Opinion
CIVIL ACTION No. 03-2981.
March 26, 2004
ORDER AND REASONS
On March 17, 2004, the following motions came on for hearing before the undersigned Magistrate Judge, to wit: (1) J. Clark Promotions, Inc.'s Motion to Intervene as a matter of right; and (2) Krewe of Neptune, Inc.'s Rule 24(b)(2) Motion to Intervene.
Present were: Louis Roy Koerner, Jr. on behalf of the plaintiff
Kenneth Charles Fonte on behalf of Sheriff Harry Lee Kyle P. Kirsch on behalf of Jefferson Parish and William Lazaro, Jr. Andre P. Guichard on behalf of Krewe of Neptune, Inc. Brad P. Scott on behalf of J. Clark Promotions, Inc.
Pursuant to the hearing and for the following reasons, the aforesaid Motions to Intervene are DENIED.
BACKGROUND
On October 24, 2003, plaintiff, The Toga Society, Inc. D/B/A Krewe of Aladdin, filed this § 1983 action against the defendants, Jefferson Parish Sheriff Harry Lee and others for denial of equal protection and other alleged unconstitutional conduct, as well as pendent state law claims. Since the year of 2000, the Krewe of Aladdin has paraded during the Carnival Season along the traditional Westbank Route in Orleans Parish and partly though the Parish of Jefferson. Officers of the organization were allegedly told that a payment to the Jefferson Parish Sheriff's office was required for protection services and that the fee of $15,000 in the year of 2000 was payable by cashier's check only. The organization complied and was issued a permit in the year 2000. Aladdin principals were allegedly informed and relied upon the representation that this was a "one-time fee" that need not be paid for the subsequent Carnival Seasons. In accordance with the alleged agreement, no further fee was demanded for the 2001 and 2002 Carnival Seasons.
On February 13, 2003, approximately nine days prior to the parade, a twenty seven thousand six hundred ($27,600.00) dollar fee was demanded for protection by Sheriff Harry Lee for the 2003 Carnival Season. Although fifteen Carnival krewes paraded in Jefferson Parish during the 2003 Carnival Season, demand for payment of the fee for protection services was made only upon one other Carnival krewe, Excalibur.
Excalibur obtained a donation from a Councilman in the amount of $20,000.00 to pay its fee. Having no such sponsor, Krewe of Aladdin's application for a parade permit was refused. Later, Jefferson Parish Sheriff Harry Lee allegedly stated that payment of the requisite fee had been worked out and thus Krewe of Aladdin's parade permit issued for the 2003 Carnival Season.
The sum and substance of the complaint for damages is that the fees charged are arbitrary and far exceed the cost of police protection along the route. Plaintiff notes that significant and varying amounts have been charged to Aladdin and that many Carnival krewes, allegedly "grand-fathered in," are charged nothing at all for parade permits. The Toga Society, Inc. seeks declaratory relief regarding its § 1983 claims based on alleged constitutional violations, including denial of equal protection, denial of substantive and procedural due process, violation of the right of free speech and deprivation of property and property rights without due process of law. Plaintiff's further seek mandatory relief ordering the issuance of parade permits for the years 2005 and thereafter, without the necessity of payment for security fees or providing estimated security fees in advance. In addition, plaintiff seeks the return of monies previously paid, alleged overpayment and/or specific performance, as well as attorneys fees under § 1988.
See Plaintiff's Second Amended Complaint for Damages, Declaratory Relief and Request for the Issuance of Mandatory and Prohibitory Injunction [Rec. Doc. No. 23].
Id. at p. 5.
J. CLARK PROMOTIONS, INC.'s MOTION TO INTERVENE
J. Clark Promotions, Inc. ("J. Clark") is a judgment creditor of the plaintiff in this lawsuit and has already filed a Notice of Seizure in this action. Via writ of fieri facias, it has seized the interests of the plaintiff in this lawsuit. More specifically, J. Clark has a judgment in its favor issued by the Twenty Fourth Judicial District Court of Jefferson Parish against the plaintiff in the amount of $33,423.32, plus interest and attorney's fees. Pursuant to an order of garnishment, J. Clark has already collected $11,448.92, but no other payments have been made. J. Clark notes that the plaintiff owes the balance due as confirmed by the aforesaid judgment and argue that, as a judgment creditor of the plaintiff, it is entitled to intervene as of right.The plaintiff and defendants in this matter contend that J. Clark's police presence is unnecessary in this action and that, pursuant to La.Rev.Stat. § 13:3865, (1) a lien has been granted against any relief which may be awarded to The Toga Society, Inc., (2) all of the parties are on notice of the existence of the lien, and (3) any relief granted in this proceeding is subject thereto. The parties further highlight that § 3865 does not convey a seizing creditor any right or interest to prosecute the debtor's claim and that perfection of the security interest in whatever may be realized by the debtor is complete upon service of the notice of seizure on the parties, which has been effected. No federal law confers an unconditional right to intervene regarding a totally unrelated judgment. Accordingly, the parties urge the Court to deny J. Clark's Motion to Intervene, whether pursuant to Rule 24(a) or (b).
Federal Rule of Civil Procedure 24(a) permits certain interested parties to intervene as a matter of right. A party is entitled to intervene as of right if: (1) the motion to intervene is timely filed; (2) the potential intervenor asserts an interest that is related to the property or transaction that forms the basis of controversy in the case into which intervention is sought; (3) disposition of the case may impair or impede potential intervenor's ability to protect its interest; and (4) existing parties do not adequately represent potential intervenor's interests. Failure to meet any one of the criteria requires denial of the motion.
See Trans Chemical Ltd. v. China National Machinery Import and Export Corporation, 332 F.3d 815, 822 (5th Cir. 2003); Heaton v. Monogram Credit Card Bank of Ga., 297 F.3d 416, 422 (5th Cir. 2002), reh'g denied, 2002 WL 31049598 (5th Cir. 2002); Supreme Beef Processors, Inc. v. United States Department of Agriculture, 275 F.3d 432, 437 (5th Cir. 2001); John Doe No. 1. v. Glickman, 256 F.3d 371, 375 (5th Cir. 2001); Taylor Communications Group, Inc. v. Southwestern Bell Telephone Co., 172 F.3d 385, 387 (5th Cir. 1999); Rigco, Inc. v. Rauscher Pierce Refsnes, Inc., 110 F.R.D. 180, 182 (N.D. Tex. 1986) (Fitzwater, J.).
See Sierra Club v. Espy, 18 F.3d 1202, 1205 (5th Cir. 1994).
Whether the intervention sought is as-of-right or permissive, it must be timely filed. At any stage before judgment, delay is pertinent only if the prospect of undue prejudice and procedural disruption first exist. In Heaton, the Fifth Circuit observed that the "requirement of timeliness is not a tool of retribution to punish the tardy would be intervenor, but rather a guard against prejudicing the original parties by the failure to apply sooner."
Heaton, 297 F.3d at 422 ( citing Sierra Club v. Espy, 18 F.3d at 1205).
There is no absolute measure of timeliness; courts should look into all of the facts and circumstances. In particular, courts should consider the following factors: (1) the length of any delay; (2) the prejudice to existing parties; (3) prejudice to the would-be intervenor should the intervention be denied; and (4) any unusual circumstances which militate for or against a determination that the application is timely. Under the Fifth Circuit's construct, alacrity is simply one factor among several to be assessed by the Court.
See Stallworth v. Monsanto Co., 558 F.2d 257, 263-68 (5th Cir. 1977).
Id.
Regarding permissive intervention, Fed.R.Civ.P. 24(b) provides:
Upon timely application anyone may be permitted to intervene in an action: (1) when a statute of the United States confers a conditional right to intervene; or (2) when an applicant's claim or defense and the main action have a question of law or fact in common. . . . In exercising its discretion the court shall consider whether the intervention will unduly prejudice the adjudication of the rights of the original parties.
Fed.R.Civ.P. Rule 24(b); see also Theriot v. Parish of Jefferson, 1995 WL 731680 *1 (E.D. La.) (Duval, J.).
In the case at bar, because the failure to meet any one ineluctable element is fatal to Rule 24(a) intervention as-of-right, the Court need only address the second element, to wit: the applicant must have an interest relating to the property or transaction that is the subject of the litigation. The term "interest" is narrowly read to mean a "direct and substantial interest in the subject matter of the litigation." In New Orleans Public Service, Inc. v. United Gas Pipeline Co., 732 F.2d 452 (5th Cir. 1984), the Fifth Circuit affirmed the district court's refusal to permit intervention where the potential intervenor failed to demonstrate an interest relating to the transaction which formed the subject matter of the action. The interest has to be "a significantly protectable interest," one that the substantive law recognizes as belonging to or owned by the party seeking intervention.
See, e.g., Trans Chemical Ltd., 332 F.3d at 823 ( citing Rigco, Inc., 110 F.R.D. at 183 with approval); New Orleans Public Service, Inc. v. United Gas Pipeline Co., 732 F.2d 452, 463 (5th Cir. 1984) ( en banc), cert. denied sub nom., Morial v. United Gas Pipeline Co., 469 U.S. 1019 (1984); United States v. Perry County Board of Education, 567 F.2d 277, 279 (5th Cir. 1978).
NOPSI, 732 F.2d at 464 ( citing Donaldson v. United States, 400 U.S. 517, 531 (1971)).
J. Clark's interest is purely economic and a purely economic interest is insufficient to justify intervention under Fed.R.Civ.P. 24(a)(2). The possibility of a benefit because the outcome of a lawsuit may increase or decrease the ability of the intervenor to collect a judgment is insufficient and does not constitute a direct, substantial, legally protectable interest.
Id. at 466.
See id. at 470; see also Rigco, Inc. v. Rauscher Pierce Refsnes, Inc., 110 F.R.D. 180, 183-184 (S.D. Tex. 1986).
In Rigco, Inc. v. Rauscher Pierce Refsnes, Inc., 110 F.R.D. 180 (S.D. Tex. 1986), prospective intervenor-shareholders argued that they had an interest in the debtor company's suit because they were responsible to the bankruptcy claimants for any deficiency in the bankrupt estate. Because any recovery by the debtor corporation in the adversarial proceeding would belong to the bankrupt estate and reduce the shareholder's liability for the deficiency, the shareholders argued that they had an interest in ensuring that the corporation secured the largest possible recovery. The key to the Rigco holding does not lie in the use of the "economic interest;" rather, the decision turns on the absence of a "direct and substantial interest in the proceedings." In Rigco, the shareholders' interest was indirect because the shareholders had no direct interest in the subject matter of the lawsuit. Instead, they had only a general interest in seeing the debtor corporation reap the maximum recovery, which would decrease their own debt in the bankruptcy proceeding. Here, as in the Rigco case, J. Clarke's claim is not against the defendants, but rather against the plaintiff.
Rigco, Inc., 110 F.R.D. at 183.
Similarly, Rule 24(b)(2) is inapplicable, since permissive intervention is only appropriate where "an applicant's claim or defense and the main action have a question of law or fact in common." J. Clark does not contend that there is a common question of law or fact and there does not appear to be any. It is simply a judgment creditor with an a purely economic interest, its lien arising out of a completely unrelated contractual arrangement. Accordingly, its motion for leave to intervene is DENIED.
KREWE OF NEPTUNE's RULE 24(b)(2) MOTION TO INTERVENE
Krewe of Neptune seeks to permissively intervene asserting the existence of common questions of fact or law. It argues that a ruling on the legal issues in the case at bar may well seal its fate, since it has been fighting the same battle against the same defendants in the Twenty Fourth Judicial District Court for the Parish of Jefferson for a number of years and to no avail. Krewe of Neptune directs the Court's attention to the matter entitled, Krewe of Neptune, Inc. v. Harry Lee, et al., 24th JDC Dkt. # 504-568.
Krewe of Neptune contends that its rights are clearly at stake, whether or not it is allowed to take part in these proceedings. It argues that the stakes are high, because it has not been permitted to parade for seven years. Without any further explanation it submits that there exist common questions of law, and thus its intervention is appropriate and will not delay these proceedings. Krewe of Neptune contends that, for reasons beyond its control, its fate has been adrift in the sea of hand-offs from judge to judge in the Jefferson Parish judicial system. The "thirst for justice" has drawn the Krewe of Neptune to the effervescent waters of the Eastern District, known far and wide for its judicious "rocket docket." Krewe of Neptune notes that the plaintiff has no objection to the intervention.
See Krewe of Neptune's Memorandum in Support of Motion for Leave to Intervene at p. 3.
However, all of the defendants in the present action oppose multiplication and obfuscation of the issues inherent in the federal case and filed formal opposition memoranda highlighting the following, to wit:
• Neptune's 24th JDC lawsuit (Dkt. No. 504-568 "N") (hereafter "the Jefferson action") involves disputed contractual agreements and representations, which are not the subject of the present action;
• The Jefferson action also relates to Carnival Seasons 1996 and 1997, which are not the subject of the instant action;
• In the Jefferson action, Neptune confessed judgment in favor of the Sheriff in return for the payment of $22,000.00, subject to a final and definitive judgment determining the right and ability of the Sheriff to charge costs for providing parade security, and agreed to deposit said sum from its bingo proceeds into the registry of the state court;
• The Consent Judgment provides: "The Parish of Jefferson shall not issue a parade permit to Krewe of Neptune, Inc. and Jack Rizzuto after February 3, 1997, unless and until Krewe of Neptune, Inc. and Jack Rizzuto satisfy any final and definitive judgment in favor of Sheriff Harry Lee;" and
• Neptune knew of The Toga Society, Inc.'s action regarding the payment of security costs as a prerequisite to the issuance of parade permits in the Parish of Jefferson, which was the subject of the defendants' Motion to Dismiss and plaintiff's Motion for Summary Judgment, both of which have been argued and are pending determination by the district judge. Defendants contend that Neptune chose to wait until after the hearing to file its Motion to Intervene.
See Consent Judgment dated January 31, 1997 ['s Exh. "A"].
See Guichard Fax Sheet dated January 26, 2004 ['s Exh. "B"].
Essentially, the defendants argue that Neptune was aware of the existence and nature of this action early on in its development, if not from the inception. The defendants argue that the intervention is not timely because significant discovery has occurred and two dispositive motions have been argued and are pending determination by the district judge. Additionally, defendants argue that Neptune's interests are adequately represented by The Toga Society, Inc. and that Neptune instituted the pending action in the state court to protect any interests it may have.
The defendants further highlight Neptune's thirty-four allegations, in addition to those made by The Toga Society, Inc. Defendants cite Doe v. Duncanville Independent Schools, 994 F.2d 160, 168 (5th Cir. 1993) for the proposition that "when one party seeking intervention has the same ultimate objective as a party to the suit, a presumption arises that its interests are adequately represented, against which petitioner must demonstrate some adversity of interest, collusion or non-feasance." Id.
Turning to the applicable law and as previously discussed, unlike subdivision (a), the determination of whether intervention is permissible under subdivision (b) is discretionary. Rule 24(b) provides that an applicant may intervene if his claim or defense and the main action have a question of law or fact in common. If the prospective intervenor's claim or defense contains no question of law or fact that is raised also by the main action, intervention must be denied. Even though there is a common question of law or fact, or the requirements of Rule 24(b) are otherwise satisfied, courts are directed to consider such factors as whether the intervenors' interests are adequately represented by other parties, whether they will significantly contribute to the full development of the underlying factual issues of the suit, the nature and extent of intervenors' interests, the standing of the intervenors to raise relevant legal issues, and whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties.
See NOPSI, 732 F.2d at 470-71.
See Aetna Insurance Co. v. Seidenberg, 1996 WL 537743, *2 (E.D. La.) (Vance, J.) ( citing 7C Wright Miller, § 1911 p. 358).
See NOPSI v. United Gas Pipe Line Co., 732 F.2d at 472; see also Mac Sales Inc. v. E.I. Dupont de Nemours, 1995 WL 581790 at *4 (E.D. La.).
The Second Circuit's decision in U.S. Postal Service v. Brennan, 579 F.2d 188 (2nd Cir. 1978) demonstrates why Neptune's intervention should be denied. In Brennan, the district court granted summary judgment and denied the intervention; the Second Circuit affirmed noting that the issue before the court was strictly one of law — i.e., either the challenged statutes were constitutional or they were not. The court found it significant that the proposed intervenors did not contend that the U.S. Attorney's Office would not advance all arguments in favor of constitutionality and that in a case which was an obvious candidate for summary judgment, there was no question of a possible conflict in trial strategies.
U.S. Postal Service v. Brennan, 579 F.2d 188, 190-191 (2nd Cir. 1978).
Id. at 191.
Here, as in Brennan, supra, Krewe of Neptune does not question the adequacy of the present plaintiff's representation. Adequacy aside, the instant case is even more compelling because Krewe of Neptune would complicate this case with collateral issues discussed below, which would necessarily impede and possibly halt the progress of the present plaintiff's lawsuit.
Neptune does not dispute that its state court case addresses ordinances which have been amended by the Parish and that the former ordinances recognize a class of parade organizations entitled to Mardi Gras parade permits, i.e., a class to which Neptune clearly does not belong. The situation created by the former statutory regime involving two classes of parade organizations does not exist with respect to ordinances at issue in the captioned federal claim.
Most notably, Krewe of Neptune does not dispute that it does not now meet and has never met the minimum membership requirement under either statutory regime, and thus it is not a member of a class of persons similarly situated to the present plaintiff. Moreover, the doctrine of Younger abstention poses a formidable challenge to allowing Krewe of Neptune's proposed intervention. Indeed, Neptune expressly has acknowledged the pendency of a longstanding and ongoing parallel state court action concerning the same issues raised in its federal complaint and declaratory relief sought in the federal action. This is not the place to elude the consequences of the state court's alleged inaction or a state court consent decree.
As previously noted, the state court consent decree specifically provides that "The Parish of Jefferson shall not issue a parade permit to Krewe of Neptune, Inc. and Jack Rizzuto after February 3, 1997, unless and until Krewe of Neptune, Inc. and Jack Rizzuto satisfy any final and definitive judgment in favor of Sheriff Harry Lee." Notwithstanding the foregoing, in its proposed Complaint of Intervention, Krewe of Neptune seeks the following mandatory and prohibitory relief, to wit: "Neptune is also entitled to injunctive relief, mandatory and prohibitory, against the defendants, preventing them from continuing the course of action that has wrongfully deprived Neptune of its constitutional rights and that causes it harm, compelling the defendants to award the last available 2005 parade permit to Neptune, and requiring said defendants to consent to release of Neptune's funds which are currently in the registry of the 24th Judicial Court for the Parish of Jefferson, State of Louisiana (#504-568), as a guarantee of payment to Sheriff Lee for his 1997 police protection fee demand" Granting Neptune's permissive intervention in this parallel federal action, instituted years after the ongoing state court proceedings, goes against the grain of "full faith and credit" and is equally irreconcilable with any notion of comity.
See Consent Judgment ('s Exhibit "A").
See Krewe of Neptune's Proposed Complaint in Intervention, at pp. 9-10 ¶ 32 (all emphasis added).
See Pennzoil v. Texaco, Inc., 481 U.S. 1, 10-11 (1987).
In Pennzoil v. Texaco, Inc., 481 U.S. 1 (1987), the Supreme Court reversed both courts below, holding that they should have abstained under the principles of federalism enunciated in Younger v. Harris, 401 U.S. 37 (1971). The Pennzoil Court noted: "Both the District Court and the Court of Appeals failed to recognize the significant interests harmed by their unprecedented intrusion into the Texas judicial system." The Court emphasized the importance of the States' interest of enforcing the orders and judgments of their courts, i.e., the authority of the state court judicial system. The Pennzoil Court explained:
[T]his case involves challenges to the processes by which the State compels compliance with the judgments of its courts. Not only would federal injunctions in such cases interfere with the execution of state judgments, but they would do so on grounds that challenge the very process by which those judgments were obtained. So long as those challenges relate to pending state proceedings, proper respect for the ability of state courts to resolve federal questions presented in state-court litigation mandates that the federal court stay its hand
Id. at 10.
Id. at 13-14.
Summarizing its rationale, the Pennzoil Court stated:
In sum, the lower courts should have deferred on principles of comity to the pending state proceedings. They erred in accepting Texaco's assertions as to the inadequacies of Texas procedure to provide effective relief. It is true that this case presents an unusual fact situation, never before addressed by the Texas courts, and that Texaco urgently desired prompt relief. But we cannot say that those courts, when this suit was filed, would have been any less inclined than a federal court to address and decide federal constitutional claims. Because Texaco apparently did not give the Texas courts an opportunity to adjudicate its constitutional claims, and because Texaco cannot demonstrate that the Texas courts were not then open to adjudicate its claims, there is no basis for concluding that Texas law and procedures were so deficient that Younger abstention is inappropriate.
Id. at 17.
Turning to the issue of Article III standing, the Circuits are split on the issue of whether an intervenor is required to demonstrate standing. In Ruiz v. Estelle, the Fifth Circuit found "the better reasoning in cases which hold that Article III does not require intervenors to possess standing." The Ruiz court rejected the argument that, even if standing is not required of all intervenors, it should be required in the case of intervenors who advanced arguments not raised by either party. The Court's reasoning follows, to wit:
See Ruiz v. Estelle, 161 F.3d 814, 831 (5th Cir. 1998).
Id. at 832.
Id. at 833.
Brown and Culberson seek the same ultimate relief as the TDCJ: the termination of the Final Judgment. They merely seek that relief based in part on different legal theories. This is not a case where intervenors seek alternative injunctive relief, or to block a proposed settlement. Instead, Brown and Culberson seek only to ask the district court to consider other possible legal grounds for granting the relief that TDCJ has already requested. Such a request creates no jurisdictional obstacle for the court.
Id. (emphasis added).
Most notably, at the outset the Ruiz court observed: "It is doubtful that, if Brown and Culberson were the only parties before the court seeking termination (or other relief respecting) the Final Judgment, they would have standing that the district court would be presented with an Article III case or controversy."
Id. at 829.
Unlike the intervenors in the Ruiz case, Krewe of Neptune seeks other relief, i.e., injunctive relief, both mandatory and prohibitory, with respect to $22,000.00 pled into the registry of the state court. Such a request does in fact present a jurisdictional obstacle for the court, because Neptune admittedly does not meet and has never met the minimum membership requirement set forth under either challenged statutory regime. The precise holding of the Fifth Circuit in Ruiz follows:
See Krewe of Neptune's Proposed Complaint in Intervention, at pp. 9-10 ¶ 32.
[W]e hold that Article III does not require intervenors to independently possess standing where the intervention is into a subsisting and continuing Article III case or controversy and the ultimate relief sought by the intervenors is also being sought by at least one subsisting party with standing to do so.
Ruiz, 161 F.3d at 830 (all emphasis added).
The gist of the standing question is whether Krewe of Neptune has alleged "such a personal stake in the outcome of the controversy as to assure that concrete adverseness sharpens the presentation of the issues upon which the court depends for illumination of difficult constitutional challenges." It is noteworthy that a plaintiff may not rest his claim generally on the legal rights of third parties, even if he has injury sufficient to satisfy Article III. At best, it is doubtful that Krewe of Neptune has Article III standing, i.e., a right to judicial relief, which appears to be necessary under the circumstances discussed above.
Baker v. Carr, 369 U.S. 186, 204 (1962); Korioth v. Briscoe, 523 F.2d 1271, 1274-75 (5th Cir. 1975).
See Warth v. Seldin, 422 U.S. 490, 499 (1975).
Other than issues discussed above, this Court finds no other unusual circumstances bearing on the timeliness inquiry. Under the circumstances presented, it is difficult to see how Krewe of Neptune will be able to significantly contribute to the full development of the issues underlying the original plaintiff's claim. Finally, it is apparent that the intervention will interject delay and may well prejudice the adjudication of the rights of the present parties, including the plaintiff's.
See Bolongon v. M/V NOR ATLANTIC, 2000 WL 222855 * 2 (E.D. La.) (Duval, J.).
Accordingly and for all of the above and foregoing reasons, the Court issues the following orders, to wit: IT IS ORDERED that J. Clark Promotions, Inc.'s Motion for Leave to Intervene is DENIED.
IT IS FURTHER ORDERED that Krewe of Neptune's Motion for Leave to Intervene is DENIED.