## Facts

- Railroads faced many employee asbestosis suits and sought coverage under multiple indemnity and liability insurance policies.
- Three affiliated railroads (the “Chesapeake railroads”) filed a diversity coverage action in federal court against approximately forty insurers concerning whether asbestosis claims fell within occupational disease coverage.
- Western Maryland Railway Company, a subsidiary of one Chesapeake railroad, filed a separate diversity coverage action against nine insurers; those nine were also defendants in the Chesapeake action.
- Insurers moved to dismiss each case under Federal Rule of Civil Procedure 19, asserting that the plaintiffs in the other action were required parties because separate litigation created a risk of multiple or inconsistent obligations.
- The district court concluded that (i) the nonjoined railroads were “necessary” parties in each case, (ii) joinder was not feasible because it would destroy complete diversity, and (iii) the absent railroads were “indispensable,” requiring dismissal of both actions.
- The railroads appealed; the D.C. Circuit consolidated the appeals.

## Issues

1. Whether the railroads absent from each action were “required” parties under Rule 19(a), including under Rule 19(a)(2)(ii) based on an asserted risk of double, multiple, or otherwise inconsistent obligations for the insurers.
2. If any absent railroad was required, whether joinder was feasible without defeating subject-matter jurisdiction.
3. If joinder was not feasible, whether equity and good conscience required dismissal under Rule 19(b).

## Decision

- The D.C. Circuit reversed the Rule 19 dismissals and remanded.
- The court held the district court misapplied Rule 19 by treating overlapping coverage disputes and the possibility of inconsistent outcomes as sufficient to make the other railroads required and indispensable parties.
- The court concluded the actions could proceed without joining the railroads who were plaintiffs in the parallel case.

## Legal Principles

- Rule 19 requires a structured inquiry: (1) whether an absent person is required under Rule 19(a); (2) if so, whether joinder is feasible; and (3) if not feasible, whether dismissal is warranted under Rule 19(b).
- Rule 19(a)(2)(ii) addresses a practical, substantial risk that an existing party will incur double, multiple, or otherwise inconsistent obligations; the mere possibility of inconsistent adjudications in separate suits is not enough.
- A Rule 19(b) indispensability determination must reflect a factor-based, equitable assessment of prejudice, the ability to shape relief to reduce prejudice, adequacy of judgment, and the availability of an adequate alternative remedy if dismissed; dismissal should not follow mechanically from diversity problems.
- When related cases are pending in the same court, coordination or case management may reduce duplication or inconsistency, weighing against dismissal for nonjoinder.

## Conclusion

The D.C. Circuit held that parallel, overlapping insurance-coverage litigation among affiliated railroads and common insurers did not, without a substantial risk of multiple or inconsistent obligations, justify dismissal under Rule 19; the district court was required to apply Rule 19(a) and 19(b) with practical and equitable rigor rather than treating consistency concerns and diversity constraints as dispositive.


W. Md. Ry. Co. v. Harbor Ins. Co., 910 F.2d 960 (D.C. Cir. 1990)