Susan Hufnagle v. Rino International Corporation et al

Filing 233

ORDER by Judge Dean D. Pregerson: denying 232 Derivative plaintiffs M. Aileen Morningstar, Alice Slettedahl Ex Parte Application to file Complaint in Intervention. (lc). Modified on 12/14/2012 (lc).

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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SUSAN HUFNAGLE, individually
and n behalf of all others
similarly situated,

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Plaintiff,

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v.
RINO INTERNATIONAL
CORPORATION, DEJON ZOU,
JENNY LIUE, BEN WANG, LI YU,
KENNITH C. JOHNSON, JIANPING
QIU, ZIE QUAN, and ZEJIN LI,
Defendants.
___________________________

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Case No. CV 10-08695 DDP (VBKx)
ORDER DENYING EX PARTE
APPLICATION FOR LEAVE TO FILE A
COMPLAINT IN INTERVENTION

[Docket Number 232]

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Presently before the court is an Ex Parte Application for

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Leave to File a Complaint in Intervention, filed by plaintiffs

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(“Derivative Plaintiffs”) in a derivative action related to this

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matter.

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I.

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Procedural Background
On April 9, 2012, Plaintiff in this action moved for

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preliminary approval of a class action settlement.

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The court granted preliminary approval on May 21, 2012.

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195).

(Dkt. No. 190).
(Dkt. No.

While Derivative Plaintiffs were not aware of the substance

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of the settlement discussions in this case prior to Plaintiffs’

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motion for preliminary approval, that motion revealed to Derivative

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Plaintiffs the nature of the assets in issue in this case.

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(Application at 7-8.)

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On August 15, 2012, Plaintiffs moved for final approval of a

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class action settlement and for attorney’s fees.

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By stipulation of the parties, that motion was set for a hearing on

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December 17, 2012.

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(Dkt. No. 198.)

(Dkt. Nos. 204, 206.)

On November 19, 2012, over three months after Plaintiffs filed

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their motion for final settlement approval, Derivative Plaintiffs,

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who were and remain non-parties to this case, attempted to file a

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Motion for Attorney Fees.

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counsel was able to electronically file the motion only by

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improperly and inaccurately listing named Plaintiff Susan Hufnagle

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as the filer.

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stricken.

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(Dkt. No. 216.)

Derivative Plaintiff’s

In any event, the motion was filed incorrectly, and

The non-party Derivative Plaintiffs subsequently filed several

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more documents in this case, including another motion for attorney

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fees, an ex parte application for relief from the court’s order

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striking Derivative Plaintiff’s first improper filing, an ex parte

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application to shorten time, and supporting declarations.

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Derivative Plaintiffs did not file a motion to intervene in this

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case.

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Plaintiffs’ pending motions, explicitly noting that Derivative

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Plaintiffs’ counsel is not counsel of record in this case.

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Thus, on December 11, 2012, the court vacated Derivative

On December 13, 2012, two business days before the hearing on
Plaintiffs’ Motion for Final Settlement Approval, Derivative

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Plaintiffs filed the instant Ex Parte Application for Leave to File

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a Complaint in Intervention.

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II.

Discussion
Ex parte relief is generally disfavored when relief may be had

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through a regularly noticed motion.

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an adequate showing of good cause or irreparable injury to the

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party seeking relief.

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883 F.Supp. 488, 492 (C.D. Cal. 1995).

It will be granted only upon

Mission Power Eng’g Co. v. Cont’l Cas. Co.,
As an initial matter, the

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court notes that Derivative Plaintiffs here were aware of the

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nature of the proposed settlement as early as April 2012, and no

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later than November 19, 2012.

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showing of good cause why they did not file a regularly noticed

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motion to intervene.1

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Derivative Plaintiffs have made no

As to the merits of Derivative Plaintiffs’ application, courts

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will grant a motion to intervene as of right where (1) the motion

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is timely, (2) the applicant asserts “an interest relating to the

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property or transaction which is the subject of the action,” (3)

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the disposition may impair the applicant’s ability to protect her

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interest, and (4) “the applicant’s interest is not adequately

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represented by the existing parties.”

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Co., 967 F.2d 1391, 1394 (9th Cir. 1992); Fed. R. Civ. P. 24(a).

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McGough v. Covington Techs.

Whether a motion to intervene is timely depends on (1) the

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stage of the underlying proceeding, (2) the prejudice to other

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parties, and (3) “the reason for and length of the delay.”

Id.

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Nor have Derivative Plaintiffs made any showing of
irreparable harm, except to the extent that they address harm in
discussing the merits of their application for leave to file a
complaint in intervention.
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Here, all three factors weigh against finding Dereivate Plaintiffs’

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application timely.

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parte application at the eleventh hour, a mere two days prior to a

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final settlement approval hearing that is the product of over two

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years of litigation and extensive settlement negotiations.

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possibility that intervention at this late date may disrupt a long-

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discussed, otherwise agreed-upon settlement also bears upon the

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prejudice to the parties to this suit.2

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Air California, 799 F.2d 535, 538 (9th Cir. 1986); Aleut Corp. v.

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First, Derivative Plaintiffs bring this ex

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See, e.g. Orange County v.

Tyonek Native Corp., 725 F.2d 527, 530 (9th Cir. 1984).
Nor have Derivative Plaintiffs shown any compelling

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explanation for their delay in seeking to intervene in this matter.

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As discussed above, Derivative Plaintiffs have known about the

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substance of the settlement proposal for over eight months.

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very least, Derivative Plaintiffs could have sought to intervene on

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November 19, 2012, but instead chose to improperly file motions in

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this action without first seeking to become parties to it.

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court’s relatively recently statement of the obvious, that

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Derivative Plaintiffs’ counsel is not counsel of record in this

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case, does not explain, let alone justify, Derivative Plaintiffs’

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lengthy delay.

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application is untimely.3

At the

This

Accordingly, Derivative Plaintiffs’ ex parte

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While the focus of this test is the prejudice to other
parties if intervention is allowed, the court also notes that the
parties here have also been prejudiced by Derivative Plaintiff’s
attempt to intervene via a last minute ex parte application, which
gives the parties here little opportunity to oppose Derivative
Plaintiffs’ intervention.
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It is also unclear to the court whether disposition of this
case would impair Derivative Plaintiff’s interests or whether those
(continued...)
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III. Conclusion

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For the reasons stated above, Derivative Plaintiffs’ Ex Parte

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Application for Leave to File Complaint in Intervention is DENIED.

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IT IS SO ORDERED.

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Dated: December 14, 2012
DEAN D. PREGERSON
United States District Judge

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(...continued)
interests are adequately represented. Derivative Plaintiffs’
proposed Complaint in Intervention makes no mention of any
potential harm to Derivative Plaintiffs, and seeks only
compensation to Derivative Plaintiffs’ counsel as a matter of
equity and fairness.
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