## Facts

- William M. Haas (Ohio) and Charles H. Glueck (Ohio) allegedly agreed that Glueck would hold legal title to Jefferson National Bank stock while Haas would own a one-half beneficial interest.
- Under a 1963 agreement, the parties were to acquire 250 shares in Glueck’s name with Haas owning half; a 1966 agreement added 34 shares on the same basis.
- Haas claimed he paid Glueck amounts corresponding to his half interest, and that the bank knew of Haas’s ownership interest, while certificates and dividends were issued to Glueck.
- In 1967, Haas requested that Glueck direct the bank to reissue certificates reflecting Haas’s ownership of 169½ shares; Glueck allegedly presented endorsed certificates and instructed reissuance of 170 shares to Haas and the remainder to Glueck.
- The bank refused to transfer or reissue shares, asserting that Glueck was indebted on a note requiring him to pledge property coming into the bank’s possession and that the transfer request was withdrawn; the stock was allegedly pledged elsewhere as collateral.
- Haas sued the bank in federal court under diversity jurisdiction, seeking a mandatory injunction requiring issuance of 169½ shares to him, or damages for their value.

## Issues

1. Whether Glueck, the legal titleholder whose rights would be affected by the requested reissuance, was a required party under Federal Rule of Civil Procedure 19(a).
2. If joinder was required but destroyed complete diversity, whether Rule 19(b) required dismissal rather than proceeding without Glueck.
3. Whether the district court could decide the Rule 19 and jurisdictional questions at the pretrial stage without awaiting trial.

## Decision

- The Fifth Circuit affirmed the dismissal for lack of subject-matter jurisdiction.
- The court held that Glueck was a required party under Rule 19(a) because adjudicating Haas’s claimed ownership and compelling reissuance could expose the bank to double or inconsistent obligations given Glueck’s legal title and related transactions.
- Because joining Glueck (an Ohio citizen) eliminated complete diversity between Haas and the aligned parties, the court evaluated indispensability under Rule 19(b).
- Applying Rule 19(b), the court found that the risk of prejudice and inadequacy of relief in Glueck’s absence, combined with the availability of a state forum where Glueck could be joined, justified dismissal.
- The court rejected the argument that it was premature to resolve indispensability at pretrial, finding the record sufficient to decide joinder and jurisdiction before trial.

## Legal Principles

- A person must be joined under Rule 19(a) when, in that person’s absence, existing parties face a substantial risk of double, multiple, or otherwise inconsistent obligations arising from the claimed interest.
- In actions seeking relief that would effectively alter a nonparty’s property rights (such as compelled transfer or reissuance of stock held in the nonparty’s name), the titleholder is commonly a required party.
- When required joinder is not feasible because it would destroy complete diversity, Rule 19(b) directs the court to determine whether, in equity and good conscience, the action should proceed without the person or be dismissed as indispensable.
- The availability of an adequate alternative forum, such as state court where all interested persons can be joined, supports dismissal under Rule 19(b) when proceeding would prejudice existing parties or risk inconsistent obligations.
- Courts may resolve Rule 19 and diversity-jurisdiction defects at the pretrial stage when the parties’ positions and operative facts are sufficiently developed to permit the analysis.

## Conclusion

The Fifth Circuit held that the legal titleholder to the disputed shares was a required and indispensable party under Rule 19, and that joining him defeated complete diversity; because proceeding without him risked inconsistent obligations and a state forum remained available, dismissal of the federal action was proper.


Haas v. Jefferson Nat’l Bank of Miami Beach, 442 F.2d 394 (5th Cir. 1971)