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DirecTV, Inc. v. Leto

November 6, 2006

DIRECTV, INC., A CALIFORNIA CORPORATION,
v.
BENNIE LETO APPELLANT



Appeal from the United States District Court for the Western District of Pennsylvania. (D.C. Civil Action No. 04-cv-00020) District Judge: Honorable Gary L. Lancaster.

The opinion of the court was delivered by: Ambro, Circuit Judge

PRECEDENTIAL

Argued October 4, 2006

Before: McKEE, AMBRO, and NYGAARD, Circuit Judges

OPINION OF THE COURT

DirecTV, a satellite cable company, caught persons pirating (that is, intercepting without payment) its television transmissions. Its policy is to sue, and it did so here. Eight defendants, including Bennie Leto, were joined in one suit brought in the United States District Court for the Western District of Pennsylvania. The claims against the defendants were timely brought.

The District Court, responding to a motion by the defendants under Federal Rule of Civil Procedure 21, entered in December 2003 what appeared to be an order severing DirecTV's claims against each defendant. The order reads:

It is hereby ORDERED that the case shall proceed under the caption of DIRECTV v. Garry Bloch, No. 03-0752, as to defendant Garry Bloch. As to each of the other defendants, the case shall proceed as a separate action under a separate civil action number upon payment by plaintiff of the requisite filing fee as to each defendant.

It is FURTHER ORDERED that all separate actions arising from this order shall be deemed RELATED and shall be assigned to the docket of the undersigned in anticipation of consolidation for the purposes of pretrial discovery.

Within days of the order, DirecTV paid a separate filing fee and filed a separate complaint against Leto. He responded by moving to dismiss on the ground that the later-filed complaint was outside the statute of limitations. This made sense only if the 2003 order dismissed DirecTV's complaint rather than severed one suit into eight separate suits. Counterintuitively, the District Court agreed with Leto that it had dismissed the initial DirecTV suit, and dismissed it with prejudice.

Feeling blindsided, DirecTV appeals. While we normally give great deference to a court's interpretation of its own orders, we cannot do so here, as the order is too clear to permit any interpretation but a severance. Even were that not the case, while district judges have discretion to remedy misjoinders either by severing claims or dismissing them without prejudice, that discretion, while accorded a wide fairway, ventures into unplayable rough when it prejudices substantial rights. Here DirecTV, initially having filed a timely complaint that misjoined defendants, is substantially prejudiced if that suit is deemed dismissed and not severed. We thus reverse and remand.*fn1

Federal Rule of Civil Procedure 20(a) permits "joinder"-the joining together of more than one party-if the plaintiff's claim "aris[es] out of the same transaction . . . and if any question of law or fact common to all defendants will arise in the action." Misjoinder, on the other hand, occurs when there is no common question of law or fact or when, as here, the events that give rise to the plaintiff's claims against defendants do not stem from the same transaction.

Misjoinder is governed by Rule 21, which reads:

Misjoinder of parties is not ground for dismissal of an action. Parties may be dropped or added by order of the court on motion of any party or of its own initiative at any stage of the action and on such terms as are just. Any claim ...


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