Green Fitness Equipment Company, LLC v. Precor Inc. et al
Filing
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ORDER DENYING MOTION TO INTERVENE by Judge Jon S. Tigar denying 33 Motion to Intervene. (wsn, COURT STAFF) (Filed on 6/19/2018)
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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GREEN FITNESS EQUIPMENT
COMPANY, LLC,
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Plaintiff,
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v.
ORDER DENYING MOTION TO
INTERVENE
Re: ECF No. 33
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PRECOR INC., et al.,
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United States District Court
Northern District of California
Case No. 18-cv-00820-JST
Defendants.
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Before the Court is David Morris’s motion to intervene into a lawsuit between Plaintiff
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Green Fitness Equipment Company, LLC (“GFE”) and Defendants Precor Inc. and 24 Hour
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Fitness USA Inc. ECF No. 33 at 1. On February 8, 2017, GFE sued Defendants for patent
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infringement, correction of inventorship, false advertising, California common law unfair
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competition, California statutory unfair competition, unjust enrichment, declaratory relief, and
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constructive trust and accounting. ECF No. 1 ¶¶ 36-85. Morris formerly worked as a sales
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representative for GFE. ECF No. 33-2 at 6. Morris seeks to intervene so he can sue Precor. Id.
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He contends that he would have “received substantial commission income” but for the “wrongful
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acts of Defendant Precor; which proximately resulted in the eleventh-hour cancellation by 24 Hour
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[Fitness] of its pending contract with GFE . . . .” Id. at 8. He seeks to bring California state law
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claims for false advertising, common law and statutory unfair competition, unjust enrichment, and
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constructive trust and accounting. ECF No. 33-1. Both Defendants and GFE oppose Morris’s
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motion to intervene. 1 ECF Nos. 35, 36.
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In Defendants’ opposition to Morris’s motion, Defendants assert that the Northern District of
California is not a proper venue. ECF No. 35 at 17. That question is not presently before the
Court and the Court does not address it here.
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I.
INTERVENTION AS OF RIGHT
To intervene as of right under Federal Rule of Civil Procedure 24(a),
(1) the applicant’s motion must be timely; (2) the applicant must
have a significantly protectable interest relating to the property or
transaction which is the subject of the action; (3) the applicant must
be so situated that the 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.
Freedom from Religion Found. v. Geithner, 644 F.3d 836, 841 (9th Cir. 2011) (citation and
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internal quotation marks omitted). “Failure to satisfy any one of the requirements is fatal to the
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application, and we need not reach the remaining elements if one of the elements is not satisfied.”
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Perry v. Proposition 8 Official Proponents, 587 F.3d 947, 950 (9th Cir. 2009) (citation omitted).
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United States District Court
Northern District of California
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Morris claims he has a significantly protectable “interest in recovering damages to
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compensate him for loss of the commission income he would have received but for Precor’s
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wrongful acts as alleged in the main action.” ECF No. 33-2 at 15. However, to trigger a right to
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intervene, “an economic interest must be concrete and related to the underlying subject matter of
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the action.” United States v. Alisal Water Corp., 370 F.3d 915, 919-20 (9th Cir. 2004) (citations
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omitted) (finding prospective collectability of a debt did not trigger a right to intervene because it
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was “several degrees removed” from “backbone” of environmental enforcement action).
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Here, Morris’s potential commission income is too far removed from the essence of this
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intellectual property dispute. See id. To permit Morris to sue Precor in this case “would create an
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open invitation for virtually any creditor . . . to intervene in a lawsuit where damages might be
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awarded.” Id. at 920 (citation omitted); see also, Hawaii-Pac. Venture Capital Corp. v. Rothbard,
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564 F.2d 1343, 1346 (9th Cir. 1977) (“Logically extended, the appellants’ contention would give
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the right to intervene in the class action suit to all persons with potential claims against any party
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in the class action suit on the ground that the outcome of the class action suit may increase or
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decrease the collectability of their claims.”)
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Morris contends he has a “direct, significant, and protectable property interest required for
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intervention under Rule 24(a).” ECF No. 33-2 at 15. He cites several cases in support of his
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argument. These cases are inapposite because in each of them the putative intervenor had a more
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direct interest in the underlying controversy. For example, in Californians For Safe &
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Competitive Dump Truck Transp. v. Mendonca, the Ninth Circuit held that a union was properly
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permitted to intervene in a suit about the enforceability of the prevailing wage law, because union
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“members had a ‘significant interest’ in receiving the prevailing wage for their services as opposed
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to a substandard wage.” 152 F.3d 1184, 1189–90 (9th Cir. 1998). See also Black & Veatch Corp.
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v. Modesto Irr. Dist., No. 1:11-CV-00695-LJO, 2011 WL 4842319, at *8 (E.D. Cal. Oct. 12,
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2011) (intervenor city had “interest in receiving a product for which it contracted, both free of
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defects and fully functional,” which was the same product at issue in the underlying suit);
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Commercial Dev. Co. v. Abitibi-Consol. Inc., No. C07-5172RJB, 2007 WL 2900191, at *4 (W.D.
Wash. Oct. 1, 2007) (real estate agent had interest in defending herself from potential liability
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United States District Court
Northern District of California
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because Defendants in underlying suit would seek contribution from her if they lost); Maclellan
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Indus. Servs. v. Local Union No. 1176, No. C06-04021 MJJ, 2006 WL 2884410, at *5 (N.D. Cal.
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Oct. 10, 2006) (union permitted to intervene where separate union’s case could affect intervening
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union’s contract rights).
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The Court finds that Morris does not have a significantly protectable interest relating to the
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subject of this litigation. Thus, even assuming that Morris met the other Rule 24(a) requirements,
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the Court must deny his motion to intervene as of right.
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II.
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PERMISSIVE INTERVENTION
“Permissive intervention is committed to the broad discretion of the district court . . . .”
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Orange Cty. v. Air California, 799 F.2d 535, 539 (9th Cir. 1986). Federal Rule of Civil Procedure
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24(b) “requires (1) an independent ground for jurisdiction; (2) a timely motion; and (3) a common
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question of law and fact between the movant’s claim or defense and the main action.” Freedom
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from Religion Found., 644 F.3d at 843 (citations omitted). “Where a putative intervenor has met
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these requirements, the court may also consider other factors in the exercise of its discretion,
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including ‘the nature and extent of the intervenors’ interest’ . . . .” Perry, 587 F.3d at 955 (quoting
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Spangler v. Pasadena City Bd. of Educ., 552 F.2d 1326, 1329 (9th Cir. 1977)). Additionally, “the
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court must consider whether the intervention will unduly delay or prejudice the adjudication of the
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original parties’ rights.” Fed. R. Civ. P. 24(b)(3).
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Even assuming Morris had satisfied the threshold prerequisites, the nature and extent of
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Morris’s interest is speculative and several degrees removed from the underlying case. Even if
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GFE prevails against Precor, Morris’ claim will be far from established. He will still need to show
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that Precor’s conduct was a substantial factor in his inability to close certain sales; that GFE would
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have paid him a commission on those sales; and the amount of that commission. In fact, it is
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possible that the two sets of claims will not overlap at all. See Med. Advocates for Healthy Air v.
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U.S. E.P.A., No. CV 11-3515 SI, 2011 WL 4834464, at *4-*5 (N.D. Cal. Oct. 12, 2011) (after
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finding that intervenor had not demonstrated a significantly protectable interest, denying
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permissive intervention because the intervenor’s interests were “too attenuated”). Additionally,
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because Morris does not have any significantly protectable interest in this intellectual property
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United States District Court
Northern District of California
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dispute, allowing intervention would unnecessarily complicate this litigation’s case management.
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See Donnelly v. Glickman, 159 F.3d 405, 412 (9th Cir. 1998) (citation omitted) (denying
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permissive intervention when “allowing intervention would only serve to undermine the efficiency
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of the litigation process.”).
Accordingly, the Court denies Morris’s motion for permissive intervention.
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III.
RULE 11 SANCTIONS
GFE “requests this Court to find Morris’s motion to be frivolous and sanctionable under
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Fed. R. Civ. P. 11 because it is not supported by any law or evidence.” ECF No. 36 at 3. “A
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motion for sanctions must be made separately from any other motion and must describe the
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specific conduct that allegedly violates Rule 11(b).” Fed. R. Civ. P. 11(c)(2); See Campos v.
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Colvin, No. 13-CV-03327-SI, 2015 WL 2266692, at *4 (N.D. Cal. May 14, 2015) (denying
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request for sanctions because movant failed to file a separate motion); Gottschalk v. City & Cty. of
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San Francisco, 964 F. Supp. 2d 1147, 1168 (N.D. Cal. 2013) (denying motion for sanctions in part
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because movant failed to “state a basis for sanctionable conduct.”).
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GFE neither filed a separate motion nor specified conduct that violated Rule 11(b). It
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requests sanctions as part of its opposition to Morris’s motion, in one conclusory sentence, and
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without providing a factual basis. See ECF No. 36 at 3. The Court denies the request.
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CONCLUSION
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Morris’s motion to intervene as of right, his alternative motion for permissive intervention,
and GFE’s request for sanctions are all DENIED.
IT IS SO ORDERED.
Dated: June 19, 2018
______________________________________
JON S. TIGAR
United States District Judge
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United States District Court
Northern District of California
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