Civ Pro 2 Notes 9/23/04


More on intervention


Rule 24 intervention has to do with other people trying to “muscle” into lawsuits nobody wanted them in.  To intervene, you need to be timely, you need to have an interest in the matter that may be impaired, and you can’t already be adequately represented by someone else.  What if a public lawsuit gets settled through a consent decree?  Consent decrees are court orders that courts have continuing power to enforce.  All judges hold hearings on whether they should grant consent decrees.  They may hold them open to anyone who thinks they may have an interest.  What if Kerr and United Nuclear protested the consent decree but their arguments were rejected?  Could they sue the NRC?  The only way they could be precluded from bringing a lawsuit is if they were parties to another lawsuit.  But they weren’t; they were just participants in the consent decree hearing.  The effect of such participation is what the next case is all about.


Martin v. Wilks


Up until this case, there was scholarly debate and judicial indecision as to who has the burden of bringing parties into lawsuits.  Is it the parties already there who have the obligation, or is it the obligation of outsiders to monitor where their interests will be affected?  This case is good law for everything except the factual situation in this actual case.  The case starts out as a lawsuit by the NAACP against the city of Birmingham and other government entities, claiming that they are discriminating in their employment practices under Title VII.  The parties want to enter consent agreements with the city.  The court has a hearing on it and gives notice of the hearing.  The Birmingham Firefighters’ Association filed a brief in opposition to the agreement, and then tried to intervene.  Their attempt to intervene was denied as untimely, and then the consent decree was approved.  The white firefighters don’t like the affirmative action plan.


Then we have a new group of parties, featuring Wilks.  They sue the city for reverse discrimination.  Wilks basically has the same interests as the BFA.  Wilks wasn’t a party to the original lawsuit and wasn’t bound by it.  Wilks’ lawsuit is dismissed.  At the district court level, the NAACP argues that Wilks and the white firefighters were bound by the decision that came out of the original lawsuit because they had notice (and in fact they participated) and they didn’t try to intervene in the lawsuit until it was too late.  The district court accepts this, but they’re also protecting their own consent decree.  What would Wilks and the others argue?  They argue that they weren’t parties to the lawsuit, they aren’t bound, and thus they must be able to attack in a new lawsuit.  The Eleventh Circuit buys this argument on appeal.


The Supreme Court tells us that the Eleventh Circuit is right.  Why?  It’s a battle between two different rules.  Are we going to have Rule 19 be the important Rule for who is brought in or excluded from cases, or will it be Rule 24?  The burden is very different.  Under Rule 19, it’s the obligation of the parties already present to identify the indispensable parties and bring them in if possible at the risk of dismissal.  But under Rule 24, it’s up to the outsiders to make that decision and see if there is someplace that they want their interests protected.  In short, it’s their responsibility to “butt in”.  The Rehnquist 5-4 majority says that joinder (as opposed to notice) is traditionally the way that parties are subjected to the jurisdiction of a court.  The idea is that the parties who are already in the lawsuit have a better idea about just who they want in the lawsuit and just who they want to bind.


Stevens, in dissent, says that sideline sitters get what they deserve: actual notice plus the opportunity to intervene means you can’t complain.  If you could have butted in, you should have.  There is power that comes from the preclusive effect of judgments and their binding nature that makes courts reluctant to expand it to parties who aren’t in the lawsuit.  This case says that if you’re not a party to a lawsuit, you’re not bound and you can challenge the result again and again.  As a litigant, this becomes part of your lawsuit.  Who do you want bound?  If you leave a party out, they can challenge your result.  Why not bring everyone in?  You might not know who’s in the group you would be bringing in.  Later, Congress changed the law of civil rights to prevent ongoing challenges to civil rights settlements, recognizing that there could always be a group not party to the original lawsuit that could prevent closure.


Interpleader – Rule 22


Here we have a situation where you’re holding on to some kind of property that’s not yours and you don’t know who it belongs to.  You want to protect yourself from multiple, inconsistent judgments.  Impleader is third-party practice under Rule 14.  Intervention is “butting in” under Rule 24.  Interpleader comes in two variants: (1) statutory interpleader and (2) Rule interpleader.  Interpleaders are great, but only if you get all the parties.


Statutory interpleader is more common.  The statute tells us the federal courts have original jurisdiction over interpleader actions with $500 in controversy and minimal diversity (only as between claimants).  You deposit the thing with the court.  So this is different than regular old diversity jurisdiction, where you need complete diversity.  Where will these lawsuits happen?  There is an interpleader venue statute, § 1397, which says you can bring the action in a district where one or more claimants reside.  How about personal jurisdiction?  § 2361 gives us nationwide service of process!  You can issue process or all claimants and stop other lawsuits in order to bring everybody together.  Everything about these statutes is designed to make it easy to bring everyone together.


On the other hand, we have Rule interpleader.  It’s a simple Rule.  The Rule doesn’t take away from statutory interpleader, but it’s still governed by the rule of complete diversity.  The only time this is used is if all your claimants are in one state and you can’t use statutory interpleader.  Otherwise, it’s kind of a “dead Rule”.


Cohen v. The Republic of the Philippines


This is all about Imelda.  Besides the shoes, she had four fancy paintings.  She gave them to Braemer, an art dealer in New York.  Braemer consigns the paintings to Cohen, who is also in New York.  Cohen gets stuck with the paintings, and they’re not his.  He wants to return them to their rightful owner.  But who’s the rightful owner?  He brings an interpleader action under § 1335 against Braemer and the Philippines.  (The Philippines claims that Imelda used government funds to get the paintings, and so they belong to the people of their country.)  How can we get the Philippines into the interpleader at all, given that there must be claimants of diverse citizenship?  Well, the claimants are minimally diverse.


Cohen puts the art in the court registry, saying he’s the stakeholder but he has no interest in the paintings.  Why does Cohen want to do this?  If he gives the paintings to the wrong person, Imelda or the Philippines can come in and sue him!  He might be liable for the value of the paintings!  Only interpleader can protect him!  Imelda tries to intervene under Rule 24.  But why didn’t Cohen interplead Marcos in the first place?  We can’t serve her!  We have nationwide service of process, but not worldwide service of process!  They have to wait for Marcos to subject herself to the power of the court.  But they can’t go and make her join.


Should we allow Marcos to intervene?  Yes.  She’s timely.  She has an interest in the paintings.  Could her interest be impaired if she’s not a party to the lawsuit?  Yes, because the paintings could go to someone other than her if she’s not a party!  The only way to get it is to become a party.  Will anyone else in the lawsuit represent her interests?  No way!  Everyone else is pretty much against her.  This is a classic case where someone would want to intervene as a matter of right under Rule 24(a).  If we could have served her, she would have been interplead in the first place.


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