United States of America v. Bright

Filing 10

ORDER AND REASONS denying 7 Motion to Dismiss Case for failure to join indispensable parties. Signed by Judge Martin L.C. Feldman on 10/4/2011. (caa, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
UNITED STATES OF AMERICA

CIVIL ACTION

VERSUS

NO. 11-1518

RAY A. BRIGHT

SECTION “F”
ORDER AND REASONS

Before the Court is the defendant’s motion for failure to join
indispensable parties pursuant to Federal Rule of Civil Procedure
12(b)(6) and 12(b)(7).

For the reasons that follow, the motion is

DENIED.
Background
This litigation arises because of a default on the repayment
of a student loan.
On September 24, 2004 Ray Bright applied for and executed a
promissory note to secure a direct consolidation loan from the U.S.
Department of Education (DOE) in the amount of $108,206.15; the
note provided for interest at the rate of 8.25% per year.

Some

time after the DOE made the loan,1 the United States made demand
for payment, but Bright defaulted.

The United States sued Bright

on June 27, 2011 to recover the debt, asserting that Bright is

1

The loan was made under the William D. Ford Federal
Direct Loan Program pursuant to Title IV, Part D of the Higher
Education Act of 1965, as amended, 20 U.S.C. § 1087a, et seq., and
34 C.F.R. Part 685.
1

indebted

to

it

for

the

promissory

note

in

the

amount

of

$172,224.44, which represents a principal of $151,515.07, plus
interest accrued through April 18, 2011 of $20,709.37.

Interest

continues to accrue on the principal amount at the daily rate of
$34.22.
Before

referring

Bright’s

defaulted

student

loan

and

promissory note to the Department of Justice for litigation, the
DOE hired Premiere Credit of North America, L.L.C. to try to
collect the debt.

Bright, pro se, now seeks to dismiss the United

States’s complaint for failure to join Premiere Credit and the
Department

of

Education,

which

he

suggests

are

indispensable

parties.
I.
The Court undertakes a two-step inquiry in determining whether
to dismiss a case for failure to join an indispensable party. Hood
ex rel. Miss. v. City of Memphis, Tenn., 570 F.3d 625, 628 (5th Cir.
2009).

The Court first determines whether the party should be

added. Id. To make this determination, the Court consults Federal
Rule of Civil Procedure, which addresses persons that must be
joined in the litigation if feasible -- “required parties”:
(1)

Required Party. A person who is subject to
service of process and whose joinder will not
deprive
the
court
of
subject-matter
jurisdiction must be joined as a party if:
(A) in that person’s absence, the court
cannot accord complete relief among the
existing parties; or
(B) that person claims an interest relating
2

to the subject of the action and is so
situated that disposing of the action in
the person’s absence may:
(i) as a practical matter impair or
impede the person’s ability to
protect the interest; or
(ii) leave an existing party subject to a
substantial
risk
of
incurring
double,
multiple,
or
otherwise
inconsistent obligations because of
the interest....
Fed.R.Civ.P. 19(a)(1)(A).

“[T]he party advocating joinder has the

initial burden of demonstrating that a missing party is necessary.”
Hood ex rel. Miss., 570 F.3d at 628.

If the facts suggest that a

possibly required party is absent, “the burden of disputing [the]
initial

[factual]

joinder.”

appraisal

falls

on

the

party

who

opposes

Id.

If the Court determines that an absent party is a “required
party” and if that person cannot be joined without destroying
subject matter jurisdiction, the Court must then determine whether
that person is “indispensable” such that litigation cannot be
properly pursued without the absent party.
omitted).

Id. at 629 (citation

To make this second determination, and thus to decide

“whether, in equity and good conscience, the action should proceed
among the existing parties or should be dismissed” (Fed.R.Civ.P.
19(b)), the Court considers the factors articulated in Rule 19(b):
(1)
(2)

the extent to which a judgment rendered in the
person’s absence might prejudice that person
or the existing parties;
the extent to which any prejudice could be
lessened or avoided by:
3

(3)
(4)

(A) protective provisions in the judgment;
(B) shaping the relief; or
(C) other measures;
whether a judgment rendered in the person’s
absence would be adequate; and
whether the plaintiff would have an adequate
remedy if the action were dismissed for
nonjoinder.

Fed.R.Civ.P. 19(b).
II.
Bright

contends

that

indispensable parties.

Premiere

Credit

and

the

DOE

are

Although he makes no particular argument

supporting his assertion that DOE is an indispensable party, Bright
contends that Premiere Credit should be made a party to subrogate
or indemnify the student loan payment, or to rehabilitate the loan,
because

Premiere

Credit

prevented

him

from

utilizing

the

rehabilitation program.2
The United States counters that neither Premiere Credit nor
the DOE is a required party because the Court may accord complete
relief in the form of a money judgment in the absence of any
additional parties. In fact, the United States submits that it did
not provide a complete assignment of its creditor rights under the
promissory

note

to

Premiere

Credit,

2

nor

was

Premiere

Credit

Bright asserts that he attempted to utilize the student
loan rehabilitation program made available by the DOE, and that he
was qualified for the rehabilitation process because of his
financial hardship and his willingness to pay an affordable
rehabilitated loan amount.
4

entitled to keep any money it could have collected from Bright.
Instead, Premiere Credit acted as an independent contractor to the
DOE, a point that Bright concedes.

In short, the United States

contends that the forms of relief Bright suggests he will seek from
Premiere (subrogation, indemnification, or rehabilitation) are
inappropriate grounds for joinder under Rule 19(a).

Finally,

because the DOE is a cabinet-level executive department, the United
States insists it is entitled to sue under 28 U.S.C. § 1345.
The Court agrees.

Bright has not carried his burden to show

that these parties should be added as “required parties.”

Neither

Premiere Credit nor the DOE are indispensable parties because
complete relief can be accorded in their absence. Accordingly, the
defendant’s motion to dismiss for failure to join indispensable
parties is DENIED.

New Orleans, Louisiana, October 4, 2011
______________________________
MARTIN L. C. FELDMAN
UNITED STATES DISTRICT JUDGE

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