William Lyon Homes, Inc. v. County of Nye et al

Filing 16

ORDER that Defendants Motion to Dismiss for Lack of Jurisdiction 9 is DENIED. Plaintiff shall file an amended complaint naming Nye County School District as a defendant on or before November 21, 2011. Signed by Judge Kent J. Dawson on 11/4/11. (Copies have been distributed pursuant to the NEF - ECS)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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William Lyon Homes, Inc.,
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Plaintiff,

Case No. 2:11-CV-00741-KJD-RJJ

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v.

ORDER

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COUNTY OF NYE, et al.,
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Defendants.
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Before the Court is the Motion to Dismiss for Lack of Jurisdiction (#9) filed by Defendants
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Board of Commissioners– County of Nye and County of Nye (collectively “Defendants”). Plaintiff
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opposed the Motion (#14) and Defendants replied (#15).
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I. Service of Process
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Plaintiff, a real estate developer, sued Nye County and its Board of Commissioners over the
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imposition of fees and taxes. Plaintiff’s Complaint was filed May 9, 2011. Plaintiff served a
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Summons on Mr. Butch Borasky, a member of the Nye County Board of Commissioners on May 23,
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2011. On June 1, Defendants filed their Motion to Dismiss arguing, inter alia, that the service on
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Mr. Borasky was ineffective and that proper service pursuant to state law should have been on the

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Chairman of the Board of the Nye Count Board of Commissioners or the Nye County Clerk. On

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June 4, 2011 Plaintiff served Mr. Gary Hollis, Chairman of the Nye County Board of

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Commissioners. Accordingly, Plaintiff has cured the defect in service.

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II. Necessary Party

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Defendants also argue that Plaintiff failed to join Nye County School District (“NCSD”) in
this action.

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Rule 12(b)(7) allows a party to seek dismissal for failure to join a party under Fed. R. Civ. P.

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19 which states, in pertinent part, that a person whose joinder to the action will not deprive the court

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of subject matter jurisdiction must be joined as a party, if:
(A) in that person’s absence, the court cannot accord complete relief among existing
parties; or

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(B) that person claims an interest relating 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

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(ii) leave an existing party subject to a substantial risk of incurring double,
multiple, or otherwise inconsistent obligations because of the interest.

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Therefore, determining whether a party is necessary and/or indispensable under Rule 19
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involves a three-step inquiry. Equal Employment Opportunity Comm’n v. Peabody W. Coal. Co.,
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400 F.3d 774, 779 (9th Cir. 2005) (citations omitted). First, the court must determine whether a
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party is “necessary.” Id. If the court finds that the absent party is a necessary party, the court must
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then determine if joinder of the party is feasible. Id. Finally, if joinder is not feasible, the court must
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determine whether the case can proceed without the absent party or whether the absent party is an
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“indispensable” party such that the court must dismiss the action. Id. “The inquiry is a practical one
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and fact specific, and is designed to avoid the harsh results of rigid application.” Makah Indian Tribe
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v. Verity, 910 F.2d 555, 558 (9th Cir. 1990).
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The Ninth Circuit has stated that “there is no precise formula for determining whether a

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particular nonparty should be joined under Rule 19(a)” and that such a determination is heavily

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influenced by the facts and circumstances of each case. Bakia v. Los Angeles County State of Cal.,

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687 F.2d at 299, 301 (9th Cir. 1982). The court has “considerable discretion” in deciding a Rule 19

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analysis. Id. at 301.

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Here, the matter at issue is a residential construction tax. Pursuant to Nevada Revised

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Statutes 387.331, NCSD may request that Defendants levy this tax to fund capital projects. After the

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tax is approved by the Nevada Tax Commission, it is collected by Nye County. 99% of the tax

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proceeds are deposited into a capital projects fund controlled by the NCSD. Nye County retains only

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administrative costs not to exceed one percent of the revenue. See N.R.S. 387.331. The NCSD

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Board of Trustees manages the expenditure of the funds for construction, remodeling, and expansion

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of school facilities. Id.

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Plaintiff argues that NCSD is not a necessary party because Plaintiff does not pay taxes to the

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NCSD. Plaintiff suggests that, if Defendants believe that the NCSD is a necessary party, Defendants

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should file a third-party complaint against it. Alternatively, Plaintiff requests that the Court should

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allow Plaintiff to substitute the NCSD as one of the “Doe” defendants named in its original

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Complaint.

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The plain wording of Fed. R. Civ. P. 19 indicates that NCSD is a necessary party under the

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facts and circumstances of this case. One of Plaintiff’s causes of action is for Unjust Enrichment and

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seeks relief through a refund of taxes paid under protest. (See Compl. ¶42.) It would be impossible

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to accord relief in the absence of the government entity that requested that tax, is the beneficiary of

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99% of the revenue from the tax, and controls expenditure of the tax revenue. Further, disposing of

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the action without the participation of NCSD would, “as a practical matter impair or impede”

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[NCSD’s] ability to protect its interest in the funds. Plaintiff provides no reason that NCSD cannot

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be joined as a party. Accordingly, the Court finds that NCSD must be joined pursuant to Fed. R.

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Civ. P. 19.
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Plaintiff has expressed its willingness to have NCSD added as a party. The Court believes

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that the most efficient method to proceed in this matter is for Plaintiff to file an amended complaint

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naming NCSD as a defendant. If Plaintiff fails to so amend the Complaint by November 21, 2011,

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this action will be dismissed.

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III. Conclusion

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IT IS HEREBY ORDERED that Defendant’s Motion to Dismiss for Lack of Jurisdiction
(#9) is DENIED.
IT IS FURTHER ORDERED that Plaintiff shall file an amended complaint naming Nye
County School District as a defendant on or before November 21, 2011.
DATED this 4th day of November 2011.

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_____________________________
Kent J. Dawson
United States District Judge

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