Intervention and Substantially Similar Actions

January 29, 2015

An applicant may intervene as of right pursuant to FRCP 24(a) if the following elements are satisfied: (1) the motion must be timely; (2) the applicant must have a “significant protectable interest” relating to the property or transaction which is the subject of the action; (3) the applicant must be situated such that disposition of the action may as a practical matter impair or impede its ability to protect that interest; and (4) the applicant’s interest must be inadequately represented by the parties to the action. Smith v. Marsh, 194 F.3d 1045, 1049 (9th Cir.1999). The Court must interpret the rule broadly in favor of intervention. Forest Conservation Council v. U.S. Forest Serv., 66 F.3d 1489, 1493 (9th Cir.1995); see also Widjaja v. YUM! Brands, Inc., Case No CV-F-09-1074 OWW-DLB, 2009 WL 3462040 (E.D.Cal. Oct. 22, 2009).

A court determines the timeliness of an intervention motion by examining: (1) the stage of the proceedings at which an applicant seeks to intervene; (2) the prejudice to the existing parties if intervention is allowed; and (3) the reasons for and the length of the delay. Smith, supra, 194 F.3d at 1049. “Prejudice to the existing parties is the most important consideration in deciding whether a motion for intervention is timely.” Widjaja, supra, at *4 (citing United States v. Oregon, 745 F.2d 550, 552 (9th Cir. 1984). In assessing timeliness, the crucial date is when the proposed intervenor should have been aware that its interests would not be adequately protected by the existing parties. Smith, supra, 194 F.3d at 1051-52.

“The burden on proposed intervenors in showing inadequate representation is minimal, and would be satsifed if they could demonstrate that representation of their interests ‘may be’ inadequate.” Arakaki v. Cayetano, 324 F.3d 1078, 1086 (9th Cir. 2003), cert. denied sub nom. Hoohuli v. Lingle, (2003) 540 U.S. 1017. Intervenors are not required to show that representation will in fact be inadequate. Id. Three factors are considered in determining the adequacy of representation: “(1) whether the interest of a present party is such that it will undoubtedly make all of a proposed intervenor’s arguments; (2) whether the present party is capable and willing to make such arguments; and (3) whether a proposed intervenor would offer any necessary elements to the proceeding that other parties would neglect.” Id.

The Court may alternatively allow Intervenors to participate under the permissive intervention provision of FRCP 24(b). Permissive intervention is appropriate when the application to intervene is timely, and when the applicants “[have] a claim or defense that shares with the main action a common question of law or fact.” FRCP 24(b)(1)(B). Although permissive intervention is within the Court’s discretion, it must consider “whether the intervention will unduly delay or prejudice the adjudication of the original parties’ rights.” FRCP 24(b)(3).

When cases involving essentially the same parties and same issues are filed in different districts, a court may dismiss the later-filed case, stay it entirely, and/or transfer it to the district where the first-filed case is pending. Pacesetter Sys., Inc. v. Medtronic, Inc., 678 F.2d 93, 95 (9th Cir.1982). “[T]he court which first acquired should try the suit and no purpose would be served by proceeding with a second action” under such circumstances. Id. The rule “serve[s] the purpose of promoting efficiency well and should not be disregarded lightly.” Church of Scientology v. United States Dep’t of the Army, 611 F.2d 738, 750 (9th Cir.1979). As this Court explained in Widjaja, supra:

“The first-to-file rule is ‘a generally recognized doctrine of federal comity which permits a district court to decline jurisdiction over an action when a complaint involving the same parties and issues has already been filed in another district.’ … The ‘sameness’ requirement does not mandate that the two actions be identical, but is satisfied if they are ‘substantially similar.’ … The purpose of this well-established rule is to promote efficiency and to avoid duplicative litigation and thus it should not be lightly disregarded … Under the doctrine, a district court may transfer, stay or dismiss the second action if it determines that it would be in the interest of judicial economy and convenience of the parties … The pre-requisites for application of the doctrine are chronology and identity of the parties and issues involved…”

Widjaja. Supra, at *9 (quoting v. Martindale-Hubbell, 420 F.Supp.2d 1093, 1097(N.D.Cal. 2009)). For the purposes of the first-to-file rule, in a class action, it is the class, not the representative that is compared. Jeske v. California Dept. of Corrections and Rehabilitation, 2012 WL 1130639 at *7 (E.D.Cal. Mar. 30, 2012).

Author: Richard Hoyer
Category: Arbitration, Legal Procedure
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