Haas v. Jefferson National Bank
442 F.2d 394 (5th Cir. 1971)

  • Haas made a private deal to buy some stock with a guy named Glueck. The shares were issued in Glueck’s name and filed with the Jefferson Bank.
  • After a few years, Haas asked Glueck to get his half of the shares reissued in his name. Glueck was willing to do it, but Jefferson refused to reissue the shares.
    • Jefferson claimed that Glueck was using the shares as collateral for a loan, so they couldn’t be reissued.
    • They also claimed that they had no evidence that Haas owned some of the shares.
  • Haas sued Jefferson to force them to issue him his shares.
    • Haas sued in Federal Court on diversity jurisdiction.
  • The Trial judge ordered Haas to amend his complaint, and join Glueck as an indispensable party to the lawsuit.
  • Then, the Trial judge dismissed the complaint on jurisdictional grounds for incomplete diversity.
    • Haas and Glueck were both Ohio residents.
  • Haas appealed, claiming that he never wanted Glueck as a party to the lawsuit.
  • The Appellate Court affirmed the dismissal.
    • The Appellate Court noted that under Rule 19, certain parties must be joined if feasible:
      • In specific, Rule 19(a)(2)(ii) requires joining when “disposition of the action in the person’s absence may leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of the claimed interest.”
      • Basically, if Haas sued and won, the Court would rule that Glueck should sign over his stock to Haas. But if Glueck isn’t a party to the lawsuit he can’t be bound by the Court!
    • The Court also ruled that without complete diversity, they had no jurisdiction to hear the case.
    • The Court considered Haas, and pointed out that he is not barred from suing, he could always take his to a State court, he just couldn’t sue in a Federal court.
  • Couldn’t it be argued that, due to the diversity issue, it was not “feasible” to join Glueck, and therefore not required based on the language of Rule 19?
    • Rule 19 does not allow for supplemental jurisdiction, which might otherwise be appropriate for cases like this.