REBEL8 Inc. v. Bajie Zhu, et al.

Filing 81

ORDER. Signed by the Honorable Manish S. Shah on 1/28/2016: Plaintiff's motion to reconsider 66 is granted, and Yiwu Yuantai Import and Export Co.'s motion to intervene 40 is now denied. The Clerk shall terminate Yiwu as a defendant-intervenor. Yiwu's motion for extension of time to complete discovery 80 is denied as moot. [For further detail see attached order.] Notices mailed by Judicial Staff. (psm, )

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
REBEL8 INC.,
Plaintiff,

No. 15 CV 5469

v.

Judge Manish S. Shah

BAJIE ZHU, et al.,
Defendants.
ORDER

Plaintiff's motion to reconsider [66] is granted, and Yiwu Yuantai Import and
Export Co.’s motion to intervene [40] is now denied. The Clerk shall terminate Yiwu
as a defendant-intervenor. Yiwu’s motion for extension of time to complete discovery
[80] is denied as moot.
STATEMENT
Plaintiff seeks reconsideration of my order granting Yiwu’s motion to
intervene. I remain of the view that Yiwu has an interest in the subject matter of
the action, because, as explained in the prior order [64], the judgment order in this
case specifies the PayPal account at issue, and Yiwu has articulated an interest in
that account that is not shared with defendant Miss Susan’s Store (namely, that
Miss Susan’s Store has no interest in the account and is not connected to it, and the
account is entirely controlled by Yiwu with no permission granted to Miss Susan’s
Store). Unlike Ungar v. Arafat, 634 F.3d 46, 52 (1st Cir. 2011), where the proposed
intervenor claimed the injunction did not apply to it, here, Yiwu claims the
judgment order (which includes, in effect, a turnover order) does apply to it. But,
upon reconsideration, I conclude that Yiwu’s interest would not be practically
foreclosed by execution of the judgment. Yiwu may pursue Miss Susan’s Store, and
plaintiff here has admitted that the judgment order does not conclusively determine
ownership of the PayPal account. No legal question has been answered in a manner
that prevents Yiwu from asserting (in some other action) that its assets were
wrongfully used to pay the judgment in this case. No stare decisis effect should be
given to the judgment order as it relates to ownership or control over the PayPal
account. As a result, the test for intervention as of right under Rule 24(a) is not
satisfied.

Yiwu has not carried its burden to justify permissive intervention.
“Permissive intervention is within the discretion of the district court where the
applicant’s claim and the main action share common issues of law or fact and where
there is independent jurisdiction.” Ligas ex rel. Foster v. Maram, 478 F.3d 771, 775
(7th Cir. 2007). Here, there is no independent jurisdiction for Yiwu’s claim because
the amount in controversy is less than $75,000 dollars. Unlike the property that is
the subject of the action (under Rule 24(a)), the “main action” here is the trademark
infringement by Miss Susan’s Store (and others). Yiwu’s claim to money in a PayPal
account does not share common issues of law or fact with the trademark
infringement. But even if the “main action” under Rule 24(b) included the
collections aspect of the judgment, I would exercise my discretion to deny
permissive intervention. Yiwu has not diligently pursued its claim, and this lack of
diligence should not be rewarded. First, and most recently, Yiwu failed to timely
respond to discovery requests from plaintiff. While Yiwu’s counsel has explained
that the press of other business (and the difficulty in obtaining information from
China) made responding difficult, see [80], the lack of communication with opposing
counsel or request for an extension of time (before deadlines expired) is a lack of
diligence. Only after I commented about the untimely discovery responses did Yiwu
file a motion for extension of time. Second, Yiwu did not attempt to appear in the
case until after plaintiff filed its motion for default judgment, and Yiwu noticed its
motion to intervene for presentment after the default judgment motion would be
heard (and after the case would likely be terminated with a final judgment). See
[38], [40-1]. The motion to intervene came well after a TRO and a preliminary
injunction froze the PayPal account at issue. The dispute over the PayPal account
could have been raised earlier. This lack of diligence demonstrates that intervention
would unreasonably delay certainty between the parties to the original action.
Whether another rule would permit a non-party objector to seek relief from
an erroneous final judgment order (or turnover order or writ of execution) has not
been addressed by the parties, and I agree with plaintiff that the only question
presented by Yiwu’s motion was whether Rule 24 requires or permits intervention. I
conclude that it does not.* Plaintiff’s motion to reconsider [66] is granted, and
Yiwu’s motion to intervene [40] is now denied.
ENTER:
___________________________
Manish S. Shah
United States District Judge

Date: 1/28/16

Rule 24 allows third-parties to challenge confidentiality orders, Bond v. Utreras, 585 F.3d
1061, 1068 (7th Cir. 2009), but that precedent, based in part on the public right to access to
the courts, is not applicable here.
*

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