The Eclipse Group LLP v. Target Corporation et al

Filing 57

ORDER granting 49 Motion for Permissive Intervention. Signed by Judge Janis L. Sammartino on 9/15/2016. (kcm)

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1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 SOUTHERN DISTRICT OF CALIFORNIA 9 10 11 THE ECLIPSE GROUP LLP, a California limited-liability partnership, 14 15 ORDER GRANTING MOTION FOR PERMISSIVE INTERVENTION Plaintiff, 12 13 Case No.: 15cv1411-JLS-BLM v. (ECF No. 49) TARGET CORPORATION, et al., Defendants. 16 17 Presently before the court is intervenor applicant Stephen M. Lobbin’s Ex Parte 18 Motion to Intervene (Interv. Mot. II) (ECF No. 49). For the reasons stated below, the Court 19 GRANTS Lobbin’s Intervention Motion. 20 BACKGROUND 21 This case arises out of a fee dispute between plaintiff law firm The Eclipse Group 22 LLP (Plaintiff) and Defendants who, among others, are Plaintiff’s former clients. (Compl. 23 ¶¶ 12, 17, 21, 26, ECF No. 1.) Movant attorney Stephen Lobbin stated in his first Motion 24 to Intervene, (ECF No. 38), that he worked with Plaintiff as an independent contractor, and 25 that he “acted as lead (and, most often, sole) counsel during the entire course of the 26 representations that are the subject and focus of this action.” (Id. at 2–3 & n.2.) Based on 27 his work in these representations, Lobbin states that he is entitled to a significant portion 28 of the sums Plaintiff seeks in this case, but that “Plaintiff has expressly repudiated 1 15cv1411-JLS-BLM 1 [Lobbin’s] entitlement to his contractual share of the unpaid attorney fees to be recovered 2 from the Defendants.” (Id. at 3.) Accordingly, Lobbin seeks to intervene in this matter to 3 protect his interests. 4 On May 26, 2016, the Court issued an Order denying with prejudice Lobbin’s 5 motion to intervene as of right pursuant to Federal Rule of Civil Procedure 24(a), and 6 denying without prejudice Lobbin’s motion for permissive intervention pursuant to Federal 7 Rule of Civil Procedure 24(b). (First Interv. Order) (ECF No. 48.) Lobbin has again moved 8 for permissive intervention, addressing the concerns the Court expressed in its First 9 Intervention Order. The Court now considers Lobbin’s current motion. 10 11 12 13 14 15 16 17 18 LEGAL STANDARD Federal Rule of Civil Procedure 24(b) provides the basis for permissive intervention. Applicants seeking intervention under Rule 24(b) must meet three criteria: (1) the movant must show an independent ground for jurisdiction; (2) the motion must be timely; and (3) the movant’s claim or defense and the main action must have a question of law and fact in common. Venegas v. Skaggs, 867 F.2d 527, 529 (9th Cir. 1989), aff’d sub nom. Venegas v. Mitchell, 495 U.S. 82 (1990); see also Donnelly v. Glickman, 159 F.3d 405, 412 (9th Cir. 1998) (citing Nw. Forest Res. Council v. Glickman, 82 F.3d 825, 839 (9th Cir. 1996), as amended 19 on denial of reh’g (May 30, 1996)). “Permissive intervention is committed to the broad 20 discretion of the district court.” Cty. of Orange v. Air Cal., 799 F.2d 535, 539 (9th Cir. 21 1986) (citing United States v. $129,374 in U.S. Currency, 769 F.2d 583, 586 (9th Cir. 22 1985)). “In exercising its discretion, the court must consider whether the intervention will 23 unduly delay or prejudice the adjudication or the original parties’ rights.” Fed. R. Civ. P. 24 25 26 27 24(b)(3). ANALYSIS The Court’s First Intervention Order explained that Lobbin’s first motion seeking permissive intervention satisfied criterions two and three. (First Interv. Order 28–29.) So 28 2 15cv1411-JLS-BLM 1 does Lobbin’s present motion. It is timely because the Court has only issued one 2 substantive ruling before this Order, and, procedurally, this case is in its infancy. It is also 3 clear that Lobbin has claims in common with Plaintiff—in fact, they are the same claims, 4 he just purports to be entitled to a portion of the recovery. The threshold requirement that 5 there be “a claim or defense that shares with the main action a common question of law or 6 fact” is therefore also satisfied. See Fed. R. Civ. P. 24(b)(1)(B). 7 The remaining requirement Lobbin must show in order to be entitled to permissive 8 intervention is an independent ground for subject matter jurisdiction. Lobbin meets this 9 requirement with his present motion. 10 Federal courts have original subject-matter jurisdiction over civil actions in which 11 there is complete diversity and the amount in controversy exceeds $75,000. See 28 U.S.C. 12 § 1332(a)(1); Naffe v. Frey, 789 F.3d 1030, 1039 (9th Cir. 2015) (citing McNutt v. Gen. 13 Motors Acceptance Corp. of Ind., 298 U.S. 178, 189 (1936)). Under the “legal certainty” 14 test, the amount in controversy is met when the sum the plaintiff claims “is apparently 15 made in good faith.” Naffe, 789 F.3d at 1039–40 (quoting St. Paul Mercury Indem. Co. v. 16 Red Cab Co., 303 U.S. 283, 288–89 (1938)). 17 In the present motion Lobbin abandons several of his original claims, leaving only 18 two: (1) breach of quasi-contract against Defendants Target and Kmart; and (2) quantum 19 meruit against Defendants Target and Kmart. (Interv. Mot. II 4.) Lobbins is a resident and 20 domiciliary of California; Target is incorporated in and maintains its principal place of 21 business in Minnesota; and Kmart is incorporated in Michigan and maintains its principal 22 place of business in Illinois. Accordingly, the complete diversity requirement is met. See 23 28 U.S.C. § 1332(c) (stating that a corporation shall be deemed to be a citizen of every 24 State where it is incorporated and every State where it has its principal place of business). 25 The amount in controversy requirement is all that remains. Lobbin claims at least 26 $150,000 against Target and $90,000 against Kmart. These figures derive from Lobbin’s 27 “conservative estimates” of the alleged 60% fee he is owed on the sums Plaintiffs seek in 28 this action. Further, the underlying past-due sums Plaintiff seeks are only slightly lower 3 15cv1411-JLS-BLM 1 than those Lobbin uses to calculate these figures. (Compare Claims of Intervenor Stephen 2 M. Lobbin 8, ECF No. 49-2, with Pl.’s First Am. Compl. 7–8, ECF No. 50.) Although 3 Plaintiff asserts that a compensation contract between Plaintiff and Lobbin limits to below 4 60% the amount of recovery to which Lobbin is entitled—either 45% or 55% of the past- 5 due amounts (see Pl.’s Mot. In Opp’n 6–7, ECF No. 51)—Plaintiff has not proved to a 6 legal certainty that Lobbin’s calculations should not control. Plaintiff does not specify 7 whether the 45% or 55% provision in the alleged contract controls the fee arrangement in 8 the underlying disputes.1 Further, Lobbin’s proposed claims are equitable causes of action 9 against Defendants to whom Lobbin alleges any purported contract between Lobbin and 10 Plaintiff would be inapplicable. Accordingly, because Lobbin’s claims appear to be made 11 in good faith and Plaintiff has not proven to a legal certainty that Lobbin’s calculations are 12 not valid, the amount in controversy is met. Subject matter jurisdiction is therefore 13 established. 14 Finally, there is no indication that granting Lobbin’s motion to intervene will unduly 15 delay or prejudice the adjudication of the original parties’ rights. Although adding an 16 additional litigant will necessarily add complexity to the case, Lobbin’s shared interest in 17 the claims against Defendants indicates that the case should continue to adjudication in a 18 timely fashion. Further, if Lobbin’s intervention is denied he likely will bring his own 19 lawsuit asserting nearly identical claims against Defendants for the same work forming the 20 basis of Plaintiff’s claims. Given these circumstances, any potential delay arising from 21 Lobbin’s intervention is therefore not undue. See Venegas, 867 F.2d at 531 (noting that 22 “judicial economy is a relevant consideration in deciding a motion for permissive 23 intervention” and that in present case district court was “in the best position to decide [the 24 relevant] issues” because “[n]o novel or difficult issues of state law appear[ed] to be at 25 26 27 28 1 The only scenario in which the amount in controversy requirement would not be met is if Lobbin’s fees are calculated at 45%, which would be insufficient to support jurisdiction against Kmart. Calculating Lobbin’s alleged 60% fee using Plaintiff’s lower past-due estimates would still satisfy the amount in controversy requirement against both Target and Kmart, (see Pl.’s First Am. Compl. ¶ 38, ECF No. 50), as would calculating Lobbin’s fee at 55% using Plaintiff’s lower past-due estimates. 4 15cv1411-JLS-BLM 1 issue . . . , and the district court [wa]s well acquainted with the underlying litigation and 2 the parties to this fee dispute”) (citing Austell v. Smith, 634 F. Supp. 326, 335 (W.D.N.C. 3 1986); Gordon v. Forsyth Cty. Hosp. Auth., Inc., 409 F. Supp. 708, 718–19 (M.D.N.C. 4 1976), aff'd in part, vacated in part 544 F.2d 748 (4th Cir.1976)). 5 CONCLUSION 6 For the foregoing reasons, the Court GRANTS Lobbin’s Intervention Motion. 7 IT IS SO ORDERED. 8 Dated: September 15, 2016 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 15cv1411-JLS-BLM

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