Affiliated Foods Midwest Cooperative, Inc. v. SuperValu Inc.

Filing 39

MEMORANDUM AND ORDER granting 10 Motion to Intervene. Ordered by Senior Judge Joseph F. Bataillon. (ADB)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
AFFILIATED FOODS MIDWEST
COOPERATIVE, INC., a Nebraska
corporation; and ASSOCIATED
WHOLESALE GROCERS, INC.,
Plaintiffs,
8:16CV465
vs.
SUPERVALU INC., a Delaware
corporation,

MEMORANDUM AND ORDER

Defendant,
Borowiak IGA Foodliner, Inc.,
Intervenor.
This matter is before the Court on the motion to intervene filed by Borowiak IGA
Foodliner, Inc. (“Borowiak”). (Filing No. 10). Borowiak filed a brief in support of the
motion.

(Filing No. 11)

Borowiak also filed a statement of interest in support of

intervention (Filing No. 12). In response, plaintiff Affiliated Foods Midwest Cooperative,
Inc. (“AFM”) filed a brief in opposition to the motion to intervene. (Filing No. 27). The
defendant, SuperValu Inc. (“SuperValu”) has not filed a response to the motion. The
plaintiff filed this action alleging that SuperValu tortiously interfered with the supply
agreement between Borowiak and the plaintiff. The defendant, SuperValu, disagrees
and argues that AFM cannot sustain a claim for tortious interference. SuperValu
additionally asserts that competition for Borowiak’s business is a matter of public
interest since society is benefitted by lawful competition. Plaintiff also filed a motion for a
temporary restraining order (“TRO”) against SuperValu.
BACKGROUND
At all material times herein the plaintiff, AFM, is a grocery store chain which
entered into a supply agreement with Borowiak. The defendant, SuperValu, is a

Minnesota-based wholesaler which served as Borowiak’s primary grocery supplier until
Borowiak decided to switch to AFM. The intervenor, Borowiak, entered in to a supply
agreement with AFM, which made AFM the primary grocery supplier to Borowiak.
On October 11, 2016, AFM filed a complaint against SuperValu in the District
Court of Madison County, Nebraska. The complaint alleged SuperValu tortiously
interfered with certain agreements between AFM and Borowiak by supplying fresh meat
and other groceries. See Filing No. 1 at 1. Borowiak alleged that there has been a
“failure or refusal” by AFM “to provide fresh meat and timely deliver produce” and AFM
has been “unable or failed to consistently serve Borowiak’s needs for other foodstuffs
and items sold by retail grocers such as the $1.00 product offering and cross-dock
products.” See Filing No. 11 at 3. As a result Borowiak purchased all fresh meat for its
seven stores from SuperValu. Id. In addition, Borowiak also learned AFM was selling
substantially all of its assets to Associated Wholesale Grocers, Inc. (“AWG”) and
Borowiak would, thereafter, be required to become an AWG member to receive the
grocery items previously provided by AFM. Id. at 2. Borowiak would be “required to
accept terms and conditions different than those in the Agreement relating to the
valuable patronage rebate Borowiak was then receiving from AFM”. See Filing No. 12-2
at 3.
Borowiak, a retail grocery chain, depends on businesses such as AFM and
SuperValu to keep inventory. See Filing No. 11 at 2. Keeping a stocked store is
essential to the livelihood of Borowiak’s business. Id. Borowiak asserts that “the TRO
impacts business and its customers in rural towns far more than it does AFM or
SuperValu.” Id. Having divergent interests, Borowiak claims its interests in this action

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are not properly represented. Id. Therefore, Borowiak requested the Court grant its
intervention request, either as a matter of right or with the Court’s permission. Id.
LAW
As a threshold matter for the plaintiff, “Article III standing is a prerequisite for
intervention in a federal lawsuit.” Curry v. Regents of Univ. of Minn., 167 F.3d 420, 422
(8thCir.1999) (quoting Standard Heating & Air Conditioning Co. v. City of
Minneapolis,137 F.3d 567, 570 (8th Cir. 1998)). “Constitutional standing requires a
showing of: (1) an injury in fact, which is an invasion of legally protected interest that is
concrete, particularized, and either actual or imminent; (2) causation; and (3)
redressability.” Curry, 167 F.3d at 422; see also Mausolf v. Babbitt, 85 F.3d 1295, 130102 (8th Cir. 1996) (finding the movant “alleged concrete, imminent, and redressable
injuries in fact” where it showed it would be injured if restrictions challenged in the action
were removed). On timely motion, the court must permit anyone to intervene who, under
Rule 24(a), any timely applicant shall be permitted to intervene:
(1) when a statute of the United States confers an unconstitutional right to
intervene; or (2) when the applicant claims an interest relating to the
property or transaction which is the subject of the action and the applicant
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 existing parties.
Fed. R. Civ. P. 24(a). Rule 24 “governs both intervention as of right and permissive
intervention . . .” United States v. Union Elec. Co., 64 F.3d 1152, 1157 (8th Cir. 1995);
See Fed. R. Civ. P. 24(a). Rule 24(b) allows for permissive intervention when:
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.
Fed. R. Civ. P. 24(b). The court notes “Rule 24 should be liberally construed with all
doubts resolved in favor of the proposed intervenor.” Tweedle v. State Farm Fire & Cas.
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Co., 527 F.3d 664, 671 (8th Cir. 2008) (quoting South Dakota v. U.S. Dept. of Interior,
317 F.3d 783, 785 (8th Cir. 2003)).
1. Timeliness
“Whether a motion to intervene is timely is determined by considering all of the
circumstances of the case.” United States v. Union Elec. Co., 64 F.3d 1152, 1158-59
(8th Cir. 1995). Three important factors for the court to consider in determining
timeliness include: “(1) the reason for any delay by the proposed intervenor in seeking
intervention; (2) how far the litigation has progressed before the motion to intervene is
filed, and (3) how much prejudice the delay in seeking intervention may cause to other
parties if intervention is allowed.” Id. at 1159. Prejudice is determined by evaluating
whether existing parties may be prejudiced by the delay in moving to intervene, not
whether the intervention itself will cause the nature, duration, or disposition of the
lawsuit to change. Id.
2. Recognized Interest
Next, an applicant for intervention must show “a recognized interest in the
subject matter of the litigation.” South Dakota v. U.S. Dept. of Interior, 317 F.3d at 785;
Union Elec. Co., 64 F.3d 1152 at 1161. Such interest must be “‘direct,’ as opposed to
tangential or collateral. Furthermore, that interest must be ‘recognized,’ i.e., both
‘substantial’ and ‘legally protectable.’” Union Elec. Co., 64 F.3d 1152 at 1161.
3. Interest Impaired by Disposition
The third showing an applicant for intervention must make is that the disposition
of the case might impair its interest. South Dakota v. U.S. Dept. of Interior, 317 F.3d at
785; Union Elec. Co., 64 F.3d at 1161. The United States Court of Appeals for the
Eighth Circuit emphasizes that Rule 24(a) “does not require, after all, that [applicants for
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intervention] demonstrate to a certainty that their interests will be impaired in the
ongoing action. It requires only that they show that the disposition of the action ‘may as
a practical matter’ impair their interests.” Union Elec. Co., 64 F.3d at 1162 (quoting Little
Rock Sch. Dist. v. Pulaski County Special Sch. Dist., 738 F.2d 82, 84 (8th Cir. 1984)).
“[T]he ‘interest’ test is primarily a practical guide to disposing of lawsuits by involving as
many apparently concerned persons as is compatible with efficiency and due process.”
Union Elec. Co., 64 F.3d at 1162 (citations and internal quotation marks omitted).
4. Existing Parties
Finally, the movant must show its “interest will not be adequately protected by the
existing parties.” South Dakota v. U.S. Dept. of Interior, 317 F.3d at 785; Union Elec.
Co., 64 F.3d at 1168. The Court must determine whether representation is adequate “by
comparing the interests of the proposed intervenor with the interests of the current
parties to the action.” Sierra Club v. Robertson, 960 F.2d 83, 86 (8th Cir. 1992). “A party
generally need only make a minimal showing that representation may be inadequate to
be entitled to intervene on that basis, but the burden is greater if the named party is a
government entity that represents interests common to the public.” Little Rock Sch. Dist.
v. North Little Rock Sch. Dist., 378 F.3d at 774, 780 (8th Cir. 2004) (internal citations
and quotations omitted). To show inadequate representation, a movant “may show that
its interests are distinct and cannot be subsumed within the public interest represented
by the government entity.” Id.
DISCUSSION
In this case, the movant filed its motion to intervene within a few days of AFM’s
ex parte motion for a TRO. No other parties assert the motion was untimely. The Court
has reviewed the record and finds that the motion is timely. Further, the Court finds
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Borowiak would be directly and immediately affected by the TRO, as SuperValu was
supplying items germane to a grocery store’s inventory when AFM allegedly was not. If
this supply were to cease, the effects could be immediately impactful to Borowiak’s
protectable interests. Therefore, the Court finds Borowiak has a direct, substantial, and
legally protectable interest in the subject matter of the litigation.
Borowiak’s business success is dependent upon companies such as AFM and
SuperValu in order to satisfy a customer’s needs. Sitting at the end of the supply chain
from production to consumer, a grocery retailer must rely on its inventory from grocery
suppliers in pursuit of serving its customers. Any inadequacy in this process would
result in a harmful effect at the retail level. Therefore, minimal supplying of fresh
produce and meat could substantially degrade the reputation and reliability of
Borowiak’s business to the rural communities it serves. The Court finds resolution of the
subject matter of this case may, as a practical matter, impair Borowiak’s interests.
Borowiak, a grocery retailer rather than supplier like AFM and SuperValu, has a
disparate or different interest compared to those represented in this matter. Borowiak is
concerned with its offerings of groceries rather than its production of grocery goods to
retailers. AFM and SuperValu are not primarily cognizant of consumer satisfaction but
rather their transactions with Borowiak. Furthermore, concern with the reputation of a
certain business in the community is not under the purview of a supplier unless that
grocer goes out of business. Under a low threshold of “a minimal showing that
representation may be inadequate”, the Court finds the movant does identify interests
distinct from those represented by AFM and SuperValu. Little Rock Sch. Dist., 378 F.3d
at 780. Accordingly, the movant may intervene as a matter of right because the movant
has Article III standing to participate in this litigation, and has satisfied Rule 24(a).
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THEREFORE, IT IS ORDERED that the motion to intervene filed by Borowiak,
Filing No. 10, is granted.

Dated this 3rd day of February, 2017.

BY THE COURT:
s/ Joseph F. Bataillon
Senior United States District Judge

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