Turner v. Efinancial, LLC
Filing
57
ORDER granting 27 Motion to Intervene by Magistrate Judge Gordon P. Gallagher on 9/5/18. (GPG)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Gordon P. Gallagher, United States Magistrate Judge
Civil Action No. 18-cv-292-CMA-GPG
JENNIFER TURNER,
Plaintiff,
v.
EFINANCIAL, LLC,
Defendant.
ORDER GRANTING ALL WEBS’S MOTION TO INTERVENE (ECF #27)
This matter comes before the Court on All Web’s motion to intervene (ECF #27) 1,
(which was referred to this Magistrate Judge (ECF #33)) 2, Efinancial’s notice of nonopposition
(ECF #35), Plaintiff’s response (ECF #44), and All Web’s reply (ECF #50). The Court has
reviewed each of the aforementioned documents and any attachments. The Court has also
considered the entire case file, the applicable law, and is sufficiently advised in the premises.
1
“(ECF #27)” is an example of the convention I use to identify the docket number assigned to a specific paper by the Court’s
case management and electronic case filing system (CM/ECF). I use this convention throughout this Order.
2
Any party may object to this non-dispositive Order within fourteen (14) days. Fed.R.Civ.P. 72(a).
1
Oral argument is not necessary to resolve this discrete issue. For the following reasons, I
GRANT the motion.
Plaintiff Turner filed suit alleging a claim for violation of the Telephone Consumer
Protection Act (TCPA) 47 U.S.C. § 227 (complaint (ECF #1)). Plaintiff claims that between
August 14, 2017 and November 2, 2017, she received five (5) text messages on her mobile
phone from Efinancial with regard to a life insurance request (ECF #1, pp. 4-5). Plaintiff states
that “[d]espite what the text messages suggest, Plaintiff did not request information on life
insurance from Efinancial. Plaintiff explicitly denies she in any way sought information from
Efinancial” (ECF #1, p. 5, para. 22). Plaintiff further states that she “had no relationship with
Defendant and did not know why she received a message purporting to be from Defendant.
Plaintiff had not provided her number to Defendant” (ECF #1, p. 5, para. 28). Additionally,
Plaintiff states “Defendant did not make the requisite disclosures to Plaintiff regarding the use of
an ATDS and did not obtain Plaintiff’s prior express written consent to receive text messages for
any purpose” (ECF #1, pa. 5, para. 29).
All Web Leads, Inc. is a corporation which “sells insurance leads to insurance providers”
(motion to intervene (ECF #27, p. 2, para. 1).
A consumer visits All Web’s website,
www.insurancequaotes.com, provides contact information which includes a telephone number,
agrees to the future contact from unnamed but solicited insurance companies, and agrees to
arbitration (ECF #27, pp. 2-3, paras. 2-7).
According to All Web, Plaintiff visited the
aforementioned website, consented to contact, agreed to arbitration, and provided her contact
information (ECF #27, p. 4, paras. 8-10). It is on this basis that All Web now seeks to intervene.
Plaintiff opposes.
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I.
Non-dispositive motion:
I determine that this is a non-dispositive order as I equate granting a motion to intervene
to granting a motion to amend. The jurisdiction and powers of magistrate judges are governed
by 28 U.S.C. § 636, and limited by the Constitution. U.S. Const. Art. III, § 1. 28 U.S.C. §
636(b) establishes that magistrate judges may hear and determine any pretrial matters pending
before the court, save for eight excepted, dispositive motions. Magistrate judges may issue orders
as to non-dispositive pretrial matters. District courts review such orders under a “clearly
erroneous or contrary to law” standard of review. 28 U.S.C. § 636(b)(1)(A).
While magistrate judges may hear dispositive motions, they may only make proposed
findings of fact and recommendations, and district courts must make de novo determinations as
to those matters if a party objects to the magistrate's recommendations. Id. § 636(b)(1)(B) & (C).
*3 The Tenth Circuit Court of Appeals has provided guidance for determining whether a motion
is dispositive or non-dispositive. In Ocelot Oil Corp. v. Sparrow Industries, the Tenth Circuit
determined that the magistrate judge's order that imposed Rule 37 sanctions aimed at striking
plaintiff's pleadings was dispositive, rather than non-dispositive. 847 F.2d 1458, 1461–63 (10th
Cir. 1988). The court reasoned that although discovery is a pretrial matter, and magistrate judges
have general authority to order discovery sanctions, they may not do so if those sanctions fall
within the eight dispositive motions excepted. Id. The court considered the res judicata effect of
the magistrate's order, and concluded that the involuntary dismissal of plaintiff's pleadings with
prejudice effectively dismissed plaintiff's action. Thus, the court concluded that the magistrate
judge's order constituted the involuntary dismissal of plaintiff's action within section
636(b)(1)(A), and was beyond the power of the magistrate judge. Id.
3
Here, granting All Web’s motion to intervene does not remove any claim or defense.
Therefore, the motion to intervene is non-dispositive, and the court issues the following order in
accordance with this finding. See, e.g., id.; see also, Rhodes v. Ohse, 1998 WL 809510, *1
(N.D.N.Y.1998) (noting that § 636(b)(1)(A) does not list motions to intervene as dispositive;
therefore, a motion to intervene is non-dispositive); U.S. v. W.R. Grace & Co.-Conn., 185 F.R.D.
184 (D.N.J., 1999) (noting that in the Third Circuit, a magistrate judge may hear and determine a
motion to intervene, as a non-dispositive, pretrial motion, even without consent of parties); U.S.
v. Brooks, 163 F.R.D. 601 (D.Or.,1995) (treating a motion to intervene as a non-dispositive
pretrial ruling, reviewable under clearly erroneous or contrary to law standard); Cuenca v. Univ.
of Kansas, 205 F. Supp.2d 1226, 1228 (D.Kan.2002) (ruling on a motion to amend is a nondispositive decision, particularly when the Magistrate judge grants the motion). “Orders granting
leave to amend are non-dispositive as they do not remove claims or defenses of a party.” Stetz v.
Reeher Enterp., Inc., 70 F.Supp.2d 119, 120 (N.D.N.Y. 1999).
II.
Legal standard for intervention-as of right:
Federal Rule of Civil Procedure 24 governs the intervention of non-parties. Under Rule
24(a)(2), non-parties may intervene in a pending lawsuit as of right if:
(1) the application is timely; (2) the applicants claim an interest relating to the
property or transaction which is the subject of the action; (3) the applicants’
interest may as a practical matter be impaired or impeded; and (4) the applicants’
interest is not adequately represented by existing parties.
Western Energy Alliance v. Zinke, 877 F.3d 1157, 1164 (10th Cir. 2017) (brackets omitted).4
“Failure to satisfy even one of these requirements is sufficient to warrant denial of a motion to
intervene as of right.” Maynard v. Colo. Supreme Court Office of Attorney Regulation Counsel,
4
No. 09–cv–02052–WYD–KMT, 2010 WL 2775569, at *3 (D. Colo. July 14, 2010) (quoting
Commodity Futures Trading Comm’n v. Heritage Capital Advisory Servs., Ltd., 736 F.2d 384,
386 (7th Cir. 1984)).
1.
Timeliness:
“The timeliness of a motion to intervene is assessed in light of all the circumstances,
including the length of time since the applicant knew of his interest in the case, prejudice to the
existing parties, prejudice to the applicant, and the existence of any unusual circumstances.”
Utah Ass’n of Counties v. Clinton, 255 F.3d 1246, 1250 (10th Cir. 2001). In assessing prejudice,
courts look to the “prejudice caused by the intervenors’ delay–not by the intervention itself.” Id.
at 1251.
All Web argues that its motion is timely in that the Complaint was filed 2/6/2018, that All
Web filed its motion to intervene “shortly after it learned of the present action,” and that the
matter is in the early stages of litigation thus resulting in no prejudice (ECF #27, pp. 6-7).
Plaintiff opposes, arguing that the motion to intervene (filed 6/29/2018) is untimely and that it
will interrupt the course of proceedings which may have included early summary judgment and
might force Plaintiff into arbitration (Plaintiff’s response (ECF #44, pp. 6-7)). Plaintiff cites
NAACP v. New York, 413 U.S. 345, 369 (1973) (a voting rights act case with “rapidly
approaching primary elections . . .[where] the granting of a motion to intervene possessed the
potential for seriously disrupting the State’s electoral process . . .”) for the proposition that
intervention should have occurred more rapidly in this action.
I cannot say that “in light of all the circumstances,” see Clinton, 255 at 1250, the motion
should be denied for lack of timeliness. First, the possible involvement of All Web is not a bolt
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from the blue for Plaintiff. As Plaintiff acknowledges in the response, All Web demanded her
participation in arbitration on May 25, 2018 (less than thirty days after the answer was filed
(ECF #26 (4/30/2018)). Second, while the parties sought and received an early dispositive
motion deadline of 7/31/2018 for “disclosure/consent related motions” in the scheduling order
(ECF #23, p. 8), no such motions have yet been filed (deadline continued to 9/30/2018(ECF
#55)) and a regular summary judgment motion deadline was not set. Finally, as to the argument
that granting this motion may force Plaintiff into arbitration, that has nothing to do with
timeliness but instead goes to the equities of the matter. A motion to compel arbitration has been
filed (ECF #45). That motion will be determined based on the law, facts and circumstances
contained within and not by a fiat denial due to a timeliness argument in an intervention motion.
For the foregoing reasons, I find the motion timely.
2 & 3. Protected interest:
Under Rule 24(a)(2), a party seeking to intervene as of right must “claim[ ] an interest
relating to the property or transaction that is the subject of the action.” Although “the contours of
the interest requirement have not been clearly defined,” Utah Ass’n of Counties, 255 F.3d at
1251, courts in this circuit have typically considered whether the proposed intervenor’s interest is
“direct, substantial, and legally protectable.” Coalition of Ariz./N.M. Counties for Stable
Economic Growth v. Dep’t of Interior, 100 F.3d 837, 840, 842 (10th Cir. 1996). This inquiry is
highly fact-specific. Western Energy Alliance, 877 F.3d at 1165. “A protectable interest is one
that would be impeded by the disposition of the action.” Id. (internal quotation marks omitted).
While “[t]he threshold for finding the requisite legally protected interest is not high,” Am.
Ass’n of People with Disabilities, 257 F.R.D. at 246, “an intervenor must specify a particularized
6
interest” in the litigation and may not “raise interests or issues that fall outside of the issues
raised” by the parties. Id. (citing Chiles v. Thornburgh, 865 F.2d 1197, 1212 (11th Cir. 1989);
Deus v. Allstate Ins. Co., 15 F.3d 506, 525 (5th Cir. 1994)).
Rule 24(a)(2) also requires proposed intervenors “to demonstrate that the disposition of
[the] action may as a practical matter impair or impede their ability to protect their interest.”
Utah Ass’n of Counties, 255 F.3d at 1253. This element “is not separate from the question of
existence of an interest.” Id. (quoting Natural Res. Def. Council v. U.S. Nuclear Regulatory
Comm’n, 578 F.2d 1341, 1345 (10th Cir. 1978)). Thus, although the burden to establish this
element is “minimal” and only requires a showing “that impairment of [a] substantial legal
interest is possible,” id., intervenors who cannot demonstrate that they have a protectable interest
in the litigation will not be able to satisfy the impairment of interest requirement. See Am. Ass’n
of People with Disabilities, 257 F.R.D. at 254 (finding that, because a proposed intervenor failed
to demonstrate a protectable interest, she also failed to establish that disposition of the action
would impair or impede her ability to protect her interest).
All Web essentially asserts that its protected interest is its entire business model (ECF
#27, p. 7). All Web contracts with various insurance companies to provide them with leads from
interested consumers who have expressed an interest in the insurance product, have provided
contact information, and have agreed to arbitration. On that basis, All Web-with consumer
permission-passes the information on to the downstream insurance provider, in this case
Efinancial. All Web is in the business of providing verified, safe, and agreed upon contact
information. Efinancial is in the business of selling the insurance. The two are separate legal
entities with potentially divergent interests.
7
To state that allowing Plaintiff to bring suit against Efinancial without allowing All Web
to intervene could destroy All Web’s business and business model is not overly dramatic. It is
highly logical to derive that should a company like Efinancial find out it is subject to suit,
without the protections and arbitration agreement it thought All Web was providing, Efinancial
would likely determine to leave All Web in the dust and find some other way of obtaining
customer leads.
Plaintiff argues that it has not alleged any wrongdoing by All Web (ECF #44, p. 7). This
is nonsensical. Plaintiff has alleged a wrong doing and argues in her complaint that she has no
idea why she received this contact, never asked for it, and it is a TCPA violation. While Plaintiff
should and will be afforded a full and fair opportunity to press her suit, Defendant(s) deserve no
less an opportunity themselves. If the facts are as All Web asserts-something to be decided
another day-this assertion is fundamentally unfair to both Efinancial and All Web. The facts are
the facts. Allowing suit of one entity because the perceived facts better benefit Plaintiff without
allowing the intervention of the real party at interest is exactly the type of machination Rule 24 is
designed to stop.
The repose the law seeks cannot be based on a partial and inadequate
determination of the circumstances as it would, were the motion to intervene denied.
Plaintiff’s final argument on this front is that the attempted intervention is not because
All Web wants to protect its own interests but instead because it wants to aid Efinancial (ECF
#44, p. 7). This argument misses the point in that the two are inextricably intertwined. Of
course Efinancial has an interest in avoiding a finding that it violated the TCPA and the
concomitant financial penalty. This is particularly true and even more important if Plaintiff is
able to prove up the class it asserts exists. See complaint, ECF #1, pp. 7-10. But, as stated
above, All Web has an interest as well, an interest that is intertwined and divergent. Should
8
Efinancial stand alone as Defendant and should it lose, as stated above, it may find a different
business model which does not include All Web. Or perhaps Efinancial may go back against All
Web for some breach of contract or under an assumption/subrogation theory.
All Web has a direct interest in this action and a legally protectable interest that it must
be afforded an opportunity to protect by allowing intervention.
4.
Adequacy of representation:
Under Rule 24(a)(2), intervenors must also demonstrate that they are not adequately
represented in the litigation. The burden of showing inadequate representation is “minimal.”
Western Energy Alliance v. Zinke, 877 F.3d 1157, 1168 (10th Cir. 2017) (bracket omitted).
Accordingly, “the possibility of divergence of interest need not be great in order” for the
intervenors to satisfy this element. Id.
As stated above, Efinancial and All Web are separate and distinct legal entities with
different and divergent interests. They have no obligation to protect one another. All Web wants
to protect its ability to conduct this sort of business, e.g., to get and provide verified leads to
downstream insurance providers, and to have an arbitration agreement. This is a different
interest from Efinancial's alleged TCPA violation, which is all it wants to protect itself from.
While the two are certainly intertwined, All Web should be allowed to protect its contact-which
includes multiple other downstream insurance companies-and need not rely on Efinancial to do
so. The minimal burden has been met to show that Efinancial cannot adequately represent All
Web in this action.
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III.
Permissive intervention:
Based on the Court’s determination that All Web must be allowed to intervene as of right,
the Court determines that there is no need to address permissive intervention at this time.
Dated at Grand Junction, Colorado, this September 5, 2018.
Gordon P. Gallagher
United States Magistrate Judge
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