## Facts

- Union health-and-welfare benefit funds and their trustees paid medical expenses for covered members and dependents, including costs for smoking-related illnesses.
- The funds sued major tobacco manufacturers and related entities, alleging a long-term course of misrepresentation and concealment about the health risks and addictiveness of cigarettes.
- The funds sought recovery for their own economic losses—allegedly increased healthcare expenditures attributable to defendants’ conduct—rather than asserting individual smokers’ personal injury claims.
- Defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(7), arguing the case could not proceed without joining purportedly required parties: (i) covered smokers/beneficiaries, (ii) employers, and (iii) other insurers and governmental payers.

## Issues

1. Whether employers, individual smokers/beneficiaries, and other insurers or governmental payers were required parties under Rule 19(a) because complete relief could not be afforded among existing parties or because their absence created a substantial risk of impaired interests or inconsistent obligations.
2. If any were required parties but could not feasibly be joined, whether Rule 19(b) required dismissal because the absent parties were indispensable.

## Decision

- The court denied defendants’ Rule 12(b)(7) motion to dismiss.
- The court held the identified employers, smokers/beneficiaries, and other payers were not required parties under Rule 19(a) for adjudication of the funds’ claims for their own increased costs.
- In the alternative, even assuming some absentee interests, the Rule 19(b) factors did not justify dismissal.

## Legal Principles

- Rule 19(a) “complete relief” addresses the relief that can be awarded between existing parties, not whether defendants might face separate suits by other potential claimants.
- The risk of multiple lawsuits or differing outcomes is not, by itself, the type of “inconsistent obligations” that triggers compulsory joinder under Rule 19(a)(2)(ii).
- A plaintiff asserting an independent economic injury may proceed without joining persons whose related injuries or payments supply background facts, where those absentees retain the ability to pursue their own distinct claims.
- Under Rule 19(b), courts apply a pragmatic, equitable analysis of prejudice, ability to shape relief, adequacy of judgment, and availability of an adequate remedy if dismissed; speculative prejudice and ordinary litigation risk do not compel dismissal.

## Conclusion

The court allowed the benefit funds’ cost-recovery action to proceed against the tobacco defendants, concluding that covered smokers, employers, and other payers were not required parties under Rule 19 and that, in any event, dismissal for nonjoinder was not warranted.


Iron Workers Loc. Union No. 17 Ins. Fund v. Philip Morris, Inc., 182 F.R.D. 512 (N.D. Ohio 1998)