represent only a moderate expansion of the present federal equity practice to cover both law and equity actions."
(d) Further reform. Once it is recognized that convenience is the true basis of joinder, a question arises as to whether it is possible or desirable to lay down in advance a general rule as to what will or will not be convenient. The present writer is inclined to the view that plaintiffs should be allowed full freedom of joinder, the trial judge having power to order separate trials whenever such joinder proves unfair to the defendant or to the court itself.
Blume, A Rational Theory for Joinder of Causes of Action and Defences and for the Use of Counterclaims, 26 Mich. L. Rev. 1, 13 (Nov. 1927).
The immediate program calls for the adoption of the federal rule in all jurisdictions which have not had the benefit of the English reform. After we have had more experience with the problems involved, we may be ready to allow complete freedom in the joinder of plaintiffs, subject to the discretion of the trial judge.
Joinder of Defendants
(a) Under the codes. The usual code provision for the permissive joinder of defendants reads as follows:
"Any person may be made a defendant who has or claims an interest in the controversy adverse to the plaintiff or who is a necessary party to the complete determination or settlement of the question involved therein".
As in the case of joinder of plaintiffs, the intention was to extend to all civil actions the principles of permissive joinder which had been followed in equity. However, as observed by Judge Clark, "many of the decisions indicate comparatively little advance over the common law rules." The language of the rule has been broad enough to permit a substantial advance, but as it did not suggest affirmatively any specific principles to be followed in permitting joinder, the tendency has been to follow equity precedents in equity cases and common law precedents in actions at law.
Clark on Code Pleading (1928), p. 265.
ILLUSTRATIONS:
(1) Separately and at different times Da, Db, and Dc cut timber on a tract claimed by P, who sues them jointly for damages.
(2) Separately and at different places but at the same time, Da, Db, and Dc discharged sewage into a stream claimed by P, who sues them jointly for damages.
(3) Separately and at different places Da, Db, and Dc are discharging sewage into a stream claimed by P, who sues them jointly for an injunction.
Joinder is not permitted in illustration (1) for at least three reasons: First. The code section which governs the joinder of causes of action (discussed, infra) requires that all causes joined "affect all the parties to the action." Second. Such joinder was not permitted at common law. Third. There is no language in the code provision for joinder of defendants (or plaintiffs) which affirmatively suggests joinder in this situation.
Joinder is permitted in illustration (3) for the simple reason that such joinder was permitted in equity before the codes. In addition, the courts may say that the causes joined in a sense or to some extent "affect all the parties to the action" and may point out that all the defendants are interested in, at least, the kind of relief demanded.
In illustration (2) the case is the same as in (3) except that legal relief is sought instead of equitable relief. Yet some courts will allow joinder in the latter case and not in the former.
Again, as in the case of joinder of plaintiffs, the reform attempted by the codes has largely failed.
(b) Under the English rules. Rule 4, Order XVI, provides:
"All persons may be joined as defendants against whom the right to any relief is alleged to exist, whether jointly, severally, or in the alternative. . . ."
Joinder in the alternative was rarely permitted in the old equity practice and not at all at common law or under the American codes. The extension of this type of joinder to all civil actions was a definite advance.
Aside from the express provision for alternative joinder, the English rule, like the code rule, fails to suggest affirmatively what principle should be followed in permitting the joinder of defendants. In the English practice this lack has been supplied by referring to the affirmative suggestions contained in the rule which governs the joinder of plaintiffs. This reference, however, has worked two ways. While finding in the rule as to plaintiffs the suggestion that defendants may be joined if the claims against them are related and present a common question, the courts have found another suggestion, viz., that the joinder of defendants should not be allowed unless these features will be present.
Ibid., p. 273.
In this country prior to the adoption of the new federal rules, provisions for joinder of defendants in the alternative were found in Rhode Island (1876), Connecticut (1879), New Jersey (1912), Wisconsin (1915), New York (1920), California (1927), Illinois (1933).
Commenting on the adoption of the provision in Wisconsin, the Supreme Court of that state has said:
"Prior to the enactment of Sec. 260.11, justice frequently miscarried, and this was realized by the legislature. At that time, when a suitor had a cause of action, but entertained a serious doubt as to who of two persons was liable therefor, it was incumbent upon him to first bring suit against one, and, if unsuccessful, to then sue the other; and not infrequently he lost out in both actions."
Lukken v. Hanover Fire Ins. Co. (1928), 194 Wis. 569, 217 N.W. 404.
(c) Under the federal rules. The new federal rules (Rule 20, Sec. a) provide:
". . . . All persons may be joined in one action as defendants if there is asserted against them jointly, severally, or in the alternative, any right to relief in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences and if any question of law or fact common to all of them will arise in the action. A plaintiff or defendant need not be interested in obtaining or defending against all the relief demanded."
It will be noted that this rule not only expressly provides for joinder in the alternative, but also provides that joinder will be proper whenever the claims are related and present a common question. This latter statement, though restrictive in character, is more valuable than the general language of the English rule. Seeing the outer boundaries clearly marked, the courts will not hesitate to allow free joinder within those boundaries.
(d) Further reform. Three ways of phrasing the rule are indicated by rules now in force. First. Use general language and leave it to the courts to fix the outer boundaries. (English and code rules) Second. Require that the claims arise out of the same transaction or series of transactions. (Illinois) Third. Require that the claims arise out of the same transaction, etc., and also require that they present a common question of law or fact. (Federal) The third way of stating the rule is the most restricted in language yet offers the greatest promise of free joinder.
A fourth way of stating the rule would be to omit the requirement that the claims arise out of the same transaction, etc., and only require that they present a common question of law or fact. The mere fact that claims or rights to relief are related, that is, arise out of the same transaction or series of transactions, does not necessarily, or even logically, lead to a conclusion that it will be convenient to deal with them together. If, on the other hand, they present a common question of law or fact, this is a showing of convenience which should permit joinder, subject, of course, to the power of the court to order separate trials, if other factors indicate that separate trials would best suit the convenience of all concerned. If a representative suit is to be permitted when several rights to relief involve a common question, without requiring that they arise out of the same transaction, etc., (Federal Rule 23, a, 3, 28 U.S.C.A. following section 723c), it would seem that actual joinder should be allowed without this requirement.
It is not desirable, however, to attempt at this time to change the federal rule. In line with the present movement for reform, all states not having a provision for joinder of defendants which embodies the experience gained under the English rule, should adopt the language of the federal rule.
Joinder of Claims
(a) Under the codes. The original Field Code provided:
"The plaintiff may unite several causes of action in the same complaint, where they all arise out of,
1. Contract, express or implied; or,
2. Injuries by force, to person or property; or,
3. Injuries without force to person or property; or,
4. Injuries to character; or,
5. Claims to recover real property; with or without damages for the withholding thereof; or,
6. Claims to recover personal property, with or without damages for the withholding thereof; or,
7. Claims against a trustee by virtue of a contract or by operation of law."
The code further provided that causes of actions united must belong to one only of these classes, must equally affect all the parties to the action, and not require different places of trial. In 1851 the word "equally" was dropped out. In 1852 a new class was added: Causes may be joined "where they all arise out of the same transaction or transactions connected with the same subject of the action".
As originally written, the code provision for the joinder of claims offered little or no improvement over the common law scheme and made no allowance for joinder in equity. The arbitrary classes were merely substitutes for the forms of action which were abolished by the code. The common-questions principle and the principle of convenience were entirely ignored.
The amendment of 1852, which was adopted in practically all of the code states, was intended to introduce the equity principle of trial convenience, but was poorly worded for this purpose. Where claims arise out of the same transaction, it is probable, but by no means certain, they will present a common question of law or fact. If they do not involve a common question, the fact that they "arise out of the same transaction or transactions connected with the same subject of the action" is of no significance. If they do involve a common question, the other feature seems unimportant.
At least one state which adopted the New York code refused to take the provisions for joinder. In rejecting the arbitrary classifications, the Iowa code commissioners of 1860 said:
Sec. 2844, Code of 1860, note.
"Hence the only question of joinder with us rests upon policy. This chiefly concerns the plaintiff, and he should be left to his own sense, in guiding him either to unite a slander suit with a promissory note, or keep them distinct. The court can, if it likes, order cases, the joinder of which it doesn't favor, to be disunited and tried separately. The English Commissioners on this subject, say that the good sense of the plaintiff will be a better guide than can any rule, to determine what causes should be united."
Other code states (Kansas, Wisconsin, and New York) have repealed the original joinder section and have substituted provisions which allow complete freedom of joinder in cases which do not involve the joinder of parties.
Some non-code states (New Jersey, Michigan, and Illinois) allow similar freedom in the joinder of claims.
(b) Under the English rules. Under the English rules the only limitation on the joinder of claims (not involving the joinder of parties) is a prohibition against joining with an action for recovery of land other actions not relating to the land, unless by leave of the court. In Ontario even this restriction has been abolished. The advances made in the United States toward free joinder, as noted above, were made under the influence of the English reform.
(c) Under the federal rules. Section a of Rule 18 provides:
"The plaintiff in his complaint. . . . may join either as independent or as alternate claims as many claims either legal or equitable or both as he may have against an opposing party. There may be a like joinder of claims when there are multiple parties if the requirements of Rules 19, 20, and 22 are satisfied. . . ."
The report of the Advisory Committee points out that "Recent development, both in code and common law states, has been toward unlimited joinder of actions".
Cases which involve the joinder of parties usually involve the joinder of claims. In these cases under the codes it is necessary to satisfy both sets of joinder provisions. A joinder may meet one test but not the other. Under the federal rule this situation is greatly simplified. If multiple parties are involved and their joinder is authorized by the rules governing joinder of parties, the road to joinder is clear, as there is no obstacle of any kind in the rule which governs the joinder of claims. If a joinder of parties is not involved, the joinder of claims is entirely free.
(d) Further reform. When it is recognized that complete freedom, subject to direction by the court, should be allowed in the joinder of claims, a question arises as to whether joinder should not be encouraged and, perhaps, compelled in some situations. Where a plaintiff has two or more claims which involve a common question of law or fact, should he be permitted to maintain a separate action on each claim? If the parties will be the same in each action, the doctrine of estoppel may save the court the necessity of deciding the question more than once. If the parties will not be the same, yet joinder is permitted, required joinder will avoid repeated decisions of the common question. Even where the parties will be the same, required joinder will effect some saving of time and expense, e.g., the empaneling of separate juries, and this is true regardless of whether a common question will be involved.
While the possibilities of encouraging or requiring joinder should not be overlooked, the great need at the present time is provision for free joinder of claims in those states which have not made this advance. The language of the federal rule is well suited for this purpose. If the language of the federal rule is not used, great care should be exercised to make the joinder of claims entirely free so that the provisions for joinder of parties can operate without restriction.
Use of Counterclaims
(a) Under the codes. The original Field Code made no provision for counterclaims. In 1852 the New York Assembly added these sections:
"The counterclaim mentioned in the last section, must be one existing in favor of a defendant, and against a plaintiff, between whom a several judgment might be had in the action, and arising out of the following causes of action:
"1. A cause of action arising out of the contract or transaction set forth in the complaint, as the foundation of the plaintiff's claim, or connected with the subject of the action;
"2. In an action arising on contract, any other cause of action arising also on contract, and existing at the commencement of the action. . . ."
In paragraphs 1 and 2 we can discover common-law recoupment and the old set-off dressed in new language. Instead of debt against debt, we have contract against contract. "Debt", as a form of action, has been abolished; a new word, "contract", has been put in its place. The requirement in paragraph 1 that a claim used as a counterclaim must be related to the plaintiff's claim, is merely a continuation of the common-law rule which governed recoupment. Although "contract" is broader than "debt", and recoupment is no longer a defense but is a genuine cross-action, it cannot be said that the codes accomplished any real reform.
(b) Under the English rules. In England "A defendant in an action may set-off, or set up by way of counterclaim against the claims of the plaintiff, any right or claim. . . . But the Court or a Judge may, on the application of the plaintiff before the trial, if in the opinion of the Court or Judge such set-off or counterclaim cannot be conveniently disposed of in the pending action, or ought not to be allowed, refuse permission to the defendant to avail himself thereof." (Order 19, rule 3)
In New Jersey a rule based on the English rule reads:
"Subject to rules, the defendant may counterclaim or set-off any cause of action,. . . . but in the discretion of the court, separate trials may be ordered, or if the counter-claim cannot be conveniently disposed of in the pending action, the court may strike it out."
The provisions of the above rules which permit trial courts to refuse to hear counterclaims or to order that they be tried separately from the plaintiff's claims, clearly state the principle which should govern the use of counterclaims, viz., convenience.
(c) Under the federal rules. Two sections of Rule 13, 28 U.S.C.A. following section 723c provide:
"(a) COMPULSORY COUNTERCLAIMS. A pleading shall state as a counter-claim any claim, not the subject of a pending action, which at the time of filing the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party's claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction.
"(b) PERMISSIVE COUNTERCLAIMS. A pleading may state as a counter-claim any claim against an opposing party not arising out of the transaction or occurrence that is the subject matter of the opposing party's claim.
Section (a) of Rule 18 in part provides:
"The plaintiff. . . . in a reply setting forth a counterclaim and the defendant in an answer setting forth a counterclaim may join either as independent or as alternate claims as many claims either legal or equitable or both as he may have against an opposing party".
As pointed out by the Advisory Committee in their report, Rule 13 is "substantially" federal Equity Rule 30, 28 U.S.C.A. § 723 Appendix "broadened to include legal as well as equitable counterclaims". A similar equity rule had been adopted in Massachusetts in 1926. The Report of the Advisory Committee also states:
"Certain states have also adopted almost unrestricted provisions concerning both the subject matter of and the parties to a counterclaim. This seems to be the modern tendency." (Cites statutes of Arkansas, New Jersey, New York, and Wisconsin.)
(d) Further reform. In 1927 the present author wrote: "The counterclaim is designed to serve two ends: (1) To allow cross demands to compensate each other and (2) to prevent an unnecessary multiplication of litigation. That it may fully serve these ends, two broad policies must be adopted into our procedure: First, to allow all counterclaims to be used, subject to direction by the court, and, second, to require that they be used in certain situations." At that time each policy had been adopted in a few jurisdictions. Now that both policies have been brought together in the new federal rules and have been extended to all civil actions, legal and equitable, the reform seems to be complete. States which have not made this advance should adapt to their own use the broad provisions of the federal rules.
Blume, A Rational Theory, etc., 26 Mich. L. Rev. 1, 52 (Nov. 1927).
Consolidation and Separate Trials
In actions at common law, as distinguished from suits in equity, to join or not join was long considered a matter of right. On a motion for consolidation, however, the question of joinder became one of discretion; not whether the claims could be pleaded together, but whether they should be tried together. This discretion was not regulated by rules laid down in advance, but was governed by consideration of trial convenience.
Rules permitting free joinder of parties, claims, and counterclaims open the way for the exercise of a similar discretion on a much broader scale. It must be remembered that free joinder is not a matter of right. On the contrary, it is a device for getting the claims of all the parties before the court so that the judge may determine whether, as a matter of trial convenience, they should be tried together or dealt with in separate trials. In making this decision the court takes into consideration the convenience of all concerned.
If rules permitting free joinder are adopted, care should be taken to give the trial judge full power to order separate trials whenever, in his judgment, separate trials will promote the interests of trial efficiency and the ends of justice. The following sections of Rule 42 of the federal rules will serve as models:
"(a) CONSOLIDATION. When actions involving a common question of law or fact are pending before the court it may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated; and it may make such order concerning proceedings therein as may tend to avoid unnecessary costs or delay.
"(b) SEPARATE TRIALS. The court in furtherance of convenience or to avoid prejudice may order a separate trial of any claim, cross-claim, counterclaim, or third-party claim, or of any separate issue or of any number of claims, cross-claims, counterclaims, third-party claims, or issues."
Program for Reform
The year 1848 has been considered a milestone in the history of procedural reform. Two events which occurred in 1938 will give that year a similar place in legal history.
(1) The Rules of Civil Procedure for the District Courts of the United States were laid before Congress January 3, 1938, and became effective September 16, 1938. These rules are significant, not only because they provide a modern, uniform procedure for the federal courts, but also because they embody the farthest advances in procedural reform. The remarkably able Advisory Committee which framed the rules made few, if any, compromises with tradition. One may guess that they resolved to advance as far as theory and experience would at all justify, expecting to be forced to retreat at some points along the line. As an effective counter-attack, however, did not develop, the advanced line has become a solid base for future operations.
(2) On July 25 and 26, 1938, the Section of Judicial Administration of the American Bar Association approved some sixty recommendations for procedural reform made by seven special committees appointed by the section. On July 28, 1938, the House of Delegates approved these recommendations, at the same time deciding that "the advocacy of said recommendations in the various jurisdictions of the country" should be made a "special program" of the Association. The program thus commenced has been expanded until it has become a major movement for procedural reform.
Many matters dealt with in the recommendations of the committees of the Section of Judicial Administration were not covered by the federal rules. Whenever a matter was so covered, the tendency of the committees was to recommend the federal rule. This tendency has become a guiding principle of the present reform movement.
Thus far in this monograph, there is no reference to the advances which have been made since 1938 in the direction of free joinder of parties, claims, and counterclaims. Wholesale adoptions of the federal rules are taking place and may be expected to continue. Such adoptions mean, of course, progress toward free joinder. If the states which have not moved in the direction of free joinder will adopt the federal rules on this subject, the completion of a long-needed reform will be in sight.
See States Move to Modernize Civil Procedure, 24 Journal of the American Judicature Society, 189 (April 1941).
Selected Bibliography
Clark, Handbook of the Law of Code Pleading, 1928, Chapters 6, 7, and 10.
Moore's Federal Practice, 1938, Chapters 13, 18, and 20.
The Annual Practice, England, 1941, Order 16, rules 1, 4, 5, 6, and 7; Order 18, rules 1 and 2; Order 19, rule 3.
Rules of Civil Procedure for the District Courts of the United States, 1938, Rules 13, 18, 20, and 42.
Recent Trends in Joinder of Parties, Causes, and Counterclaims, 37 Columbia Law Review, 1937, p. 462 (citing many law-review articles).