Steven L. Lombardo v. Mercantile Resource Group, Inc. ( 2020 )

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 10 STEVEN L. LOMBARDO and LIFE FORCE TRUST, Case No. 20-cv-02153-NC 11 Plaintiffs, ORDER TO JOIN DAVID SANCHEZ 12 v. TO THIS CASE OR TO SHOW CAUSE 13 WHY THE CASE SHOULD NOT BE MERCHANTILE RESOURCE GROUP, DISMISSED UNDER RULE 19 14 INC, and CHOCTAW INDIAN ASSET RECOVERY TRUST dba CHOCTAW 15 MANAGEMENT GROUP 16 Defendants. 17 Plaintiffs Steven Lombardo and Life Force Trust (LFT) filed a complaint against 18 defendants Merchantile Resource Group, Inc (MRG) and Choctaw Management Group 19 (CMG) with claims for breach of contract and breach of fiduciary duty. Dkt. No. 1. The 20 Court ordered the plaintiffs to show cause why it had subject matter jurisdiction over this 21 action because the Complaint did not identify the citizenship of every defendant and did 22 not sufficiently allege that the amount in controversy exceeded $75,000. Dkt. No. 25. The 23 Court additionally ordered the plaintiffs to show cause why service of process was proper 24 when it appeared that the defendants were not on notice of this action. Id. Plaintiffs filed a 25 response to the Court’s order. Dkt. Nos. 27, 28. 26 The Court now orders the plaintiffs to show cause by July 15 why it should not 27 dismiss this case for failure to join a required party under Federal Rule of Civil Procedure 1 Under Federal Rule of Civil Procedure 19(a)(1)(B)(i), a person who is subject to 2 service of process and whose joinder will not deprive the court of subject matter 3 jurisdiction must be joined as a party if that person claims an interest relating to the subject 4 of the action and is so situated that disposing of the action in the person’s absence may as a 5 practical matter impair or impede the person’s ability to protect the interest. A court may 6 consider sua sponte the absence of a required person and dismiss a case for failure to join 7 that person. Republic of Philippines v. Pimentel, 553 U.S. 851, 861 (2008). Rule 19 8 imposes a three-step inquiry where the Court must ask: (1) whether the absent party is 9 necessary; (2) whether it is feasible to order that the absent party be joined; and (3) if 10 joinder is not feasible, whether the case proceed without the absent party, or if the absent 11 party is indispensable such that the action must be dismissed. Salt River Project Agric. 12 Improvement & Power Dist. v. Lee, 672 F.3d 1176, 1179 (9th Cir. 2012). 13 Here, David Sanchez is a necessary party as described in Rule 19(a)(1)(B)(i). 14 According to the complaint, Sanchez is the managing director of defendant MRG and the 15 trustee of defendant CMG. Compl. ¶¶ 5, 7. CMG is currently holding the eighty-two 16 bonds that are the subject of this suit. Id. ¶ 10. Sanchez and plaintiff Steven Lombardo 17 allegedly entered into a written contract to create a 50/50 ownership of those bonds, which 18 Sanchez allegedly violated. Id. ¶ 2; see also Dkt. No. 1, Ex. 1 (agreement between 19 Sanchez and Lombardo). Lombardo seeks delivery of the bonds. Id. ¶ 21. Sanchez clearly 20 has an interest in the bonds; thus, disposing of this action in his absence may impede his 21 interest in the bonds. 22 Next, the Court must determine whether it is feasible to order that David Sanchez 23 be joined. This is not clear. The Complaint only states that Lombardo has tried to contact 24 Sanchez but was unable to find him. Compl. ¶ 10. The Court does not know Sanchez’s 25 citizenship or how that may affect the Court’s subject matter jurisdiction over the case. 26 Finally, the Court is concerned that Sanchez is indispensable such that this action 27 must be dismissed if he is not joined as a party. Rendering a judgment in Sanchez’s 1 The Court therefore orders the plaintiffs, by July 15, 2020, to: 2 (1) join David Sanchez as a party to this action, OR 3 (2) show cause why the Court should not dismiss this case under Rule 19 for failure 4 to do so. 5 6 IT IS SO ORDERED. 7 8 Dated: June 30, 2020 hbte _ — _ NATHANAEL M. COUSINS 9 United States Magistrate Judge 10 11 12 13 14 15 16 © 17 E ig 19 20 21 22 23 24 25 26 27 28