## Facts

- Several Georgia corporations and two Tennessee corporations jointly owned real property in Georgia on which Doctors Hospital was located.
- The Georgia corporations alleged that, as to the ownership and operation of Doctors Hospital, the parties were partners and therefore owed one another fiduciary duties.
- The Georgia corporations claimed the Tennessee corporate partners breached those duties by establishing and operating a competing hospital in the same market.
- Plaintiffs sought an accounting of defendants’ profits from the competing hospital and imposition of a constructive trust over those profits.
- Hospital Corporation of America (HCA) was named as a defendant based on its ownership of one of the Tennessee corporate defendants (General Care Corporation), even though HCA itself was not alleged to be a partner.
- Defendants moved to dismiss under Federal Rule of Civil Procedure 17(a), arguing the suit was not brought in the name of the real party in interest. They contended that Doctors Hospital (the partnership venture) was the proper plaintiff, or alternatively that the partners could not proceed in the configuration pled.

## Issues

1. Under Federal Rule of Civil Procedure 17(a), are the plaintiff partner corporations “real parties in interest” who may sue in their own names for alleged wrongful competition and related fiduciary breaches by co-partners under Georgia partnership law, or must the action be brought in the name of Doctors Hospital (the partnership venture/entity)?

## Decision

- The court denied defendants’ motion to dismiss.
- The court held the named plaintiffs were real parties in interest under Rule 17(a).
- The court allowed the action to proceed in the plaintiffs’ names without requiring substitution of Doctors Hospital as the sole plaintiff.

## Legal Principles

- Federal Rule of Civil Procedure 17(a) requires that a civil action be prosecuted in the name of the real party in interest—i.e., the party who possesses the right to enforce the claim.
- Determining the real party in interest depends on the substantive law that creates the right being asserted; federal procedure looks to state law to identify who owns the claim.
- Under Georgia partnership law, a partner may have a direct right to sue a co-partner for wrongful competition and related breaches of fiduciary duty.
- When state law gives individual partners a direct cause of action, those partners may qualify as real parties in interest under Rule 17(a), even if the partnership venture could also assert claims arising from the same conduct.

## Conclusion

Because Georgia partnership law provides partners a direct right to sue co-partners for wrongful competition and fiduciary breaches, the court concluded the plaintiff partners—not Doctors Hospital as an entity—held enforceable rights and therefore satisfied Rule 17(a)’s real-party-in-interest requirement, so dismissal was not warranted.


DM II, Ltd. v. Hospital Corporation of America, 130 F.R.D. 469 (1989)