Askin v. Quaker Oats Company, The
Filing
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MEMORANDUM Opinion and Order. Signed by the Honorable Young B. Kim on 10/20/2011. (aac, )
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
DANIEL ASKIN, on behalf of himself
and all others similarly situated,
Plaintiff,
v.
THE QUAKER OATS COMPANY,
Defendant.
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11 CV 111
Magistrate Judge Young B. Kim
October 20, 2011
MEMORANDUM OPINION and ORDER
In this purported class action brought under this court’s diversity jurisdiction, Daniel
Askin alleges that The Quaker Oats Company (“Quaker”) deceptively labels several of its
granola and oatmeal products as being “heart-healthy” despite the fact that their ingredients
include artificial trans-fats. Askin claims that these labeling practices violate the Illinois
Consumer Fraud and Deceptive Practices Act (“ICFA”), 815 ILCS § 505/1, et seq., and
common law breach of warranty principles. Askin’s suit comes on the heels of three similar
suits previously filed in the Northern District of California, bringing nearly identical claims
under California’s consumer protection laws. Quaker has moved to dismiss Askin’s suit
under the first-to-file rule. Currently before the court is the motion to intervene filed by
Victor Guttmann, Kelley Bruno, Sonya Yrene, and Rebecca Yumul (together, “the Guttmann
plaintiffs”), all plaintiffs in the consolidated putative class action pending in California.
They seek to intervene in this case for the limited purpose of filing their own motion to
dismiss under the first-to-file rule. For the following reasons, the motion is granted:
Background
In February, November, and December 2010 three distinct sets of plaintiffs filed their
respective putative class actions against Quaker in the Northern District of California.
Guttmann and Robert Chacanaca filed the first suit, alleging that Quaker’s Chewy Granola
Bars contain artificial trans fats and are deceptively labeled. Next came Yrene’s suit, making
similar claims with respect to Quaker’s Instant Oatmeal. Third in line were Bruno and
Yumul, who took aim at Quaker’s Oatmeal to Go Bars. Two days after that third filing, the
plaintiffs in the first suit moved to consolidate the actions and appoint their counsel, the
Weston Firm and Law Offices of Ronald A. Marron, as interim class counsel.
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Chacanaca hired a new law firm, Reese Richman in New York, to replace his original
attorney. Reese Richman filed the current Illinois action on behalf of Askin on January 7,
2011, and then six days later filed a motion in California on Askin’s behalf under 28 U.S.C.
§ 1407, seeking to move the California actions to Illinois. As a result, the district court in
California stayed the first case and deferred ruling on the pending consolidation motion. See
Chacanaca v. Quaker Oats Co., C 10-0502 RS, 2011 WL 441324, at *2 (N.D. Cal. Feb. 3,
2011).
After holding a hearing on Askin’s motion to transfer, an MDL panel denied the
motion in April 2011, explaining that Askin had not given a sufficient reason to centralize
the various proceedings. (R. 48-2, Ex. B at 2.) The panel pointed out that a fourth action,
Pelobello v. The Quaker Oats Co., No. 3:11-00093, had been filed in the Northern District
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of California, and concluded that the various parties “have every ability to cooperate and
minimize the possibilities of duplicative discovery and inconsistent pretrial rulings between
the four Northern District of California actions and the sole outlying Northern District of
Illinois action.” (Id.) The MDL panel concluded that the filing of the Illinois case “is
insufficient reason at this point to centralize these proceedings.” (Id.)
Three days after the MDL panel’s decision the Guttmann plaintiffs renewed their
motion to consolidate the actions pending in the Northern District of California. Chacanaca
opposed the motion and sought to have Reese Richman (Askin’s counsel here) appointed as
interim class counsel. On June 14, 2011, the district court in California granted the
Guttmann plaintiffs’ motion, consolidated the four California cases, and appointed the
Weston and Marron firms as interim counsel in the consolidated actions. (R. 48-4, Ex. D
at 3.)
Ten days later, the Guttmann plaintiffs filed their amended consolidated
complaint—which had been lodged in the Guttmann case since December 2010—alleging
violations of California’s unfair competition, false advertising, and consumer protection
laws. (R. 48-5, Ex. E ¶¶ 110-144.)
Three days after the consolidation of the California actions, Askin filed his amended
complaint in this case, including in his complaint allegations that are partly copied from the
California consolidated complaint. (Compare R. 22 with R. 48-5, Ex. E.) On June 30, 2011,
the parties in this case consented to the jurisdiction of this court. See 28 U.S.C. § 636(c);
(R. 25). One week later Quaker filed two motions to dismiss: one under the first-to-file rule,
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(R. 32), and one under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), arguing that
Askin lacks standing in this case, (R. 38). The Guttmann plaintiffs filed the current motion
to intervene four days later, on July 11, 2011.1 They seek leave to intervene in this matter
for the purpose of filing their own motion to dismiss. (R. 46.)
Analysis
The Guttmann plaintiffs argue that they are entitled to intervene in this action as of
right under Rule 24(a), and alternatively, that they qualify for permissive intervention under
Rule 24(b). Intervention is a procedural device meant to promote efficiency in the resolution
of legal disputes by consolidating related legal questions in a single lawsuit on the one hand,
while on the other hand not allowing a single suit to become “‘unnecessarily complex,
unwieldy or prolonged.’” Shea v. Angulo, 19 F.3d 343, 349 (7th Cir. 1994) (quoting United
States v. Pitney Bowes, Inc., 25 F.3d 66, 69 (2d Cir. 1994)). This court concludes that
although the Guttmann plaintiffs have not shown that they meet the requirements for
intervention as of right, the competing polices above are best served by granting their motion
for permissive intervention and allowing them to file their motion to dismiss under the firstto-file rule.
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The parties’ consent extends to the resolution of the current motion to intervene. See
People Who Care v. Rockford Bd. of Educ., Sch. Dist. No. 205, 171 F.3d 1083, 1089 (7th Cir.
1999).
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I.
Intervention as of Right
“A party may seek intervention as of right if the party has ‘an interest’ and is ‘so
situated that the disposition of the action may as a practical matter impair or impede the
applicant’s ability to protect that interest, unless the applicant’s interest is adequately
represented by the existing parties.’” Ligas ex rel. Foster v. Maram, 478 F.3d 771, 773 (7th
Cir. 2007) (quoting Fed. R. Civ. P. 24(a)(2)). In order to prevail on a motion to intervene
under Rule 24(a), the moving party must meet the following criteria: (1) the motion to
intervene must be timely; (2) the proposed intervenors must have a legally protected interest
related to the subject matter of the action; (3) the disposition of the suit must threaten to
impair that interest; and (4) the proposed intervenor’s interest must not be adequately
represented by the existing parties. Id. “The proposed intervenor has the burden of proving
each element, and lack of even one element requires denial of the motion.” American Nat’l
Bank & Trust Co. of Chicago v. City of Chicago, 865 F.2d 144, 146 (7th Cir. 1989).
The Guttmann plaintiffs have established that their motion to intervene is timely
within the meaning of Rule 24. The test for timeliness is primarily one of reasonableness,
Reich v. ABC/York-Estes Corp., 64 F.3d 316, 321 (7th Cir. 1995), under the guise of which
four factors are weighed: “(1) the length of time the intervenor knew or should have known
of his interest in the case, (2) the prejudice to the original party caused by the delay, (3) the
resulting prejudice to the intervenor if the motion is denied, and (4) any unusual
circumstances,” People Who Care v. Rockford Bd. of Educ., 68 F.3d 172, 175 (7th Cir.
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1995). There is no precise time limit under this test, which is designed primarily to ensure
that potential intervenors are diligent “in learning of a suit that might affect their rights,” and
that they act “reasonably promptly” in moving to protect those rights. Nissei Sangyo Am.,
Ltd. v. United States, 31 F.3d 435, 438-39 (7th Cir. 1994); see also Aurora Loan Servs., Inc.
v. Craddieth, 442 F.3d 1018, 1027 (7th Cir. 2006) (“The reason for requiring promptness is
to prevent a tardy intervenor from derailing a lawsuit within sight of the terminal.” (Internal
quotation omitted.)).
Although the Guttmann plaintiffs did not file the current motion until seven months
after Askin filed his original complaint, they filed it only three weeks after the district court
in California ruled on the motion to consolidate the actions pending there. That decision
appointed as interim class counsel the law firms representing the Guttmann plaintiffs, thereby
establishing the core legal interest that the Guttmann plaintiffs now point to in support of this
motion. Because they acted with dispatch from the time that interest arose, the first factor
weighs in their favor. As for the second factor, the existing parties will not suffer any
prejudice from allowing intervention at this stage because the proposed intervention is for
the purpose of filing a motion to dismiss. Quaker’s motion to dismiss under the first-to-file
rule is currently pending and not yet fully briefed, so allowing the Guttmann Plaintiffs to
intervene to submit their own motion will not delay the current proceedings in any
meaningful way. On the other hand, the Guttmann plaintiffs would be prejudiced by the
denial of the opportunity to bring before this court its arguments pertaining to the import of
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the consolidated California actions. Additionally, the “unusual circumstances” factor falls
in the Guttmann plaintiffs’ favor, given Askin’s counsel’s role in prolonging the relevant
class-action litigation against Quaker. Askin’s counsel, on behalf of Chacanaca, was
competing in the California litigation with the Guttmann plaintiffs with respect to the motion
to consolidate, and Askin managed to delay that decision by filing this suit and the
unsuccessful MDL motion six days later. Accordingly, all of these factors point toward a
finding that the motion to intervene is timely.
The Guttmann plaintiffs do not fare as well, however, in their attempt to show that
their interest in this case—and the potential threat to that interest—is the kind that is
contemplated by Rule 24(a)(2). Precisely what the requisite interest is has never been
defined with any particularity, but the Seventh Circuit has made clear that it must be a
“‘direct, significant, legally protectable’ one.” Security Ins. Co. of Hartford v. Schipporeit,
Inc., 69 F.3d 1377, 1380 (7th Cir. 1995) (quoting American Nat’l Bank, 865 F.2d at 146).
In other words, “the applicant’s interest must be one on which an independent federal suit
could be based.” Aurora Loan, 442 F.3d at 1022. In evaluating the proposed intervenor’s
interest, this court focuses “on the issues to be resolved by the litigation and whether the
potential intervenor has an interest in those issues.” Reich, 64 F.3d at 322. This is a “highly
fact-specific determination, making comparison to other cases of limited value.” Security
Ins. Co. of Hartford, 69 F.3d at 1381.
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The main interest highlighted by the Guttmann plaintiffs is their interest in this court’s
application of the first-to-file rule, but that interest is just a restatement of their cited interests
in avoiding inconsistent rulings and minimizing waste. After all, the first-to-file rule exists
to prevent duplicative litigation and to minimize waste. See Alchemist Jet Air, LLC v.
Century Jets Aviation, LLC, No. 08 CV 5386, 2009 WL 1657570, at *5 n.4 (N.D. Ill. June
12, 2009). To the extent that the Guttmann plaintiffs argue that the potential stare decisis
effect of decisions made in this litigation provides them with a legally protectable interest in
intervening, “a simple claim of potential stare decisis effect is not enough” to justify
intervention as of right. National Union Fire Ins. Co. of Pittsburgh v. Continental Ill. Corp.,
113 F.R.D. 532, 536 (N.D. Ill. 1986). That is because “the opinion of a single district judge
rarely yields an effect broader than the force its reasoning carries,” and that reason is not
enough to justify “adding as parties all who might be concerned about the court’s choice of
words.” Bethune Plaza, Inc. v. Lumpkin, 863 F.3d 525, 532 (7th Cir. 1988). Thus in a
situation where a proposed party “has nothing to contribute except legal argument,” concerns
about stare decisis do not rise to the standard of Rule 24(a)(2). Id. at 533.
Here, the Guttmann plaintiffs seek to intervene simply to present legal arguments in
support of a motion to dismiss under the first-to-file rule without being constrained by any
of the views expressed in the motion filed by Quaker—their opponent in the California
litigation. Any reasoning in this court’s ultimate decision on the first-to-file motion is
unlikely to have much persuasive authority in the Northern District of California. And even
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if this court denies the motion to dismiss under the first-to-file rule and that decision is
ultimately challenged on appeal, by the time this litigation proceeds to a final appealable
order the California litigation will have progressed as well, likely rendering moot the
concerns regarding duplication and waste raised in the Guttmann plaintiffs’ proposed first-tofile motion. Accordingly, their interest in avoiding the possible stare decisis effect in
California of decisions related to the first-to-file question here does not have sufficient teeth
to meet the Rule 24(a) standard for intervention as of right. See id.
The Guttmann plaintiffs also point to their interest in having the California interim
class counsel represent the proposed nationwide class as a legally protectable interest
supporting intervention as of right. They explain that the California court appointed their
counsel instead of Askin’s counsel—who also sought the post—as interim class counsel in
that litigation, and argue that permitting Askin’s counsel to respond to substantive motions
filed in this case would fly in the face of the appointment decision. But the Guttmann
plaintiffs have not cited any cases in which a law firm’s interest in protecting its role as
interim class counsel is characterized as the kind of “direct, significant, legally protectable”
interest required to justify intervention as of right. See Security Ins. Co. of Hartford, 69 F.3d
at 1380. Accordingly, this court concludes that the Guttmann plaintiffs have not cleared the
necessary hurdle of showing that they have the kind of legally protectable interest that
militates toward intervention as of right, or that the disposition of this case will jeopardize
that interest.
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The Seventh Circuit has made clear that “[i]ntervention as of right will not be allowed
unless all requirements of the Rule are met,” Sokaogon Chippewa Cmty. v. Babbitt, 214 F.3d
941, 946 (7th Cir. 2000), and accordingly, this court need not analyze the Guttmann
plaintiffs’ arguments under the fourth prong. Nonetheless, it is worth mentioning in light of
this court’s decision to grant permissive intervention that Quaker cannot adequately represent
the Guttmann plaintiffs’ interest under the first-to-file rule. The burden of establishing “lack
of adequate representation is minimal,” Meridian Homes Corp. v. Nicholas W. Prassas &
Co., 683 F.2d 201, 205 (7th Cir. 1982), and “the proposed intervenor should be treated as the
best judge of whether the existing parties adequately represent his or her interests,” Michigan
v. United States Army Corps of Eng’rs, 10 CV 4457, 2010 WL 3324698, at *6 (N.D. Ill. Aug.
20, 2010) (internal quotation omitted). Here the Guttmann plaintiffs persuasively argue that
given their role as opponents to Quaker in the California litigation, Quaker cannot adequately
represent their interests with respect to the first-to-file motion. The Guttmann plaintiffs
“cannot be required to look for adequate representation to an opponent.” Charles Alan
Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice & Procedure: Civil 3d § 1909
(2007). The court raises that concern here because it adds weight to this court’s decision to
exercise its discretion in favor of granting the Guttmann plaintiffs leave to intervene
permissively under Rule 24(b).
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II.
Permissive Intervention
Rule 24 allows for permissive intervention where the movant “has a claim or defense
that shares with the main action a common question of law or fact.” Fed. R. Civ. P.
24(b)(1)(B); see also Flying J, Inc. v. J.B. Van Hollen, 578 F.3d 569, 573 (7th Cir. 2009).
The rule also requires the court to “consider whether the intervention will unduly delay or
prejudice the adjudication of the original parties’ rights.” Fed. R. Civ. P. 24(b)(3). This
court enjoys broad discretion in determining whether these requirements have been met. See
Griffith v. University Hosp., LLC, 249 F.3d 658, 661-62 (7th Cir. 2001).
Askin does not deny that there is substantial overlap between the facts and issues
underlying the Guttman plaintiffs’ California claims and those he is making under the ICFA
here. For example, the contents of the accused Quaker products and the labeling and
marketing practices attached to those products are common factual elements between the two
cases. And both cases raise questions of law including whether state consumer protection
statutes are preempted by the Food, Drug, and Cosmetic Act, 21 U.S.C. § 341, et seq., and
how the FDA’s labeling regulations should be enforced. Despite this overlap, Askin argues
that allowing permissive intervention will prejudice his rights because the Guttmann
plaintiffs are seeking this case’s dismissal. In other words, he asserts that because the
California case involves California consumer protection laws instead of Illinois law, if the
Guttman plaintiffs are successful in dismissing this case under the first-to-file rule Askin will
have lost his chance to pursue his rights under the ICFA. But that is an argument against
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dismissal, not an argument against intervention. That the Guttman plaintiffs’ potentially
meritorious arguments in favor of dismissal might jeopardize Askin’s case does not suggest
that allowing them to intervene will unduly prejudice Askin within the meaning of Rule
24(b). And as the Guttmann plaintiffs point out, if they succeed in having this case dismissed
under the first-to-file rule Askin will become part of the putative nationwide class in the
California litigation. To the extent that he wishes to pursue his claims independently, he will
remain free to do so.
Askin also argues that permissive intervention should be denied here because it would
be a waste of resources to allow the Guttmann plaintiffs to file their own first-to-file motion
when Quaker’s is already pending. But this case has not yet moved past the dismissal stage
and Quaker’s motion to dismiss under the first-to-file rule has yet to be briefed. Under these
circumstances, allowing the Guttmann plaintiffs to submit their own motion will cause no
undue delay. It is hard to see how Askin’s rights will be compromised in any way by
allowing the Guttmann plaintiffs to submit the proposed motion. But to ensure that the
motions progress efficiently this court will allow Askin to file a joint response to Quaker’s
and the Guttmann plaintiffs’ motions to dismiss under the first-to-file rule. With the concern
for efficiency thus contained, and the common questions of law and fact not subject to real
dispute, this court concludes that permissive intervention is appropriate under Rule 24(b).
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Conclusion
This court concludes that allowing the Guttmann plaintiffs to intervene in this case
pursuant to Rule 24(b) will allow this court to resolve all of the issues related to the first-tofile question without prolonging or unduly complicating the current suit. See Shea, 19 F.3d
at 349. Accordingly, the Guttmann plaintiffs’ motion to intervene for the purpose of filing
their motion to dismiss under the first-to-file rule is granted.
ENTER:
_________________________________
Young B. Kim
United States Magistrate Judge
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