Hallisey v. Zuckerberg et al

Filing 67

ORDER DENYING 35 MOTION TO INTERVENE. Signed by Judge Haywood S. Gilliam, Jr. on 7/20/2018. (ndrS, COURT STAFF) (Filed on 7/20/2018)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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In Re Facebook, Inc. Shareholder Derivative

Case No. 18-cv-01792-HSG

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Privacy Litigation

ORDER DENYING MOTION TO
INTERVENE

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Re: Dkt. No. 35

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United States District Court
Northern District of California

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Pending before the Court is the motion to intervene filed by Karen Sbriglio. Dkt. No. 35

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(“Mot.”). For the following reasons, the Court DENIES the motion.
I.

LEGAL STANDARD
Federal Rule of Civil Procedure 24(a) governs intervention as of right. The rule is

“broadly interpreted in favor of intervention,” and requires a movant to show that
(1) the intervention application is timely; (2) the applicant has a
significant protectable interest relating to the property or transaction
that is the subject of the action; (3) the disposition of the action may,
as a practical matter, impair or impede the applicant’s ability to
protect its interest; and (4) the existing parties may not adequately
represent the applicant’s interest.

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Citizens for Balanced Use v. Mont. Wilderness Ass’n, 647 F.3d 893, 897 (9th Cir. 2011) (citing

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Prete v. Bradbury, 438 F.3d 949, 954 (9th Cir. 2006)).

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Courts deciding motions to intervene as of right are “guided primarily by practical

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considerations, not technical distinctions.” See id. (quoting Sw. Ctr. for Biological Diversity v.

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Berg, 268 F.3d 810, 818 (9th Cir. 2001)); see also U.S. v. City of L.A., 288 F.3d 391, 397 (9th Cir.

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2002) (stating that “equitable considerations” guide determination of motions to intervene as of

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right) (citation omitted).

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Federal Rule of Civil Procedure 24(b) governs permissive intervention. The Ninth Circuit

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has held that:

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[A] court may grant permissive intervention where the applicant for
intervention shows (1) independent grounds for jurisdiction; (2) the
motion is timely; and (3) the applicant's claim or defense, and the
main action, have a question of law or a question of fact in common
. . . As with motions for intervention as of right, [a] finding of
untimeliness defeats a motion for permissive intervention.

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League of United Latin Am. Citizens v. Wilson, 131 F.3d 1297, 1308 (9th Cir. 1997)

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(internal citations and quotation marks omitted). “A motion for permissive intervention pursuant

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to Rule 24(b) is directed to the sound discretion of the district court.” San Jose Mercury News,

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Inc. v. U.S. Dist. Court--N. Dist. (San Jose), 187 F.3d 1096, 1100 (9th Cir. 1999).
The Court addresses each factor in turn.

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II.

INTERVENTION AS OF RIGHT

United States District Court
Northern District of California

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A.

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Ms. Sbriglio’s motion was timely: she filed the motion nine days after the parties filed the

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Stipulation to Consolidate Related Actions, Appoint Lead Counsel, and Related Matters, Dkt. No.

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33 (“Consolidation Stipulation”), and this modest delay was reasonable under the circumstances

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and did not substantially prejudice the parties. See Cal. Dep’t of Toxic Substances Control v.

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Commercial Realty Projects, Inc., 309 F.3d 1113, 1119 (9th Cir. 2002) (“Three factors should be

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evaluated to determine whether a motion to intervene is timely: (1) the stage of the proceeding at

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which an applicant seeks to intervene; (2) the prejudice to other parties; and (3) the reason for and

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length of the delay.”); Smith v. L.A. Unified Sch. Dist., 830 F.3d 843, 858 (9th Cir. 2016) (“The

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crucial date for assessing the timeliness of a motion to intervene is when proposed intervenors

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should have been aware that their interests would not be adequately protected by the existing

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parties”) (quotation marks omitted).

Timeliness

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B.

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Ms. Sbriglio’s stated interest is:

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Significant Protectable Interest

[T]he limited purpose of objecting to the [Consolidation Stipulation]
requesting, among other things, consolidation of the . . . five (5)
derivative actions currently pending before this Court. Facebook’s
Restated Certificate of Incorporation sets forth in Article IX that
Delaware is the exclusive forum for shareholder derivative suits. As
drafted, the [Consolidation Stipulation] interfere[s] with the
Delaware Court of Chancery’s jurisdiction over the action that [Ms.
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Sbriglio] filed in Delaware and her right to prosecute her action in
Delaware.

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Mot at 1.

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Ms. Sbriglio has no significant protectable interest in the Consolidation Stipulation or in

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the outcome of the cases before this Court. “[A] party has a sufficient interest for intervention

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purposes if it will suffer a practical impairment of its interests as a result of the pending litigation.”

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California ex rel. Lockyer v. United States, 450 F.3d 436, 441 (9th Cir. 2006)). Ms. Sbriglio

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suffers no practical impairment of her interests based on the Consolidation Stipulation as written,

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because, on its face, it does not apply to her case. See Dkt. No. 33, Proposed Order ¶ 6 (“This

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Order shall apply to each case that is related to the Consolidated Action and to any shareholder
derivative action arising out of the same or substantially same transactions or events as the Related

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United States District Court
Northern District of California

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Actions that is subsequently filed in, remanded to, or transferred to this Court.”).

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Further, Article IX of Facebook’s Certificate of Incorporation states that “[u]nless the

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corporation consents in writing to the selection of an alternative forum, the Court of Chancery of

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the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum

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for (1) any derivative action or proceeding brought on behalf of the corporation.” Mot., Ex. A at

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12 (emphasis added). The right to enforce this clause belongs to Facebook alone. Ms. Sbriglio

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has no protectable interest in whether (or not) Facebook asserts that right with respect to the cases

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in this Court.

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C.

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Likewise, the disposition of this action without the requested intervention would not

Disposition Without Ms. Sbriglio

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hamper the protection of Defendant Facebook’s interest in enforcing any forum-related rights, or

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any of Ms. Sbriglio’s rights. Ms. Sbriglio has not articulated any effect her intervention would

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have on Defendant Facebook’s ability to assert (or waive) its rights under Article IX. See Sw. Ctr.

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for Biological Diversity v. Berg, 268 F.3d 810, 822 (9th Cir. 2001) (“[I]f an absentee would be

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substantially affected in a practical sense by the determination made in an action, he should, as a

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general rule, be entitled to intervene.” (quotation marks omitted)). The Consolidation Stipulation,

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as written, has no effect on Ms. Sbriglio’s rights in the Delaware lawsuit. The Court therefore

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finds that Ms. Sbriglio has failed to meet the requirements for intervention as of right, and thus
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need not reach the question of adequacy of representation.

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III.

PERMISSIVE INTERVENTION
“District courts have discretion to permit an entity to intervene if the entity raises a claim

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that has a legal or factual issue or issues in common with the underlying action. In exercising their

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discretion, courts must consider whether intervention will unduly delay or prejudice the existing

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parties.” In re Benny, 791 F.2d 712, 722 (9th Cir. 1986) (internal citations omitted).
Here, the Court finds that intervention by Ms. Sbriglio would unduly delay the presently

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related actions by inserting an unrelated issue into an otherwise completed stipulation to

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consolidate these cases. To the extent that Facebook intends to seek transfer to Delaware under
Article IX, it can assert those rights in a motion to dismiss filed after consolidation. The

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United States District Court
Northern District of California

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consolidation of the presently related actions will conserve the resources of the Court and the

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parties in the event such a motion is filed.

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IV.

CONCLUSION

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For the forgoing reasons, Ms. Sbriglio’s motion to intervene is DENIED.

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IT IS SO ORDERED.

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Dated: 7/20/2018
______________________________________
HAYWOOD S. GILLIAM, JR.
United States District Judge

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