The Real Party in Interest
The parties agreed that the test to determine the real party in interest is to examine the essential nature and effect of the proceeding as it appears from the entire record. To do so, the U.S. Court of Appeals for the Ninth Circuit instructs courts to consider whether the state has a specific and concrete interest in the case, and the extent to which the state has a “substantial interest” in the relief sought. If the relief benefits only the state, then the state may be the real party in interest.
In its analysis, the district court focused on two cases, Department of Fair Emp’t v. Lucent Tech and Nevada v. Bank of Am. Corp. In Lucent, the California Department of Fair Employment and Housing, acting on behalf of the state, brought a wrongful termination action on behalf of an employer’s former employee. There, the Ninth Circuit held that the State of California was not a real party in interest because California’s interest in protecting all persons from employment discrimination was only a general governmental interest with most of the requested relief for damages available by the individual aggrieved. The Ninth Circuit also found that any relief unique to the Department of Fair Employment and Housing was tangential. By contrast, in Nevada, the Ninth Circuit found Nevada was the real party in interest where Nevada’s Attorney General filed a complaint on behalf of Nevada consumers against a bank and other defendants for deceptive trade practices related to the 2008 mortgage crisis. The Ninth Circuit determined Nevada’s Attorney General had statutory authority to pursue its claims, and Nevada had an interest in eliminating deceptive practices against consumers.
Lack of Diversity of Citizenship
In this case, the district court found that the action against gun manufacturers was similar to the Nevada case in that the state had concrete interests in this litigation and would substantially benefit from the remedy sought. The state sought to prevent the dissemination of ghost guns and to mitigate risks posed by them, and California had specific interests in holding entities to account that violate California’s firearm and consumer safety laws for the benefit of all Californians. The plaintiff also had statutory authority to bring both causes of action. Moreover, the court held that the Giffords Law Center was not the real party in interest because the defendants did not assert specific facts to establish that the organization was the real party in interest in their notice of removal, and the defendants did not offer any reasoning as to why the organization’s involvement in prior litigation meant the Giffords Law Center functioned as the plaintiff in this litigation.
Impact for Practitioners
“Where a plaintiff is seeking diversity jurisdiction, one has to carefully examine the citizenship of all parties to the case to ensure there is complete diversity,” states Mark A. Romance, Miami, FL, Co-Chair of the ABA Litigation Section’s Pretrial Practice & Discovery Committee. “Attorneys therefore need to dig deeper into who is affected by the litigation to fully examine the diversity issue,” adds Romance.
“On selecting a venue, this case tells us that it is always strategic,” states Joseph V. Schaeffer, Pittsburgh, PA, Co-Chair of the Litigation Section’s Pretrial Practice & Discovery Section. “What it all comes back to is the idea that the plaintiff is the master of his or her complaint and has quite a bit of latitude on how to style it and where to file,” adds Schaeffer.