Substitution

Abstract

Rule 25 of the Federal Rules of Civil Procedure is a relatively obscure, but critical, procedural provision. When parties merge, die, become incompetent, are replaced in office, or assign their interests, Rule 25 allows the litigation to persist, and does so (at least in theory) without substantial substantive alteration in the litigation. This seemingly straightforward provision has been increasingly utilized by parties and federal courts, particularly as underlying economic transactions potentially relevant to litigation have become both more sophisticated and more commonplace. Although Rule 25 has been universally viewed as containing self-evident and entirely unproblematic principles, both in theory and as applied, this Article contends that, as presently articulated, Rule 25 not only authorizes widespread circumvention of the complete diversity rule, but does so in a manner that is increasingly misused in the evolving American economic and legal market. The Article argues that Rule 25 creates numerous additional substantive and jurisdictional problems as well, particularly given the contemporary breadth of statutory supplemental jurisdiction. The Article identifies these problems and supports a modification of Rule 25 jurisprudence in an attempt to ameliorate them.

Keywords: Substitution, Rule 25, Transfer of Interest, Assignment

JEL Classification: K41