Innovation Ventures LLC et al v. Pittsburg Wholesale Grocers Inc et al

Filing 632

ORDER denying 630 Motion to Intervene. For the reasons discussed in the attached, U.S. Wholesale's motion to intervene is DENIED. Ordered by Judge Kiyo A. Matsumoto on 9/30/2019. (Mazzurco, Vincent)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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INNOVATION VENTURES LLC, et al.,
Plaintiffs,
-againstPITTSBURG WHOLESALE GROCERS INC.,
et al.,

ORDER
13-CV-6397(KAM)(ST)

Defendants.
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MATSUMOTO, United States District Judge
Pursuant to Federal Rule of Civil Procedure 24 (“Rule
24”), non-party U.S. Wholesale Outlet & Distribution, Inc.,
(“U.S. Wholesale” or “putative-intervenor”), seeks to intervene
in this action which has been closed since April 24, 2017.

(See

ECF No. 611, Not. Voluntary Dismissal; ECF No. 612, Order
granting Motion for Entry of Judgment under Rule 54(b); ECF No.
630, Ltr. Mot.; ECF No. 621, Pls.’ Opp.; ECF No. 622, Reply.)
For the reasons discussed below, the putative-intervenor’s
motion is DENIED.
U.S. Wholesale moves to intervene so that it may,
first, modify the protective order in this now-closed case.
(Ltr. Mot. 1.)

It seeks access to deposition transcripts of two

witnesses in this action, Matthew Dolmage and Kevin Riffle.
Second, if the protective order is modified, U.S. Wholesale
seeks this court’s permission to request leave of the United

States District Court for the Central District of California to
use both transcripts in a case pending before that court.

(Id.)

Plaintiffs oppose, and on June 6, 2019, filed a letter
representing to the court that discovery in the California
litigation closed as of March 2019, and that in January 2019,
U.S. Wholesale deposed Dolmage in the California litigation.
(ECF No. 627, Pls.’ Supp. Ltr.)

U.S. Wholesale clarified on

June 19, 2019, that it no longer sought the deposition
transcript of Riffle.

(ECF No. 628, USW Supp. Ltr. 1.)

The court assumes familiarity with the lengthy history
of this case that involved numerous defendants and spanned
several districts.

Much of the history is not pertinent to the

court’s decision herein.

U.S. Wholesale seeks to have this

court modify the protective order, and it devotes much of its
submission to the question of whether Ninth Circuit law applies
to such modification.

(Ltr. Mot. 2.)

Whether or not that is

the case, this court must first decide U.S. Wholesale’s motion
to intervene under Federal Rule of Civil Procedure 24, and
applies the precedent of its governing circuit, the Second
Circuit.

The putative-intervenors’ citation to and arguments

relying on Ninth Circuit law regarding protective order
modification and contractual interpretation are thus
inapplicable to this first step of the inquiry regarding
intervention.
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U.S. Wholesale does not indicate whether it seeks
intervention as of right under Rule 24(a), or permissive
intervention under Rule 24(b).

Even on reply, putative-

intervenor does not argue that its motion is proper under Rule
24, which plaintiffs argue it is not.

(Pls.’ Opp. 8-10.)

Instead, U.S. Wholesale argues only that the protective order
should be modified.

The court must nevertheless be satisfied

that intervention is proper.
First, Rule 24 permits an intervention as of right
when a putative intervenor is given an unconditional right to
intervene by federal statute; or a permissive intervention when
given a conditional right by a federal statute.
24(a)(1); (b)(1)(A).

Fed. R. Civ. P.

in its letter motion.

U.S. Wholesale invokes no federal statute
Second, Rule 24(a) permits an

intervention as of right by anyone who “claims an interest
relating to the property or transaction that is the subject of
the action and . . . that disposing of the action may as a
practical matter impair or impede the movant’s ability to
protect its interest.”

Fed. R. Civ. P. 24(a)(2).

By contrast,

a permissive intervention requires only a showing that 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).

In addition to such a showing, Rule 24 requires the motion to
“state the grounds for intervention and be accompanied by a
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pleading that sets out the claim or defense for which
intervention is sought.”

Fed. R. Civ. P. 24(c).

Courts have

found, however, that “a failure to attach . . . a proposed
pleading” as required by Rule 24(c) “is not fatal to the motion
to intervene and may be waived by a failure to object.”
N. Shore-Long Island Jewish Health Sys., Inc. v. MultiPlan,
Inc., No. 12-CV-1633, 2015 WL 777248, *18 (E.D.N.Y. Feb. 13,
2015) (citing In re Parr, 17 B.R. 801, 804 n.3 (Bankr. E.D.N.Y.
1982), adopted by, No. 12-CV-1633, 2015 WL 1345814 (E.D.N.Y.
Mar. 25, 2015).

U.S. Wholesale does not attach a pleading to

its letter motion to intervene and states only that it seeks
intervention to have this court modify the protective order.
(Ltr. Mot. 2-3.)

Plaintiffs did not object to this omission.

To intervene as of right pursuant to Rule 24(a)(2), a
movant must show that: (1) the application is timely; (2) the
applicant claims an interest relating to the subject matter of
the action; (3) the protection of the interest may as a
practical matter be impaired by the disposition of the action;
and (4) the interest is not adequately protected by an existing
party.

N. Shore-Long Island Jewish Health Sys., 2015 WL 777248,

at *18 (citing R Best Produce, Inc. v. Shulman–Rabin Mktg.
Corp., 467 F.3d 238, 240 (2d Cir. 2006)).

As to permissive

intervention, “[i]n exercising its broad discretion under Rule
24(b), a court considers the same factors that it considers for
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intervention as of right.”

MASTR Adjustable Rate Mortg. Tr.

2006–A3 v. UBS Real Estate Secs., No. 12-CV-7332, 2013 WL
139636, at *2 (S.D.N.Y. Jan. 11, 2013); see also Peterson v.
Islamic Republic of Iran, 290 F.R.D. 54, 57 (S.D.N.Y. 2013)
(“Courts typically consider the same four factors whether a
motion for intervention is ‘of right’ under Fed. R. Civ. P.
24(a) or ‘permissive’ under Fed. R. Civ. P. 24(b).”).

“Failure

to satisfy any one of these requirements is a sufficient ground
to deny the application.
intervene must be denied.”

Thus[,] an untimely motion to
Farmland Dairies v. Comm’r of N.Y.

State Dep’t of Agric. & Mkts., 847 F.2d 1038, 1043 (2d Cir.
1988); see also NAACP v. New York, 413 U.S. 345, 366 (1973).
But see In re Pineapple Antitrust Litig., 2015 WL 5439090, at *2
(“[T]here is no implication in the caselaw or in common sense
why the passage of more than three years should disable a
journalist from seeking unsealing.”).
U.S. Wholesale has not even attempted to establish its
right to intervention under the more onerous requirements of
Rule 24(a).

Thus, the court will evaluate its motion under

Rule 24(b), as “permissive intervention [under Rule 24(b)] is
the proper method for a nonparty to seek a modification of a
protective order.”

A.T. & T. Corp. v. Sprint Corp., 407 F.3d

560, 562 (2d Cir. 2005).

“‘A litigant's purpose in seeking

modification of an existing protective order is also relevant
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for determining whether to grant a modification.’”

Dorsett v.

County of Nassau, 289 F.R.D. 54, 65 (E.D.N.Y. 2012) (quoting In
re Ethylene Propylene Diene Monomer Antitrust Litig., 255 F.R.D.
308, 324 (D. Conn. 2009)).

Courts appear to require a lesser

showing when the press or other public interest group seeks to
intervene to modify a protective order or otherwise unseal
judicial documents.

See, e.g., United States v. Erie County,

763 F.3d 235, 238 (2d Cir. 2014) (reviewing district court’s
decision to deny access to sealed compliance reports to New York
Civil Liberties Union); In re Pineapple Antitrust Litig., 2015
WL 5439090, at *2.

“[R]equests to modify protective orders so

that the public may access discovery materials is arguably
subject to a more stringent presumption against modification
because there is no public right of access to discovery
materials.’”

Dorsett, 289 F.R.D. at 65 (quoting In re Ethylene,

255 F.R.D. at 324).
Courts are instructed to evaluate the timeliness of
the proposed intervention “against the totality of the
circumstances before the court.”

Farmland Dairies, 847 F.2d at

1044; Dorsett, 289 F.R.D. at 72.

The Second Circuit has

emphasized a district court’s “broad discretion under Rule 24(b)
to determine whether to permit intervention on the basis that
the intervenor’s ‘claim or defense and the main action have a
question of law or fact in common.’”
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St. John’s Univ. v.

Bolton, 450 F. App’x 81, 84 (2d Cir. 2011) (quoting Fed. R. Civ.
P. 24(b)(2)).
To determine if a motion to intervene is timely,
courts consider the following: (1) the length of time the
applicant knew or should have known of his interest before
making the motion; (2) prejudice to the existing parties
resulting from the applicant's delay; (3) prejudice to the
applicant if the motion is denied; and (4) the presence of
unusual circumstances militating for or against a finding of
timeliness.

In re Akron Beacon J. v. Metro. Life. Ins. Co., No.

94-CV-1402, 1995 WL 234710, at *6 (S.D.N.Y. Apr. 20, 1995).
“Post-judgment intervention, [however,] is generally disfavored
because it fosters delay and prejudice to existing parties.”
Dorsett, 289 F.R.D. at 72 (citing Farmland Dairies, 847 F.2d at
1044).
Nowhere in its letter motion to intervene or in its
reply does U.S. Wholesale argue pertinent authority for applying
Rule 24(b) to the instant case.

Plaintiffs, in opposing the

motion to intervene, argue the motion is untimely because the
putative-intervenors, through counsel, had notice of the
discovery documents they seek; that denial would not prejudice
U.S. Wholesale; and that “unusual circumstances” exist to deny
the motion.

(Opp. 8-9.)

As to these unusual circumstances,

which the court does not find dispositive, plaintiffs insinuate
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that U.S. Wholesale’s counsel filed new lawsuits based on the
information they learned in discovery in this case.

(Opp. 9-

10.)
First, the court finds the motion is untimely.

The

relevant depositions took place in November 2013 and April 2014.
U.S. Wholesale moved in September 2018, sixteen months after
this action was closed, and more than four years after the
depositions.

Admittedly, an intervention during the pendency of

an action may be more disruptive than a post-judgment
intervention, and the delay here does not appear to prejudice
any party or add to the disruption.

Nevertheless, this

substantial delay weighs against finding the motion timely,
especially given the fact that U.S. Wholesale’s counsel
represented parties in this action and were aware of the
availability of the protected discovery materials.
Second, denying the motion would not prejudice U.S.
Wholesale.

As plaintiffs argue, U.S. Wholesale has already

taken Dolmage’s deposition.

Though U.S. Wholesale argues it

“will not have any way to impeach Mr. Dolmage at trial,” it had
the opportunity it was entitled to in deposing Dolmage in the
California litigation.

U.S. Wholesale’s does not explain how

its interests will be impaired if it is left with the discovery
it took in the California litigation.

The court agrees with

plaintiffs that U.S. Wholesale has “largely obtained” the
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discovery it seeks in this case.

Though U.S. Wholesale

clarified it no longer seeks Riffle’s deposition, plaintiffs
represented, and U.S. Wholesale did not dispute, that U.S.
Wholesale also had the opportunity to depose Riffle in the
California litigation, noticed his deposition, but chose to
cancel the deposition shortly before it was scheduled.

(Pls.’

Supp. Ltr. 1 n.1.)
U.S. Wholesale presents no compelling reason to
disturb this long resolved and closed action, so that it may
obtain additional discovery in a collateral matter.
to intervene is therefore DENIED.

The motion

See A.T.& T., 407 F.3d at 562

(affirming denial of motion to intervene and modify protective
order seeking discovery documents in an attempt to circumvent
closure of discovery in collateral state action).

As the court

denies the motion for failure to comply with Rule 24, it need
not reach the question of whether the protective order is
governed by Ninth Circuit Law, and declines to do so.

Dated:

September 30, 2019
Brooklyn, New York
/s/
Kiyo A. Matsumoto
United States District Judge

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