5 Joinder 5 Joinder
5.1 Basic Claim and Party Joinder 5.1 Basic Claim and Party Joinder
5.1.1. FRCP 13: Counterclaim and Crossclaim
5.1.2. FRCP 18: Joinder of Claims
5.1.3. FRCP 19: Required Joinder of Parties
5.1.4. FRCP 20: Permissive Joinder of Parties
5.1.5 Temple v. Synthes Corp. 5.1.5 Temple v. Synthes Corp.
TEMPLE v. SYNTHES CORP., LTD.
No. 90-295.
Decided November 5, 1990
Per Curiam.
Petitioner Temple, a Mississippi resident, underwent surgery in October 1986 in which a “plate and screw device” was implanted in his lower spine. The device was manufactured by respondent Synthes Corp., Ltd. (U. S. A.) (Synthes), a Pennsylvania corporation. Dr. S. Henry LaRocca performed the surgery at St. Charles General Hospital in New Orleans, *6 Louisiana. Following surgery, the device’s screws broke off inside Temple’s back.
Temple filed suit against Synthes in the United States District Court for the Eastern District of Louisiana. The suit, which rested on diversity jurisdiction, alleged defective design and manufacture of the device. At the same time, Temple filed a state administrative proceeding against Dr. LaRocca and the hospital for malpractice and negligence. At the conclusion of the administrative proceeding, Temple filed suit against the doctor and the hospital in Louisiana state court.
Synthes did not attempt to bring the doctor and the hospital into the federal action by means of a third-party complaint, as provided in Federal Rule of Civil Procedure 14(a). Instead, Synthes filed a motion to dismiss Temple’s federal suit for failure to join necessary parties pursuant to Federal Rule of Civil Procedure 19. Following a hearing, the District Court ordered Temple to join the doctor and the hospital as defendants within 20 days or risk dismissal of the lawsuit. According to the court, the most significant reason for requiring joinder was the interest of judicial economy. App. to Pet. for Cert. A-12. The court relied on this Court’s decision in Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U. S. 102 (1968), wherein we recognized that one focus of Rule 19 is “the interest of the courts and the public in complete, consistent, and efficient settlement of controversies.” Id., at 111. When Temple failed to join the doctor and the hospital, the court dismissed the suit with prejudice.
Temple appealed, and the United States Court of Appeals for the Fifth Circuit affirmed. 898 F. 2d 152 (1990) (judgt. order). The court deemed it “obviously prejudicial to the defendants to have the separate litigations being carried on,” because Synthes’ defense might be that the plate was not defective but that the doctor and the hospital were negligent, while the doctor and the hospital, on the other hand, might claim that they were not negligent but that the plate was de *7 fective. App. to Pet. for Cert. A-3. The Court of Appeals found that the claims overlapped and that the District Court therefore had not abused its discretion in ordering joinder under Rule 19. A petition for rehearing was denied.
In his petition for certiorari to this Court, Temple contends that it was error to label joint tortfeasors as indispensable parties under Rule 19(b) and to dismiss the lawsuit with prejudice for failure to join those parties. We agree. Synthes does not deny that it, the doctor, and the hospital are potential joint tortfeasors. It has long been the rule that it is not necessary for all joint tortfeasors to be named as defendants in a single lawsuit. See Lawlor v. National Screen Service Corp., 349 U. S. 322, 329-330 (1955); Bigelow v. Old Dominion Copper Mining & Smelting Co., 225 U. S. 111, 132 (1912). See also Nottingham v. General American Communications Corp., 811 F. 2d 873, 880 (CA5) (per curiam), cert. denied, 484 U. S. 854 (1987). Nothing in the 1966 revision of Rule 19 changed that principle. See Provident Bank, supra, at 116-117, n. 12. The Advisory Committee Notes to Rule 19(a) explicitly state that “a tortfeasor with the usual ‘joint-and-several’ liability is merely a permissive party to an action against another with like liability.” 28 U. S. C. App., p. 595. There is nothing in Louisiana tort law to the contrary. See Mullin v. Skains, 252 La. 1009, 1014, 215 So. 2d 643, 645 (1968); La. Civ. Code Ann., Arts. 1794, 1795 (West 1987).
The opinion in Provident Bank, supra, does speak of the public interest in limiting multiple litigation, but that case is not controlling here. There, the estate of a tort victim brought a declaratory judgment action against an insurance company. We assumed that the policyholder was a person “who, under § (a), should be ‘joined if feasible.’” 390 U. S., at 108, and went on to discuss the appropriate analysis under Rule 19(b), because the policyholder could not be joined without destroying diversity. Id., at 109-116. After examining the factors set forth in Rule 19(b), we determined that the *8 action could proceed without the policyholder; he therefore was not an indispensable party whose absence required dismissal of the suit. Id., at 116, 119.
Here, no inquiry under Rule 19(b) is necessary, because the threshold requirements of Rule 19(a) have not been satisfied. As potential joint tortfeasors with Synthes, Dr. La-Rocca and the hospital were merely permissive parties. The Court of Appeals erred by failing to hold that the District Court abused its discretion in ordering them joined as defendants and in dismissing the action when Temple failed to comply with the court’s order. For these reasons, we grant the petition for certiorari, reverse the judgment of the Court of Appeals for the Fifth Circuit, and remand for further proceedings consistent with this opinion.
It is so ordered.
5.1.6 Helzberg's Diamond Shops, Inc. v. Valley West Des Moines Shopping Center, Inc. 5.1.6 Helzberg's Diamond Shops, Inc. v. Valley West Des Moines Shopping Center, Inc.
HELZBERG’S DIAMOND SHOPS, INC., Appellee, v. VALLEY WEST DES MOINES SHOPPING CENTER, INC., Appellant.
No. 77-1355.
United States Court of Appeals, Eighth Circuit.
Submitted Sept. 2, 1977.
Decided Nov. 10, 1977.
*817 J. David Jackson, Minneapolis, Minn, (argued), Thomas W. Finn, Minneapolis, Minn., and Edward J. Houlehan, Kansas City, Mo., on brief, for appellant.
Loeb H. Granoff, Kansas City, Mo., for appellee.
The Honorable Donald D. Alsop, Judge, United States District Court for the District of Minnesota, sitting by designation.
ALSOP, District Judge.
On February 3,1975, Helzberg’s Diamond Shops, Inc. (Helzberg), a Missouri corporation, and Valley West Des Moines Shopping Center, Inc. (Valley West), an Iowa corporation, executed a written Lease Agreement. The Lease Agreement granted Helzberg the right to operate a full line jewelry store at space 254 in the Valley West Mall in West Des Moines, Iowa. Section 6 of Article V of the Lease Agreement provides:
[Valley West] agrees it will not lease premises in the shopping center for use as a catalog jewelry store nor lease premises for more than two full line jewelry stores in the shopping center in addition to the leased premises. This clause shall not prohibit other stores such as department stores from selling jewelry from catalogs or in any way restrict the shopping center department stores.
Subsequently, Helzberg commenced operation of a full line jewelry store in the Valley West Mall.
Between February 3, 1975 and November 2, 1976 Valley West and two other corporations entered into leases for spaces in the Valley West Mall for use as full line jewelry stores. Pursuant to those leases the two corporations also initiated actual operation of full line jewelry stores.
On November 2, 1976, Valley West and Kirk’s Incorporated, Jewelers, an Iowa corporation, doing business as Lord’s Jewelers (Lord’s), entered into a written Lease Agreement. The Lease Agreement granted Lord’s the right to occupy space 261 in the Valley West Mall. Section 1 of Article V of the Lease Agreement provides that Lord’s will use space 261
. only as a retail specialty jewelry store (and not as a catalogue or full line jewelry store) featuring watches, jewelry (and the repair of same) and incidental better gift items.
However, Lord’s intended to open and operate what constituted a full line jewelry store at space 261.
In an attempt to avoid the opening of a fourth full line jewelry store in the Valley West Mall and the resulting breach of the Helzberg-Valley West Lease Agreement, Helzberg instituted suit seeking preliminary and permanent injunctive relief restraining Valley West’s breach of the Lease Agreement. The suit was filed in the United States District Court for the Western District of Missouri. Subject matter jurisdiction was invoked pursuant to 28 U.S.C. § 1332 based upon diversity of citizenship between the parties and an amount in controversy which exceeded $10,000. Personal jurisdiction was established by service of process on Valley West pursuant to the Missouri “long arm” statute, Rev.Stat.Mo. § 506.500 et seq. (1977). Rule 4(e), Fed.R.Civ.P.
Valley West moved to dismiss pursuant to Rule 19 because Helzberg had failed to join Lord’s as a party defendant. 1 That motion was denied. The District Court 2 went on to order that
pending the determination of [the] action on the merits, that [Valley West] be, and it is hereby, enjoined and restrained from allowing, and shall take all necessary steps to prevent, any other tenant in its Valley West Mall (including but not limited to Kirk’s Incorporated, Jewelers, *818 d/b/a Lord’s Jewelers) to open and operate on March 30, 1977, or at any other time, or to be operated during the term of [Helzberg’s] present leasehold, a fourth full line jewelry store meaning a jewelry store offering for sale at retail a broad range of jewelry items at various prices such as diamonds and diamond jewelry, precious and semi-precious stones, watches, rings, gold jewelry, costume jewelry, gold chains, pendants, bracelets, belt buckles, tie tacs, tie slides and earrings, provided, however, nothing contained herein shall be construed to enjoin [Valley West] from allowing the opening in said Valley West Mall of a small store, known by [Valley West] as a boutique, which sells limited items such as only Indian jewelry, only watches, only earrings, or only pearls.
From this order Valley West appeals.
It is clear that Valley West is entitled to appeal from the order granting preliminary injunctive relief. 28 U.S.C. § 1292(a)(1). However, Valley West does not attack the propriety of the issuance of a preliminary injunction directly; instead, it challenges the District Court’s denial of its motion to dismiss for failure to join an indispensable party and argues that the District Court’s order fails for lack of specificity in describing the acts of Valley West to be restrained.
Ordinarily, the denial of a motion to dismiss is not reviewable. Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949); Catlin v. United States, 324 U.S. 229, 65 S.Ct. 631, 89 L.Ed. 911 (1945); United States v. Barket, 530 F.2d 181 (8th Cir. 1975), cert. denied, 429 U.S. 917, 97 S.Ct. 308, 50 L.Ed.2d 282 (1976). However, because the denial of Valley West’s motion to dismiss enters into and becomes a part of the District Court’s order granting preliminary injunctive relief and because the granting of preliminary injunctive relief is itself appealable, we can and will review the order denying Valley West’s motion to dismiss. See United States v. Fort Sill Apache Tribe, 507 F.2d 861, 205 Ct.Cl. 805 (1974).
Rule 19, Fed.R.Civ.P., provides in pertinent part:
(a) A person who is subject to service of process and whose joinder will not deprive the court of jurisdiction over the subject matter of the action shall be joined as a party in the action if (1) in his absence complete relief cannot be accorded among those already parties, or (2) he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his 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 his claimed interest. .
(b) If a person as described in subdivision (a)(1) — (2) hereof cannot be made a party, 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. The factors to be considered by the court include: first, to what extent a judgment rendered in the person’s absence might be prejudicial to him or those already parties; second, 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 nonjoinder.
Because Helzberg was seeking and the District Court ordered injunctive relief which may prevent Lord’s from operating its jewelry store in the Valley West Mall in the manner in which Lord’s originally intended, the District Court correctly concluded that Lord’s was a party to be joined if feasible. See Rule 19(a)(2)(i), Fed.R.Civ.P. Therefore, because Lord’s was not and is not subject to personal jurisdiction in the Western District of Missouri, the District Court was required to determine whether *819 or not Lord’s should be regarded as indispensable. After considering the factors which Rule 19(b) mandates be considered, the District Court concluded that Lord’s was not to be regarded as indispensable. We agree.
The determination of whether or not a person is an indispensable party is one which must be made on a case-by-case basis and is dependent upon the facts and circumstances of each case. Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 88 S.Ct. 733, 19 L.Ed.2d 936 (1968); 7 C. Wright & A. Miller, Federal Practice & Procedure § 1607 (1972); 3A J. Moore, Federal Practice H 19.07—2[0] (1976). An analysis of the facts and circumstances of the case before us lead us to conclude that Lord’s was not an indispensable party and that, therefore, the District Court did not err in denying Valley West’s motion to dismiss.
Rule 19(b) requires the court to look first to the extent to which a judgment rendered in Lord’s absence might be prejudicial to Lord’s or to Valley West. Valley West argues that the District Court’s order granting preliminary injunctive relief does prejudice Lord’s and may prejudice Valley West. We do not agree.
It seems axiomatic that none of Lord’s rights or obligations will be ultimately determined in a suit to which it is not a party. See Mallow v. Hinde, 25 U.S. (12 Wheat.) 193, 6 L.Ed. 599 (1827); E. B. Elliott Adv. Co. v. Metropolitan Dade County, 425 F.2d 1141 (5th Cir.), cert. denied, 400 U.S. 805, 91 S.Ct. 12, 27 L.Ed.2d 35 (1970); 7 C. Wright & A. Miller, Federal Practice & Procedure § 1611, at 112 (1972). Even if, as a result of the District Court’s granting of the preliminary injunction, Valley West should attempt to terminate Lord’s leasehold interest in space 261 in the Valley West Mall, Lord’s will retain all of its rights under its Lease Agreement with Valley West. None of its rights or obligations will have been adjudicated as a result of the present proceedings, proceedings to which it is not a party. Therefore, we conclude that Lord’s will not be prejudiced in a way contemplated by Rule 19(b) as a result of this action.
Likewise, we think that Lord’s absence will not prejudice Valley West in a way contemplated by Rule 19(b). Valley West contends that it may be subjected to inconsistent obligations as a result of a determination in this action and a determination in another forum that Valley West should proceed in a fashion contrary to what has been ordered in these proceedings.
It is true that the obligations of Valley West to Helzberg, as determined in these proceedings, may be inconsistent with Valley West’s obligations to Lord’s. However, we are of the opinion that any inconsistency in those obligations will result from Valley West’s voluntary execution of two Lease Agreements which impose inconsistent obligations rather than from Lord’s absence from the present proceedings.
Helzberg seeks only to restrain Valley West’s breach of the Lease Agreement to which Helzberg and Valley West were the sole parties. Certainly, all of the rights and obligations arising under a lease can be adjudicated where all of the parties to the lease are before the court. See Lomayaktewa v. Hathaway, 520 F.2d 1324 (9th Cir. 1975), cert. denied, 425 U.S. 903, 96 S.Ct. 1492, 47 L.Ed.2d 752 (1976). Thus, in the context of these proceedings the District Court can determine all of the rights and obligations of both Helzberg and Valley West based upon the Lease Agreement between them, even though Lord’s is not a party to the proceedings.
Valley West’s contention that it may be subjected to inconsistent judgments if Lord’s should choose to file suit elsewhere and be awarded judgment is speculative at best. In the first place, Lord’s has not filed such a suit. Secondly, there is no showing that another court is likely to interpret the language of the two Lease Agreements differently from the way in which the District Court would. Therefore, we also conclude that Valley West will suffer no prejudice as a result of the District Court’s proceeding *820 in Lord’s absence. Any prejudice .which Valley West may suffer by way of inconsistent judgments would be the result of Valley West’s execution of Lease Agreements which impose inconsistent obligations and not the result of the proceedings in the District Court.
Rule 19(b) also requires the court to consider ways in which prejudice to the absent party can be lessened or avoided. The District Court afforded Lord’s an opportunity to intervene in order to protect any interest it might have in the outcome of this litigation. Lord’s chose not to do so. In light of Lord’s decision not to intervene we conclude that the District Court acted in such a way as to sufficiently protect Lord’s interests. Cf. 7 C. Wright & A. Miller, Federal Practice & Procedure § 1610, at 103 (1972).
Similarly, we also conclude that the District Court’s determinations that a judgment rendered in Lord’s absence would be adequate and that there is no controlling significance to the fact that Helzberg would have an adequate remedy in the Iowa courts were not erroneous. It follows that the District Court’s conclusion that in equity and good conscience the action should be allowed to proceed was a correct one.
In sum, it is generally recognized that a person does not become indispensable to an action to determine rights under a contract simply because that person’s rights or obligations under an entirely separate contract will be affected by the result of the action. 3A J. Moore, Federal Practice H 19.10, at 2349-50 (1976); see also Division 525, Railway Conductors v. Gorman, 133 F.2d 273 (8th Cir. 1943); 7 C. Wright & A. Miller, Federal Practice & Procedure § 1613, at 135 (1972). This principle applies to an action against a lessor who has entered into other leases which also may be affected by the result in the action in which the other lessees are argued to be indispensable parties. See Cherokee Nation v. Hitchcock, 187 U.S. 294, 23 S.Ct. 115, 47 L.Ed. 183 (1902). We conclude that the District Court properly denied the motion to dismiss for failure to join an indispensable party.
Valley West also argues that the District Court’s order does not comply with the specificity provisions of Rule 65(d), Fed.R.Civ.P. Valley West contends that the terms of the order fail to apprise it of the behavior which the order requires it to perform. Valley West claims that Rule 65(d) mandates that the District Court spell out the “necessary steps” which it is to take to prevent the opening of a fourth full line jewelry store and define the term “full line jewelry store.”
Rule 65(d) provides in pertinent part: Every order granting an injunction . shall be specific in terms; shall describe in reasonable detail
the act or acts sought to be restrained
These provisions require specificity and are designed to prevent uncertainty and confusion on the part of those to whom the injunction is directed and to avoid the possible founding of a contempt citation on a decree too vague to be understood. They require that those enjoined receive explicit notice of precisely what conduct is outlawed. Schmidt v. Lessard, 414 U.S. 473, 476, 94 S.Ct. 713, 38 L.Ed.2d 661 (1974).
We think that the District Court’s order measures up to the statutory standard. Although the order does not spell out the steps which Valley West is to take, it does provide Valley West with explicit notice that it is not to allow the opening or operation of a fourth full line jewelry store in the Valley West Mall. In addition, Valley West’s protestations notwithstanding, it is difficult to imagine how the District Court might have more adequately defined the term “full line jewelry store.”
In view of the foregoing, it follows that the judgment of the District Court is affirmed.
Affirmed.
5.1.7. FRCP 14: Third-Party Practice
5.1.8 Price v. CTB, Inc. 5.1.8 Price v. CTB, Inc.
Jon V. PRICE, Plaintiff, v. CTB, INC., Latco, Inc., et al., Defendants. Latco, Inc., Third Party Plaintiff, v. Illinois Tool Works, Inc., J & S Tool and Fastener, Inc., Third Party Defendants.
No. Civ.A. 00-D-1199-S.
United States District Court, M.D. Alabama, Southern Division.
Sept. 17, 2001.
*1300 Jere L. Beasley, Stephen W. Drinkard, Larry A. Golston, Jr., Rhon E. Jones, Beasley, Allen, Crow, Methvin, Portis & Miles, PC, Montgomery, AL, Samuel J. Clenney, III, Abbeville, AL, M. Adam Jones, Hall Smith & Jones, Dothan, AL, for Jon V. Price.
Brandy A. Adkins, Richard E. Brough-ton, Ball, Ball, Matthews & Novak, P.A., Montgomery, AL, Helen Johnson Alford, Holly Alves, Frank L. Parker, Jr., Carr, Alford, Clausen & McDonald, LLC, Mobile, AL, Amy V. Bowman, E. Chadwick Morriss, Rushton, Stakely, Johnston & Garrett, P.A., Montgomery, AL, Charles “Skip” D. Davidson, Davidson Law Firm, Ltd., Little Rock, AR, D, Mitchell Henry, Webster & Henry, P.C., Montgomery, AL, Deborah Whitmore Hicks, Eufaula, AL, for CTB, Inc., Lateo, Inc.
Michael Baird Beers, Constance T. Buckalew, William F. Patty, Angela Christine Taylor, Beers Anderson Jackson Nelson Hughes & Patty, PC, Montgomery, AL, Charoen Popkhand Inc., Huntsville, AL, Laurence J. McDuff, E. Berton Spence, Lange, Simpson, Robinson & Sim-erville, Birmingham, AL, for Illinois Tool Works, Inc., J&S Tool and Fasteners, Inc.
John W. Dodson, K. Claire, White, Ferguson, Frost & Dodson, Birmingham, AL, for movant.
MEMORANDUM OPINION AND ORDER
DE MENT, District Judge.
Before the court is Third Party Defendant Illinois Tool Work, Inc.’s (“ITW”) Motion to Dismiss (“Mot.”), filed on August 17, 2001. (Doc. 70.) Third Party Plaintiff Lateo, Inc. (“Lateo”) filed a Response on September 4, 2001. After careful consideration of the arguments of counsel, the relevant law, and the record as a whole, the court finds that ITW’s Motion to Dismiss is due to be denied.
I. BACKGROUND
Lateo, a building contractor, is an original defendant in the underlying action concerning the quality of its workmanship when it constructed chicken houses for various Alabama farmers. The causes of action against Lateo include breach of the construction contract, fraudulent misrepresentation of the caliber of materials to be used, and negligence and wantonness in the construction. Lateo moved to file a Third Party Complaint against, inter alios, ITW on February 21, 2001, approximately six months after the case had been removed to the Middle District of Alabama. It failed in its attempt to properly serve ITW until July 19, because it did not name the appropriate agent for service. In the Third Party Complaint, Lateo alleges that *1301 ITW, a nail manufacturer, defectively designed the nails used in the construction of the chicken houses. The specific causes of action include breach of warranty, violation of the Alabama Extended Manufacturer’s Liability Doctrine, and common law indemnity. ITW argues that it was improperly impleaded under Rule 14 of the Federal Rules of Civil Procedure, or, alternatively, that the Third Party Complaint is barred by the equitable doctrine of laches.
II. DISCUSSION
Under Rule 14(a), a defendant may assert a claim against anyone not a party to the original action if that third party’s liability is in some way dependent upon the outcome of the original action. Davenport v. Neely, 7 F.Supp.2d 1219, 1223 (M.D.Ala.1998). There is a limitation on this general statement, however. Even though it may arise out of the same general set of facts as the main claim, a third party claim will not be permitted when it is based upon a separate and independent claim. United States v. Joe Grasso & Son, Inc., 380 F.2d 749, 751 (5th Cir.1967). 1 Rather, the third party liability must in some way be derivative of the original claim; a third party may be impleaded only when the original defendant is trying to pass all or part of the liability onto that third party. Allstate Ins. Co. v. Hugh Cole Builder, Inc., 187 F.R.D. 671, 673 (M.D.Ala.1999).
Lateo argues that ITW is the prototypical third party defendant under Rule 14. It asserts that ITW can be found liable for the warranty surrounding its products if Lateo is first found liable for faulty construction. Furthermore, insists Lateo, this derivative liability merely involves a shift in the overall responsibility of the allegedly defective chicken houses. ITW contends, however, that because Rule 14 is merely a procedural rule, the propriety of its application depends upon the existence of a right to indemnity under the substantive law. ITW accurately states the law in this regard, see, e.g., Gen. Dynamics Corp. v. Adams, 340 F.2d 271, 279 (5th Cir.1965), but its conclusion that there is no viable substantive claim under Alabama law is incorrect.
Conceding that Alabama does not recognize a right to contribution among joint tortfeasors, Lateo directs the court’s attention to the concept of implied contractual indemnity. Under this doctrine, Alabama courts recognize that a manufacturer of a product has impliedly agreed to indemnify the seller when 1) the seller is without fault, 2) the manufacturer is responsible, and 3) the seller has been required to pay a monetary judgment. Allstate Ins. Co. v. Amerisure Ins. Cos., 603 So.2d 961, 963 (Ala.1992). Under Latco’s theory, should it be found liable for its construction of the chicken houses, it can demonstrate that the true fault lies with the nailguns and the nails manufactured by ITW.
Alabama caselaw, not to mention the parties’ briefs, is especially sparse with respect to the contours of the doctrine of implied indemnity. However, Illinois courts have applied the doctrine in similar cases, and the court finds no reason to believe that Alabama courts would interpret the common law principles in a different manner. Indeed, the reasoning of the Supreme Court of Illinois in an almost identical case compels the court to find that impleader is proper here. See Maxfield v. Simmons, 96 Ill.2d 81, 70 Ill.Dec. 236, 449 N.E.2d 110 (1983). In Maxfield, an individual brought suit against a contractor alleging that the latter had constructed the roof of the plaintiffs home in a “poor and shoddy manner.” Id. at 110. *1302 The contractor, in turn, filed a third party-complaint against the manufacturer and the seller of the roof trusses, alleging that their defective nature entitled the contractor to indemnification. Id. 2
The Maxfield court observed that the specific fact pattern was not governed by any provisions of the Uniform Commercial Code as adopted by the state of Illinois. Id. at 112. ITW has argued as much with respect to the Alabama code. However, while ITW asks the court to conclude from this basis that there is no cause of action under Alabama law, the court is inclined to follow the lead of the Maxfield court and look to Section 1-103 of the Alabama U.C.C. Therein it states that, “[ujnless displaced by the particular provisions of this title, the principles of law and equity ... shall supplement its provisions.” Ala. Code § 7-1-103 (1975). The equitable doctrine of implied indemnity has been applied to such factual scenarios as a means of alleviating the harshness surrounding rules prohibiting contribution among joint tortfeasors. See Bethlehem Steel Corp. v. Chicago Eastern Corp., 863 F.2d 508, 521 (7th Cir.1988). The court finds that Alabama law provides Lateo a cause of action under common law indemnity against ITW.
It must be noted, however, that, under Alabama law, the doctrine permits recovery only when the party to be indemnified is “without fault.” Allstate Ins. Co., 603 So.2d at 963. Whether, in fact, such a factual scenario will be proven at trial is irrelevant for present purposes. The only issue before the court is whether there exists a legal basis to implead ITW, not whether ITW is, in fact, liable to Lateo. Since Rule 14 permits Lateo to implead any party who “may be liable,” Fed. R.Civ.P. 14(a), it follows that the court must permit development of the factual record so the extent of that liability may be determined. See Travelers Ins. Co. v. Busy Electric Co., 294 F.2d 139, 149 (5th Cir.1961); IHP Indus., Inc. v. PermAlert, ESP, 178 F.R.D. 483, 487 (S.D.Miss.1997).
Furthermore, since Lateo has established a basis upon which it may properly implead ITW, the court need not address the applicability of Rule 14 to the other claims in Latco’s Third Party Complaint. It is well established that a properly impleaded claim may serve as an anchor for separate and independent claims under Rule 18(a). See City of Orange Beach v. Scottsdale Ins. Co., 166 F.R.D. 506, 511 (S.D.Ala.1996); 6 Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1452, at 414. 3 In short, the court finds that Lateo has properly impleaded ITW under Rule 14(a).
*1303 ITW contests that, notwithstanding the above discussion, the Third Party Complaint is barred under the equitable doctrine of laches. This defense fails for two reasons. First of all, a party seeking such equitable relief must first demonstrate that it has been prejudiced by the other party’s unreasonable delay. Ex Parte Sasser, 730 So.2d 604, 605-06 (Ala.1999). ITW has failed to demonstrate any detriment caused to it by Latco’s failure to properly implead it until almost one year after the original suit had been filed. Second, the doctrine of laches does not apply in the absence of sufficient information on the part of the party who allegedly failed to do what was required of it by equity. Sims v. Lewis, 374 So.2d 298, 305 (Ala.1979). While it is an open question whether equity required Lateo to implead ITW earlier than it did, it must be pointed out that Lateo attempted to serve ITW in February of 2001, but service faded merely because one of ITW’s subsidiaries was not an authorized agent for such purposes. Absent some indicia of culpability on the part of Lateo, the court refuses to apply the remedy of laches. 4 To the contrary, ITW was properly impleaded.
III. ORDER
Accordingly, it is CONSIDERED and ORDERED that ITW’s Motion To Dismiss be and the same is hereby DENIED.
. All Fifth Circuit decisions rendered prior to October 1, 1981, are binding upon courts in the Eleventh Circuit. Bonner v. City of Prichard, 661 F.2d 1206 (11th Cir.1981) (en banc).
. In the present matter, Lateo has also im-pleaded the retailer of ITW’s products, but it has not contested the propriety thereof.
. The court finds it necessary to dispel any worry that its rule might permit defendants to improperly encumber ongoing lawsuits by simply asserting claims of implied contractual indemnity. Rule 14(a) grants federal courts discretion in determining the propriety of a third party complaint, and in making its determination, a court may consider the burden upon the litigation that might ensue, as well as the merit of the third party complaint. See generally 6 Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1443. Rules 21 and 42 further provide original plaintiffs protection against vexatious litigation by permitting the court to drop parties or to sever claims. In the present matter, the court deems it appropriate to allow the factual record to develop so that the role of ITW’s products in the allegedly defective chicken houses can be determined. Under the rationale that a stitch in time saves nine, the court considers it more efficient to determine liability presently rather than to risk potential relitigation on all the issues at a later date. See, e.g., Ex Parte Duncan Constr. Co., 460 So.2d 852, 854 (Ala.1984) (observing that purpose of impleader rule is to avoid duplicative litigation of similar factual and *1303 legal questions). This conclusion is underscored given that forty identical suits were filed against Lateo. (Mot-¶ 1.)
. ITW’s reliance upon Cochrane Roofing & Metal Co., Inc. v. Callahan, 472 So.2d 1005 (Ala.1985) is misplaced. In that case the parties had an express indemnification agreement, yet the plaintiff failed to notify the defendant of the pending suit until two years after it began. Id. at 1008. In fact, the defendant was only notified so that it could be called upon to pay the lawyer over which it had no role in selecting or directing. Id. ITW, on the other hand, has obtained its own counsel and has ample time to investigate the claim against it such that there is no burden imposed upon it to justify the application of laches.
5.2 Interpleader 5.2 Interpleader
5.2.1. FRCP 22: Interpleader
5.2.2. 28 U.S.C. § 1335 - Statutory Interpleader
5.2.3. 28 U.S.C. § 1397 - Statutory Interpleader Venue
5.2.4. 28 U.S.C. § 2361 - Statutory Interpleader Process
5.2.5 State Farm Fire & Casualty Co. v. Tashire 5.2.5 State Farm Fire & Casualty Co. v. Tashire
STATE FARM FIRE & CASUALTY CO. et al. v. TASHIRE et al.
No. 391.
Argued February 14-15, 1967.
Decided April 10, 1967.
*525 Otto R. Skopil, Jr., and John Gordon Gearin argued the cause and filed briefs for petitioners.
Nick Chaivoe and James B. Griswold argued the cause and filed a brief for respondents.
Mark C. McClanahan filed a brief for Anderson & Geary et al., as amici curiae.
Mr. Justice Fortas
delivered the opinion of the Court.
Early one September morning in 1964, a Greyhound bus proceeding northward through Shasta County, California, collided with a southbound pickup truck. Two of the passengers aboard the bus were killed. Thirty-three others were injured,, as were the bus driver, the driver of the truck and its lone passenger. One of the dead and 10 of the injured passengers were Canadians; the rest of the individuals involved were citizens of five American. States. The ensuing litigation led to the present case, which raises important questions concerning administration of the interpleader remedy in the federal courts.
The litigation began when four of. the injured passengers filed suit in California state courts, seeking, damages in excess of $1,000,000. Named as defendants were Greyhound Lines, Inc., a California corporation; Theron Nauta, the bus driver; Ellis Clark, who drove the truck; and Kenneth Glasgow, the passenger in the truck who was apparently its owner as well. Each of the individual defendants was a citizen and resident of Oregon. Before these cases could come to trial and before other suits were filed in California or elsewhere, petitioner State Farm Fire & Casualty Company, an Illinois corporation, brought this action in the nature of interpleader in the United States District Court for the District of Oregon.
*526In its complaint State Farm asserted that at the time of the Shasta County collision it had in force an insurance policy with respect to Ellis Clark, driver of the truck, providing for bodily injury liability' up to $10,000 per person and $20,000 per occurrence and for legal representation of Clark in actions covered by the policy. It asserted that actions already filed in California and others which it anticipated would be filed far exceeded in aggregate damages sought the amount of its maximum liability under the policy. Accordingly, it paid into court the sum of $20,000 and asked the court (1) to require all. claimants to establish their claims against Clark and his insurer in this single proceeding and in no other, and (2) to discharge State Farm from all further obligations under its policy — including its duty to .defend Clark in lawsuits arising from the accident. Alternatively, State Farm expressed its conviction that the policy issued to Clark excluded from coverage accidents resulting from his operation of a truck which belonged to another and was being used in the business of another. The complaint, therefore, requested that the court decree that the insurer owed no duty to Clark and was not liable on the policy, and it asked the court to refund the $20,000 deposit.
Joined as defendants were Clark, Glasgow, Nauta, Greyhound Lines, and each of the prospective claimants. Jurisdiction was predicated upon 28 U. S. C. § 1335, the federal interpleader statute,1 and upon general diversity *527of citizenship, there being diversity between two or more of the claimants to the fund and between State Farm and all of the named defendants.
An order issued, requiring the defendants to show cause why they should not be restrained from filing or prosecuting “any proceeding in any state or United States Court affecting the property or obligation involved in this interpleader action, and specifically against the plaintiff and the defendant-Ellis D. Clark.” Personal service was effected on each of the American .defendants, and registered mail was employed to reach the 11 Canadian claimants. Defendants Nauta, Greyhound, and several of the injured passengers responded, contending that the policy did cover this accident and advancing various arguments for the position that interpleader was either impermissible or inappropriate in the present circumstances. Greyhound; however, soon switched sides and moved that the court broaden any injunction to include Nauta and Greyhound among those, who could not be sued except within the confines of the interpleader proceeding.
When a temporary injunction along the lines sought • by State Farm was issued by the United States District Court for the District of Oregon, the present respondents moved to dismiss the action and, in the alternative, for a change of venue — to the Northern District of California, in which district' the collision had occurred. After a hearing, the court declined to dissolve the temporary injunction, but continued the motion for a change of venue. The injunction was later broadened to include the protection sought ,by Greyhound, but modified to *528permit the filing — although not the prosecution — of suits. The injunction, therefore, provided that all suits against Clark, State Farm, Greyhound, and Nauta be prosecuted in the interpleader proceeding.
On interlocutory appeal,2 the Court of Appeals for the Ninth Circuit reversed. 363 F. 2d 7. The court found it unnecessary to réach respondents’ contentions relating to service of process and the scope of the injunction, for it concluded that interpleader was not available in the circumstances of this case. It held that in States like Oregon which do not permit “direct action” suits against insurance companies until judgments are obtained against the insured, the insurance companies may pot invoke federal interpleader until the claims against the insured, the alleged tortfeasor, have been reduced to judgment. Until that is done, said the court, claimants with unliquidated tort claims are not “claimants” within the meaning of § 1335, nor are they “persons having claims against the plaintiff” within the meaning of Rule 22 of the Federal Rules of Civil Procedure.3 Id., *529at 10. In accord with that view, it directed dissolution of the temporary injunction and dismissal of the action.. Because the Court of Appeals’ decision on this point conflicts with those of other federal courts,4 and concerns a matter of significance to the administration of federal interpleader, we granted certiorari. 385 U. S. 811 (1966). Although we reverse the decision of the Court of Appeals upon the jurisdictional question, we direct a substantial modification of the District Court’s injunction for reasons which will appear.
*530I.
Before considering the issues presented by the petition for certiorari, we find it necessary to dispose of a question neither raised by the parties nor passed upon by the courts below. Since the matter concerns our jurisdiction, we raise it on our own motion. Treinies v. Sunshine Mining Co., 308 U. S. 66, 70 (1939). The interpleader statute, 28 U. S. C. § 1335, applies where there are “Two or more adverse claimants, of diverse citizenship . . . This provision has been uniformly construed to require only “minimal diversity,” that is, diversity of citizenship between two or more claimants, without regard to the circumstance that other rival claimants may be co-citizens.5 The language of the statute, the legislative purpose broadly to remedy the problems posed by multiple claimants to a single fund, and the consistent judicial interpretation tacitly accepted by Congress, persuade us that the statute requires no more. There remains, however, the question whether such a statutory construction is consistent with Article III of our Constitution, which extends the federal judicial power to “Controversies . . . between Citizens of different States . . . and between a State, or the Citizens thereof, and foreign States, Citizens or Subjects.” In Strawbridge v. Curtiss, 3 Cranch 267 (1806), this Court held that the diversity of citizenship statute required “complete diversity”: where co-citizens appeared on both sides of a dispute, *531jurisdiction was lost. But Chief Justice Marshall there purported to construe only “The words of the act .of congress,” not the Constitution itself.6 And in a variety of contexts this Court and the lower courts have concluded that Article III poses no obstacle to the legislative extension of federal jurisdiction, founded on diversity, so long as any two adverse parties are not có-citizens.7 Acqordingly, we conclude that the present case is properly in the federal courts.
II.
We do not agree with the Court of Appeals that, in the absence of a state law or contractual provision for *532"direct action” suits against the insurance company, the company must wait until persons asserting claims against its insured have reduced those claims to judgment before seeking to invoke the benefits of federal- interpleader. That may have been a tenable position under the 19268 and 1936 interpleader statutes.9 These statutes did not carry forward the language in the 1917 Act authorizing, interpleader where advérse claimants “may claim” benefits as well as where they “are claiming” them.10 In-1948, however, .in the revision of the Judicial Code, the “may claim” language was restored.11 Until the decision below, every court confronted by the question has concluded that the 1948 revision removed whatever requirement there might previously have been that the insurance com*533pany wait until at least two claimants reduced their claims to judgments.12 The commentators are in accord.13
Considerations of judicial administration demonstrate the soundness of this view which, in any event, seems compelled by the language of the present statute, which is remedial and to be liberally construed.- Were an insurance company required to await reduction - of claims to judgment, the first claimant to obtain such a judgment or to negotiate a settlement might appropriate all or a disproportionate slice of the fund before his fellow claimants were able to establish their claims. The difficulties such a race to judgment pose for the insurer,14 and the unfairness which may result to some claimants, were among the principal evils the interpleader device -was intended to remedy.15
III.
The -fact that State Farm had properly invoked the interpleader jurisdiction under .§ 1335 did not, however, entitle it to an order both enjoining prosecution of suits against it outside the confines of the interpleader proceeding and also extending such protection to its insured, the alleged tortfeasor. Still less was Greyhound Lines entitled to have that order expanded so as to protect itself and its driver, also alleged to be tortfeasors, from suits brought by its passengers in various state or federal courts. Here, the scope of the litigation, in terms of *534parties and claims, was vastly more extensive than the confines of the “fund,” the deposited proceeds of the insurance policy. In these circumstances, the mere existence of such a fund cannot, by use of interpleader, be employed to accomplish purposes that exceed the needs of orderly contest with respect'to the fund.
There are situations, of a type not present here, where the effect of interpleader is to confine the total litigation to a single forum and proceeding. One such case is where a stakeholder, faced with rival claims to the fund itself, acknowledges — or denies — his liability to one or the other of the claimants.16 In this situation, the fund itself is the target of the claimants. It marks the outer limits of the controversy. It is, therefore, reasonable and sensible that interpleader, in discharge of its office to protect the fund, should also protect the stakeholder from vexatious and multiple litigation. In this context, the suits sought to be enjoined are squarely within the language of 28 U. S. C. § 2361, which provides iii part:
“In any civil action of interpleader or in the nature of interpleader under section 1335 of this title, a district court may issue its process for all claimants and enter its order restraining them from instituting or prosecuting any proceeding in any State or United States court affecting the property, instrument or obligation involved in the interpleader action . . . .” (Emphasis added.)
But the present case is another matter. Here, an accident has happened. Thirty-five passengers or their representatives have claims which they wish- to press against a variety of defendants: the bus company,- its driver, the owner of the truck, and the truck driver. The circumstance that one of the prospective defendants hap*535pens to have an insurance policy is a fortuitous event which should not of itself shape the nature of the ensuing litigation. For example, a resident of California, injured in California aboard a bus owned by a California corporation should not be forced to sue that corporation anywhere but in California simply because another prospective defendant carried an insurance policy. And an insurance company whose maximum interest in the case cannot exceed $20,000 and who in fact asserts that it has no interest at all, should not be allowed to determine that dozens of tort plaintiffs must be compelled to press their claims — even those claims which are not against the insured and which in no event could be satisfied out of the meager insurance fund — in a single forum of the insurance company’s choosing. There is nothing in the statutory scheme, and very little in the judicial and academic commentary üpon that scheme, which requires that the tail be allowed to wag the dog in this fashion.
State Farm’s interest in this case, which is the fulcrum of the interpleader procedure, is confined to its $20,000 fund. That interest receives full vindication when the court restrains claimants from seeking to enforce against the insurance company any judgment obtained against its insured, except in the interpleader proceeding itself. To the extent that the District Court sought to control claimants’ lawsuits against the insured and other alleged tortfeasors, it exceeded the powers granted to it by the statutory scheme.
We recognize, of course, that our view of interpleader means that it cannot be used to solve all the vexing problems of multiparty litigation arising out of a mass tort.' But interpleader was never intended to perform such ⅛ function, to be an all-purpose “bill of peace.”17 Had *536it been so intended, careful provision would necessarily have been made to insure that a party with little or no interest in the outcome of a complex controversy should not strip truly interested parties of substantial rights— such as the right to choose the forum in which to establish their claims, subject to generally applicable rules-of jurisdiction, venue,. service of process, removal, and change of venue. None of the legislative and academic sponsors of a modern federal interpleader device viewed their accomplishment as a “bill of peace,” capable of sweeping dozens of lawsuits out of the various state and federal courts in which they were brought and into a single interpleader proceeding. And only in two reported instances has a federal interpleader court sought to control the underlying litigation against alleged tortfeasors as opposed to the allocation of a fund among successful tort plaintiffs. See Commercial Union Insurance Co. of New York v. Adams, 231 F. Supp. 860 (D. C. S. D. Ind. 1964) (where there was virtually no objection and where all of the basic tort suits would in any event have been prosecuted in the forum state), and Pan American Fire & Casualty Co. v. Revere, 188 F. Supp. 474 (D. C. E. D. La. 1960). Another district court, on the other hand, has recently held that it lacked statutory authority to *537enjoin suits against the alleged tortfeasor as opposed to proceedings against the fund itself. Travelers Indemnity Co. v. Greyhound Lines, Inc., 260 F. Supp. 530 (D. C. W. D. La. 1966).
In light of the evidence that federal interpleader was not intended to serve the function of a “bill of peace” in the context of multiparty litigation arising out of a mass tort, of the anomalous power which such a construction of the statute would give the stakeholder, and of the thrust of the statute and the purpose it was intended to serve, we hold that the interpleader statute. did not authorize the injunction entered in the present case. Upon remand, the injunction is to be modified consistently with this opinion.18
*538H — ( <!
The judgment of the Court of Appeals is reversed, and the case is remanded to the United States District Court for proceedings consistent with this opinion.
It is so ordered.
28 U. S. C. § 1335 (a) provides: “The district courts shall have original jurisdiction of any civil action of interpleader or in the nature of interpleader filed by any person, firm, or corporation, association, or society having in his or its custody or possession money or property of the value of $500 or more, or having issued a . . . policy of insurance ... of value or amdunt of $500 or more ... if
“(1) Two or more adverse claimants, of diverse citizenship as defined in section 1332 of this title, are claiming or may claim to *527be entitled to such money or property, or to any one or more of the benefits arising by virtue of- any . . . policy . . . ; and if (2) the plaintiff has . . . paid . . . the amount due under such obligation into the registry of the court, there to abide the judgment of the court . . . ,”
28 U. S. C. §1292 (a)(1).
We need not pass upon the Court of Appeals’ conclusions with respect to the interpretation of interpleader under Rule 22, which provides that “(1) Persons having claims against the plaintiff may be joined as defendants and required to interplead when their claims are such that the plaintiff is or may be exposed to double or multiple liability. . . First, as we indicate today, this action was properly brought under § 1335. Second, State Farm did not purport to invoke Rule 22. Third, State Farm could not have invoked it in light of venue and service of process limitations. Whereas statutory inter-pleader may be brought in the district where any claimant resides (28 U. S. C. § 1397), Rule interpleader based upon diversity of citizenship may be brought only in the district where all plaintiffs or all defendants reside (28 U. S. C. § 1391 (a)). And whereas statutory interpleader enables a plaintiff to employ nationwide service of process (28 U. S. C. § 2361), service of process under Rule 22 is confined *529to that providerbin Rule 4. See generally 3 Moore, Federal Practice ¶ 22.04.
With respect to the Court of Appeals’ views on Rule 22, which seem to be shared by our Brother Douglas, compare Underwriters at Lloyd’s v. Nichols, 363 F. 2d 357 (C. A. 8th Cir. 1966), and A/S Krediit Pank v. Chase Manhattan Bank, 155 F. Supp. 30 (D. C. S. D. N. Y. 1957), aff’d, 303 F. 2d 648 (C. A. 2d Cir. 1962), with National Casualty Co. v. Insurance Co. of North America, 230 F. Supp. 617 (D. C. N. D. Ohio 1964), and American Indemnity Co. v. Hale, 71 F. Supp. 529 (D. C. W. D. Mo. 1947). See also 3 Moore, Federal Practice ¶ 22.04, at 3008 and n. 4.
See, e. g., Travelers Indemnity Co. v. Greyhound Lines, Inc., 260 F. Supp. 530 (D. C. W. D. La. 1966); Commercial Union Insurance Co. of New York v. Adams, 231 F. Supp. 860 (D. C. S. D. Ind. 1964); Pan American Fire & Casualty Co. v. Revere, 188 F. Supp. 474 (D. C. E. D. La. 1960); Onyx Refining Co. v. Evans Production Corp., 182 F. Supp. 253 (D. C. N..D. Tex. 1959).' Although Travelers and Revere were brought in Louisiana, a State which authorizes “direct action” suits against insurance companies, the statute .was not relied upon in Travelers (see 260 F. Supp., at 533, n. 3), and furnished only an alternative ground in Revere (see .188 F. Supp., at 482-483).
The only post-1948 case relied upon by the Court of Appeals and respondents, National Casualty Co. v. Insurance Co. of North America, 230 F. Supp. 617 (D. C. N. D. Ohio 1964), turns out to be of little assistance with respect to statutory interpleader since that court denied statutory interpleader solely on the ground that all claimants were citizens of Ohio and hence lacked the required diversity of citizenship. Id., at 619.
See, e. g., Haynes v. Felder, 239 F. 2d 868, 872-875 (C. A. 5th Cir. 1957); Holcomb v. Aetna Life Insurance Co., 255 F. 2d 577, 582 (C. A. 10th Cir.), cert. denied sub nom. Fleming v. Aetna Life Insurance Co., 358 U. S. 879 (1958); Cramer v. Phoenix Mut. Life Ins. Co., 91 F. 2d 141, 146-147 (C. A. 8th Cir.); cert. denied, 302 U. S. 739 (1937); Commercial Union Insurance Co. of New York v. Adams, 231 F. Supp. 860, 863 (D. C. S. D. Ind. 1964); 3 Moore, Federal Practice ¶ 22.09, at 3033.
Subsequent decisions of this Court indicate that Strawbridge is not to be given an expansive reading. See, e. g., Louisville Railroad Co. v. Letson, 2 How. 497, 554-556 (1844), expressing the view that in 1839 Congress had in fact acted to “rid the courts of the decision in the case of Strawbridge and Curtis.” Id., at 556.
See, e. g., American Fire & Cas. Co. v. Finn, 341 U. S. 6, 10, n. 3 (1951), and Barney v. Latham, 103 U. S. 205, 213 (1881), construing the removal statute, now 28 U. S. C. § 1441 (c); Supreme Tribe of Ben-Hur v. Cauble, 255 U. S. 356 (1921), concerning class actions; Wichita R. R. & Light Co. v. Public Util. Comm., 260 U. S. 48 (1922), dealing with intervention by co-citizens. Full-dress arguments for the constitutionality of “minimal diversity” in situations like interpleader-, which arguments need not be rehearsed here, are set out in Judge Tuttle’s opinion in Haynes v. Felder, 239 F. 2d, at 875-876; in Judge Weinfeld’s opinion in Twentieth Century-Fox Film Corp. v. Taylor, 239 F. Supp. 913, 918-921 (D. C. S. D. N. Y. 1965); and in ALI, Study of the Division of- Jurisdiction Between State and Federal Courts 180-190 (Official Draft, Pt. 1, 1965); 3 Moore, Federal Practice ¶ 22.09, at 3033-3037; Chafee, Federal Interpleader Since the Act of 1936, 49 Yale L. J. 377, 393-406 (1940); Chafee, Interpleader in the United States .Courts, 41 Yale L. J. 1134, 1165-1169 (1932). We noté that-the American Law Institute’s proposals for revision of the Judicial Code to deal with the problem of multiparty, multijurisdiction litigation are predicated upon the permissibility of “minimal diversity” as a jurisdictional basis.
44 Stat. 416 (1926), which added casualty companies to the enumerated categories of plaintiffs able to bring interpleader, and provided for the enjoining of proceedings in other courts.
49 Stat. 1096 (1936), which'authorized “bills in the nature of interpleader,” meaning those in which the plaintiff is not wholly disinterested with respect to the fund he has deposited in court. See Chafee, The Federal Interpleader Act of 1936: I, 45 Yale L. J. 963 (1936).
39 Stat. 929 (1917). See Klaber v. Maryland Casualty Co., 69 F. 2d 934, 938-939 (C. A. 8th Cir. 1934), which held that the omission in the 1926 Act of the earlier statute’s “may claim” language required the denial of interpleader in the face of unliquidated claims (alternative holding).
Although the Reviser’s Note did not refer to the statutory change or its purpose, we have it on good authority that it was the omission in the Note rather than the statutory change which was inadvertent. See 3 Moore, Federal Practice ¶ 22.08, at 3025-3026, n. 13. And it was widely, assumed that restoration of the “may claim” language would have the effect of overruling the holding in Klaber, supra, that one may not invoke interpleader to protect against unliquidated claims. See, e. g., Chafee, 45 Yale L. J., at 1163-1167; Chafee, Federal Interpleader Since the Act of 1936, 49 Yale L. J. 377, 418-420 (1940). In circumstances like these, the 1948 revision of the-. Judicial Code worked substantive changes. Ex parte Collett, 337 U. S. 55 (1949).
See cases listed in n. 4.
3 Moore', Federal Practice ¶ 22.08, at 3024-3025; Keeton, Preferential Settlement of Liability-Insurance Claims, 70 Harv. L. Rev. 27, 41-42 (1956).
See Keeton, op. cit. supra, n. 13.
The insurance problem envisioned at the time was that of an insurer faced with conflicting but mutually exclusive claims to a policy, rather than an insurer confronted with the problem of allocating a fund among various claimants whose independent claims may exceed the amount of the fund. S. Rep. No. 558, 74th Cong., 1st Sess., 2-3, 7, 8 (1935); Chafee, Modernizing Interpleader, 30 Yale L. J. 814, 818-819 (1921).
This was the classic situation envisioned by the sponsors of interpleader. See n. 15, supra.
There is not a word in the legislative history suggesting such, a purpose. See S. Rep. No. 558, 74th Cong., 1st Sess. (1935). And Professor Chafee, upon whose work the Congress heavily *536depended, has written that little thought was given to the scope of the “second stage” of interpleader, to just what would be adjudicated by the interpleader court. See Chafee, Broadening the Second Stage of Federal Interpleader, 56 Harv. L. Rev. 929, 944-945 (1943). We note that in Professor Chafee’s own study of the bill of peace as a device for dealing with the problem of multiparty litigation, he fails even to mention interpleader. See Chafee, Some Problems of Equity 149-198 (1950). In his writing on interpleader, Chafee assumed that the interpleader court would allocate the fund “among all the claimants who get judgment within a reasonable time ...” Chafee, The Federal Interpleader Act of 1936: II, 45 Yale L. J. 1161, 1165 (1936). See also Chafee, 49 Yale L. J., at 420-421.
We find it unnecessary to pass upon respondents’ contention, raised in the courts below but not passed upon by the Court óf Appeals, that interpleader should have been dismissed on the ground that the 11 Canadian claimants are “indispensable parties” who .have-not been properly served. The argument is that 28 U. S. C. § 2361 provides the exclusive mode of effecting service of process in statutory interpleader, and that § 2361 — which authorizes a district court to “issue its process for all claimants” but subsequently refers to service of “such process” by marshals “for the respective districts where the claimants reside or may be found” — does not permit service of process beyond the Nation’s borders. Since our decision will require basic reconsideration of the litigation by the parties as well as the lower courts, there appears neither need nor necessity to determine this question at this time. We intimate no view as to the exclusivity of § 2361, whether it authorizes service of process in foreign lands, whether in light of the limitations we have imposed on the interpleader court’s injunctive powers the Canadian claimants are in fact “indispensable parties” to the interpleader proceeding itsélf, or whether they render themselves amenable to service of process under § 2361 when they come into an American jurisdiction to establish their rights with respect either to the alleged tortfeasors or to the insurance fund. See 2 Moore, Federal Practice ¶4.20, at 1091-1105.
Mr. Justice Douglas,
dissenting in part.
While I agree with the Court’s view as to “minimal diversity” and that the injunction, if granted, should run only against prosecution of suits against the insurer, I feel that the use which we today allow to be made of the federal interpleader statute,1 28 U. S. C. § 1335, is, with all deference, unwarranted. How these litigants are “claimants” to this fund in the statutory sense is indeed a mystery. If they are not “claimants” of the fund,2 neither are they in the category of those who “are claiming” or who “may claim” to be entitled to it.
*539This insurance company’s policy provides that it will “pay on behalf of the insured all sums which the insured-shall become legally obligated to pay.” To date the insured has not become “legally obligated” to pay any sum to any litigant. Since nothing is owed under the policy, I fail to see how any litigant can be a “claimant” as against the insurance company. If that is doubtful the doubt is resolved by two other conditions:
(1) The policy states “[n]o action shall lie against the company . . . until the amount of the insured’s obligation to pay shall have been finally determined either by judgment against the insured after actual trial or by written agreement of the insured, the claimant and the company.”
(2) Under California law where the accident happened and under Oregon law where the insurance contract was made, a direct action against the insurer is not allowable until after a litigant receives a final judgment against the insured.3
Thus under this insurance policy as enforced in California and in Oregon a “claimant” against the insured can become a “claimant” against the insurer only after final judgment against the insured or after a consensual written agreement of the insurer, a litigant, and the insured. Neither of those two events has so far happened.4
*540This construction of the word “claimant” against the fund is borne' out, as the Court of Appeals noted, by Rule 22 (1) of the Federal Rules of Civil Procedure.5' That Rule, also based on. diversity óf citizenship, differs only in the district where the suit may be brought and in the reach of service of process, as the Court points out.6 But it illuminates the nature of federal interpleader for it provides that only “persons having claims against the plaintiff [insurer] may be joined as defendants and required to interplead.”
Can it be that we have two kinds of interpleader statutes as between which ah insurance company can choose: one that permits “claimants” against the insurer (“persons having claims against the plaintiff”) to be joinéd and the other that permits “claimants” against the insured to be joined for the benefit of the insurer even though they may never be “claimants” against the insurer? I cannot believe that Congress launched such an irrational scheme.
The Court rests heavily on the fact that the 1948 Act contains the phrase “may claim,” while the 1926 and 1936 . interpleader statutes, contained the phrase “are claiming.” From this change in language the Court infers that Congress intended to allow an insurance company to interplead even though a judgment has not been entered against the insured and there is no direct-action statute. This inference is drawn despite the fact that the Reviser’s Note contains no reference to the change in wording or its purpose; the omission is dismissed as “inadvertent.” But it strains credulity to suggest *541that mention would not have been made of such a drastic change, if in fact Congress intended to make it. And, despite the change in wording, under the 1948 Act there must be “adverse claimants . . . [who] are claiming or may claim to be entitled to such money ... , or to any one or more of the benefits arising by virtue of any . . . policy . . . .” Absent a direct-action statute, the victims are not “claimants” against the insurer until their claims against the insured have been reduced to judgment. Understandably, the insurance company wants the best of two worlds. It does not want an action- against it until judgment against its insured. But, at the same time, it wants the benefits of an interpleader statute. Congress could of course confer such a benefit. But it is not for this Court to grant dispensations from the effects of the statutory scheme which Congress has erected.
I would construe its wbrds in the normal sense and ■affirm the Court of Appeals.
“(a) The district courts shall have original jurisdiction of any civil action of interpleader or in the nature of interpleader filed by any person, firm, or corporation, association, or society having in his or its custody or possession money or property of the value of .$500 or more, or having issued a note, bond, certificate, policy of insurance, or other instrument of value or amount of $500 or more ... if
“(1) Two or more adverse claimants, of diverse citizenship as defined in section 1332 of this title, are claiming or may claim to be entitled to such money or property, or to any one or more of the benefits arising by virtue of any note, bond, certificate, policy or other instrument, or arising by virtue of any such obligation; and if (2) the plaintiff has deposited such money or property . . . into the registry of the court, there to abide the judgment of the court . . .
Under the policy issued by State Farm, it promises “ [t] o pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of (A) bodily injury sustained by other persons . . . caused by accident arising, out of the ownership, maintenance or use, including loading or unloading, of the owned automobile . ” The insured will “become legally *539•obligated to pay” only if he has been found to be at fault for the accident, or if the victim’s claim has been settled in accord with the policy terms. The claim against the insurance company is thus contingent on a finding that the insured was at fault or a settlement. This is unlike the situation where the insurance company has issued a policy such as a workmen’s compensation policy which insures the insured for liability imposed in the absence of fault.
See Calif.. Ins. Code § 11580 (b) (2); Ore. Rev. Stat. § 23.230..
In those States having a direct-action statute, allowing an action against the insurer prior to judgment against the insured, inter-pleader jurisdiction can be sustained absent a judgment against the insured. The direct-action statute gives the injured party the status of a “claimant” against the insurer. See, e. g., Pan American Fire & Casualty Co. v. Revere, 188 F. Supp. 474, 482-483.
Rule 22 (1) provides in part:
“Persons having claims against the plaintiff may be joined as defendants and required to interplead when their claims are such that the plaintiff is or may be exposed to double or multiple liability.”
See n. 3 of the Court’s opinion.
5.3 Intervention 5.3 Intervention
5.3.1. FRCP 24: Intervention
5.3.2 Arakaki v. Cayetano 5.3.2 Arakaki v. Cayetano
HUG, Circuit Judge:
Josiah Hoohuli and other native Hawaiians (collectively “Hoohuli”) seek to intervene in a lawsuit challenging the provision of benefits by the Office of Hawaiian Affairs (“OHA”), the Department of Hawaiian Home Lands (“DHHL”), and the Hawaiian Homes Commission (“HHC”) to native Hawaiians1 and Hawaiians.2 Hoo-huli, lessees of Hawaiian homestead lands or applicants for such leases, seek intervention on the grounds that they have an interest in continuing to receive benefits as native Hawaiians, and an interest to stop the provision of benefits to Hawaiians by limiting the eligibility to only native Hawaiians.
We address whether the district court erred in denying Hoohuli’s motion to intervene as a matter of right.
I
On March 4, 2002, Plaintiffs Arakaki et al. (collectively “Plaintiffs”) filed a civil action against the State of Hawaii and various state agencies, challenging the constitutionality of race-based privileges. This suit follows closely on the heels of the Supreme* Court’s recent Rice v. Cayetano decision, which held that limiting voter eligibility to elect the trustees to the OHA to members of the racial classifications Hawaiian and native Hawaiian violated the Fifteenth Amendment. 528 U.S. at 499, 120 S.Ct. 1044.
Plaintiffs challenge the exclusive benefits given to Hawaiians and native Hawaiians by the OHA, the HHC, and the DHHL. Plaintiffs allege the provision of such benefits is racially discriminatory and violates the Equal Protection clauses of the Fifth and Fourteenth Amendments. They also allege that, as beneficiaries of § 5(f) of the Hawaii Admission Act’s public land trust, the State and HHC/DHHL discriminate against them, which constitutes a breach of trust. Pub. L. 86-3, 73 Stat. 4, § 5(f) (1959) (“Admission Act”). Plaintiffs asserted standing as taxpayers, and as beneficiaries of the public land trust established by Congress in § 5(f).
On March 18, 2002, the- district court granted proposed defendants-intervenors State Council of Hawaiian Homestead Association (“SCHHA”), and Anthony Sang, Sr.’s (“Sang”) Motion to Intervene. The SCHHA is an organization of native Hawaiian HHC homestead lessee associations; Sang is a lessee.
On March 25, 2002, Hoohuli filed its motion to intervene. Hoohuli alleged two interests justifying intervention: (1) to ensure continued receipt of benefits for native Hawaiians; and (2) to limit the class of eligible beneficiaries to only native Hawaiians, at the exclusion of the broader Hawaiian class. Additionally, Hoohuli sought to raise as a defense to its receipt of benefits that, absent discrimination by the United States, it should be entitled to tribal status, and its benefits scrutinized under rational basis review pursuant to Morton *1082v. Mancari, 417 U.S. 535, 94 S.Ct. 2474, 41 L.Ed.2d 290 (1974). A magistrate judge denied this motion on May 2, 2002. Hoo-huli timely appealed to the district court.
On May 8, 2002, the district court dismissed for lack of standing Plaintiffs’ breach of the public land trust claims. It ruled that Plaintiffs’ claim for relief, invalidating the stated purpose of § 5(f), rather than alleging an actual breach of the trust created by § 5(f), amounted to a generalized grievance. Since Plaintiffs were not proceeding on the basis of any direct injury, they lacked standing to complain. The district court held that the only claims remaining were Plaintiffs’ equal protection challenges asserted as taxpayers against the direct expenditures of tax revenues by the legislature. Plaintiffs’ motion for reconsideration of this order was denied on June 18, 2002. Plaintiffs have not appealed this order to the Ninth Circuit.
On June 13, 2002, the district court denied Hoohuli’s motion to intervene, both as a matter of right and permissively. The district court first held that since Plaintiffs’ public land trust claims were dismissed, Hoohuli had no significantly pro-tectable interest in those claims at this time. The district court ruled that Hoohu-li’s intervention to assert additional claims of breaches of public land trusts, specifically that benefits should be limited to only native Hawaiians, was not raised by existing parties and clearly separable from Plaintiffs’ remaining equal protection challenge. The district court also noted that nothing prevented Hoohuli from filing its own breach of trust suit against the State to claim benefits should be allocated to only native Hawaiians.
Next, the district court addressed Hoo-huli’s motion to intervene in Plaintiffs’ equal protection claims. The district court observed that Hoohuli had a significantly protectable interest in the manner in which its tax dollars are used. A ruling in Plaintiffs’ favor would impair Hoohuli’s interest in the continued receipt of homestead leases. Hoohuli’s interest in limiting benefits to native Hawaiians, however, was not encompassed by the issues before the court. Additionally, Hoohuli failed to demonstrate that the State defendants would not adequately represent their interests. The court ruled that Defendants and Hoo-huli have the same ultimate objective, and that to date, Defendants have demonstrated that they will vigorously oppose Plaintiffs’ challenges to the provision of benefits to native Hawaiians. The court rejected Hoohuli’s proffered justification that Defendants are inadequate because they will not argue as a defense that the Department of the Interior is engaging in unconstitutional race discrimination by excluding native Hawaiians in the definition of “Indian tribe.”
The district court denied Hoohuli’s request for permissive intervention because it sought to interject new issues into this action beyond the scope of Plaintiffs’ claims. Hoohuli’s participation would unnecessarily complicate the litigation, and existing Defendants, including native Hawaiian lessees, would vigorously seek to uphold the provision of these benefits.3
Jurisdiction is proper before this Court pursuant to 28 U.S.C. § 1291.
II
The district court’s decision regarding intervention as a matter of right pursuant to Federal Rule of Civil Procedure 24(a)(2) is reviewed de novo. Southwest Ctr. for Biological Diversity v. Berg, 268 F.3d 810, 817 (9th Cir.2001).
*1083III
Rule 24 traditionally receives lib- ' eral construction in favor of applicants for intervention. Donnelly v. Glickman, 159 F.3d 405, 409 (9th Cir.1998). Courts are guided primarily by practical and equitable considerations. Id.
Rule 24(a)(2) gives a person the right to intervene:
[u]pon timely application ... (2) when the applicant claims an interest relating to the property or transaction which is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant’s ability to protect that interest, unless the applicant’s interest is adequately represented by existing parties.
Fed.R.Civ.P. 24(a)(2).
A party seeking to intervene as of right must meet four requirements: (1) the applicant must timely move to intervene; (2) the applicant must have a significantly protectable interest relating to the property or transaction that is the subject of the action; (3) the applicant must be situated such that the disposition of the action may impair or impede the party’s ability to protect that interest; and (4) the applicant’s interest must not be adequately represented by existing parties. Donnelly, 159 F.3d at 409. Each of these four requirements must be satisfied to support a right to intervene. League of United Latin Am. Citizens v. Wilson, 131 F.3d 1297, 1302 (9th Cir.1997).
When a plaintiffs action is narrowed by court order, the court may consider the case as restructured in ruling on a motion to intervene. United States v. City of Los Angeles, 288 F.3d 391, 399 (9th Cir.2002).
A. Public Land Trust Beneficiary Claim
Hoohuli seeks to intervene to support in part and to challenge in part Plaintiffs’ public land trust beneficiary claim created by § 5(f), of the Admission Act. Hoohuli joins in the view that provision of leasehold benefits to Hawaiians is illegal, but believes that providing benefits to native Hawaiians does not breach § 5(f) of the Act.
Assuming Hoohuli timely filed its motion to intervene, intervention is nevertheless inappropriate for the public land trust beneficiary claim. Rule 24(a) requires an applicant to demonstrate a significantly pro-tectable interest relating to the property or transaction that is the subject of the action. Donnelly, 159 F.3d at 409. Here, Plaintiffs’ § 5(f) public trust claim has been dismissed by the district court and not subsequently appealed before this Court. Because this trust claim is no longer the subject of Plaintiffs’ action, intervention is inappropriate as a matter of right.
We offer no comment on Hoohuli’s option of filing its own § 5(f) breach of trust suit against the State to raise the claim that benefits should be restricted to native Hawaiians. We only hold that intervention is not necessary when the litigation will not impair or impede the applicant’s ability to protect its interests because the claim is no longer a subject of the plaintiffs action. Donnelly, 159 F.3d at 409.
B. Equal Protection Claim
Hoohuli seeks to intervene as of right to address Plaintiffs’ equal protection claims challenging the expenditure of tax revenues for programs that benefit only Hawaiians and native Hawaiians.
*10841. Timeliness
All parties concede that Hoohuli timely filed its motion to intervene. The district court did not abuse its discretion by finding Hoohuli’s motion, filed three weeks after the filing of Plaintiffs’ complaint, timely. Southwest Ctr., 268 F.3d at 817.
2. Significantly Protectable Interest
The requirement of a significantly protectable interest is generally satisfied when “the interest is protectable under some law, and that there is a relationship between the legally protected interest and the claims at issue.” Sierra Club v. EPA, 995 F.2d 1478, 1484 (9th Cir.1993). The applicant must satisfy each element. Donnelly, 159 F.3d at 410. “An applicant generally satisfies the ‘relationship’ requirement only if the resolution of the plaintiffs claims actually will affect the applicant.” Id.
The Supreme Court has yet to provide any clear definition of the nature of the “interest relating to the property or transaction which is the subject of the action.” 7C Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure: Civil 2d § 1908, at 21 (Supp. 2002). Wright suggests the term “significantly protectable interest” has not been a term of art in the law, and sufficient room for disagreement exists over the meaning of the term. Id.
Hoohuli claims that the district court found, as it was compelled to do under Price v. Akaka, 928 F.2d 824, 826-27 (9th Cir.1990), that it had a protectable interest in the subject of the action. In Price, plaintiffs filed a § 1983 claim against the State of Hawaii, alleging that OHA managed income derived from § 5(b) lands for purposes not provided in § 5(f) on the Admission Act. Id. at 826. Section 5(f) lists various purposes for the trust lands and the income derived therefrom. The district court dismissed plaintiffs’ suit for lack of subject matter jurisdiction and failure to state a claim. Id. This Court reversed, holding that plaintiffs, as beneficiaries of the § 5(f) trust, had standing to enforce the spending provisions of § 5(f). Plaintiffs demonstrated an injury in fact through the trustees’ expenditure • of income on purposes not specified by § 5(f). Id. Allowing plaintiffs to enforce § 5(f) was also consistent with common law trusts. Id. at 827. This Court additionally held that subject matter jurisdiction was appropriate and the Eleventh Amendment did not bar the suit. Id. at 827-28.
Hoohuli’s reference to Price does not advance its motion to intervene. Price does not justify intervention, but rather provides authority for standing to a beneficiary seeking to enforce the § 5(f) provisions of the Admission Act. In other words, Hoohuli may rely upon Price to support an independent suit as a beneficiary challenging the provision of benefits to Hawaiians under § 5(f). Hoohuli’s standing for a collateral suit under Price, however, does not alone justify a Rule 24(a) right to intervene in any § 5(f) breach of trust or equal protection litigation. Instead, to successfully intervene as of right in a pending case, Hoohuli must satisfy the four Donnelly requirements.
We agree with the district court that Hoohuli has a significantly protectable interest in the manner in which its tax dollars are used, specifically a continued receipt of benefits. Hoohuli, as lessees of Hawaiian homestead lands or applicants for such leases, have a stake in the outcome of Plaintiffs’ equal protection challenge. Consequently, Hoohuli’s protectable interest in the continued receipt of benefits supports intervention.
Hoohuli also asserts an interest in limiting the class of beneficiaries to native Hawaiians. In order to intervene on this basis, Hoohuli must demonstrate a rela*1085tionship between its interests and the claims raised by Plaintiffs. Sierra Club, 995 F.2d at 1484.
Here, Hoohuli does not adequately demonstrate a relationship between its dilution interest and the claims raised by Plaintiffs. Plaintiffs claim the provision of benefits from the OHA, HHC, and DHHL is racially-based and violates equal protection, and make no distinction between the grant of benefits to Hawaiians and native Hawaiians. Hoohuli’s interests, on the other hand, are twofold: continuing to receive benefits, and preventing the dilution of benefits by limiting eligibility to only native Hawaiians. The district court held that Hoohuli’s interest in preventing dilution of benefits went beyond the claims at issue. We agree.
Hoohuli asserts that the district court misinterpreted Portland Audubon Society v. Hodel, 866 F.2d 302 (9th Cir.1989), to reject Hoohuli’s interest in the litigation as unrelated to the interests presented by either party. Hoohuli correctly observes this Circuit clarified the holding of Portland Audubon in Sierra Club. In Sierra Club, this Court distinguished Portland Audubon by broadening the scope of a “protectable interest” to include rights that are generally protected by law, and not only those interests protected by the statute under which the litigation is brought. Sierra Club, 995 F.2d at 1484.
Hoohuli’s analysis is misplaced. First, a small technical matter: nowhere in the district court’s order does it cite Portland Audubon. Rather, the district court cites Sierra Club, 995 F.2d at 1484, as authority for the proposition that a significantly pro-tectable interest be both protectable under law and related to the claims at issue. Without directly citing any case, the district court concludes that Hoohuli’s interest in limiting the receipt of land trust benefits to only native Hawaiians was separable from the interests asserted by Plaintiffs because it was not raised by any existing party.
The magistrate judge cites Portland Audubon as authority for requiring an interest that the laws at issue were intended to protect. The magistrate judge also cites Sierra Club for requiring a relationship between the interest and the claim at issue. Neither the district judge nor the magistrate judge discuss either case beyond the general rule. This citation by the magistrate judge to Portland Audubon is harmless, though, because the district court does not cite this rule or rely upon the magistrate judge’s analysis.
Second, despite Sierra Club distinguishing Portland Audubon on the scope of a “protectable interest,” it reaffirmed the requirement that some relationship exist between the legally protected interest and the claims at issue. The integrity of Sierra Club is not questioned. This Court recently discussed this two-step standard for a significantly protectable interest in Donnelly, 159 F.3d at 409 (citing Northwest Forest Res. Council v. Glickman, 82 F.3d 825, 837 (9th Cir.1996)). This relationship requirement is dispositive of Hoo-huli’s dilution interest.
Hoohuli also relies on a First Circuit case granting intervention to black police officers to defend their promotions, as interests related to the action, against white officers alleging an impermissible promotion practice based on racial grounds. Cotter v. Mass. Ass’n of Minority Law Enforcement Officers, 219 F.3d 31 (1st Cir. 2000). While Cotter supports Hoohuli’s claim that it has an interest in defending the continued receipt of benefits, it does nothing to support its interest in preventing dilution of its benefits due to unrelat-edness.
We agree with the district court that Hoohuli has a significantly protectable interest against Plaintiffs’ equal protection *1086challenge in the continued receipt of benefits as native Hawaiians. We also agree that Hoohuli does not have a significantly protectable interest in its dilution claim to limit benefits to native Hawaiians. This claim is unrelated to Plaintiffs’ equal protection challenge seeking to invalidate all benefits to Hawaiians and native Hawaiians. Hoohuli is not permitted to inject new, unrelated issues into the pending litigation. Sierra Club, 995 F.2d at 1484.
3. Impairment of Interest
We agree with the district court’s conclusion that a ruling in favor of Plaintiffs’ equal protection challenge would impair Hoohuli’s ability to protect its interest in the continued receipt of benefits as native Hawaiians. Hoohuli’s interest in limiting the class of beneficiaries to native Hawaiians is not impaired by Plaintiffs’ equal protection claim. We offer no comment on the merits of Hoohuli’s own equal protection lawsuit challenging the provision of benefits to Hawaiians.
4. Adequacy of Representation
This Court “follow[s] the guidance of Rule 24 advisory committee notes that state that ‘if an absentee would be substantially affected in a practical sense by the determination made in an action, he should, as a general rule, be entitled to intervene.’ ” Southwest Center, 268 F.3d at 822 (citation omitted). As noted above, Hoohuli’s continued receipt of benefits will cease altogether should Plaintiffs prevail. Hoohuli would be justified in intervention to protect the continued receipt of benefits if it demonstrates that existing parties do not adequately protect its interest. Donnelly, 159 F.3d at 409. The burden on proposed intervenors in showing inadequate representation is minimal, and would be satisfied if they could demonstrate that representation of their interests “may be” inadequate. Trbovich v. United Mine Workers, 404 U.S. 528, 538 n. 10, 92 S.Ct. 630, 30 L.Ed.2d 686 (1972).
This Court considers three factors in determining the adequacy of representation: (1) whether the interest of a present party is such that it will undoubtedly make all of a proposed intervenor’s arguments; (2) whether the present party is capable and willing to make such arguments; and (3) whether a proposed inter-venor would offer any necessary elements to the proceeding that other parties would neglect. California v. Tahoe Reg’l Planning Agency, 792 F.2d 775, 778 (9th Cir.1986).
The most important factor in determining the adequacy of representation is how the interest compares with the interests of existing parties. 7C Wright, Miller & Kane, § 1909, at 318 (1986). When an applicant for intervention and an existing party have the same ultimate objective, a presumption of adequacy of representation arises. League of United Latin Am. Citizens, 131 F.3d at 1305. If the applicant’s interest is identical to that of one of the present parties, a compelling showing should be required to demonstrate inadequate representation. 7C Wright, Miller & Kane, § 1909, at 318-19.
There is also an assumption of adequacy when the government is acting on behalf of a constituency that it represents. City of Los Angeles, 288 F.3d at 401. In the absence of a “very compelling showing to the contrary,” it will be presumed that a state adequately represents its citizens when the applicant shares the same interest. 7C Wright, Miller & Kane, § 1909, at 332. Where parties share the same ultimate objective, differences in litigation strategy do not normally justify intervention. City of Los Angeles, 288 F.3d at 402.
Hoohuli has not overcome the presumption that existing parties will adequately represent its interests. First, based on the record before this Court, present par*1087ties have demonstrated they are capable and willing to make all of Hoohuli’s arguments. Hoohuli’s chief objection is that existing parties will not raise as a defense that, absent discrimination by the United States, native Hawaiians should be entitled to tribal status. It claims the federal government racially discriminates against native Hawaiians through the Indian Reorganization Act, 25 U.S.C. § 479, and the Indian Self Determination Act, 25 U.S.C. § 450. These Acts allow native persons from Alaska and the continental United States to seek tribal status. Hawaii is excluded. Consequently, native Hawaiians are not presently granted tribal recognition by Congress.
Tribal recognition is significant because it allows a more deferential rational basis review of government benefit programs to persons of tribal ancestry under Morton v. Mancari. Due to the Supreme Court’s recent ruling in Rice v. Cayetano, holding the classification “native Hawaiian” to be racial, the provision of benefits pursuant to this classification may be subject to the more demanding strict scrutiny review. We observe that in Rice, the Supreme Court did not address the merits of native Hawaiians’ equal protection claim against the United States for the denial of tribal status, staying, in the words of the Court, “far off that difficult terrain.” 528 U.S. at 519, 120 S.Ct. 1044. The Supreme Court likewise avoided addressing the constitutionality of the benefits and trust structure at issue today, limiting its opinion only to the voting restriction. Id, at 521-22, 120 S.Ct. 1044. The district court and eventually this Court may in the course of this litigation be required to venture onto this challenging terrain to resolve this difficult issue. The only question we must resolve, however, is whether existing defendants are capable and willing to make this argument should it be necessary.
We conclude that the State defendants will adequately represent Hoohuli’s interest at trial. Counsel for the State and HHC/DHHL, and OHA have stated before this Court that it will make all arguments necessary to defend the benefits to native Hawaiians. Additionally, we are aware of no conflict that prevents the State and its agency defendants from raising this argument.
Second, Hoohuli fails to demonstrate it would offer any necessary elements to the proceeding that other parties would neglect. Hoohuli shares the same ultimate objective as the State and its agencies. The State and HHC/DHHL defendants are directed by section 4 of the Admission Act, and Article XII of the Hawaii Constitution to provide benefits to native Hawaiians. In such circumstances a presumption of adequacy of representation arises. League of United Latin Am. Citizens, 131 F.3d at 1305.
Finally, native Hawaiian homestead lessees, the SCHHA, have already successfully intervened as parties to the litigation. Counsel for SCHHA have stated that they are willing to speak with Hoohuli and raise some of its arguments. Not every native Hawaiian group could or should be entitled to intervene.
The presence of SCHHA as a similarly situated intervenor, combined with the State defendants’ specific statutory and constitutional obligations to protect native Hawaiians’ interests, distinguishes this case from those in which we have permitted intervention on the government’s side in recognition that the intervenors’ interests are narrower than that of the government and therefore may not be adequately represented. See, e.g., Southwest Ctr., 268 F.3d at 823 (“the City’s range of considerations in development is broader than the profit-motives animating [intervening] developers”); Californians for Safe Dump Truck Transp. v. Mendonca, 152 F.3d 1184, 1190 (9th Cir.l998)(the intervenor’s interest “were potentially more narrow *1088and parochial than the interests of the public at large”); cf. Forest Conservation Council v. U.S. Forest Serv., 66 F.3d 1489, 1499 (9th Cir.l995)(“The Forest Service is required to represent a broader view than the more narrow, parochial interests of the [state and local government interve-nors].”). For these reasons, we hold that Hoohuli does not overcome its compelling burden to demonstrate that the State and its agencies do not adequately represent its interests.
IV
The district court did not err in denying Hoohuli’s Rule 24 motion to intervene as a matter of right. Hoohuli .cannot intervene in Plaintiffs’ breach of trust challenge to § 5(f) because this claim has been dismissed due to lack of standing. Hoohuli does have a significantly protectable interest at stake in Plaintiffs’ equal protection challenge. Intervention is improper, however, because its interests are adequately represented by existing parties. The district court is AFFIRMED.
. "Native Hawaiians” are those who are descendants of the races inhabiting the Hawaiian Islands prior to 1778 with at least 50% Hawaiian blood quantum. Haw.Rev.Stat. § 10-2.
. "Hawaiians” are those who are descendants of the races inhabiting the Hawaiian Islands prior to 1778 without reference to blood quantum. Id. This broader class includes the narrower class "native Hawaiians.” Rice v. Cayetano, 528 U.S. 495, 499, 120 S.Ct. 1044, 145 L.Ed.2d 1007 (2000).
. On appeal, Hoohuli does not challenge the denial of this request for permissive intervention. Therefore our review is limited to whether intervention as of right was appropriate pursuant to Rule 24(a)(2).
5.3.3 Freedom From Religion Foundation, Inc. v. Geithner 5.3.3 Freedom From Religion Foundation, Inc. v. Geithner
FREEDOM FROM RELIGION FOUNDATION, INC.; Paul Storey; Billy Ferguson; Karen Buchanan; Joseph Morrow; Anthony Arlen; Elisabeth Steadman; William M. Shockley; Charles Crannell; Collette Crannell; Mike Osborne; Kristi Craven; Paul Ellcessor; Joseph Rittell; Wendy Cor *837 by; Pat Kelley; Carey Goldstein; Debora Smith; Kathy Fields; Richard Moore; Susan Robinson; Ken Nahigan, Plaintiffs-Appellees, v. Timothy GEITHNER, Secretary, U.S. Dept. of the Treasury; Douglas Shulman, Commissioner, IRS; Selvi Stanislaus, Executive Officer of the California Franchise Tax Board; United States of America, Defendants-Appellees, Michael Rodgers, Pastor, DefendantIntervenor-Appellant.
No. 09-17753.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted Feb. 14, 2011.
Filed May 9, 2011.
*839 Kevin T. Snider, Pacific Justice Institute, Sacramento, CA, argued the cause and filed the briefs for the appellant. With him on the briefs was Matthew B. McReynolds, Sacramento, CA.
Ivan C. Dale, Department of Justice, Tax Division, Washington, D.C., argued the cause and filed a brief for the appellees. With him on the briefs were John A. DiCicco, Acting Assistant Attorney General, Gilbert S. Rothenberg, Acting Deputy Assistant Attorney General, and Teresa E. McLaughlin, Department of Justice, Tax Division.
The Honorable Tena Campbell, Senior United States District Judge for the District of Utah, sitting by designation.
OPINION
O’SCANNLAIN, Circuit Judge:
We must decide whether an individual who claims certain federal and state tax *840 exemptions may intervene in an unrelated action challenging the constitutionality of those exemptions.
I
The Freedom from Religion Foundation, Inc. (“FFRF”) sued the Secretary of the Treasury and the Commissioner of the Internal Revenue Service in their official capacities under 28 U.S.C. § 2201, alleging that the so-called “parsonage exemption” violates the Establishment Clause of the United States Constitution. 1 FFRF also sued the Executive Officer of the California Franchise Tax Board (“CFTB”) in his official capacity under 42 U.S.C. § 1983, alleging that California’s parsonage exemption violates the Establishment Clause of both the United States and California Constitutions. 2 The challenged statutes allow “minister[s] of the gospel” to exclude their rental allowance, or the rental value of any home furnished to them as part of their compensation, from gross income. 26 U.S.C. § 107. FFRF seeks a declaration that the challenged statutes are unconstitutional and an injunction forbidding the defendants from “continuing to grant or allow tax benefits under sections 107 and 265(a)(6) of the Internal Revenue Code and the corresponding sections of the California Revenue and Taxation Code.”
Six days after FFRF filed its complaint, Pastor Michael Rodgers, a minister of the gospel in the Sacramento area who regularly claims both the federal and state parsonage exemptions, moved to intervene as a defendant on behalf of himself and Does 1-100 — ministers within the jurisdiction of the Eastern District of California. Rodgers sought to intervene both as of right, pursuant to Federal Rule of Civil Procedure 24(a)(2), and permissively, pursuant to Rule 24(b)(1)(B). The federal defendants opposed the motion, and the district court denied Rodgers’s motion both for intervention as of right and for permissive intervention.
Rodgers timely appeals.
II
We review a denial of a motion to intervene as of right de novo. Perry v. Prop. 8 Official Proponents, 587 F.3d 947, 950 (9th Cir.2009).
Federal Rule of Civil Procedure 24(a)(2) provides:
On timely motion, the court must permit anyone to intervene who ... claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant’s ability to protect its interest, unless existing parties adequately represent that interest.
*841 We have summarized the requirements of intervention as of right under Rule 24(a)(2) as follows:
(1) [T]he [applicant’s] motion must be timely; (2) the applicant must have a “significantly protectable” interest relating to the property or transaction which is the subject of the action; (3) the applicant must be so situated that the disposition of the action may as a practical matter impair or impede its ability to protect that interest; and (4) the applicant’s interest must be inadequately represented by the parties to the action.
California ex rel. Lockyer v. United States, 450 F.3d 486, 440 (9th Cir.2006) (quoting Sierra Club v. EPA, 995 F.2d 1478, 1481 (9th Cir.1993)). Although Rule 24(a)(2) is construed broadly in favor of intervenors, Wilderness Soc’y v. U.S. Forest Serv., 630 F.3d 1173, 1179 (9th Cir.2011) (en banc), the applicant bears the burden of showing that each of the four elements is met, Prete v. Bradbury, 438 F.3d 949, 954(9th Cir.2006). “Failure to satisfy any one of the requirements is fatal to the application.” Perry, 587 F.3d at 950. Because we agree with the district court’s conclusion that the government adequately represents Rodgers’s interests, we need not discuss the first three requirements. 3
A
‘Where the party and the proposed intervenor share the same ‘ultimate objective,’ a presumption of adequacy of representation applies.” Perry, 587 F.3d at 951 (quoting Arakaki v. Cayetano, 324 F.3d 1078, 1086 (9th Cir.2003)). This presumption of adequacy is “nowhere more applicable than in a case where the Department of Justice deploys its formidable resources to defend the constitutionality of a congressional enactment.” Lockyer, 450 F.3d at 444. Here, the federal defendants have demonstrated that their ultimate objective is to uphold the constitutionality of the challenged statutes. In their motion to dismiss, the federal defendants argued, inter alia, that “[s]ections 107 and 265(a)(6) constitute constitutional accommodations of religious practice by eliminating discrimination between ministers and similarly situated tax-payers. Sections 107 and 265(a)(6) are part of a governmental policy of neutrality toward religion, and government neither advances nor inhibits religious practice through these provisions.” Rodgers has presented no evidence that would lead us to doubt that the federal defendants’ ultimate objective is to uphold the challenged statutes. Accordingly, we are satisfied that Rodgers and the federal defendants have the same ultimate objective and that the “presumption of adequate representation applies.” Perry, 587 F.3d at 951.
B
Such presumption can be rebutted only by “a compelling showing to the contrary.” Id. (internal quotation marks and citation omitted). Rodgers first attempts to rebut the presumption by arguing that the federal defendants might urge a narrow interpretation of the statute because the Solicitor General, when defending acts of Congress, “lean[s] heavily on the Ashwander [v. Tennessee Valley Authority, 297 U.S. 288, 56 S.Ct. 466, 80 L.Ed. 688 (1936) ] principle of construing a statute so as to avoid constitutional doubt.” Lockyer, 450 F.3d at 444 (internal quotation marks and citation omitted). Rodgers fears that the federal defendants might, in an at *842 tempt to save the parsonage exemption from being declared unconstitutional, urge the court to construe the statutes in a narrow way that would reduce the value of the exemption. But Rodgers has presented no evidence that the federal defendants actually have urged a narrow interpretation of the challenged statutes in the district court. And, in any event, it is unclear whether there is a narrow construction of sections 107 and 265(a)(6) that would be responsive to FFRF’s constitutional challenge. Furthermore, even if we agreed with Rodgers’s contention, we have previously held that “just because the government theoretically may offer a limiting construction of a statute that is narrower than that of a party proposing intervention does not mean that the party has overcome the presumption of adequacy of representation.” Lockyer, 450 F.3d at 444.
Rodgers next argues that the presumption should be rebutted because the federal defendants are tasked both with upholding the constitutionality of the challenged statutes and with protecting the public treasury. He suggests that their interest in maximizing federal tax revenues might lead the federal defendants to abandon key arguments that could be marshaled in defense of the challenged statutes. Rodgers points to the IRS’s litigation behavior in Warren v. Commissioner to show that the IRS cannot be trusted to mount a robust defense of the parsonage exemption. 114 T.C. 343 (2000). In Warren, the IRS proffered an interpretation of a prior version of section 107 that would have reduced the value of the exemption to some ministers. Id. at 346-7. But the IRS’s position in Warren does not support Rodgers’s argument in favor of intervention because in Warren the IRS explicitly conceded the constitutionality of section 107. See Warren v. Comm’r (Warren I), 282 F.3d 1119, 1123-24 (9th Cir.2002) (Tallman, J., dissenting) (noting that both parties “clearly stated that ... they believe the parsonage exclusion is constitutional”). Contrary to Rodgers’s assertions, the IRS’s behavior in Warren does not indicate that the federal defendants in this case will fail to “make all of [Rodgers’s] proposed arguments,” or that they are not “willing to make such arguments.” Perry, 587 F.3d at 952(internal quotation marks and citation omitted).
Rodgers also argues that he should be allowed to intervene because the federal defendants might not appeal an adverse ruling. He correctly notes that the government may not appeal an adverse ruling by a district court without first obtaining the approval of the Solicitor General. See 28 C.F.R. § 0.20(b). But if the mere possibility that the federal defendants might decline to appeal were sufficient to rebut the presumption of adequacy, then nearly every case involving a federal defendant would be subject to intervention as of right. Moreover, the government typically appeals district court decisions ruling federal statutes unconstitutional. Cf. 28 U.S.C. § 530D(a)(1)(B)(ii) (requiring Attorney General to report to Congress a decision to refrain from defending the constitutionality of a federal statute or not to appeal an adverse determination thereof). In the absence of any evidence that the government is not willing and able to appeal, Rodgers fails to make a “compelling showing” that would rebut the presumption that the federal government will adequately represent his interests. Perry, 587 F.3d at 951.
Finally, Rodgers argues that the federal defendants will not adequately represent his interests in defending the constitutionality of the state statutes. This argument also fails. The state government, not the federal government, has the burden of defending state laws from constitutional challenges. In his original motion to intervene, Rodgers questioned *843 whether the executive official of the CFTB would defend sections 17131.6 and 17280(d)(2) of the California Revenue and Tax Code, However, Rodgers filed his motion to intervene before the State of California had even been served with FFRF’s complaint. And because the district court issued its order denying Rodgers’s motion to intervene before the state had filed an answer, the district court concluded that any “determination that the State of California may not adequately represent the potential intervenor’s interests with respect to the California statutes at issue [is] ... premature.” 4 Because Rodgers did not present any arguments on appeal as to why California would not adequately represent his interest in upholding the state parsonage exemption, any claim to that effect is waived.
In conclusion, because the federal defendants adequately represent Rodgers’s interests, he is not entitled to intervene as of right under Rule 24(a)(2).
Ill
We review the denial of a motion for permissive intervention for abuse of discretion. See League of United Latin American Citizens (“LULAC”) v. Wilson, 131 F.3d 1297, 1307 (9th Cir.1997). A district court necessarily abuses its discretion if it commits a legal error. United States v. Hinkson, 585 F.3d 1247, 1261-62 (9th Cir.2009) (en banc).
Federal Rule of Civil Procedure 24(b)(1)(B) provides that “[o]n timely motion, the court may permit anyone to intervene who ... has a claim or defense that shares with the main action a common question of law or fact.” We have often stated that permissive intervention “requires (1) an independent ground for jurisdiction; (2) a timely motion; and (3) a common question of law and fact between the movant’s claim or defense and the main action.” Beckman Indus., Inc. v. Int’l Ins. Co., 966 F.2d 470, 473 (9th Cir.1992); see, e.g., United States v. City of Los Angeles, 288 F.3d 391, 403 (9th Cir.2002); LULAC, 131 F.3d at 1308; Northwest Forest Resource Council v. Glickman, 82 F.3d 825, 839 (9th Cir.1996).
The district court concluded that because Rodgers could not demonstrate constitutional standing he failed to satisfy the independent jurisdictional grounds requirement. This requirement stems, however, from our concern that intervention might be used to enlarge inappropriately the jurisdiction of the district courts. See Fed.R.Civ.P. 82. This concern manifests itself most concretely in diversity cases where proposed intervenors seek to use permissive intervention to gain a federal forum for state-law claims over which the district court would not, otherwise, have jurisdiction. See, e.g., Blake v. Pallan, 554 F.2d 947, 956-57 (9th Cir.1977) (dismissing an intervening plaintiffs state-law claims for lack of independent jurisdictional grounds).
The jurisdictional requirement also prevents permissive intervention from being used to destroy complete diversity in state-law actions. See 28 U.S.C. § 1332; Cf. 28 U.S.C. § 1367(b) (providing that, in diversity actions, “the district courts shall not have supplemental jurisdiction ... over claims by plaintiffs against persons made parties under Rule ... 24 ..; or over claims by persons ... seeking to intervene as plaintiffs under Rule 24 ... when exercising supplemental jurisdiction over such claims would be inconsistent with the jurisdictional requirements of section 1332.”).
*844 But in federal-question cases, the identity of the parties is irrelevant and the district court’s jurisdiction is grounded in the federal question(s) raised by the plaintiff. See 28 U.S.C. § 1331. The jurisdictional requirement, therefore, prevents the enlargement of federal jurisdiction in such cases only where a proposed intervenor seeks to bring new state-law claims. See, e.g., Beckman Indus., Inc., 966 F.2d at 473 (holding that “an independent jurisdictional basis is not required [in this case] because intervenors do not seek to litigate a claim on the merits”); Blake, 554 F.2d at 956-57. Where the proposed intervenor in a federal-question case brings no new claims, the jurisdictional concern drops away. See 7C Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice & Procedure § 1917 (3d ed. 2010) (“In federal-question cases there should be no problem of jurisdiction with regard to an intervening defendant nor is there any problem when one seeking to intervene as a plaintiff relies on the same federal statute as does the original plaintiff.”). We therefore clarify that the independent jurisdictional grounds requirement does not apply to proposed intervenors in federal-question cases when the proposed intervenor is not raising new claims.
Here, it is undisputed that the district court is exercising federal-question jurisdiction and that Rodgers does not seek to bring any counterclaims or cross-claims. Accordingly, Rodgers is not required to make any further showing that his intervention is supported by independent jurisdictional grounds. Because the district court did not apply the correct legal rule, its decision denying Rogers permissive intervention was not an appropriate exercise of discretion. See Hinkson, 585 F.3d at 1261-62. We accordingly vacate that portion of the district court’s order and remand so that the “district court may reassess the request for permissive intervention under the criteria established by Rule 24(b).” City of Los Angeles, 288 F.3d at 404.
IV
For the foregoing reasons, the judgment of the district court is AFFIRMED IN PART, VACATED IN PART, AND REMANDED.
Each side shall bear its own costs.
. The federal parsonage exemption is provided by sections 107 and 265(a)(6) of the Internal Revenue Code. Section 107 provides:
In the case of a minister of the gospel, gross income does not include — (1) the rental value of a home furnished to him as part of his compensation; or (2) the rental allowance paid to him as part of his compensation, to the extent used by him to rent or provide a home and to the extent such allowance does not exceed the fair rental value of the home, including furnishings and appurtenances such as a garage, plus the cost of utilities.
26 U.S.C. § 107. Section 265(a)(6) provides:
No deduction shall be denied under this section for interest on a mortgage on, or real property taxes on, the home of the taxpayer by reason of the receipt of an amount as — ... (B) a parsonage allowance excludable from gross income under section 107.
26 U.S.C. § 265(a)(6).
. The California parsonage exemption is provided by sections 17131.6 and 17280(d)(2) of the California Revenue & Tax Code. These statutes largely mirror their federal counterparts.
. We note, however, our agreement with the district court's conclusion that Rodgers's motion was timely, that he has a “significantly protectable interest,'' and that he is so situated that the disposition of the action may impair his ability to protect his interest.
. We note that since this appeal was filed, the state has filed a motion to dismiss FFRF’s complaint in which it argues that the challenged statutes "survive constitutional scrutiny under both federal and state law.”