TDC Lending v. Private Capital Group, 2:17-cv-00188

Background

TDC Lending sued Private Capital alleging securities marketing/sale misconduct and breach of contract (primarily an escrow agreement) related to a loan transaction.
Private Capital moved to mandatorily join three individuals (JT Johnson Jr., Derrick Robinson, Jabar Langford) as defendants under Fed. R. Civ. P. 19, asserting they committed identity theft and intercepted loan proceeds tied to a Loan Agreement.
Private Capital argued those individuals are necessary because TDC’s claimed damages and causation depend on the Loan Agreement and the individuals’ conduct.
TDC opposed, arguing the suit can proceed without the individuals because TDC seeks money damages against the existing defendants for misrepresentations and breach of contracts between the current parties; the individuals are at most relevant witnesses.
The magistrate judge denied the motion, finding Private Capital failed to satisfy Rule 19(a) — the individuals are not necessary parties, do not claim a nonfrivolous interest in the suit, and their absence will not impair their rights or expose existing parties to inconsistent obligations.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the three individuals are "required parties" under Rule 19(a)(1)(A) because complete relief cannot be accorded without them	TDC: lawsuit seeks relief from existing defendants; complete relief can be afforded among current parties	Private Capital: complete relief impossible without individuals because liability and damages flow from Loan Agreement and individuals’ conduct	Denied — individuals not necessary; TDC can obtain complete relief against existing defendants
Whether the individuals claim an interest related to the subject matter under Rule 19(a)(1)(B)	TDC: individuals have no legally protected interest implicated by TDC’s claims	Private Capital: individuals have an interest in the Loan Agreement and thus a protectable stake	Denied — movant failed to identify any nonfrivolous interest the individuals claim
Whether disposing of the action in the individuals’ absence would impair or impede their ability to protect an interest under Rule 19(a)(1)(B)(i)	TDC: no impairment; individuals are not parties and have no protectable interest here	Private Capital: court may need to define individuals’ role in the Loan Agreement, impairing their interests	Denied — no showing of how interests would be impaired; any role is contested and speculative
Whether absence of individuals risks existing parties incurring double, multiple, or inconsistent obligations under Rule 19(a)(1)(B)(ii)	TDC: no risk of inconsistent obligations to existing parties; Private Capital can pursue third-party claims if needed	Private Capital: potential for inconsistent judgments and need to litigate separately	Denied — speculation insufficient; individuals are nonparties and Private Capital may bring third-party claims if necessary

Key Cases Cited

Sac & Fox Nation of Missouri v. Norton, 240 F.3d 1250 (10th Cir. 2001) (Rule 19 analysis and court’s discretion in required-party determinations)
Davis v. United States, 192 F.3d 951 (10th Cir. 1999) (party’s claimed interest under Rule 19 does not include patently frivolous claims)
Visión en Análisis y Estrategia, S.A. v. Andersen, [citation="662 F. App'x 29"] (2d Cir. 2016) (distinguishable precedent where parties were directly implicated throughout complaint)