Mastercard Int'l, Inc. v. Visa Int'l Serv. Ass'n

471 F.3d 377, 2006 U.S. App. LEXIS 31248

 

RULE:

Is it an abuse of discretion to not allow a party to join a lawsuit when they are not necessary and indispensable to the litigation.

FACTS:

Appellant Visa International Service Association ("Visa") moved to dismiss the underlying action contending that it is a necessary and indispensable party under Federal Rule of Civil Procedure 19. Visa also moved to intervene in the action under Federal Rule of Civil Procedure 24.The underlying lawsuit is a breach of contract action brought by MasterCard against FIFA seeking enforcement of an alleged contractual provision giving MasterCard "firstright to acquire" exclusive sponsorship rights in its product category for the FIFA World Cup event in 2010 and 2014. At the same time, FIFA was in negotiations with Visa regarding those sponsorship rights and Mastercard learned that FIFA had decided to finalize an agreement with Visa. Upon learning of the FIFA-Visa deal, MasterCard notified both FIFA and Visa that it considered FIFA's actions a violation of the right of first refusal provision in the MasterCard Contract and MasterCard would seek legal redress if FIFA went forward with the Visa Contract. MasterCard filed suit for breach of contract after Visa held a press conference announcing its contract with FIFA and sought to enjoin FIFA from performing the Visa contract. Two weeks before the preliminary injunction hearing, Visa sent a letter to the district court stating that it was a necessary and indispensable party to the litigation because of its contractual entitlement to the FIFA sponsorship rights. Visa claimed that because it was an indispensable party, the case must be dismissed for lack of subject matter jurisdiction. Since MasterCardand Visa are both incorporated under the laws of Delaware, Visa's joinder would destroy diversity jurisdiction-the sole basis for federal jurisdiction. The district court denied Visa’s motion

ISSUE:

Does the court have to allow a non-party to join the litigation merely because they have some interest in it?

ANSWER:

No.

CONCLUSION:

The Court affirms the lower court’s determination that Visa is not a necessary party. Here, Visa’s absence will not prevent the district court from granting complete relief between MasterCard and FIFA. Further, while the Visa contract is affected by the litigation, it is not the contract that is the basis of the litigation. Lastly, although FIFA could be ordered to perform both contracts, it is unlikely that they are at risk of having inconstant commitments to both companies and therefore Visa is not necessary in this litigation.

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