COMMUNITY VOCATIONAL SCHOOLS OF PITTSBURGH, INC. v. MILDON BUS LINES INC.
MEMORANDUM OPINION re 64 MOTION to Intervene Pursuant to Federal Rule of Civil Procedure 24 filed by ERIE INSURANCE EXCHANGE. Signed by Chief Judge Joy Flowers Conti on 4/17/17. (jp)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
COMMUNITY VOCATIONAL SCHOOLS OF
PITTSBURGH, INC., a corporation, individually
and as the representative of a class of similarly
MILDON BUS LINES, INC., a Pennsylvania
Defendant/Third Party Plaintiff,
CAROLINE ABRAHAM and JOEL ABRAHAM, )
Third Party Defendants.
Civ. No. 09-1572
CONTI, Chief District Judge.
In its motion for leave to intervene (ECF No. 64), Erie Insurance Exchange (“Erie”) calls
upon the court to allow it to intervene in this case pursuant to Federal Rule of Civil Procedure 24
(“Rule 24”). This punitive class action case seeks to advance claims under the Telephone
Consumer Protection Act (“TCPA”), 47 U.S.C. § 227. (ECF No. 1.) Community Vocational
Schools of Pittsburgh, Inc. (“plaintiff”) represents a class of persons who allegedly received
unlawful facsimile messages from Mildon Bus Lines, Inc. (“Mildon Bus” or “defendant”) in
Erie is the insurance provider for Mildon Bus and is currently providing representation to
it subject to a reservation of rights. (ECF No. 64 at 2.) Erie seeks to intervene in this case for the
limited purpose of submitting special jury interrogatories. Erie’s claimed purpose for
intervention is to determine whether it has a duty to indemnify defendant against any judgment
obtained by plaintiff. (Id. at 7.) Erie states that if the jury enters an award of general damages,
Erie will be unable to determine whether it has a duty to indemnify Mildon Bus against the
judgment. (Id. at 8.) For the reasons set out in this opinion, the court finds that Erie failed to
satisfy the requirements for intervention of right under Rule 24(a), and at this time it is premature
for the court to determine whether to allow permissive intervention under Rule 24(b). Erie’s
motion to intervene, therefore, is denied.
II. Procedural History
On November 30, 2009, plaintiff filed a class action complaint against defendant
advancing a claim under the TCPA for sending unlawful facsimile messages. (ECF No. 1.) On
July 27, 2010, defendant filed for bankruptcy in the United States Bankruptcy Court for the
Western District of Pennsylvania. In re Mildon Bus Lines, Ins., Civil Action No. 10-25312. On
September 22, 2010, this court issued a stay with respect to this case pending resolution of
defendant’s bankruptcy proceedings. (ECF Nos. 26, 27.) The bankruptcy court, in light of the
insurance coverage, lifted the automatic stay to permit this case to proceed to the extent of the
coverage. (Civil Action No. 10-25312, ECF No. 79.) Erie filed a claim against defendant in the
Court of Common Pleas of Allegheny County concerning insurance coverage (“coverage
action”). Erie Ins. Exch. v. Mildon Bus Lines, Inc. and Community Vocational Sch. of
Pittsburgh, Alleg. Cty. Ct. of Common Pleas, Civil Action No. 10-003030. This court continued
the stay of this matter pending the resolution of summary judgment motions in Erie’s coverage
action. (ECF No. 64 at 2.) On November 22, 2016, after being advised that summary judgment
was not granted in favor of Erie, this court held a status conference, at which point it reopened
the case and ordered fact discovery to be completed on or before February 15, 2017. (ECF No.
49.) On January 30, 2017, this court granted plaintiff’s unopposed motion to extend fact
discovery, and ordered that discovery be completed on or before May 15, 2017. (ECF No. 62.)
On February 2, 2017, Erie filed a motion for leave to intervene pursuant to Federal Rule
of Civil Procedure 24 (“Rule 24”), accompanied by a memorandum of law in support of its
motion. (ECF No. 64.) On February 22, 2017, plaintiff filed a response to Erie’s motion for
leave to intervene, accompanied by a memorandum of law in support of its response. (ECF Nos.
67, 68.) On March 7, 2017, defendant filed a brief in reply to plaintiff’s response in opposition
to Erie’s motion to intervene. (ECF No. 74.) On March 7, 2017, Erie filed a reply brief in
further support of its motion to intervene. (ECF No. 75.) A hearing was held on the motion on
March 27, 2017. Having been fully briefed and argued, this motion is now ripe for disposition.
Rule 24(a) and Rule 24(b)
Erie seeks to intervene in the underlying action for the limited purpose of submitting
special jury interrogatories. Erie seeks “intervention of right” under Federal Rule of Civil
Procedure 24(a) (“Rule 24(a)”). Rule 24(a) states, in relevant part:
(a) Intervention of Right. Upon timely application, anyone shall be permitted to
intervene in an action… (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.
The Third Circuit Court of Appeals utilizes a four-factor test to determine whether the
intervening party has a right to intervene under Rule 24(a). This test requires:
1) a timely application for leave to intervene, 2) a sufficient interest in the
underlying litigation, 3) a threat that the interest will be impaired or affected by
the disposition of the underlying action, and 4) that the existing parties to the
action do not adequately represent the prospective intervenor's interests.
Liberty Mut. Ins. Co. v. Treesdale, Inc., 419 F.3d 216, 220 (3d Cir. 2005) (citing
Kleissler v. United States Forest Serv., 157 F.3d 964, 969 (3d Cir. 1998)). Each of the
factors must be satisfied for intervention under Rule 24(a) to be granted and the burden is
on the party seeking intervention. Mountain Top Condo. Ass'n v. Dave Stabbert Master
Builder, Inc., 72 F.3d 361, 366 (3d Cir. 1995).
If the intervening party does not meet its burden under Rule 24(a) it may still be able to
intervene under Rule 24(b). Rule 24(b), which provides for permissive intervention, provides the
court with discretion in determining whether intervention is proper. Brody By & Through
Sugzdinis v. Spang, 957 F.2d 1108, 1124 (3d Cir. 1992) (“Whether to grant permissive
intervention under Rule 24(b), as the doctrine’s name suggests, is within the discretion of the
district court.”). Rule 24(b) provides, in relevant part:
(b) Permissive intervention. Upon timely application, anyone may be permitted
to intervene in an action: . . . (2) when an applicant's claim or defense and the
main action have a question of law or fact in common.
Fed.R.Civ.P. 24(b)(2). A district court may exercise its discretion and allow a timely
applicant to intervene under Rule 24(b) if the original plaintiff and the intervenor share a
“question of law or fact in common.” McKay v. Heyison, 614 F.2d 899, 906 (3d Cir.
1980). “In exercising its discretion the court shall consider whether the intervention will
unduly delay or prejudice the adjudication of the rights of the original parties.”
Rule 24(c), Notice and Pleading Required
As a preliminary matter, the court will address plaintiff’s argument that Erie’s motion
should be dismissed for failing to attach a pleading under Federal Rule of Civil Procedure 24(c)
(“Rule 24(c)”). Rule 24(c) requires the party seeking intervention to serve a motion to intervene
and a proposed pleading on the opposing parties. Fed.R.Civ.P. 24(c) (“motion must state the
grounds for intervention and be accompanied by a pleading that sets out the claim or defense for
which intervention is sought.”) (emphasis added). Rule 24(c) is “designed to ensure that parties
have advance notice of the claims that an intervenor plans to make.” SEC v. Investors Sec.
Leasing Corp., 610 F.2d 175, 178 (3d Cir. 1979) (finding that court was without jurisdiction to
rule on intervening party’s claims because applicant failed to serve a motion to intervene on the
other parties, and consequently those parties had absolutely no way to know the claims for
Generally, failure to comply with the requirements of Rule 24(c) will result in the denial
of a motion to intervene. Meridian Financial Advisors, LTD v. Contract Purchase & Design,
Inc., 495 B.R. 274, 280 (Bankr. W.D. Pa. 2013); see Township of S. Fayette v. Allegheny Cty
Housing Auth., 183 F.R.D. 451 (W.D. Pa. 1998) (motion to intervene dismissed when movants
did not submit the requisite proposed pleading). Nonetheless, “despite the compulsory language
of [Rule 24(c)], some federal circuits have held that whether ‘to permit a procedurally defective
motion to intervene is within the sound discretion of the district court.’” United States ex rel.
Frank M. Sheesley Co. v. St. Paul Fire & Marine Ins. Co., 239 F.R.D. 404, 408 (W.D. Pa. 2006)
(quoting Retired Chi. Police Ass'n v. City of Chicago, 7 F.3d 584, 595 (7th Cir. 1993); see
Providence Baptist Church v. Hillandale Comm., Ltd., 425 F.3d 309, 313 (6th Cir. 2005);
Beckman Indus., Inc., v. Int'l Ins. Co., 966 F.2d 470, 474 (9th Cir. 1992). Although the
requirements under Rule 24(c) state that a party seeking intervention must attach “a pleading that
sets out the claim or defense for which intervention is sought,” this condition may be waived if
the court finds that the other parties will not be prejudiced by the failure to have a proposed
pleading along with the motion for intervention. See Id. (quoting Fed.R.Civ.P. 24(c)).
Plaintiff offers no evidence that it has been or will be prejudiced Erie’s failure to submit a
pleading with its motion to intervene. Plaintiff instead focuses its objection on a technical
reading of Rule 24(c). (see ECF No. 66 at 4.) Given that Erie seeks to intervene in order to
submit special interrogatories, not to file a pleading, and there is no evidence that Erie’s failure
to submit a pleading along with its motion to intervene caused prejudice to the existing parties,
the court will exercise its discretion and waive the pleading requirement.
Both “intervention of right” and “permissive intervention” require that the party seeking
to intervene do so in a timely manner. Given that timeliness is a threshold matter for Rule 24(a)
and Rule 24(b), the court will begin by addressing this question. See Lawrence Music, Inc. v.
Samick Music Corp., 227 F.R.D. 262, 263 (W.D. Pa. 2005) (quoting In re Safeguard Scientifics,
220 F.R.D. 43, 46-7 (E.D. Pa. 2004)) (“ ‘threshold to both permissive intervention and
intervention of right is timeliness.’ ”).
In order to determine whether a request for intervention is timely a district court must
analyze “ ‘the facts and circumstances surrounding the proceedings,’ ” which requires
consideration of “ ‘the totality of the circumstances’ ” rather than the mere counting of days.
Lawrence Music, Inc., 227 F.R.D. at 263 (quoting In re Safeguard Scientifics, 220 F.R.D. at 467). When “making a timeliness assessment, a district court must consider (1) the stage of the
proceedings when the movant seeks to intervene; (2) the prejudice the delay may cause the
parties; and (3) the reason for the delay.” In re Cmty. Bank of N. Va. & Guar. Nat’l Bank of
Tallahassee Second Mortgage Loan Litig., 418 F.3d 277, 314 (3d Cir. 2005). If a request for
intervention is deemed to be untimely, the request shall be denied. United States v. Alcan
Aluminum, 25 F.3d 1174, 1181 (3d Cir. 1994).
The first prong of the timeliness test requires the court to look at the stage of the
proceedings and the length the intervening party waited before seeking to intervene in the action.
While “ ‘the mere passage of time does not, of itself, render an application for intervention
untimely,’ ” the length of time an applicant waits to request intervention is a factor in
considering timeliness. Lawrence Music, Inc., 227 F.R.D. at 263 (quoting In re Safeguard
Scientifics, 220 F.R.D. at 47). The time period “ ‘should be measured from the point at which
the applicant knew, or should have known, of the risk to its rights.’ ” Wallach v. Eaton Corp.,
837 F.3d 356, 375 (3d Cir. 2016) (quoting Alcan Aluminum, 25 F.3d 1174, 1183).
Here, plaintiff filed its complaint on November 30, 2009. Since that time Erie has been
representing defendant subject to a reservation of rights. (ECF No. 64 at 2.). Erie was, therefore,
aware of the risk to its rights for over seven years before it filed its February 2, 2017, motion to
intervene. Plaintiff argues that a delay of seven years is “patently unreasonable” and cites
Lawrence Music, Inc. v. Samick Music Corp., 227 F.R.D. 262 (W.D. Pa. 2005), in support of
this contention. In Lawrence Music, Inc., which also involved a motion to intervene by Erie, the
district court denied Erie’s motion to intervene, in part because it determined that “Erie's
excessive delay in filing its motion to intervene  weigh[ed] against granting the motion.”
Lawrence Music, Inc., 227 F.R.D.at 264.
Lawrence Music, Inc., however, is distinguishable from the matter at hand. Under the
first prong of the timeliness test “the critical inquiry is: what proceedings of substance on the
merits have occurred?” Mountain Top, 72 F.3d at 369. In Lawrence Music, Inc., the parties had
already adjudicated cross-motions for summary judgment and were scheduled for trial when Erie
filed its motion to intervene. The court found that Erie filed its motion “literally on the eve of
trial” and that due to the late stage in the proceedings Erie’s delay was excessive. Here, plaintiff
survived the motion to dismiss phase and the parties are presently engaged in fact discovery, but
no summary judgment motions are filed or trial scheduled, as was the case in Lawrence Music,
Inc.. Furthermore, while Erie did wait seven years to file its motion to intervene, for the majority
of this time – from September 22, 2010 to November 22, 2016 – the matter was stayed. Given
that this case is not at a particularly late stage, the mere fact that seven years has elapsed since
the initial complaint was filed does not in and of itself make Erie’s motion untimely filed. See
United States v. British Am. Tobacco Australia Servs., Ltd., 437 F.3d 1235, 1239 (D.C. Cir.
2006) (“elapsed time alone may not make a motion for intervention untimely”); Jones v.
Blinziner, 536 F. Supp. 1181, 1188 (N.D. Ind. 1982) (“The time element itself must be
considered but the mere lapse of time by itself does not make an application untimely.”); see also
Mountain Top, 72 F.3d at 370 (finding motion to intervene was not untimely where parties had
engaged in “some written discovery and settlement negotiations . . . [but] there were no
depositions taken, dispositive motions filed, or decrees entered during the four year period in
The second prong of the timeliness test requires a court to look for possible prejudice
caused to the existing parties by the applicant’s delay. In re Cmty. Bank, 418 F.3d at 314.
Potential prejudice is considered the “most important factor in determining the timeliness of a
motion to intervene as of right.” Petrol Stops Nw. v. Cont'l Oil Co., 647 F.2d 1005, 1010 (9th
Cir. 1981); McDonald v. E. J. Lavino Co., 430 F.2d 1065, 1073 (5th Cir. 1970) (“The most
important consideration in determining timeliness is whether any existing party to the litigation
will be harmed or prejudiced by the proposed intervenor's delay in moving to intervene.”).
Where the intervening party did not meaningfully delay in filing its motion to intervene, courts
have been skeptical to find that the other parties have been prejudiced. Wallach, 837 F.3d at
In arguing that Erie’s motion was untimely, plaintiff alleges that “Erie’s intervention in
this matter will certainly cause prejudice to the parties and ultimately confusion to the jury by
injecting issues that neither party needs to address as part of their claims and defenses.” (ECF
No. 66 at 7.) Plaintiff misconstrues the meaning of prejudice in this context. “The prejudice
prong of the timeliness inquiry ‘measures prejudice caused by the intervenors' delay—not by the
intervention itself.’” Utah Ass'n of Ctys. v. Clinton, 255 F.3d 1246, 1251 (10th Cir. 2001). While
the intervention itself may very well prejudice plaintiff, the question at this point focuses not on
whether the intervention will cause prejudice, but whether the delay will cause prejudice. 7C
Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1916 (3d ed. 2017)
(“Delay is not the only possible form of prejudice to the existing parties, but if the intervention
will not delay the termination of the litigation intervention ordinarily will be allowed.”).
To determine whether the timing of the applicant’s motion to intervene caused prejudice
to the existing parties courts once again look at the stage of the underlying proceedings. Courts
have found there to be prejudice when “extensive discovery has [already] been undertaken and
completed, all critical issues have been resolved, and a final Order has been entered.”
Pennsylvania v. Rizzo, 530 F.2d 501, 506-07 (3d Cir. 1976); see In re Fine Paper Antitrust
Litigation, 695 F.2d 494, 500 (3d Cir. 1982) (finding that intervention would cause “harm [to]
the original parties through dilution of the settlement fund, relitigation of the class issue, or
reevaluation of the adequacy of the settlement.”). Conversely, courts have not found prejudice
where “few legally significant events have occurred.” Diaz v. S. Drilling Corp., 427 F.2d 1118,
1126 (5th Cir. 1970); see John Doe No. 1 v. Glickman, 256 F.3d 371, 378 (5th Cir. 2001) (no
prejudice where “the parties might be inconvenienced by renewed discovery or pretrial
proceedings, [but] there had not yet been any trial or final judgment in the action.”); Utah Ass'n
of Ctys. v. Clinton, 255 F.3d 1246, 1250–51 (10th Cir. 2001) (no prejudice where case was
“ready for final disposition; no scheduling order ha[d] been issued, no trial date set, and no cutoff date for motions set . . . [and] all that had occurred prior to the motion to intervene were
document discovery, discovery disputes, and motions by defendants seeking dismissal on
jurisdictional grounds.”); Sherman v. Griepentrog, 775 F. Supp. 1383, 1386 (D. Nev. 1991) (no
prejudice where intervention was “made relatively early in the proceedings, at a time prior to the
court's ruling on class certification and prior to any rulings on the merits.”).
As stated previously, Erie’s motion to intervene was not filed at a particularly late stage
in the underlying proceedings. At this point discovery is not yet closed; no schedule for summary
judgment motions or trial is set; the court issued no ruling on class action; and there is no final
judgment. Given the relatively early stage in the proceedings and the fact that plaintiff did not
show how Erie’s delay will cause the purported class harm, the court does not find that the
timing of Erie’s motion to intervene is prejudicial to the existing parties.
Under the third prong of the timeliness test the intervening party must have an adequate
reason for delay. In re Cmty. Bank, 418 F.3d at 314. In order to satisfy this standard a party
“must convincingly explain its reason for the delay in filing its motion to intervene.” Choike v.
Slippery Rock Univ., 297 F. App’x 138, 141 (3d Cir. 2008). As a practical matter this factor is
less significant than the first two prongs of the timeliness test; courts frequently choose not even
to address the applicant’s reason for delay. See e.g., Wallach, 837 F.3d 356; Mountain Top, 72
F.3d 361; In re Fine Paper Antitrust Litig., 695 F.2d 494.
Though Erie did not expressly state its reason for delay in its original motion to intervene,
in its reply brief Erie asserted that it chose to intervene at this time based on the state court’s
summary judgment rulings in the coverage action. Erie alleges that its “Motion to Intervene is
required to further protect its rights under the [insurance] Policy at issue.” (ECF No. 75 at 4.)
(citing Butterfield v. Giuntoli, 670 A.2d 646, 658 (Pa. Super. Ct. 1995), for the proposition that
an insurer who fails to submit jury interrogatories forfeits its right to later deny its duty to
indemnify). While the court will not venture at this time to determine whether Erie’s motion to
intervene in this action is in fact its only means for protecting its rights under state law, Erie’s
decision not to intervene until it had determined that such intervention might be the only means
by which to protect its rights is an adequate reason for delay, particularly given that the totality
of the timeliness factors weigh in favor of Erie’s motion.
In light of the relatively early stage of these proceedings and the lack of prejudice to the
existing parties due to Erie’s delay, the court finds that Erie’s motion to intervene is timely filed
under both Rule 24(a) and Rule 24(b).
Rule 24(a) – Intervention of Right
If a court determines that the party seeking intervention filed a timely application, the
court must then apply the remaining factors of the four-factor test under Rule 24(a). The
intervening party must show
a sufficient interest in the underlying litigation,  a threat that the interest will be
impaired or affected by the disposition of the underlying action, and  that the existing
parties to the action do not adequately represent the prospective intervenor's interests.
Liberty Mut. Ins. Co. v. Treesdale, Inc., 419 F.3d 216, 220 (3d Cir. 2005) (citing Kleissler v.
United States Forest Serv., 157 F.3d 964, 969 (3d Cir. 1998)). Each factor must be satisfied in
order for the court to grant leave to intervene under Rule 24(a). Mountain Top, 72 F.3d at 366.
Under Rule 24(a), the intervening party must have “a sufficient interest in the underlying
litigation.” Treesdale, 419 F.3d at 220. For an interest to be sufficient the applicant must
demonstrate “ʻan interest relating to the property or transaction which is the subject of the
action.”’ Id. (quoting Fed.R.Civ.P. 24(a)(2)). “Some courts treat the ‘interest’ test as a
pragmatic process that qualifies as many concerned parties as is compatible with efficiency.”
Kleissler, 157 F.3d at 969. As the District of Columbia Circuit Court of Appeals stated in Smuck
v. Hobson, 408 F.2d 175, 179 (D.C. Cir. 1969):
The decision whether intervention of right is warranted . . . involves an
accommodation between two potentially conflicting goals: to achieve judicial
economies of scale by resolving related issues in a single lawsuit, and to prevent
the single lawsuit from becoming fruitlessly complex or unending. Since this task
will depend upon the contours of the particular controversy, general rules and past
decisions cannot provide uniformly dependable guides.
Smuck, 408 F.2d at 179.
While there is no precise definition of “sufficient interest,” several guidelines have
“[A]n intervenor’s interest must be one that is significantly protectable. [This
means that] the interest must be a legal interest as distinguished from interests of a
general and indefinite character. The applicant must demonstrate that there is a
tangible threat to a legally cognizable interest to have the right to intervene. This
interest is recognized as one belonging to or one being owned by the proposed
intervenors . . . . In general, a mere economic interest in the outcome of litigation
is insufficient to support a motion to intervene. Thus, the mere fact that a lawsuit
may impede a third party’s ability to recover in a separate suit ordinarily does not
give the third party a right to intervene.”
Treesdale, 419 F.3d 216, 220-21 (quoting Mountain Top, 72 F.3d at 366). “In addition, a number
of courts have concluded that this interest must be ‘direct,’ as opposed to contingent or remote.”
Harris v. Pernsley, 820 F.2d 592, 596 (3d Cir. 1987).
Here, Erie alleges that it has an interest in determining “whether it has a duty to
indemnify [defendant] against any judgment obtained by [plaintiff]” and that “if the jury enters
an award of general damages, Erie will be unable to determine whether it has a duty to indemnify
[defendant] against the judgment.” (ECF No. 64 ¶¶ 42, 47.) Essentially, Erie is alleging that it
has an interest in establishing, through jury interrogatories, that plaintiff’s claims against
defendant are not covered by the insurance policies defendant has with Erie. This claim mirrors
the claims made by the intervening parties in Travelers Indemnity Co. v. Dingwell, 884 F.2d 629
(1st Cir. 1989), and Restor-A-Dent Dental Laboratories., Inc. v. Certified Alloy Products, Inc.,
725 F.2d 871 (2d Cir. 1984).
In Dingwell, the defendant and a group of fifteen companies who used the defendant’s
services (the “Generator Group”) faced liability under state and federal environmental protection
laws. Dingwell, 884 F.2d at 631. In order to avoid litigation, the Generator Group signed a
consent decree with the Environmental Protection Agency and the Maine Department of
Environmental Protection. The defendant and the Generator Group also reached an agreement
with respect to each party’s contribution and indemnity. The defendant’s insurers contested this
agreement, including the extent to which they could be held liable under the defendant’s
insurance policies. The Generator Group filed a motion for entry of a consent judgment, and the
defendant’s insurers sought to intervene. Id. at 631–32.
In determining whether the insurers had a sufficient interest in the underlying litigation
under Rule 24(a), the First Circuit Court of Appeals found that the insurers had asserted an
interest in minimizing the defendant’s liability and in establishing that the claims against the
defendant were not covered by his insurance policies. Id. at 638. The court found that neither
interest was sufficient to satisfy the interest requirement. The court held:
There can be no dispute that an insurer has a direct interest in a lawsuit brought by
an injured party against its insured when the insurer admits that the claim is
covered by the policy in question. When the insurer offers to defend the insured
but reserves the right to deny coverage, however, the insurer's interest in the
liability phase of the proceeding is contingent on the resolution of the coverage
issue. . . . Allowing the insurer to intervene to protect its contingent interest would
allow it to interfere with and in effect control the defense. Such intervention
would unfairly restrict the insured, who faces the very real risk of an uninsured
liability, and grant the insurer “a double bite at escaping liability.
Id. at 639 (citations omitted). With respect to the insurers’ interest in establishing that the
defendant’s claims were not covered by his insurance policy, the court found that this interest “is
not related to the subject matter of the action between the [Generator] Group and defendant”
because the underlying case involved liability, “not the respective rights and obligations of an
insured and his insurers under their insurance policy.” Id. at 640.
Restor-A-Dent also involved an insurer seeking to intervene in an action concerning the
liability of the insurance holder. Restor-A-Dent, 725 F.2d at 872. In Restor-A-Dent, the insurer
sought to intervene “for the limited purpose of submitting written interrogatories to [the] Court
for submission to the jury, to be answered by the jury in the event that it returns a verdict
awarding damages to plaintiff.” Id. After pointing out that the defendant had “not cited any case
where an insurance company has been allowed to intervene as of right for the purpose of
proposing interrogatories for submission to the jury,” the Second Circuit Court of Appeals
upheld the district court's determination that the insurer lacked a sufficient interest in the
underlying litigation. Id. at 875–76. The court of appeals found that the insurer’s interests were
too contingent to support intervention, because any liability the insurer may face depended on
both the jury returning a verdict against the defendant and on a finding that the defendant was
covered under the insurance policy. Id.
Here, Erie seeks to intervene based on the same interest asserted in Dingwell and RestorA-Dent, namely that Erie may be held liable for funding plaintiff’s recovery in the event plaintiff
succeeds in this action and Erie loses it coverage action in state court. This interest is insufficient
for two reasons. First, Erie’s alleged interest is contingent on the outcome of two separate trials.
As the Second Circuit Court of Appeals explicitly stated in Dingwell, “[w]hen the insurer offers
to defend the insured but reserves the right to deny coverage . . . the insurer's interest in the
liability phase of the proceeding is contingent on the resolution of the coverage issue.” Dingwell,
884 F.2d at 639. A doubly contingent interest of this nature is too speculative to be sufficient
under Rule 24(a). See Id.; Restor-A-Dent, 725 F.2d at 875-76; Janvey v. Hamric, Civil Action
No. 13-0775, 2015 WL 11120300, at *2 (N.D. Tex. Aug. 11, 2015) (denying an insurer’s right to
intervene under Rule 24(a) because any interest the insurer had in the underlying liability case
was too contingent, as it depended both on the plaintiff winning its fraud case and on the insurer
losing its coverage dispute); Lewis v. Excel Mech., LLC, Civil Action No. 13- 281, 2013 WL
3762904, at *2 (D.S.C. July 16, 2013) (finding that an insurer had no interest in the subject
matter of the underlying action under Rule 24(a) where the insurer sought to intervene on the
basis that it may be required to fund part of the plaintiff’s recovery if a future award of damages
ends up being covered by the defendant’s insurance policy); Shorb by Shorb v. Airco, Inc., Civil
Action No. 82-1983, 1985 WL 5954, at *2 (E.D. Pa. June 21, 1985) (denying an insurance
company’s motion to intervene under Rule 24(a), in part, because “proposed intervenor's interest
is contingent on the success of one of the parties”); see also Kleissler, 157 F.3d 964, 969 (3d Cir.
1998) (pointing out that courts often reject interests that they deem “speculative.”).
In addition to being too contingent, the interest asserted by Erie is not related to the
subject matter of the underlying action. Plaintiff’s case against defendant involves claims arising
under the TCPA. Erie’s interest is in its obligations under defendant’s insurance policy. Erie’s
interest is a separate issue, which is already being litigated in a separate action, and there is no
reason to believe that a decision in favor of plaintiff in this case will prevent Erie from
adequately presenting its chosen defense in the coverage action. As the court stated in Dingwell,
“we will not allow the insurers to bootstrap their coverage defenses into this lawsuit.” Dingwell,
884 F.2d at 640.
As stated previously, an intervening party must satisfy all four factors under Rule 24(a) in
order to intervene as of right. Mountain Top, 72 F.3d at 366. Because Erie does not have a
sufficient interest in the underlying litigation, and, therefore, cannot satisfy the second Rule 24(a)
factor, the court will deny Erie’s motion for intervention under Rule 24(a).
Rule 24(b) – Permissive Intervention
Even though the court concluded that Erie has no right to intervene under Rule 24(a), the
court must still determine whether intervention is appropriate under Rule 24(b). Rule 24(b),
which allows for permissive intervention, provides district courts with discretion to decide
whether to grant intervention. Brody, 957 F.2d at 1124. Rule 24(b) allows a district court to
exercise its discretion whenever a party attempting to intervene shares a “question of law or fact
in common” with the original plaintiff. Fed.R.Civ.P. 24(b)(1)(B).If the court finds that a
common question exists, the court should consider whether the intervention will unduly delay or
prejudice the original parties. Id. In situations where intervention was not granted under Rule
24(a), an applicant may still meet the requirements under Rule 24(b). The court may consider the
same facts and circumstances used to determine whether intervention was appropriate under Rule
24(a) to determine whether the court should use its discretion to permit intervention under Rule
24(b). United States v. Terr. of the Virgin Islands, 748 F.3d 514, 524 (3d Cir. 2014) (denying
applicant’s Rule 24(b) permissive intervention motion for the same reasons it denied the motion
pursuant to Rule 24(a)); Brody, 957 F.2d at 1124 (finding that because intervention of right was
not available, “the same reasoning would indicate that it would not be an abuse of discretion to
deny permissive intervention as well.”).
Here, Erie claims that it shares a common question of fact with plaintiff, because the
question whether defendant knowingly violated the TCPA is a common question to both the
instant matter and the coverage action. (ECF No. 64 at 9–10.) Plaintiff avers that the TCPA is a
strict liability statute, and that consequently the question of defendant’s knowledge is not
relevant to the underlying action. (ECF No. 66 at 14–15.) As stated previously, defendant
contests the use of a strict liability standard and instead argues that the court should apply an “on
whose behalf” standard. (ECF No. 74 at 3.) If defendant is correct, the parties would likely have
to address the question whether defendant knowingly violated the TCPA in the underlying
The court need not decide whether defendant’s knowledge is a common question in both
actions, because it is clear that at this time permissive intervention will cause undue delay and
Erie made no arguments with respect to whether the TCPA is a strict liability statute, and
instead simply concludes that defendant’s knowledge is a common question of fact, without
responding to plaintiff’s assertions to the contrary.
prejudice. Erie did not attach its proposed interrogatories to its motion to intervene, but averred
in the hearing held before this court on March 27, 2017, that the questions it intends to the jury
through its special interrogatories will all be grounded in the factual evidence presented by the
existing parties. Erie asserted at the hearing that its interrogatories will not go beyond the scope
of the evidence presented by the parties, and therefore will not cause confusion or prejudice to
the parties. However, in its motion to intervene Erie suggested that its special interrogatories
would ask the jury such questions as
whether any injuries caused by defendant’s violation of the TCPA were “intended
whether the allegations and/or damages amount to a personal or advertising
when any personal or advertising injury took place; and
whether any person’s right to privacy has been violated.
(ECF No. 64 at 11.)
Because the purpose of Rule 24 is to promote efficiency, the court must consider
“whether the intervention will unduly delay or prejudice the adjudication of the rights of the
original parties.” Fed.R.Civ.P. 24(b)(3). In other words, will it cause undue delay or prejudice to
ask the jury the kinds of questions Erie hopes to present. At this point, neither the court nor the
parties know what kinds of questions Erie would seek to pose to the jury. This lack of certainty is
only enhanced by Erie’s contention that it cannot provide the court with a set of questions until it
knows what evidence the parties introduced at trial.
Given this lack of certainty the court is concerned that the questions Erie may eventually
pose will only be tangentially related to the underlying action and could, therefore, complicate
the issues to be decided by the jury or confuse the jury. See Shea v. Angulo, 19 F.3d 343, 346
(7th Cir. 1994) (denying intervention where “allowing [defendant] to intervene in [the] action
would insert into it a complex factual question, completely unrelated to the quarrel between the
original parties to the suit.”); Montgomery v. Rumsfeld, 572 F.2d 250, 255 (9th Cir. 1978)
(holding that the district court acted within its discretion when it denied intervention of
additional parties on the basis that this intervention would “unnecessarily delay and complicate
the case.”); Sec. & Exch. Comm'n v. Everest Mgmt. Corp., 475 F.2d 1236, 1240 (2d Cir. 1972);
(“the complicating effect of the additional issues and the additional parties outweighs any
advantage of a single disposition of the common issues.”); F.T.C. v. First Capital Consumer
Membership Servs., Inc., 206 F.R.D. 358, 366 (W.D.N.Y. 2001) (denying permissive
intervention where applicant’s claims “would implicate collateral issues”); Fisher Foods, Inc. v.
Ohio Dep't of Liquor Control, 555 F. Supp. 641, 651 (N.D. Ohio 1982) (“even though a common
question of law or fact exists it is still within the discretion of the Court whether to allow
intervention and intervention will frequently be denied if collateral or extrinsic issues would be
brought in.”); see also 7C Charles Alan Wright & Arthur R. Miller, Federal Practice and
Procedure § 1913 (3d ed. 2017) (“the court . . . may deny intervention if the complicating effect
of the additional issues outweighs any advantage of a single disposition of the common issue.”).
Without knowing the content of Erie’s interrogatories, the court is also concerned that the
questions Erie would seek to present could cause contention and delay among the parties. See
Lawrence Music, 227 F.R.D. at 264 (“Erie's attempt to intervene for the purpose of submitting
special jury verdicts that may be irrelevant to, or beyond the scope of, the specific claims in this
litigation, has the potential of generating a great deal of contention and motions over the
substance of the proposed special verdicts, which, as defendant further notes, were not attached
by Erie to its motion to intervene.”).
Because of the high potential for complication and delay, the court will not allow Erie to
intervene without a greater degree of certainty about the nature and substance of its proposed
interrogatories. The court cannot consider Erie’s motion to intervene under Rule 24(b), at
minimum, until the parties have submitted their evidence. Therefore, the court will deny Erie’s
Rule 24(b) motion without prejudice.
While Erie’s motion to intervene is timely, Erie did not show that it has a sufficient
interest in the underlying litigation. Consequently, the court will deny Erie’s motion for
intervention of right under Rule 24(a) with prejudice.
Because the court is concerned that Erie’s proposed interrogatories will cause undue
delay and prejudice to the existing parties, the court cannot determine whether permissive
intervention is appropriate while the content of these interrogatories remains wholly
indeterminate. The court, therefore, will deny Erie’s motion for permissive intervention under
Rule 24(b) without prejudice. An appropriate order will be entered.
Dated: April 17, 2017
/s/ Joy Flowers Conti
Joy Flowers Conti
Chief United States District Judge
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