TULSA INDUSTRIAL AUTHORITY v. CITY OF TULSA
2014 OK 81
| Okla. | 2014Background
- Taxpayer J. Clark Bundren sought to intervene in litigation challenging the legality of certain public expenditures/financing tied to bonds issued by Tulsa Industrial Authority and payments by the City of Tulsa.
- After this Court's 2011 decision reversing denial of intervention in equity, Taxpayer filed a petition in intervention in 2012; appellees moved to dismiss arguing bondholders were necessary parties under 12 O.S. § 2019.
- The trial court granted dismissal with leave to amend, expressly ordering that any amended petition seeking to enjoin payments to bondholders require notice/service on bondholders; Taxpayer filed an amended petition but did not serve bondholders.
- The trial court again dismissed with leave to amend and ordered joinder; Taxpayer instead petitioned this Court for writ relief, and the district court ultimately entered dismissal with prejudice for failure to join necessary parties.
- The Oklahoma Supreme Court affirmed, holding bondholders were necessary parties and that Taxpayer failed to comply with orders to join/serve them; dismissal with prejudice was appropriate after repeated failure to cure.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether bondholders are necessary parties under 12 O.S. § 2019 | Bondholders need not be joined; if they want relief they can sue separately; prior appellate opinion implied they were not necessary | Bondholders claim an interest such that absent joinder defendants face risk of double, multiple, or inconsistent obligations | Bondholders are necessary parties; joinder/service required under § 2019 to avoid inconsistent obligations |
| Whether prior Oklahoma Supreme Court opinion precluded joinder requirement | Prior opinion’s silence meant bondholders not necessary | Silence did not decide joinder; appellate court does not decide issues not presented below | Prior opinion did not resolve joinder; trial court’s joinder order stands |
| Whether notice or federal disclosure satisfied joinder/service requirement | Compliance with any federal disclosure duty should suffice as notice to bondholders | § 2019 requires service/joining, not merely notice; Taxpayer did not serve bondholders | Notice/federal disclosure alone insufficient; service and joinder required under § 2019(A) |
| Whether Taxpayer’s lack of knowledge of bondholders excused nonjoinder | Taxpayer claimed no access to bondholder names and denied discovery | No showing that Taxpayer attempted and was denied discovery; burden to attempt to obtain names | Failure to seek/obtain bondholder identities or to serve them did not excuse nonjoinder; dismissal proper |
Key Cases Cited
- Tulsa Industrial Authority v. City of Tulsa, 270 P.3d 113 (Okla. 2011) (prior appeal addressing intervention and equitable claims)
- Kersh Lake Drainage Dist. v. Johnson, 309 U.S. 485 (U.S. 1940) (bondholders may be bound by decrees when an indenture trustee properly represents them)
- FDIC v. Bank of New York, 479 F. Supp. 2d 1 (D.D.C. 2007) (indenture trustee can adequately represent noteholders so they need not be named parties in many cases)
- Prough v. Edinger, 862 P.2d 71 (Okla. 1993) (repeated failure to cure pleading defects warrants dismissal with prejudice)
- Boston v. Buchanan, 89 P.3d 1034 (Okla. 2003) (appellate courts do not issue first-instance rulings)