Opinion
No. 3-04-CV-1228-BD.
March 9, 2005
MEMORANDUM OPINION AND ORDER
Defendant Blockbuster Inc. has filed a supplemental motion to dismiss this case due to the absence of an indispensable party. For the reasons stated herein, the motion is granted.
I.
This is a declaratory judgment action brought by Plaintiff Patrick Miele, a member of Rhapsody, LLC ("the Company"), against Defendant Blockbuster, Inc. ("Blockbuster") and Defendants Marc Bruder and Bruder Releasing, Inc. ("BRI Defendants"). At issue is the validity of an Acquisition Agreement executed by the BRI Defendants, acting as an agent for the Company, which purports to assign certain soundtrack and music rights in a theatrical motion picture entitled Rhapsody to Blockbuster. According to plaintiff, the BRI Defendants had no authority to enter into this Agreement without the approval of a majority of the members of the Company. As a result of this unauthorized contract, plaintiff alleges that he is no longer able to secure his investment rights in the soundtrack and his proportional rights in the motion picture without litigation. By this suit, plaintiff seeks a declaratory judgment invalidating the Acquisition Agreement and an injunction prohibiting any further distribution or sale of the Rhapsody movie and soundtrack.
By order dated January 26, 2005, the court dismissed all claims against the BRI Defendants for lack of personal jurisdiction and sua sponte questioned whether the case could proceed in their absence. Meile v. Blockbuster Inc., 2005 WL 176170 (N.D. Tex. Jan. 26, 2005). Plaintiff and Blockbuster have addressed this issue in supplemental briefs filed on February 18, 2005. The court now determines that the inability to join the BRI Defendants warrants dismissal of the remaining claims and causes of action.
In its brief, plaintiff asks the court to reconsider its order dismissing the claims against the BRI Defendants. Although the federal rules do not recognize a motion for reconsideration as such, a party may ask the court to revisit an interlocutory order "to correct manifest errors of law or fact or to present newly discovered evidence." Waltman v. International Paper Co., 875 F.2d 468, 473 (5th Cir. 1989). All the arguments advanced by plaintiff in his supplemental brief, as well as the evidence detailed in his supplemental appendix, could have been presented earlier. Therefore, the court declines to reconsider its prior order. See Texas Instruments, Inc. v. Hyundai Electronics Industries, Co. Ltd., 50 F.Supp.2d 619, 621 (E.D. Tex. 1999), quoting Resolution Trust Corp. v. Holmes, 846 F.Supp. 1310, 1316 (S.D. Tex. 1994) (motions for reconsideration are not "the proper vehicle for rehashing old arguments or advancing legal theories that could have been presented earlier").
II.
The decision whether to dismiss a civil action for failure to join an indispensable party involves two inquiries. See HS Resources, Inc. v. Wingate, 327 F.3d 432, 439 (5th Cir. 2003). First, the court must determine whether the absent party should be joined under Fed.R.Civ.P. 19(a). Joinder is warranted if:
(1) in 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 matter 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). If either condition is satisfied, the court must join the absent party "if feasible." Wingate, 327 F.3d at 439. However, if joinder is not feasible, the court must decide whether the absent party is indispensable under Fed.R.Civ.P. 19(b). Id. Among the factors relevant to that determination are: (1) prejudice to the absent party or other parties to the lawsuit from a judgment; (2) whether the shaping of relief can lesson prejudice to the absent party; (3) whether adequate relief can be given to other parties without the participation of the absent party; and (4) whether the plaintiff has another effective forum if the suit is dismissed. Id., citing Cornhill Insurance PLC v. Valsamis, Inc., 106 F.3d 80, 84 (5th Cir. 1997). Dismissal is required only if the absent party is truly "indispensable." Id. at 439 n. 11, citing 5A C. Wright A. Miller, FEDERAL PRACTICE AND PROCEDURE § 1359.
A.
It is abundantly clear that the BRI Defendants, as parties to the Acquisition Agreement, have an interest in the subject matter of this action. If the case proceeds in their absence and the court determines that the Agreement is invalid, such a decision undoubtedly would impair the ability of the BRI Defendants to distribute the Rhapsody motion picture and soundtrack. Moreover, Blockbuster would be subject to a substantial risk of incurring inconsistent obligations with respect to the Acquisition Agreement. This is especially true in light of a lawsuit recently filed by plaintiff against the BRI Defendants and others in California federal court. Therefore, the BRI Defendants should be joined "if feasible."
The California lawsuit involves a contract executed by Ron Perlstein, another member of the Company and its resident agent, which purports to give the BRI Defendants the right to enter into distribution arrangements for the Rhapsody motion picture. Although Blockbuster is not a party to that action, its rights will be affected if the California court determines that the contract authorizing the BRI Defendants to enter into the Acquisition Agreement is invalid.
B.
Because the BRI Defendants cannot be joined due to the absence of personal jurisdiction, the court must determine "whether in equity and good conscience the action should proceed among the parties before it, or should be dismissed." FED. R. CIV. P. 19(b). The gravamen of plaintiff's complaint is that the BRI Defendants lacked authority to enter into the Acquisition Agreement with Blockbuster. Any determination by this court regarding the validity of the Agreement would necessitate determining the rights of absent parties — the BRI Defendants. If the court determines that the Acquisition Agreement is invalid, such a decision would impair the ability of the BRI Defendants to distribute the Rhapsody motion picture and soundtrack without giving them an opportunity to defend their interests. It also would foster future litigation, as any judgment entered in this case would not be binding on the BRI Defendants. See Schutten v. Shell Oil Co., 421 F.2d 869, 871 (5th Cir. 1970) (one purpose of Rule 19 is to avoid multiple litigation of the same issues). Such a result is contrary to the "complete, consistent, and efficient settlement of controversies." Pulitzer-Polster v. Pulitzer, 784 F.2d 1305, 1312 (5th Cir. 1986), citing Provident Tradesmen Bank Trust Co. v. Patterson, 390 U.S. 102, 111, 88 S.Ct. 733, 738, 19 L.Ed.2d 936 (1968). Plaintiff does not suggest, and the court is unaware, of any way to shape relief to lessen prejudice to the BRI Defendants. Finally, plaintiff may challenge the validity of the Acquisition Agreement in California federal court where jurisdiction is proper as to both Blockbuster and the BRI Defendants.
The court rejects plaintiff's argument that the forum selection clause in the Acquisition Agreement, which provides for "exclusive jurisdiction of the courts in Dallas County in the State of Texas and North Texas Federal Courts," precludes another court from hearing the case. In its brief, Blockbuster argues that the California federal court is an adequate forum for the resolution of this dispute. ( See Def. Supp. Br. at 12). Such an admission likely prevents Blockbuster from making a contrary argument in the California action.
CONCLUSION
The court finds that the BRI Defendants are truly indispensable parties to this litigation whose joinder is required under Fed.R.Civ.P. 19. Accordingly, defendant's supplemental motion to dismiss is granted. The court will dismiss this case without prejudice by separate judgment issued today.SO ORDERED.