Twin Pines Coal Company, Inc et al v. Colonial Pipeline Company

Filing 234

MEMORANDUM OPINION. Signed by Chief Judge Sharon Lovelace Blackburn on 7/16/2012. (KAM, )

FILED
2012 Jul-16 PM 04:31
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
TWIN PINES COAL COMPANY,
INC.; RGGS LAND &
MINERALS, LTD.,
Plaintiffs,
v.
COLONIAL PIPELINE
COMPANY,
Defendant.

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CASE NO. 2:09-cv-01403-SLB

MEMORANDUM OPINION
This case is currently before the court on the putative intervenors, Twin Pines,
LLC and Twin Pines II, LLC’s (collectively the “movants”) Unopposed Motion to
Intervene. (Doc. 225.) As discussed below, the Motion is due to be granted.
I. BACKGROUND
This case arises out of a breach of contract action by plaintiffs Twin Pines Coal
Company, Inc. (“TPCC”) and RGGS Land & Materials, LTD., L.P. (“RGGS”) against
defendant Colonial Pipeline Company (“Colonial”). After undertaking significant
discovery and filing cross-motions for summary judgment, the parties privately settled the
case and have agreed to dismiss all claims with prejudice and establish a settlement fund.
(See doc. 223.) However, a dispute remains over the amount of attorneys’ fees owed
certain counsel for plaintiffs who have filed with the court a claim and statutory lien for
said fees, (doc. 222), and a Motion for Court Ordered Award of Attorneys’ Fees, (doc.

226). The dispute arises out of a separate agreement between TPCC and movant Twin
Pines, LLC. Sometime prior to the parties settling this action, TPCC “sold substantially
all of its assets to Twin Pines, LLC pursuant to an Asset Purchase Agreement” under
which both TPCC and Twin Pines, LLC retained a one-half interest in the recovery from
this case. (Doc. 225 ¶ 1.) According to Twin Pines, LLC and Twin Pines II, LLC, the
settlement in this case includes recovery for certain “Future Claims,” and that under the
Asset Purchase Agreement any recovery from said claims “belongs to Twin Pines, LLC
and Twin Pines II, LLC” and not TPCC. (Id. ¶ 2.) Because certain plaintiffs’ attorneys
now make claims against the fund for fees, Twin Pines, LLC and Twin Pines II, LLC
move to intervene to protect their interests in the one-half recovery and “future claims”
provided for under the Asset Purchase Agreement. (Id. ¶ 3.)
II. DISCUSSION
Federal Rule of Civil Procedure 24(a)(2) provides for intervention as of right.
The Eleventh Circuit construes the rule to include four requirements:
“a party must establish that ‘(1) his application to intervene is
timely; (2) he has an interest relating to the property or
transaction which is the subject of the action; (3) he is so
situated that disposition of the action, as a practical matter, may
impede or impair his ability to protect that interest; and (4) his
interest is represented inadequately by the existing parties to the
suit.’”
Fox v. Tyson Foods, Inc., 519 F.3d 1298, 1302-03 (11th Cir. 2008) (quoting Chiles v.
Thornburgh, 865 F.2d 1197, 1213 (11th Cir.1989)). Although the movants’ Motion is
unopposed, Rule 24(a) “continues to set bounds that must be observed.” Id. at 1302

(internal quotations and citation omitted). Thus, the court addresses each of the elements
quoted above.
Timeliness
A motion to intervene must be timely– “a threshold factor that must be satisfied
before the other factors should be considered.” Hollywood Cmty. Synagogue, Inc. v. City
of Hollywood, FL, 254 F. App’x 769, 771 (11th Cir. 2007) (per curiam) (citing NAACP v.
New York, 413 U.S. 345, 365 (1973)). The court takes into account the length of time
between when the putative intervenor knew of his interest in the case and when his
motion was filed, any prejudice to the existing parties for failure to timely move to
intervene, the extent of prejudice to the putative intervenor if his motion is denied, and
any other unusual circumstances weighing for or against a finding of timeliness. Id. at
771 (internal quotations and citation omitted).
Although nothing in the record indicates when the fee dispute first arose, certain
attorneys for plaintiffs filed their Claim for Attorneys’ Fees and Statutory Lien on May
11, 2012. (Doc. 222.) The movants then filed their Motion to Intervene eleven days later
on May 22, 2012. (Doc. 225.) The court finds this is a reasonable amount of time and
that the existing parties endured no prejudice as a result of the filing date; and indeed,
they have advanced no such argument. As discussed below, it appears that the movants
have a valid interest in the fee dispute and thus would be prejudiced if denied the right to
intervene. Lastly, the court finds no unusual circumstances to consider under the
timeliness factor. The Motion is timely.

Interest Relating to the Property or Transaction
The second requirement under Rule 24(a)(2) is that the movants show they have an
interest relating to the property or transaction which is the subject of this action. Fox, 519
F.3d at 1303. It is well-settled in the Eleventh Circuit that such an interest must be
“‘direct, substantial and legally protectable.’” Mt. Hawley Ins. Co. v. Sandy Lake Props.,
Inc., 425 F.3d 1308, 1311 (11th Cir. 2005) (per curiam) (quoting Georgia v. U.S. Army
Corps of Eng’rs, 302 F.3d 1242, 1249 (11th Cir. 2002)). Further, a legally protectable
interest “‘is something more than an economic interest[,] . . . one which the substantive
law recognizes as belonging to or being owned by the applicant’ . . . [and] derive[d] from
a legal right.” Id. (quoting United States v. S. Fla. Water Mgmt. Dist., 922 F.2d 704, 710
(11th Cir. 1991)).
The movants have a direct and legally protectable interest in the settlement fund
established by the existing parties. TPCC, Twin Pines, LLC, and Twin Pines II, LLC are
parties to the Asset Purchase Agreement as well as an Assignment and Assumption
Agreement, which entitle movants to certain recovery from the settlement fund
established to satisfy the various claims in this case. (Doc. 225 ¶ 2.) “‘Property interests
[such as] existing ... contracts that are threatened by the potential’ results in a case qualify
an applicant for intervention as a matter of right.” Danner Constr. Co. v. Hillsborough
Cnty., 809-CV-650-T-17TBM, 2009 WL 2525486, at *4 (M.D. Fla. Aug. 17, 2009)
(quoting Sierra Club v. Espy, 18 F.3d 1202, 1207 (5th Cir. 1994)); see also S. Fla.
Equitable Fund LLC v. City of Miami, Fla., No. 10-21032-CIV, 2010 WL 2925358, at *3

(S.D. Fla. 2010) (“Contract rights, such as rights conferred by settlement agreement, are
legally protectable interests.”); In re HealthSouth Corp. Ins. Litig., 219 F.R.D. 688, 692
n.4 (N.D. Ala. 2004) (distinguishing arguments for and against intervention and citing
favorably to a Third Circuit case, which found “intervenors had a legally protectable
interest in a specific fund-the insurance proceeds that were deposited in the registry of the
court pending resolution of the dispute” (citing Mountain Top Condo. Assoc. v. Dave
Stabbert Master Builder, Inc., 72 F.3d 361, 366 (3d Cir. 1995))). The rights under those
agreements are likely to be affected by the pending claim and statutory lien against the
settlement fund in this case. Thus, the court finds that movants have a legally protectable
interest relating to the remaining issue in this case regarding the disputed attorneys’ fees.
Impairment of Ability to Protect the Interest
The third factor requires movants to show that the court’s disposition of the
disputed claims to the settlement fund may impede their ability to protect their interest in
the fund. Fox, 519 F.3d at 1303. As mentioned above in the court’s analysis of the
second factor, the movants’ interest in the settlement fund under their agreements with
TPCC may necessarily be affected by a ruling on the remaining disputed claims in this
case. “Where a party seeking to intervene in an action claims an interest in the very
property and very transaction that is the subject of the main action, the potential stare
decisis effect may supply that practical disadvantage which warrants intervention as of
right.” Stone v. First Union Corp., 371 F.3d 1305, 1310 (11th Cir. 2004) (internal
quotation and citations). The court finds movants satisfy the third requirement under

Rule 24(a)(2).
Inadequate Representation
Lastly, movants must show that their interests in the fee disputed are inadequately
represented by the existing parties. Fox, 519 F.3d at 1303. “The ‘requirement of the Rule
is satisfied if the applicant shows that representation of his interest may be inadequate;
and the burden of making that showing should be treated as minimal.’” Clark v. Putnam
Cnty., 168 F.3d 458, 461 (11th Cir. 1999) (quoting Trbovich v. United Mine Workers, 404
U.S. 528, 538 n.10 (1972)). As movants state in their Motion, no existing parties
represent their interests in this case. (Doc. 225 ¶ 5.) Indeed, none of the parties currently
before the court could represent movants’ interest in the disputed claims to the settlement
fund because movants’ recovery is governed by the agreements they entered into with
TPCC. Thus, movants satisfy their burden under the fourth requirement.
III. CONCLUSION
Based on the foregoing and as directed by the court’s Order entered
contemporaneously herewith, movants’ Motion to Intervene will be granted.
DONE this 16th day of July, 2012.

SHARON LOVELACE BLACKBURN
CHIEF UNITED STATES DISTRICT JUDGE