Cahoo et al v. SAS Analytics Inc. et al
Filing
543
OPINION AND ORDER denying 454 , 477 and 502 Motions to intervene. Signed by District Judge David M. Lawson. (DPer)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
PATTI JO CAHOO, KRISTEN MENDYK,
KHADIJA COLE, HYON PAK, and
MICHELLE DAVISON,
Plaintiffs,
Case Number 17-10657
Honorable David M. Lawson
v.
FAST ENTERPRISES LLC, CSG GOVERNMENT
SOLUTIONS, STEPHEN GESKEY,
SHEMIN BLUNDELL, DORIS MITCHELL,
DEBRA SINGLETON, and SHARON
MOFFET-MASSEY,
Defendants.
__________________________________________/
OPINION AND ORDER DENYING MOTIONS TO INTERVENE
Three individuals, Michael Bell, Carmelita Colvin, and Suzette Marie Heathcote, have
moved to intervene as plaintiffs in this case. They each allege that they were victimized by the
defendants’ development and application of the automated fraud detection and adjudication system
known as the Michigan Integrated Data Automated System, or MiDAS. These individuals believe
that they can address the shortcomings that the Court identified when it denied the motion for class
certification. And each intends to revive the attempt to certify a class, which they seek to represent.
Because the factors courts consider under Federal Rule of Civil Procedure 24 do not favor
intervention at this stage of the case, the motions will be denied.
I.
A. Background
The Court has discussed the facts of this case in several prior opinions, and the parties are
familiar with them. Summarizing briefly, the plaintiffs filed a putative class action complaint for
damages on March 2, 2017. The defendants moved to dismiss the complaint, and on March 2,
2018, the Court dismissed several individual defendants and several counts of the complaint,
leaving intact the plaintiffs’ due process, equal protection, and Fourth Amendment claims against
the remaining defendants. The State defendants appealed the decision arguing qualified immunity,
and on January 3, 2019, the Sixth Circuit affirmed the Court’s decision with respect to the
plaintiffs’ due process claim and reversed the decision as to the plaintiffs’ equal protection and
Fourth Amendment claims. Cahoo v. SAS Analytics Inc., 912 F.3d 887, 907-08 (6th Cir. 2019).
The parties then agreed to dismiss the equal protection and Fourth Amendment claims against all
defendants and later agreed to dismiss defendant McMurtry.
The plaintiffs maintained a claim for a violation of procedural due process against
defendants FAST, CSG, and State defendants Steven Geskey, Shemin Blundell, Doris Mitchell,
Debra Singleton, and Sharon Moffett-Massey. The parties engaged in another round of motion
practice beginning in the spring of 2020. On April 24, 2020, the plaintiffs moved for class
certification. The corporate defendants then moved to dismiss the complaint, raising jurisdiction
and real-party-in interest arguments, in early May 2020. In late July, all parties filed motions for
summary judgment.
The Court granted defendant SAS’s motion and dismissed the complaint against it without
prejudice for want of subject matter jurisdiction on August 11, 2020. As the parties were
exchanging their summary judgment briefs, plaintiffs’ counsel filed two motions to intervene in
hopes of bolstering their motion for class certification, one on behalf of Michael Bell followed by
another on behalf of Carmelita Colvin. The Court later denied FAST’s and CSG’s motions to
dismiss on December 21, 2020. The following day, the Court denied the plaintiffs’ motion for
class certification. And on March 25, 2021, the Court denied the motions for summary judgment
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except as to individual State defendants Blundell, Mitchell, and Singleton, who were dismissed
from the lawsuit. The Court also dismissed the case as to plaintiff Hyon Pak.
When the Court denied the plaintiffs’ motion for class certification, it found that the
plaintiffs satisfied the first two elements of Federal Rule of Civil Procedure 23(a): numerosity and
commonality. The Court also identified “one group of potential plaintiffs whose claims may
benefit from class treatment: those individuals adjudicated guilty of fraud solely because they did
not return their questionnaires.” Opinion on Class Cert., ECF No. 497, PageID.38632. However,
the Court ultimately found that the class representatives failed to establish Rule 23(a)’s typicality
and adequacy of representation elements and Rule 23(b)(3)’s predominance and superiority
elements.
The Court also observed that the plaintiffs produced strong evidence that MiDAS’s builtin procedures failed to satisfy rudimentary due process requirements and concluded that the
plaintiffs met the commonality requirement because “[a] decision on the defendants’ responsibility
for creating and launching a fraud adjudication system that foreseeably would deny claimants
notice and a proper determination of intent-based liability without an opportunity to be heard in
their defense is central to the validity of each of the claims and could be decided in one stroke.”
Id. at PageID.38654-55 (internal citations omitted). However, the Court found that the plaintiffs
failed to satisfy the typicality and adequacy of representation elements because Cahoo, Cole, and
Mendyk each filed for bankruptcy and were susceptible to unique defenses that threatened to
dominate the litigation, and the individual circumstances of Davison and Pak varied significantly
(Davison moved to a different address before the UIA issued its questionnaires and the UIA did
not re-issue them after she updated her address; Pak replied to initial questionnaires but failed to
reply to follow-up questionnaires). Moreover, none of the plaintiffs actually alleged that they saw
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the notices (although other evidence permitted the inference that they did see them), and they relied
on substantially different facts to support their arguments that the UIA’s manner of notice was
deficient.
The Court also found that the plaintiffs failed to meet Rule 23(b)(3)’s preponderance and
superiority elements. The Court observed that the “case is complex, and like MiDAS itself,
involves many moving pieces and individualized considerations that are outcome determinative.”
Id. at PageID.38661. The Court also found “the management of the class impracticable” due to
the “individualized outcome-determinative considerations, and [because] the plaintiffs have not
identified a single course of wrongful conduct that ties every claim together.” Id. at PageID.38662.
Alternatively, the plaintiffs proposed certifying issue classes under Rule 23(c)(4) based on
the “method of notice, content of notice, failure to provide for a meaningful hearing and failure to
provide an impartial process.” Ibid. But the Court rejected that request because those proposed
subclasses called for “fact-intensive inquiries that still would fail the preponderance and
commonality requirements of Rule 23(a)(2) and (b)(3), as the resolution of those issues would
depend on whether the individuals received actual notice.” Id. at PageID.38663.
In January 2021, Bell and Colvin filed supplements to their motions to intervene in which
they expressed an intention to file a renewed motion for class certification. Suzette Heathcote,
represented by a different attorney, moved to intervene later that month.
B. Michael Bell
Like the named plaintiffs, Michael Bell alleges that the UIA violated his right to due
process by determining that he committed fraud without an adequate pre-determination
opportunity to be heard. He argues that (1) the UIA’s manner of mailing notices was deficient, (2)
the UIA based his fraud adjudication in part on improperly prorated earnings; and (3) the UIA
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based his fraud adjudication in part on his failure to respond to the deficiently mailed
questionnaires.
Bell received unemployment benefits in the latter half of 2013. He says that the UIA
flagged his case in April 2015 and concluded that it overpaid benefits for the weeks spanning
October 5, 2013 through November 2, 2013. The UIA mailed Bell fact-finding questionnaires on
April 3, 2015. However, Bell no longer lived at the address listed in the UIA’s records and did
not receive or respond to the questionnaire.
On April 13, 2015, the UIA determined that Bell committed fraud, apparently based on his
failure to respond and its records of his prorated earnings, and it mailed a notice of determination
and list of overpayments that day. The Agency sought reimbursement of $9,025, consisting of
$1,805 in principal and $7,220 in penalties. However, an administrative law judge (ALJ)
overturned Bell’s fraud determination on May 18, 2017, and he alleges that his employer
confirmed that the contested wages alleged by the UIA were incorrect.
He initially sought to intervene in this action if the Court found that Khadija Cole (the only
other named plaintiff who alleged income spreading) is not an adequate class representative.
C. Carmelita Colvin
Carmelita Colvin filed for unemployment benefits around June 2013. She alleges that
“[n]early a year later, the Agency deferred to her employer without properly weighing evidence or
making a credibility determination and found that Ms. Colvin defrauded the Agency when she
truthfully reported that she was fired by her employer.” Colvin Mot. Intervene, ECF No. 477,
PageID.37533-35. In her supplemental motion, she adds only that she “was auto-adjudicated of
fraud after she did not respond to the fraud questionnaire regarding a separation of work issue.”
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On March 6, 2014, the UIA issued a fraud determination notice and charged Colvin with
$2,664 in principal and $10,656 in penalties, totaling $13,320. However, on January 8, 2020, an
ALJ reversed the determination, finding that “Colvin denied that she quit and there was no credible
evidence contradicting her testimony.”
Colvin initially sought to intervene in this action if the Court found that Patti Jo Cahoo and
Kristen Mendyk (who also have claims related to separation issues) are inadequate class
representatives.
D. Suzette Heathcote
Suzette Heathcote also alleges that she was falsely accused of fraud based on MiDAS’s
faulty income spreading function and her failure to respond to questionnaires. Heathcote received
unemployment benefits for four weeks in January 2014 but got a job shortly after. She earned
wages in February and March 2014. However, she alleges that as MiDAS “datamined” the UIA’s
database for discrepancies, it prorated her earnings throughout the first quarter of 2014 and
wrongfully assumed that she received earnings in January 2014. The UIA issued fact finding
questionnaires on September 30, 2014. After she failed to respond, the UIA determined that she
committed fraud on October 14.
Heathcote contends that she was unaware of the fraud determination or questionnaires until
she lost her job again and filed for benefits later in 2014. However, the UIA records that she
attached indicate that the UIA issued her determination notice on October 14, 2014, and that the
Agency had received an appeal from her one week later, on October 21.
Heathcote alleges that she hired an attorney to represent her at a hearing before an ALJ on
June 8, 2015, at which no UIA representatives appeared. On July 8, 2015, an ALJ reversed the
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decision because the employer appeared with payroll records showing that it had not paid
Heathcote until February 2014.
II.
Federal Rule of Civil Procedure 24, which governs intervention, sets the standards for
“intervention of right,” Fed. R. Civ. P. 24(a), and “permissive intervention,” Fed. R. Civ. P. 24(b).
According to the Sixth Circuit, “Rule 24 should be ‘broadly construed in favor of potential
intervenors.’” Stupak-Thrall v. Glickman, 226 F.3d 467, 472 (6th Cir. 2000) (quoting Purnell v.
Akron, 925 F.2d 941, 950 (6th Cir. 1991)). But “this does not mean that Rule 24 poses no barrier
to intervention at all.” Ibid.
Timing is an important consideration for both types of intervention. Id. at 479. “To
intervene as a matter of right in a lawsuit under Federal Rule of Civil Procedure 24(a), a proposed
party must establish that: ‘(1) the motion to intervene is timely; (2) the proposed intervenor has a
substantial legal interest in the subject matter of the case; (3) the proposed intervenor's ability to
protect that interest may be impaired in the absence of intervention; and (4) the parties already
before the court may not adequately represent the proposed intervenor's interest.’” Kirsch v. Dean,
733 F. App’x 268, 274 (6th Cir. 2018) (quoting United States v. Michigan, 424 F.3d 438, 443 (6th
Cir. 2005)).
Permissive intervention also requires a “timely motion.” League of Women Voters of
Michigan v. Johnson, 902 F.3d 572, 577 (6th Cir. 2018). If the timing is right, “the court may
permit anyone to intervene who . . . has a claim or defense that shares with the main action a
common question of law or fact.’” Ibid. Considerations include “‘whether the intervention will
unduly delay or prejudice the adjudication of the original parties’ rights.’” Ibid. (quoting Fed. R.
Civ. P. 24(b)(3)).
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As most proposed intervenors do, the movants here invoke both parts of the rule. The
defendants predictably oppose the motions as coming too late in this thoroughly litigated case,
which, one hopes, is closer to the end than the beginning.
A.
One aspect of the defendants’ untimeliness argument invokes the statute of limitations as
it applies to the remaining due process claim brought under 42 U.S.C. § 1983. Even if the movants
satisfy all the requisites of Rule 24, if their claims are time-barred, intervention is not appropriate.
Stotts v. Memphis Fire Dep’t., 679 F.2d 579, 582 (6th Cir. 1982) (affirming trial court’s denial of
intervention which rested in part on the unavailability of the substantive relief sought by movant).
The parties agree that the statute of limitations for these claims is three years. See Wolfe
v. Perry, 412 F.3d 707, 713-14 (6th Cir. 2005). The relevant injuries occurred on April 13, 2015
(Bell), March 6, 2014 (Colvin), and October 14, 2014 (Heathcote). The parties also agree,
therefore, that the intervenors’ claims are time-barred unless subject to equitable tolling.
In American Pipe and Construction Company v. Utah, 414 U.S. 538 (1974), the Supreme
Court held that the filing of a class action “tolls the running of the statute [of limitations] for all
purported members of the class who make timely motions to intervene after the court has found
the suit inappropriate for class action status.” Id. at 553. The Supreme Court later expanded
American Pipe tolling to apply to separate actions by members of a putative class. Crown, Cork
& Seal Co., Inc. v. Parker, 462 U.S. 345 (1983). However, the Sixth Circuit has held that the
limitations period is not tolled for putative class members who choose to file individual actions
before the district court rules on class certification. Wyser-Pratte Mgmt. Co. v. Telxon Corp., 413
F.3d 553, 568-69 (6th Cir. 2005). That rule has little effect on the proposed intervenors here,
however, because class certification was not denied until December 22, 2020, and they still have
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plenty of time to file an independent action against all of the defendants before the three-year
period of limitations expires. It certainly would not bar intervention to pursue their individual
claims against the defendants.
The defendants take issue with the proposed intervenors’ stated intentions to attempt to
revive class certification. They cite China Agritech v. Resh, in which the Supreme Court limited
the applicability of American Pipe tolling to individual, not class-wide, claims. China Agritech v.
Resh, ---U.S.---, 138 S. Ct. 1800, 1085 (2018). The Supreme Court held that when a court denies
class certification, a putative class member may join the existing suit or promptly file an individual
action, but she may not start a “successive class action” beyond the time allowed by the statute of
limitations. Id. at 1806.
It is apparent that China Agritech’s gloss on the tolling rules would bar a stand-alone class
action by the intervenors if filed now. However, their intention is to ask the Court to revisit the
class certification ruling, not to start a new class action. The order denying the motion to certify
the class remains an interlocutory ruling at this stage of the case. And it is well established that
“[d]istrict courts have authority both under common law and [Federal] Rule [of Civil Procedure]
54(b) to reconsider interlocutory orders and to reopen any part of a case before entry of final
judgment.” Rodriguez v. Tennessee Laborers Health and Welfare Fund, 89 F. App’x 949, 959 (6th
Cir. 2004) (citations omitted). To obtain that relief, a motion must be supported by “(1) an
intervening change of controlling law; (2) new evidence available; or (3) a need to correct a clear
error or prevent manifest injustice.” Ibid. It is not apparent that the proposed intervenors would
be able to make the required showing, but the statute of limitations would not bar their attempt.
Intervention cannot be denied in this case based on any considerations related to the statute
of limitations. The policy discussion in China Agritech animating the tolling rules, however, is
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relevant to the timeliness question under Rule 24, as explained further below. See Lindblom v.
Santander Consumer USA, Inc, No. 1:15-CV-00990-BAM, 2019 WL 4640684, at *7 (E.D. Cal.
Sept. 24, 2019).
B.
For both permission intervention and intervention by right, courts evaluate the timeliness
of a motion to intervene “in the context of all relevant circumstances [by consideration of] the
following five factors: ‘(1) the point to which the suit has progressed; (2) the purpose for which
intervention is sought; (3) the length of time preceding the application during which the proposed
intervenors knew or should have known of their interest in the case; (4) the prejudice to the original
parties due to the proposed intervenors’ failure to promptly intervene after they knew or reasonably
should have known of their interest in the case; and (5) the existence of unusual circumstances
militating against or in favor of intervention.’” Kirsch, 733 F. App’x at 274-75 (quoting Jansen v.
City of Cincinnati, 904 F.2d 336, 340 (6th Cir. 1990)).
1.
This case has been pending since March 2, 2017. By the time the proposed intervenors
moved to intervene over three years later, the Court had already resolved a round of dispositive
motions that had been appealed, discovery had concluded on June 22, 2020 after several
extensions, the plaintiffs had moved for class certification, the defendants filed another batch of
motions to dismiss, and the parties all had moved for summary judgment. Heathcote’s motion
came even later — arriving after the Court denied the corporate defendants’ motions to dismiss
and the plaintiffs’ motion for class certification. There is still more to do: resolution of another
interlocutory appeal by the State defendants, trial motions, final pretrial, trial. But the intervenors
are trying to jump the freight train just before it reaches its destination. This factor does not favor
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the intervenors. See Clarke v. Baptist Mem’l Healthcare Corp., 427 F. App’x 431, 436 n. 2 (6th
Cir. 2011) (denying intervention where three years had elapsed since the plaintiffs filed their
complaint and the trial court “denied defendant’s motion to dismiss . . . and denied plaintiffs’
request for class certification.”).
Heathcote cites Beach v. Healthways, Inc., 264 F.R.D. 360, 364-66 (M.D. Tenn. 2010) to
support her timeliness argument. In that case, the court granted a motion to intervene after denying
a class certification motion because the intervenor sought to file a renewed motion for class
certification. However, that case is distinguishable. The case had not progressed as far as this
action has — the parties in Beach had not filed any dispositive motions, and six months remained
for the parties to complete merits discovery. Id. at 363. Also, the district court, finding that this
factor “dovetail[ed] into the factor of prejudice to the defendants,” concluded that the defendants
would not suffer undue prejudice because “much of the work addressing a class certification has
been done” and remained applicable to the points raised by the proposed intervenor. Id. at 365.
By contrast, this action “is complex, and like MiDAS itself, involve[s] many moving pieces and
individualized considerations that are outcome determinative.” Opinion Denying Mot. Class Cert,
ECF No. 497, PageID38661. As discussed below, the addition of new parties necessarily involves
an intensively fact-specific analysis that would require a significant amount of new work.
2.
The purpose for which the intervention is sought must be considered in terms of the
“importance of the legal interests asserted.” Clarke, 427 F. App’x at 436. The proposed
intervenors here identify twin purposes: renewing the class certification motion and pursuing their
individual claims against these defendants.
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Bell and Colvin sought to shore up the class certification efforts that might have suffered
from the inadequacies of Cahoo, Mendyk, and Cole as class representatives because of their
bankruptcy filings. They seem to suggest that those deficiencies were the sole reasons that class
certification was denied. However, although the Court found that those named plaintiffs’ claims
were subject to unique defenses, there were other reasons class certification was denied beyond
the failure to establish typicality and adequacy of representation. The Court found that “the
plaintiffs . . . ha[d] not demonstrated that common questions presented predominate over the
panoply of individualized considerations,” that the “case is fraught with individualized outcomedeterminative considerations, and the plaintiffs have not identified a single course of wrongful
conduct that ties every claim together,” rendering “the management of the class impracticable.”
Opinion on Class Cert. at 30-32, ECF No. 497, PageID.38660-62. Although the proposed
intervenors argue at length that their claims are typical and they are adequate class representatives,
they have not addressed how they will overcome the Court’s findings on the predominance and
superiority elements. Even if the intervenors’ motions are granted, it is highly unlikely that they
will succeed on a renewed motion for class certification.
Intervention is not necessary for the proposed intervenors to pursue their individual claims.
They “do not explain how, if at all, resolution of [the current plaintiff’s] claims will affect them or
how their interests are related to the individual claims at issue.” Lindblom, 2019 WL 4640684, at
*7 (E.D. Cal. Sept. 24, 2019). They have their separate, stand-alone claim for damages arising
from their individual wrongful fraud adjudications, which they can pursue regardless of the
ultimate disposition of the claims of the named parties.
This factor also weighs against intervention.
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3.
Bell and Colvin should have known of their interest in this case well before they moved to
intervene, and this factor cuts against intervention. Heathcote stands on firmer footing, however.
Bell and Colvin argue that any delay in the filing of their motion is “directly attributable to
[the] defendants’ delay in attempting to disqualify plaintiffs Cahoo and Mendyk.” That argument
is disingenuous. These proposed intervenors are represented by the same attorneys as the named
plaintiffs, who should have known that three of five of their potential class representatives filed
for bankruptcy (opening them to real-party-in-interest defenses), and two of those three entered
into consent judgments with the State (raising judicial estoppel defenses). The failure to catch
these issues early on in litigation is not the defendants’ fault. In fact, the defendants listed these
affirmative defenses in their respective answers, which were filed as early as March 2018, putting
plaintiffs’ counsel was on notice of these defenses. Yet the intervention motions were not filed
until August and September 2020. That delay is their responsibility. See New York v. Hill, 528
U.S. 110, 115 (2000) (attorney’s knowledge is imputed to client); Cruz-Gomez v. Lynch, 801 F.3d
695, 700 (6th Cir. 2015) (same).
Heathcote, on the other hand, maintains that she had no reason to take any action to protect
her interests until the Court denied the class certification motion, since she had no reason to know
that the plaintiffs were inadequate class representatives. Once she discovered this defect, she
moved to intervene within one month of the Court’s order.
The defendants cite Lindblom, 2019 WL 4640684, at *7, for the idea that this factor favors
denial of intervention, which is sensible as to Bell’s and Colvin’s motions. But that case actually
supports Heathcote’s argument. In Lindblom, the court denied several motions to intervene filed
about nine months after the court denied class certification because the named plaintiff was
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atypical (subject to a statute of limitations defense). The intervenors argued that their motion was
timely, but the court disagreed in part because the intervenors were represented by the same
counsel as the atypical named plaintiff and were aware of the defendants’ statute of limitations
defense for years because the defendant listed it in its answer. Id. at *5. “Rather than seeking to
intervene as soon as they learned that [the atypical plaintiff] may be an inadequate representative,
the intervenors waited until after discovery closed, class certification was denied, and the Court
denied [] prior intervenors’ motions for permissive intervention.” Ibid.
Heathcote is not represented by plaintiffs’ counsel. Although the defendants raised the
real-party-in-interest and estoppel defenses in their answers, Heathcote had no reason to know that
the named plaintiffs were actually susceptible to those defenses until well into 2020, when the
parties began disputing that issue. By that time, Heathcote’s individual claim had expired under
the statute of limitations. And she could not intervene or file a separate action until after the Court
denied class certification. Wyser–Pratte, 413 F.3d at 569; Stein v. Regions Morgan Keegan Select
High Income Fund, Inc., 821 F.3d 780, 789 (6th Cir. 2016) (recognizing that Wyser-Pratte
“represents the minority rule” and expressing “doubts about its holding” but affirming the decision
as binding). Thus, once the Court denied class certification, Heathcote promptly sought “to
intervene as soon as [she] learned that” her interests were no longer represented by the class action
and she was permitted to take action herself. Lindblom, 2019 WL 4640684, at *5.
This factor favors Heathcote, but not Bell or Colvin.
4.
The prejudice factor strongly weighs against intervention.
Relying on Beach v.
Healthways, Inc., the proposed intervenors discount the defendants’ concerns about replowing the
same ground — at considerable expense — arguing that most of the work has already been
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completed, the claims have not changed, and additional discovery would not be substantial. That
argument, however, substantially underestimates the time and effort necessary to revisit class
certification with new proposed class representatives presenting new claims.
The problem with the plaintiffs’ class certification motion was not simply the named
plaintiffs as class representatives. There were inadequate showings on the predominance and
superiority elements as well. To revisit class certification, the parties would have to re-brief four
of six relevant elements (typicality, adequacy of representation, predominance, and superiority),
which represents the lion’s share of the work. Moreover, the defendants have the right to conduct
full discovery on the intervenors’ claims, considering the fact-intensive nature of the case. That
would entail obtaining and analyzing the benefit files from the UIA, propounding interrogatories,
requesting document production, obtaining employer records, and conducting depositions. In
essence, the “timing of the motion would force defendants to start from scratch on class
certification, while [the] plaintiffs would gain the benefit of hindsight, having already seen the
arguments in opposition . . . .” Clarke, 427 F. App’x at 437 n.3. Allowing that attempt also would
sanction a daisy-chain of certification attempts, which contravenes the policy considerations the
Supreme Court discussed in China Agritech. Lindblom, 2019 WL 4640684, at *(“The same policy
reasons discussed in China Agritech warrant prohibiting the Intervenors here to ‘piggyback’ on an
earlier, timely filed class action. Allowing them to do so does not serve the purposes of Rule 23.
Accordingly, in light of the holding and reasoning of China Agritech, the Court finds that the
Intervenors’ reasons for and length of delay weigh against intervention.”) (citing China Agritech,
138 S. Ct. at 1811).
The same prejudice issue is true for the individual claims. The parties have engaged in
substantial discovery and motion practice, including two rounds of motions to dismiss (two of
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which involve an interlocutory appeal), and cross-motions for summary judgment.
Thus,
“allowing intervention would derail this case and would require significant and costly discovery
to essentially relitigate the case after four years of contentious litigation.” Lindblom, 2019 WL
4640684, at *4.
Heathcote argues that adding additional plaintiffs to this case could “create less delay and
prejudice” compared to the prospect of other proposed intervenors filing “multiple separate, new
cases against the same defendants.” That may be true, but that consideration is irrelevant. The
relevant inquiry is the prejudice to the original parties, not proposed intervenors. Stupak-Thrall,
226 F.3d at 478. Here, forcing the defendants to conduct more discovery and relitigate dispositive
motions would cause substantial prejudice. Heathcote also argues that if the intervenors filed new
cases, those cases would require pleadings, scheduling conferences, additional discovery, and
motions. Although true as well, that consideration also is irrelevant. The “relevant inquiry in
determining prejudice is the ‘harm arising from the late intervention as opposed to early
intervention’ and not whether Defendant may someday be forced to litigate the Intervenors’ or
other individual’s claim in some other forum.” Lindblom, 2019 WL 4640684, at *4 (quoting Lee
v. Pep Boys-Manny Moe & Jack of California, No. 12-05064, 2016 WL 324015, at *6 (N.D. Cal.
Jan. 27, 2016) (citing Cal. Dep't of Toxic Substances Control v. Com. Realty Projects, Inc., 309
F.3d 1113, 1119 (9th Cir. 2002)).
The prejudice imposed by adding new parties this late in the case is a heavy counterweight
to the intervenors’ motions.
5.
The parties have not identified any “unusual circumstances militating against or in favor
of intervention.’” Kirsch, 733 F. App’x at 274-75.
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Considering all the factors, however, leads to the ineluctable conclusion that the
intervention motions are not timely.
C.
Beyond timeliness, the other factors do not favor the proposed intervenors. “The proposed
intervenors must show that they have a substantial interest in the subject matter of this litigation.”
Grutter v. Bollinger, 188 F.3d 394, 398 (6th Cir. 1999) (citing Jansen v. City of Cincinnati, 904
F.2d 336, 341 (6th Cir. 1990)). “The inquiry into the substantiality of the claimed interest is
necessarily fact-specific.” Michigan State AFL-CIO v. Miller, 103 F.3d 1240, 1245 (6th Cir.
1997). Although the Sixth Circuit “has opted for a rather expansive notion of the interest sufficient
to invoke intervention of right,” ibid., “this does not mean that any articulated interest will do.”
Coal. to Defend Affirmative Action v. Granholm, 501 F.3d 775, 780 (6th Cir. 2007); see StupakThrall, 226 F.3d at 472.
Of the two interests the intervenors identified, the purported class interests are far from
compelling. See Stampley v. Altom Transp., Inc., No. 14-3747, 2019 WL 10891859, at *2–3 (N.D.
Ill. Sept. 11, 2019) (denying motion to intervene as class representative after denial of class
certification because Court was “not persuaded that an interest in pursuing a class action in the
district court after a class has been decertified is a legally protectable interest justifying
intervention”), aff’d, 958 F.3d 580 (7th Cir. 2020); Lindblom, 2019 WL 4640684, at *7 (“the
Intervenors have not established that their interest in pursuing a particular class action procedure,
as opposed to protecting a substantive right, is protectible under Rule 24(a)(2)”). Moreover,
Heathcote’s argument that she and many others “will be left without recourse” is not accurate. As
she conceded, no one contests the intervenors’ right to file individual cases. The same is true for
the absent class members.
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For the individual claims, the proposed intervenors do not explain how they have a
protectable interest in “the property or transaction” which is the subject of the action because the
case proceeds on the four remaining plaintiffs’ individual claims. Fed. R. Civ. P. 24(a)(2). They
do not seek to challenge any universally applicable principles or laws. See Miller, 103 F.3d at
1247 (holding that the Michigan Chamber of Commerce had a substantial legal interest where it
was regulated by several challenged statutory provisions). And they do not suggest that they have
an interest in any of the plaintiffs’ fraud adjudications.
The proposed intervenors bear a “minimal” burden of demonstrating that absent
intervention, “that impairment of its substantial legal interest is possible.” Grutter, 188 F.3d at
399 (quoting Miller, 103 F.3d at 1247). The Sixth Circuit has “acknowledged that potential stare
decisis effects can be a sufficient basis for finding an impairment of interest.” Ibid. (citing Linton
v. Comm’r of Health & Env't, 973 F.2d 1311, 1319 (6th Cir. 1992). But that danger does not exist
here. Because, as explained earlier, the intervenors do not have a substantial interest in the subject
matter of this litigation, “it necessarily follows that such an interest would not be impaired by
resolution.” Lindblom, 2019 WL 4640684, at *8; see also Lee, 2016 WL 324015, at *4 (“The
Court is unaware of any case holding that . . . potential impairment to absent putative class
members satisfies the ‘impairment of protectable interest’ requirement for purposes of mandatory
intervention.”). The intervenors concede that they are not without recourse because they may file
individual actions to vindicate their rights. See Blake v. Pallan, 554 F.2d 947, 954 (9th Cir. 1977)
(“[m]ere inconvenience . . . caused by requiring [the intervenors] to litigate separately is not the
sort of adverse practical effect contemplated by Rule 24(a)(2).”) (citing SEC v. Everest Mgmt.
Corp., 475 F.2d 1236, 1239 (2d Cir. 1972)). And the intervenors need not worry about any
“potential stare decisis effects,” Grutter, 188 F.3d at 399, because the resolution of the plaintiffs’
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individual claims will have little impact on the resolution of the intervenors’ claims, particularly
in light of the intensively fact-sensitive inquiries at play.
Finally, “applicants for intervention must overcome the presumption of adequate
representation that arises when they share the same ultimate objective as a party to the suit.”
Michigan, 424 F.3d at 443-44. This, too, however, is a “minimal” burden; “it is sufficient to prove
that representation may be inadequate.” NE. Ohio Coal for Homeless and Serv. Emp. Int'l Union,
Local 1199 v. Blackwell, 467 F.3d 999, 1008 (6th Cir. 2006) (emphasis in original) (citing Linton,
973 F.2d at 1319). “One is not required to show that the representation will in fact be inadequate.”
Miller, 103 F.3d at 1247. “[I]t may be enough to show that the existing party who purports to seek
the same outcome will not make all of the prospective intervenor’s arguments.” Ibid.
This factor is focused on the individual claims, as the action was “stripped of its character
as a class action” when the Court denied the plaintiffs’ motion for class certification. United
Airlines, Inc. v. McDonald, 432 U.S. 385, 393 (1977); Fed. R. Civ. P. 23 advisory committee’s
note to 1966 amendment. Thus, the ability of the named plaintiffs to represent the absent class
members’ interests is no longer a consideration.
Of course, the named plaintiffs will be unable to represent the interests of the intervenors
on their individual claims. But they would not be expected to look out for the separate claims of
individuals who are capable of filing their own actions. In that context, there is no possibility that
the proposed intervenors’ interests in their individual claims would be impaired absent
intervention.
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D.
These factors do not favor intervention by right. As noted above, the more lenient
requirements for permissive intervention still require a timely motion. The proposed intervenors
have not met that requisite.
III.
On balance, the relevant factors weigh against allowing the moving parties to intervene in
this pending case.
Accordingly, it is ORDERED that the motions to intervene (ECF No. 454, 477, 502) are
DENIED.
s/David M. Lawson
DAVID M. LAWSON
United States District Judge
Date: May 4, 2021
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