Smith v. Hastings Fiber Glass Products Inc et al

Filing 60

MEMORANDUM ORDER denying 49 Motion to Intervene. Signed by Magistrate Judge Karen L Hayes on 11/22/13. (crt,Crawford, A)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
MONROE DIVISION
TYSON SMITH

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CIVIL ACTION NO. 11-0894

VERSUS

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JUDGE ROBERT G. JAMES

HASTINGS FIBER GLASS
PRODUCTS, INC., ET AL.

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MAG. JUDGE KAREN L. HAYES

MEMORANDUM ORDER
Before the undersigned Magistrate Judge, on reference from the District Court, is a
motion for leave of court to file an intervention [doc. # 49] filed by Newton B. Schwartz, Sr.
The motion is partially opposed. For reasons detailed below, the motion for leave to intervene is
DENIED.1
Background
On June 15, 2011, Tyson Smith filed the instant products liability action against Hastings
Fiber Glass Products, Inc. (“Hastings”). (Compl.).2 Smith alleges that he suffered serious and
disabling injuries on June 21, 2010, when a “block and sheave” manufactured by Hastings
disintegrated and struck him in the face. Id.3 On January 6, 2012, the workers’ compensation

1

As this motion is not one of the motions excepted in 28 U.S.C. § 636(b)(1)(A), nor
dispositive of any claim on the merits within the meaning of Rule 72 of the Federal Rules of
Civil Procedure, this ruling is issued under the authority thereof, and in accordance with the
standing order of this court. Any appeal must be made to the district judge in accordance with
Rule 72(a) and LR 74.1(W).
2

3

Smith invoked this court’s diversity jurisdiction, 28 U.S.C. § 1332.

He also sued Hastings Manufacturing Company, LLC. On November 21, 2011,
however, Smith voluntarily dismissed this party. See Stipulated Order and Judgment [doc. #s 17
& 19].

insurer, Travelers Property Casualty Company of America (“Travelers”), intervened in this
matter to recover benefits and medical expenses that it had expended on behalf of Smith.
(Compl. in Intervention [doc. # 22]).
On October 15, 2013, Newton B. Schwartz, Sr. (“Schwartz”) filed the instant motion for
leave to intervene. In support of his motion he attached a copy of a “Fee Agreement . . .”
executed by Tyson Smith, Jack Harang, and Newton B. Schwartz (via handwritten addition)
whereby Smith retained Harang and, apparently, Schwartz, to represent him in connection with
the matter at hand. See Fee Agreement; M/Intervention, Exh. B. The proposed intervention
implies that Smith never met Newton B. Schwartz, Sr. See Petition in Intervention, ¶ I(2).
Nonetheless, Schwartz alleges that he helped to investigate the responsible parties and to draft
the original complaint. Id., ¶ I(1). Furthermore, Schwartz expended $9,498.70 on various costs
and expenses in this case. Id., Exh. C.
Schwartz’s proposed intervention seeks to recover 1) the above-delineated costs
expended herein, together with his earned share of any attorney’s fees recovered in this case; and
2) certain unpaid sums purportedly due under a December 31, 2009, “Agreement Regarding
$250,000, Loan and Fees and Expenses for Various Cases” (hereinafter, “Loan Agreement”) in
which Jack Harang agreed to reimburse Schwartz for his share of expenses in various cases that
Schwartz and Harang worked on together. See Petition in Intervention and Exh. A.
On November 7, 2013, Harang, individually, and on behalf of Tyson Smith, filed a
response to the proposed intervention. (Pl. Resp. [doc. # 56]). Plaintiff and Harang do not
oppose that portion of the intervention by Schwartz that seeks to recover the expenses paid, and

2

fees earned by Schwartz in this case. (Pl. Resp. [doc. # 56]). However, they do oppose the
intervention insofar as it seeks to recover damages or fees related to the Loan Agreement. Id.
Schwartz filed a reply brief on November 13, 2013. (Reply [doc. # 59]). Thus, the matter is ripe.
Law
Federal Rule of Civil Procedure 24 contemplates two types of intervention: intervention
of right and permissive intervention. Rule 24(a)(2) provides an absolute right of intervention to a
non-party that meets all four of the following requirements: “(1) the application for intervention
must be timely; (2) the applicant must have an interest relating to the property or transaction
which is the subject of the action; (3) the applicant must be so situated that the disposition of the
action may, as a practical matter, impair or impede his ability to protect that interest; (4) the
applicant's interest must be inadequately represented by the existing parties to the suit.”
Mothersill D.I.S.C. Corp. v. Petroleos Mexicanos, S.A., 831 F.2d 59, 61 (5th Cir. 1987) (citations
omitted); see also Hopwood v. State of Tex., 21 F.3d 603, 605 (5th Cir. 1994).4
Intervention of right requires a “direct, substantial, legally protectable interest in the
proceedings,” which is determined by reference to substantive law. Mothersill, supra (citations
omitted). Furthermore, the intervenor’s burden to demonstrate the inadequacy of representation
by the existing parties is minimal, requiring only a showing that the representation of its interest
“may be” inadequate. Hopwood, supra (citation omitted).
Permissive intervention is appropriate where “an applicant's claim or defense and the
main action have a question of law or fact in common.” Trans Chemical Ltd. v. China Nat.
4

Intervention of right also applies when a federal statute confers an unconditional right
to intervene. Fed.R.Civ.P. 24(a)(1). Movant does not seek to intervene on this basis.
3

Machinery Import and Export Corp., 332 F.3d 815, 824 (5th Cir. 2003) (citation omitted).
Permissive intervention remains “wholly discretionary” with the court. S.E.C. v. Funding
Resource Group 2000 WL 1468823 (5th Cir. 2000) (unpubl.) (citing New Orleans Public
Service, Inc. v. United Gas Pipe Line Co., 732 F.2d 452, 471 (5th Cir. 1984) (en banc)).5
However, “[i]n exercising its discretion, the court must consider whether the intervention will
unduly delay or prejudice the adjudication of the original parties’ rights.” Fed.R.Civ.P. 24(c).
Discussion
Applying the foregoing considerations to the facts at hand, the court finds that Schwartz’s
intervention is warranted as a matter of right with regard to his claim for expenses and fees
reasonably expended in this matter. “By written contract signed by his client, an attorney at law
may acquire as his fee an interest in the subject matter of a suit . . .” La. R.S. § 37:218. Mr.
Harang confirmed that Plaintiff discharged Mr. Schwartz several months ago. (Pl. Response, pg.
2). Furthermore, Schwartz represented that this claim, and his participation herein, will remain
dormant until such time as there is a recovery in Plaintiff’s favor.6

5

Permissive intervention also is authorized when a federal statute confers a conditional
right to intervene. Fed.R.Civ.P. 24(b)(1)(A). Movant does not contend that intervention is
warranted on these grounds.
6

Counsel, however, will need to demonstrate compliance with Rule 1.5(e) of the
Louisiana Rules of Professional Conduct:
[a] division of fee between lawyers who are not in the same firm may be made
only if:
(1)

the client agrees in writing to the representation by all of the lawyers
involved, and is advised in writing as to the share of the fee that each
lawyer will receive;

(2)

the total fee is reasonable; and
4

However, the court finds that intervention is not warranted, either as of right or
permissively, insofar as it seeks to assert a claim stemming from the Loan Agreement. From
what the court can discern, the Loan Agreement makes no mention of this case as one of the
“various” categories of cases included therein. Thus, the Loan Agreement does not accord
Schwartz an interest in the litigious right at issue here. In addition, Schwartz’s claim under the
Loan Agreement does not share a common question of law or fact with the principal action. To
the extent that the Loan Agreement provides Schwartz with an interest in “various” other cases,
he can protect that interest by intervening in those other matters, or by proceeding against Mr.
Harang directly in a separate suit.7
The court further observes that the proposed intervention is deficient because it fails to
assert any basis for the exercise of federal subject matter jurisdiction
For the foregoing reasons,
IT IS ORDERED that the motion for leave to intervene [doc. # 49] filed by Newton B.
Schwartz, Sr. is hereby DENIED, without prejudice to his right to re-file the motion with a
proposed pleading in conformity with this order
THUS DONE AND SIGNED at Monroe, Louisiana, this 22nd day of November 2013.

(3)

each lawyer renders meaningful legal services for the client in the matter.

7

Apparently, at least one such suit is pending. See Schwartz v. Harang, Civ. Action No.
13-0038 (S.D. Tex.) (Pl. M/Leave, Exh. D).
5