This аction arises from a partnership gone awry. Peter Schnabel, Steven Marble, Kevin Lui, and the various entities respectively controlled by them entered a partnership agreement to produce “simulation” attractions for an amusement park in mainland China. As the project progressed, Schnabel and Marble became increasingly disenchanted with the acts and omissions taken of Lui and the entities associated with him. Schnabel and Marble, et al., filed suit in the United States District Court for the Central District of California. Shortly thereafter, Lui and various entities filed suit against Marble, et al., in California Superior Court, in and for Los Angeles County. Marble removed the state court action to federal court, based on diversity jurisdiction. The two suits were consolidated, as the removed action was essentially a counterclaim to the claims initially brought in federal court. After an extensive history of discovery abuses by Lui and his entities, the district court dismissed thе claims in the removed complaint, struck the defendants’ answer to the original complaint, and deemed admitted all of the original plaintiffs’ requests for admission. At a bench trial on damages, defendants failed to present any evidence. The trial court awarded damages to Schnabel, Marble, and several entities, for claims including breach of contract and fraud in the inducement. Defendants Lui, Froyer Holdings Development & Trading Co., Froyer Holdings USA, Inc., and FSN Top Secret Productions, Inc., brought this appeal, primarily raising jurisdictional issues. We have jurisdiction pursuant to 28 U.S.C. § 1291, and affirm.
I. BACKGROUND
A. Factual Background
In 1995, Premier Rides, Inc. (“Premier”) began negotiations with Suzhou Amusement Land (“Suzhou”) to build two amusement park rides in the People’s Republic of China. The two attractions contemplated were “Time Machine” and “Top Secret,” which would entail film footage presented in a 360 degree theater on fixed
In the summer of 1995, Premier successfully negotiated agreements with Suzhou to sell it the two attractions. After signing contracts with Suzhou, Premier discovered that the proposed funding for the project — by letters of credit from a Chinese bank — was unacceptable to its financial institutions in the United States. As a result, Premier sought alternative sources of financing. In' early 1996, Marble introduced Premier and Schnabel to Kevin Lui (“Lui”). Lui is fluent in Mandarin Chinese, had prior experience building attractions in China, and asserted that he had sufficient financial resources available to solve any problems in financing the project. Schnabel, Marble, and Lui executed partnership agreements in Los Angeles in February of 1996.
The primary partnership agreement provided, in relevant part, that the parties would “work together as partners in the development, financing and installation of the two Simulation Attractions,” and would divide all profits equally. Lui and one of his companies, Froyer Holdings Development & Trading Co. (“Froyer Trading”) assumed responsibility for financing the project. Premier and Schnabel were project managers responsible for reviewing costs and budgets, while Catalyst and Marble agreed to produce the projects, including fabrication, installation, and training. Under the agreement, Lui was to provide the partners with an accounting, and permit inspection of books and records. The partners also agreed to produce a “first class product,” whiсh would enable them to resell the ride concepts to other amusement parks.
As the project progressed, Lui, Froyer Trading and other companies controlled by Lui, including Froyer Holdings USA, Inc. (“Froyer USA”), and FSN Top Secret Productions, Inc. (“FSN Top Secret”) increasingly alienated the other partners by their acts and omissions. Premier, Schnabel, Catalyst, and Marble complained that Lui failed to provide them with financial records and records of communication with third parties. Lui and his entities contracted with third parties directly, misappropriated designs, failed to pay vendors, and generally engaged in conduct which was harmful to the business reputations of the remaining partners. Lui also engaged in cost-cutting and elimination of various aspects of the attractions as designed, sacrificing quality. The rides were completed, but Premier, Catalyst, Schnabel and Marble found it impossible to resell the ride concepts due to the inferiority of the rides produced.
B. Procedural Background
In March of 1998, Plaintiffs Premier, Schnabel, Catalyst, and Marble filed a complaint in the United States District Court for the Central District of California, against Lui and Froyer Trading (the “original action”). Less than four months later, Lui, Froyer USA, and FSN Top Secret filed a complaint in Los Angeles County Superior Court, against Marble and Catalyst (the “removed action”).
The notice of removal in the removed action alleged the following citizenship as a basis for diversity jurisdiction: (1) that Lui was a citizen of Australia; (2) thаt Froyer USA was a California corporation, with its principal place of business in California; (3) that FSN Top Secret was a California corporation, with its principal place of business in California; (4) that Marble was a citizen of New Mexico; and (5) that Catalyst was a Delaware corporation with its principal place of business in New Mexico.
The same counsel represented Lui and Froyer Trading as defendants in the original action, and Lui, Froyer USA, and FSN Top Secret as plaintiffs in the removed action. Plaintiffs in the removed action did not move for remand, but did file a jury demand in the removed case. On April 14,1999, the district court consolidated the two cases, as the removed case “appears to be a counterclaim to [the original action].” After consolidation, Schnabel, Premier, Marble, and Catalyst were denominated the “Plaintiffs,” while Lui, Froyer Trading, Froyer USA, and FSN Top Secret and were denominated “Defendants.” The court added the notation “and related counterclaims” to the caption. The parties proceeded in the consolidated case as realigned, but defense counsel continued to sign many papers and motions as counsel for Lui and Froyer USA. Counsel occasionally also signed papers as counsel for Froyer Trading and FSN Top Secret.
On December 7, 1999, Plaintiffs filed a motion for leave to file a second amended complaint or, in the alternative, a counterclaim. On December 20, 1999, Defendants Lui, Froyer USA, and Froyer Trading filed a motion to dismiss for lack of jurisdiction. As part of the briefing filed on this motion, plaintiffs proposed a Third Amended Complaint, to cure any jurisdictional defect in the pleading of the proposed Second Amended Complaint. The district court heard the Plaintiffs’ motion in conjunction with Defendants’ motion to dismiss for lack of subject matter jurisdiction on January 10, 2000. Defendants sоught dismissal of Plaintiffs’ Proposed Second Amended Complaint for failure to plead the basis for diversity jurisdiction, and the court granted the motion. However, because Defendants “only challenged the allegations in the complaint, not the factual basis for diversity,” the court granted leave to amend, and accepted the proposed Third Amended Complaint for filing.
The Third Amended Complaint added claims against Defendants Froyer USA and FSN Top Secret, and alleged thirteen causes of action. The Third Amended Complaint alleged citizenship of the Plaintiffs: that Schnabel was a citizen of Germany domiciled in the British West Indes; that Premier was a Maryland corporation with its principal place of business in Maryland; that Marble was a United States citizen domiciled in New Mexico; and that Catalyst was a Delaware corporation with its principal place of business in New Mexico. For citizenship of the Defendants, the Third Amended Complaint alleged that Lui was a citizen of Australia domiciled in
On February 2, 2000, Defendants Lui and Froyer USA filed a motion to dismiss (the Third Amended Complaint) for lack of subject matter jurisdiction, and for failure to join an indispensable party. For the motion to dismiss for lack of subject matter jurisdiction, Defendants argued that FSN Top Secret was a joint venture or partnership involving the Plaintiff Catalyst, which would destroy diversity jurisdiction. However, evidence submitted by the Defendants in support of this argument demonstrated that FSN Top Secret was in fact a California cоrporation.
The court also rejected dismissal for failure to join the partnership as an indispensable party. Defendants argued that the partnership of Lui, Schnabel, and Marble should be joined as an indispensable party, and that any joinder of the partnership would destroy diversity jurisdiction. The court found that the partnership was not an indispensable party, because California law permits actions against general partners for claims arising from the partnership, and the partnership at issue had no separate name, assets or contracts. As such, the nonjoinder of the partnership would not prevent the court from according complete relief among the parties, nor would it prejudice any party. Holding that the partnership did not meet the threshold standard articulated in Rule 19, the court denied the motion to dismiss the action for failure to join an indispensable party under Rule 12(b)(7).
After substantial discovery abuses by the Defendants, the district court dismissed the Defendants’ claims in the removed complaint, struck the Defendants’ answer to the original complaint, and deemed admitted all of the Plaintiffs’ requests for admission. The remaining claims of Plaintiffs’ Third Amended Complaint proceeded to trial on September 22, 2000. On November 27, 2000, the court entered findings of fact and conclusions of law. The court found Defendants liable to Plaintiffs for breach of contract, fraud in the inducement, and intentional interference with prospective economic advantage. The court entered final judgment in favor of the Plaintiffs for various amounts on various claims, including separate damage awards for breaсh of contract and fraud in the inducement, against Defendants Lui, Froyer Trading, Froyer USA, and FSN Top Secret, with Defendants held jointly and severally liable. Defendants Lui, Froyer Trading, Froyer USA, and FSN Top Secret timely filed their notice of appeal.
II. STANDARD OF REVIEW
A district court’s decision to deny joinder under Federal Rule of Civil Proce
III. ANALYSIS
Defendants Lui, Froyer Trading, Froyer USA, and FSN Top Secret argue first that the district court abused its discretion in denying their motion to dismiss for failure to join the partnership as an indispensable party. Defendants next contend that the district court lacked subject matter jurisdiction over both the original action and the removed action, claiming that FSN Top Secret should have been considered a citizen of New Mexico, based on factual issues raised for the first time on appeal. Defendants also claim that the district court lacked personal jurisdiction over Froyer USA and FSN Top Secret because no summons was served with the Third Amended Complaint. Finally, Defendants argue that the district court erred in awarding damages oh both claims of fraud in the inducement and breach of contract.
A. Joinder of the Partnership as an Indispensable Party
On review of the district court’s denial of Defendants’ motion to dismiss for failure to join an indispensable party, we first examine the standard articulated in Rule 19 for indispensable parties. Fed.R.Civ.P. 12(b)(7); 19(b). To find that a person who is not joined is “indispensable,” the absent person must first be deemed necessary as a “person to be joined if feasible” under Rule 19(a)(1) and (2). Fed.R.Civ.P. 19(b). If the person is necessary, and cannot be joined, “the court shall determine whether in equity and good conscience the action should proceed among the parties before it or should be dismissed, the absent person being thus regarded as indispensable.” Id. Rule 19 then provides four factors for the trial court to consider, in determining whether the matter should proceed or be dismissed for failure to join the absent person:
*1030 [F]irst, to what extent a judgment rendered in the person’s absence might be prejudicial to the person or those already parties; sеcond, the extent to which, by protective provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened or avoided; third, whether a judgment rendered in the person’s absence will be adequate; fourth, whether the plaintiff will have an adequate remedy if the action is dismissed for nonjoin-der.
Fed.R.Civ.P. 19(b).
To begin, the district court held that the partnership was not a “person to be joined if feasible,” and therefore rejected dismissal for failure to join an indispensable party. If joinder of a party will not deprive the court of subject matter jurisdiction, the party shall be joined as necessary if:
(1) [I]n the person’s absence complete relief cannot be accorded among those already parties, or (2) the person claims an interest relating to the subject of the action and is so situated that the disposition of the action in the person’s absence may (i) as a practical mаtter impair or impede the person’s ability to protect that interest or (ii) 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.
Fed.R.Civ.P. 19(a).
Under California law, partners are permitted to “maintain an action against the partnership or another partner for legal or equitable relief.” Cal. Corp.Code § 16405(b). Relief is available against another partner for an accounting, enforcement of rights under the partnership agreement, dissolution, and to enforce other rights of a partner arising under the code or for rights independent of the partnership agreement. Id. Given the state law permitting plaintiff partners to sue defendant partners for breach of contract, dissolution, and accounting, the district court rejected the argument that Plaintiffs’ claims stated injury only to the partnership. In addition, Plaintiffs presented affirmative evidence that the partnership had no separate assets, and was not a party to any contracts in its own name. The court therefore held that complete relief could be afforded among existing parties without joinder of the partnership, and that the failure to join the partnership would not prejudice any party.
Defendants cite several California cases for the proposition that the “interest of an individual partner in partnership assets is not subject to attachment or execution except on a claim against the partnership entity.” Epstein v. Frank,
Assuming that the parties’ partnership agreement was governed by the repealed law which was in effect in 1996, an issue not explicitly addressed by the parties, the authority cited remains inapposite. In Ep
In the instant case, the рartnership had no name, assets, or contracts as a partnership. Unlike Hildebrand, no judgment was entered against the partnership as an entity which had not appeared in its own name. See Hildebrand,
Having established that an action is available against and among individual partners, we note that Defendants have not addressed how the partnership factually meets the standard under Rule 19 as a person “to be joined if feasible.” Fed. R.Civ.P. 19(a). It is undisputed that the partnership has no assets and no contractual obligatiоns, hence no showing that in the partnership’s absence “complete relief cannot be accorded among those already parties.” Fed.R.Civ.P. 19(a)(1). For the second prong, there is no argument that the partnership had interests which could not be protected without joinder, nor that existing parties faced a risk of multiple or inconsistent liabilities. See Fed.R.Civ.P. 19(a)(2)®, (ii). As such, the district court properly found that the partnership was not an entity “to be joined if feasible” under Rule 19(a). Because the partnership is not a necessary party under the standard of Rule 19(a), it cannot be indispensable under Rule 19(b). Fed.R.Civ.P. 19(b). Consequently, the district court’s denial of the motion to dismiss for failure to join an indispensable party was not an abuse of discretion.
B. Exercise of Diversity Jurisdiction 1. Jurisdiction over Removed Action
Defendants argue that although FSN Top Secret was a California corporation, its principal place of business was New Mexico, thus it is a citizen of New Mexico. See 28 U.S.C. § 1332(c)(1), Bank of Cal. Nat’l Ass’n v. Twin Harbors Lumber Co.,
Although subject matter jurisdiction is reviewed de novo and may be raised at any point in the proceedings, the standard shifts when the argument raises new factual bases for the lack of jurisdiction which were not developed in the trial court
In this case, Defendants filed their complaint in state court identifying Lui as a resident of Australia, and Froyer USA and FSN Top Secret as California corporations. Defеndants identified the defending Plaintiffs Marble as a resident of California, and Catalyst as an entity doing business in the state of California. Plaintiffs filed their “Notice of Removal under 28 U.S.C. § 1441(b) [Diversity]” on August 6, 1998. In doing so, Plaintiffs alleged in the Notice that Marble was a citizen and resident of New Mexico, and that Catalyst was a New Mexico corporation, with its principal place of business in New Mexico. Plaintiffs also asserted that Froyer USA and FSN Top Secret were California corporations, both having their principal place of business in California. Defendants filed a jury demand, and never brought a motion to remand or to otherwise contest this factual allegation in the notice of removal.
Information regarding the principal place of business of the corporate Defendants was uniquely within Defendants’ capacity to ascertain. Having failed to raise a factual contention in the district court, which if proved would deprive the court оf subject matter jurisdiction, Defendants now attack the judgment entered against them.
Applying the standard of Albrecht v. Lund, nothing on the face of the pleadings at time of removal indicated that FSN Top Secret had a principal place of business in New Mexico. See Albrecht,
2. Diversity Jurisdiction over Original Action
Defendants -also challenge the district court’s exercise of diversity jurisdiction in the original action, alleging that FSN Top Secret’s purported “nerve center” was in New Mexico. In support of this argument, Defendants cite the deposition testimony of Steven Marble. Nothing in this deposition supports its position. Defendants’ argument is based on an attenuated theory: that the deposition shows that the principal place of business for Plaintiff Catalyst was New Mexico; that we should infer that FSN Top Secret conducted its business only through Catalyst; and thus attribute Catalyst’s New Mexico “nerve center” to FSN Top Secret. Even if Defendants could show some deposition testimony clearly supporting their argument, there is no indication in the record that evidence of a New Mexico “nerve center” was filed or otherwise raised in the district court. As noted by the district court, FSN Top Secret simply described itself as “a corporation incorporated in the State of California” in the complaint filed in the removed action.
After the Third Amended Complaint was filed in the district court, Defendants Lui and Froyer USA did file a motion to dismiss with their Rule 19 motion. The
Although Albrecht v. Lund specifically deals with jurisdictional facts in the context of removal, we see no principled distinction between that case and a case originally filed in the district court for purposes of diversity jurisdiction. See Albrecht,
The procedural history of this case demonstrates that Defendants, without factual support, have repeatedly asserted new theories to defeat diversity jurisdiction. In its complaint filed in the removed action, FSN Top Secret identified itself as a California corporation. Later, on motion to dismiss for lack of subject matter jurisdiction, the district court entered factual findings that FSN Top Secret was a California corporation, at a time when Marble’s deposition was available and cited by Defendants. Because there was no allegation in the trial court that FSN Top Secret was a citizen of New Mexico, we decline to reopen the matter on appeal. On the record of factual issues raised before it, the district court’s factual finding that FSN Top Secret was a California corporation for diversity purposes was not clear error.
C. Personal Jurisdiction over Froyer USA and FSN Top Secret
Defendants FSN Top Secret and Froyer USA argue that the district court lacked personal jurisdiction over them for claims stated in the Third Amended Complaint because they were not served with a summons. Plaintiffs contend that despite any technical defect in failure to serve a summons with the Third Amended Complaint, the district court did have personal jurisdiction over FSN Top Secret and Froyer USA. FSN Top Secret and Froyer USA were added as Defendants in the Third Amended Complaint, which was served on the attorney of record for all Defendants in the сonsolidated action. Although these were the first claims stated against FSN Top Secret and Froyer USA, no summons was served on either party.
Froyer USA explicitly joined in a motion under Rule 12(b) after service of the Third Amended Complaint. Under Rule 12(h)(1), Froyer USA has waived any defense of lack of personal jurisdiction, insufficiency of process, or insufficiency of service of process, by failing to raise the defense in its first motion under Rule 12(b). See Fed.R.Civ.P. 12(b), (h)(1)(A).
Plaintiffs argue that FSN Top Secret also waived any defense under Rule (h)(1), by failing to join in the first 12(b) motion brought by codefendants Lui and Froyer USA, where all Defendants were represented by one attorney. Specifically, under Rule 12(g), when any motion is brought under Rule 12, all Rule 12 defenses must be raised in the motion, unless exempt from waiver under Rule 12(h)(2). Fed.R.Civ.P. 12(g); 12(h)(2). Plaintiffs ask us to adopt a rule that when the same counsel appears for all Defendants of record, one party should not be allowed to circumvent the consolidation requirements of Rule 12(g) by failing to join in the Rule 12(b) motions of its codefendants. See Church of Scientology v. Linberg,
In Church of Scientology, two defendants argued that the defense of lack of personal jurisdiction was not waived by the failure to raise it in the Rule 12(b) motions of the remaining codefendants. Id. at 966. The same attorney represented all codefendants, but filed a Rule 12(b) motion only on behalf of “those defendants herein who have been properly served with process.” Id. Because counsel could cite no legitimate reason why the remaining two defendants could not have raised their defenses in the same motion, the district court held that the defenses were waived. Id. at 966-67. The practical effect of permitting defendants to raise the defense in a second Rule 12(b) motion would have been circumvention of the consolidation requirements of Rule 12(b), (g) аnd (h). Id. Given the purpose of consolidation, to prevent “the dilatory tactic of filing a series of 12(b) motions,” the district court held that the defense of lack of personal jurisdiction was waived by failing to join in the 12(b) motion of codefendants. Id. Despite the policy concerns underlying the waiver provisions of Rule 12, nothing in the rule requires codefendants represented by the same counsel to raise or waive all their defenses together.
Plaintiffs next argue that the voluntary appearance of FSN Top Secret and Froyer USA in the removed action through counsel waives any attack on personal jurisdiction in the original federal action. Plaintiffs contend that when actions are consolidated under the Federal Rules of Civil Procedure, the suits are merged, and become one form of action. See Roden v. Empire Printing Co.,
In response to this authority, FSN Top Secret counters that it cannot lose its right to raise its individual defenses in the original federal action, because consolidation does not impact its separate and distinct rights. See J.G. Link & Co. v. Continental Cas. Co.,
At first glance, the holdings in Roden and Link appear to be in conflict regarding the nature of consolidation. “Consolidation” as a term of legal procedure is generally used in three different contexts: (1) when several actions are stayed while one is tried, and the judgment in the cаse tried will be conclusive as to the others; (2) when several actions are combined and lose their separate identities, becoming a single action with a single judgment entered; and (3) when several actions are tried together, but each suit retains its separate character, with separate judgments entered. 9 Wright & Miller, Fed. Practice & Procedure: Civil 2d § 2382 (1995). The language of Rule 42(a) seems to authorize consolidation either as merger or as retaining separate character, but the majority of courts have held that consolidated actions retain their separate character. See id. at n. 9 (citing eases from Second, Third, Fifth, Sixth, Seventh, and Eighth circuits); Fed.R.Civ.P. 42(a). However, the primary source of the majority rule is a decision which predates the adoption of Rule 42 on July 1, 1966. See id. (citing Johnson v. Manhattan Ry. Co.,
In Johnson, the Court examined consolidation under 28 U.S.C. § 734, which has since been repealed and replaced by Rule 42(a). Under the statute, 28 U.S.C. § 734, consolidation was permitted as a matter of convenience and economy in administration, but did not merge the suits into a single cause, nor change the rights of the parties, nor make those who are parties in one suit parties in another.
In the context of merger of consolidated actions for purposes of Rule 54(b), we have adopted a stronger rule which is in accord with those circuits rejecting Johnson, rather than the case-by-case approach of Ringwald. In Huene, for example, we held that entry of judgment disposing of one of two consolidated cases was not an appeal-able judgment under 28 U.S.C. § 1291, absent a Rule 54(b) certification. Huene v. United States,
At the same time, Johnson maintains viability in other contexts. See, e.g., Continental Airlines v. Goodyear Tire & Rubber Co.,
Nonetheless, we do not resolve the issue of whether consolidated actions in general retain their separate character under Johnson and its progeny, or are merged for purposes of determining personal jurisdiction. We may affirm on any ground supported by the record, and do so based on the facts of this case. DP Aviation v. Smiths Indus. Aerospace & Def. Sys. Ltd.,
The district court in this case ordered the two actions “consolidated for all further proceedings,” finding that the removed action “appears to be a counterclaim to[the original federal action].” Because the Third Amended Complaint stated claims in thе nature of compulsory counterclaims, no service of summons was necessary to effect personal jurisdiction.
In state court, Lui, FSN Top Secret, and Froyer USA filed their complaint against Marble and Catalyst, who removed the action to federal court. Under Rule 13, a counterclaim is compulsory in the responsive pleading “if it arises out of the transaction or occurrence that is the subject matter of the opposing party’s claim,” and does not require joinder of parties over whom the court lacks jurisdiction. See Fed.R.Civ.P. 13(a). Consequently, when the state action was removed to federal court, Marble and Catalyst were required to raise as counterclaims any claims they had arising out of the same transaction or occurrence, against Lui, FSN Top Secret, and Froyer USA.
The day Marble and Catalyst removed the ease to federal court, they also filed a “notice of related case” in the removed case. The district court later consolidated the cases, noting that the removed case “appears to be a counterclaim” to the orig
Had Plaintiffs titled their Third Amended Complaint as “Counterclaim,” or “Third Amended Complaint and Counterclaim,” Defendants could not have raised a defect in summons, because it would have been clear that the claims were responsive to the complaint of FSN Top Secret as a plaintiff in the removed action. No summons is required with a counterclaim, as plaintiffs who avail themselves of the district court consent to personal jurisdiction.
FSN Top Secret and other Defendants filed their complaint against Plaintiffs, who removed to federal court, where the two actions were consolidated.
In this case, where all parties appeared as plaintiffs, and all claims arose from the same transaction or occurrence, the district court properly exercised personal jurisdiction over all parties.
D. Damages Awarded for Fraud and Breach of Contract
Defendants argue that the district court erred in awarding separate damages on “identical evidence” of wrongful conduct. See Tavaglione v. Billings,
In this case, the district court’s findings of fact indicated that on Plaintiffs’ breach of contract claim, Plaintiffs Marble and Schnabel were damaged from the failure to account for, or pay, any of the profits obtained from the sales of the Time Machine and Top Secret projects in the underlying sale of the rides to Suzhou Amusement Land. In awarding damages for the breach, the court gave seven specific ways in which the contracts were breached, involving failure to account for the partnership profits from the project sales to Suzhou. Judgment was awarded on these damages, based on the calculation of lost profits in the breach of the partnership agreement.
On Plaintiffs’ claims of fraud in the inducement, the court cited a lack of intent to perform under the contract, and concealment of that lack of intent. In addition, the district court noted that, as a result of Defendants’ fraud, Plaintiffs Schnabel and Marble were deprived of the opportunity to market and reproduce the rides; i.e., resell the rides to other amusement park owners other than Suzhou. Awarding damages for fraud in the inducement, the court awarded fraud damages which represented “their share of the lost profits from resales of the Top Secret and Time Machine rides.” Judgment was entered against Defendants on Plaintiffs’ fraud claims in this amount.
IV. CONCLUSION
For the foregoing reasons, the judgment of the district court is affirmed. The district court did not abuse its discretion in failing to join the partnership as an indispensable party. Diversity jurisdiction was proper for both the original federal action and the removed state court action. The exercise of personal jurisdiction was proper, where the claim asserted was in the nature of a counterclaim against plaintiffs in the consolidated action. Finally, the district court’s award of damages for both fraud and breach of contract claims was not clearly erroneous.
AFFIRMED.
Notes
. The removed action also included Froyer Asia, Ltd., a foreign corporation with its principal place of business in China, as a plaintiff, and Catalyst International, Inc., a Nevada corporation with principal place of business
. Defendants claimed that Marble, in his deposition, identified FSN Top Secret as a partnership based on the following testimony: "[FSN Top Secret]'s a corporation owned by Kevin Lui and it's a partnership that includes Froyer, Suzhou Amusement Land, and this Entity New Wave Entertainment that Kеvin Lui created and Catalyst International.”
. If the partnership were joined, diversity jurisdiction would not lie, as a partnership is a citizen of every state of which its partners are citizens. See Carden v. Arkoma Assocs.,
. As a practical matter, counsel may face a conflict of interest if two clients have such diverse interests that their defenses cannot be joined in one motion, but that issue is not before us.
.For example, when a party who has appeared only as a defendant, defends and files a counterclaim, objection to personal jurisdiction is waived. See, e.g., Freeman v. Bee Machine Co.,
. Once Marble and Catalyst raised this comрulsory counterclaim, the joinder of Schnabel and Premier as plaintiffs was proper. See Fed.R.Civ.P. 19(a).
. Defendants could argue that by contesting removal in this appeal, they did not actually appear as plaintiffs in the removed action. However, as discussed herein, jurisdiction on removal was proper. Further, after removal but before consolidation, Defendants FSN Top Secret and Froyer USA filed a jury demand, and a joint report of early meeting of counsel.
. “The courts, not the parties, are responsible for aligning the parties according to their interests in the litigation. If the interests of a party named as a defendant coincide with those of the plaintiff in relation to the purpose of the lawsuit, the named defendant must be realigned as a plaintiff for jurisdictional purposes.” Continental Airlines,