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NATIONAL MARITIME UNION v. CURRAN

November 29, 1949

NATIONAL MARITIME UNION OF AMERICA et al.
v.
CURRAN et al.



The opinion of the court was delivered by: KAUFMAN

The Court has before it three motions:

(1) A motion for a temporary injunction restraining the defendants from interfering with the activities, duties or functions of the plaintiffs.

 (2) A motion by the defendants to dismiss the complaint for want of jurisdiction over the parties and the subject matter of the dispute.

 (3) A motion made orally by the plaintiffs at the argument to amend the complaint by adding five parties plaintiff, dropping the original eleven parties, and amending the allegations of the original complaint to some extent.

 Plaintiffs allege in their original complaint as follows: That they are duly elected officials of the National Maritime Union of America; that plaintiff Drummond was elected as Port Agent of the Port of New York Branch of the Union, and the other plaintiffs were elected as Patrolmen of the New York Branch of the Union; that on the 14th day of November, 1949, defendants purported to remove the plaintiff Drummond from his office, and on the 15th day of November, attempted to remove the other plaintiffs, in violation of the Constitution of the Union; that plaintiffs have exhausted all their remedies within the Union, and that their purported removal from office will result in irreparable loss both to the plaintiffs and to the membership of the Union in that they are being deprived of their salaries, and the membership is being deprived of the services of their elected representatives. Plaintiffs filed their complaint on November 16, 1949, requesting that defendants be permanently enjoined from removing or attempting to remove plaintiffs from office and from circulating false statements that plaintiffs have resigned from their respective offices.

 An order to show cause was signed on November 17, 1949, which, as modified on November 18, restrained the defendants from stating falsely that plaintiff Drummond has resigned as Port Agent of the Port of New York, and from disbursing the funds of the New York Branch of the Maritime Union, and ordered the defendants to show cause on November 22, 1949 why an injunction pendente lite should not be granted restraining the defendants from interfering with the activities, duties or functions of the plaintiffs.

 The defendants countered with a motion to dismiss the complaint because of lack of jurisdiction since no diversity of citizenship between all the parties plaintiff and defendant was shown. At the conclusion of the argument on this latter motion on November 22nd, plaintiffs' attorney verbally moved to amend the complaint by adding new parties with diverse citizenship and dropping the original parties who did not have diverse citizenship and requested that the action be regarded as a class action pursuant to Rule 23 of the Federal Rules of Civil Procedure, 28 U.S.C.A., in order that jurisdiction might be conferred upon this Court.

 The motion which should be considered first by this Court is the plaintiffs' oral motion to amend in order to confer jurisdiction; for if it is not granted, then the motion for a temporary injunction must fall and the complaint must be dismissed, since plaintiffs have not shown on their original complaint diversity of citizenship as between each proper, necessary or indispensable party on one side of the controversy, and each proper, necessary or indispensable party on the other side. Genovese v. Skol Co., D.C.S.D.N.Y. 1945, 73 F.Supp. 423; City of Indianapolis v. Chase National Bank, 1941, 314 U.S. 63, 62 S. Ct. 15, 86 L. Ed. 47. This is so even if the action is considered to be a class suit under Rule 23, Steele v. Guaranty Trust Co. of New York, 2 Cir., 1947, 164 F.2d 387, certiorari denied 1948, 333 U.S. 843, 68 S. Ct. 661, 92 L. Ed. 1127; Boesenberg v. Chicago Title & Trust Co., 7 Cir., 1942, 128 F.2d 245, 141 A.L.R. 565; Supreme Tribe of Ben-Hur v. Cauble, 1921, 255 U.S. 356, 41 S. Ct. 338, 65 L. Ed. 673.

 The initial question presented therefore is whether plaintiffs will be allowed to amend their complaint to give the court jurisdiction where no jurisdiction existed, either patent or implied, when the complaint was filed. Though there is authority for the view that an amendment presupposes jurisdiction of the case, e.g., McMichael v. United States, D.C.N.D. Ala. 1945, 63 F.Supp. 598, the better view, which seems to be more in keeping with the spirit and liberality of the Federal Rules, does permit an amendment to cure a jurisdictional defect that is more than merely technical. E.g., Hackner v. Guaranty Trust Co. of New York, 2 Cir., 1941, 117 F.2d 95, certiorari denied 1941, 313 U.S. 559, 61 S. Ct. 835, 85 L. Ed. 1520; International Allied Printing Trades Ass'n v. Master Printers Union, D.C.N.J. 1940, 34 F.Supp. 178; Moreschi v. Mosteller, D.C.W.D. Pa. 1939, 28 F.Supp. 613.

 Though plaintiffs may amend their pleading as a matter of course since the responsive pleading of defendants has not been served, Rule 15(a), F.R.C.P., an amendment whereby parties are added and dropped can only be made by order of the Court 'on such terms as are just.' Rule 21, F.R.C.P. In addition to the question as to whether this Court, in the exercise of its discretion, should allow the amendment, there is the further question of the power of the court to grant the particular request in this case.

 Plaintiffs are asking that five new plaintiffs satisfying the diversity requirements be added and the original eleven plaintiffs thereafter be dropped so as to give the Court the requisite jurisdiction over the parties. Though plaintiffs' counsel seeks to accomplish this in two steps, the procedure must be taken as a whole, and it amounts in effect to a substitution of a new plaintiff for the original plaintiff (considering each group as a single party plaintiff). Can Rule 21, allowing parties to be dropped or added, be then construed to permit a complete substitution of all the parties? Logically, it does not seem that the intention of the framers of the Rules was to permit such a substitution, especially in light of Rule 25 which is entitled 'Substitution of Parties' and enumerates the instances when a substitution can be effectuated, such as in case of death or transfer of interest. It has been held that Rule 21 is not a substitution rule, but contemplates the retention of a party or parties when another party is added or dropped, and therefore that a sole party plaintiff or defendant cannot be dropped and another added. United States v. Swink, D.C.E.D. Va. 1941, 41 F.Supp. 98; Schwartz v. Metropolitan Life Insurance Co., D.C. Mass. 1941, 2 F.R.D. 167; Schwartz v. The Olympic, Inc., D.C. Del. 1947, 74 F.Supp. 800; cf. Davis v. L. L. Cohen & Co., 1925, 268 U.S. 638, 45 S. Ct. 633, 69 L. Ed. 1129. However, this has been criticized as an unduly narrow restriction of Rule 21, on the ground that the same result, i.e., substitution, could be attained by a liberal interpretation of Rule 15 on amendments. 3 Moore, Federal Practice, p. 2907 (2d ed. 1948). In conformance with this more liberal view, substitution has been permitted by the method of adding and dropping parties. Hackner v. Guaranty Trust Co. of New York, cited supra; United States v. Saunders Petroleum Co., D.C.W.D. Mo. 1947, 7 F.R.D. 608; United States v. Koike, 9 Cir., 1947, 164 F.2d 155; In re Raabe, Glissman & Co., D.C.S.D.N.Y. 1947, 71 F.Supp. 678; Owen v. Paramount Productions, D.C.S.D. Cal. 1941, 41 F.Supp. 557; cf. Keystone Telephone Co. v. United States, D.C.E.D.N.Y. 1943, 49 F.Supp. 508.

 This Court believes that the view as expressed in the Hackner case not only is controlling in this Circuit, but is the wiser answer to the problem of expediting trials and avoiding the unnecessary delay and expense of requiring an action to be started anew where a substitution is desired though the subject matter of the actions remains identical. Hence, having the power to grant the substitution by amendment, the question that necessarily follows is whether this Court will exercise its discretion in the instant case.

 The cases cited in which substitution was permitted other than under Rule 25 were all deviations from the strict rule, and there were extenuating circumstances in all those cases allowing such deviation. It seems that the plaintiffs in this case must bring their request within the circumstances, or at least the reasoning, of those cases to permit their proposed amendment to be granted.

 The first, and most justifiable situation allowing substitution, is where the same person is the party both before and after substitution, but desires to change the capacity in which he is bringing the action. This is exemplified by the case of Owen v. Paramount Productions, cited supra, where plaintiff was ...


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