explaining that both are nonbinding persuasive authority
How later courts described this case
- explaining that both are nonbinding persuasive authority
- “The district courts ... owe no obedience ... to the decisions of the courts of appeals in other circuits.”
- “[d]ecisions of district courts and other courts of appeal are, of course, not binding on us and are looked to only for their persuasive effect”; “[i]f they fail to persuade by the use of sound and logical reasoning, they will not be followed, no matter how great their number”
- over the strong dissent of Judge (now Chief Justice) Burger, who, however, does not mention the possibility of ratification
Written by the judges who cited it.
The opinion
BURGER, Circuit Judge
(dissenting):
I find myself unable to join the majority’s reversal of the District Court’s denial of the motion to compel joinder of plaintiff-appellees’ insurance carriers pursuant to Rule 17(a). The practical outlines of this litigation and the question for determination must be looked at: The defendant in this action for damages would prefer to have the jurors know that the contest was between an insurance company and the defendant store rather than between two private litigants. And of course this is why the insurer for its interests wants to keep “out of sight.” I can see no compelling reason of public policy or of common sense for failing to give effect to the agreements of the parties. It seems to me that there may well be some public policy served in having the triers decide the issues uninfluenced by the circumstance that “a large insurance company” will pay the bill.
I am troubled by the suggestion that “the insurers in this case have an uvr worthy motive, if not an improper and illegal purpose, in attempting to avoid subrogation by frustrating the enforcement of Rule 17(a).” (emphasis added) I see nothing “unworthy,” “illegal,” or *1016 even undesirable in seeking to have the triers evaluate the case without regard to liability coverage.
Since Celanese Corp. v. John Clark Indus., 214 F.2d 551 (5th Cir. 1954), which is cited and quoted by the majority on the question of improper motivation involved the same kind of loan receipt we have before us, a close examination of that opinion is warranted. The opinion pointed out that:
[T]he purpose of the practice long obtaining in the federal courts and now set forth in Rule 17 * * * that every action shall be prosecuted in the name of the real party in interest, is to enable the defendant to avail himself of evidence and defenses that the defendant has against the real party in interest, and to assure him finality of the judgment * * *.
* * * Its [the defendant-appellant’s] real, its only concern was not to have the insurance companies brought into the suit to protect itself against being again sued * * * but for the possible prejudice which plaintiff might suffer in the minds of the jury because of the knowledge that plaintiff was insured. Such a purpose is neither a proper nor a legal purpose. The courts have uniformly condemned it.
Id. at 556-557 (footnote omitted). As I read Judge Hutcheson’s opinion in Celanese, it supports the position I take in dissent and should give no comfort to the majority.
1 am unable to distinguish the Celanese situation from the one before us here. Defendant-appellant would prefer to be sued by a named insurance company so that a jury verdict might be moderated by the realization that the injured plaintiff has coverage for his losses. This motivation seems hardly more worthy than the insurer’s motive in suing in the insured’s name so that its recovery will not be improperly minimized when the jury takes cognizance of the fact that an insurance company is suing to recover the losses in question.
The insurers and policyholders have entered a “loan receipt agreement” for the purpose of avoiding subrogation. The parties call their agreement a loan, but they also intend that it be one if only for its operation in preventing subrogation. When parties enter agreements with the desire to affect their private legal relationships and rights, the agreements should not be nullified unless compelling policy reasons so command. I for one can discover no policy considerations which demand the naming of insurers as parties to litigation when not to do so is to allow the jury to consider the issues of liability and damages strictly on the merits and without regard to the coverage or non-coverage of the parties litigant. 1
. Similarly, I would not challenge the analytical sophistication of those courts which have given effect to loan agreements. It is quite probable that they too are unimpressed with any driving need for obviating the agreements of the parties involved.