United States Court of Appeals
FOR THE EIGHTH CIRCUIT

___________ No. 96-3915

___________ Standard Heating and Air * Conditioning Co.; Quality * Refrigeration, Inc.; Thermex * Corporation; Advance Energy * Services, Inc.; Ray N. Welter * Heating Co., * Plaintiffs - Appellees, *

v. * City of Minneapolis; Examination * District Court for the District Board of Warm Air Heating * of Minnesota Installers; Examination Board of * Refrigeration Installers; Board * of Examiners and Plumbers, * Defendants - Appellees, *
Minnesota Mechanical Contractors * Association; Sheet Metal, Air * Conditioning & Roofing * Contractors Association; Metro * Plumbing-Heating-Cooling * Contractors Association, *
Intervenors Defendants - * Appellants. * *

*

* Appeal from the United States

*

*

*

___________ Submitted: November 21, 1997 Filed: February 25, 1998

## The Honorable Patrick Conmy, United States District Judge for the District of 1 

## North Dakota, sitting by designation.
-2- ___________ Before BOWMAN and MURPHY, Circuit Judges, and CONMY, District Judge. 1

___________ MURPHY, Circuit Judge.
Three tr ade associations appeal from the denial of their motion t o intervene in a lawsuit brought against the City of Minneapolis and several of its trade licensing boards. Standard Heatingand Air Conditioning Co., Quality Refrigeration, Inc., Thermex Corp., Adva nce Energy Services, Inc., and Ray N . Walter Heating Co. (the companies) sued the city and it s examining boards for air heating installers, ref rigeration installers, and plumbers to challenge certain ordinances and rules governin g apprenticeship, testing, and licensing. We affirm.
Individuals seeking to enter the hea ting and cooling, refrigeration, and plumbing and gas trades in Minneapolis are subject to licensin g standa rds established by city examination boards. Minneapolis Code § § 277. 770, 277.790, 277.1010, 277.1030, 277.1170, 277.1190. Board rule s require that individuals wishing to become journeymen in any of thes e trades obtain a certi ficate of competency and show they meet the required standards. Minneapolis Code §§ 277.730, 277.990 , 277.1470. The standards mandate, among other things, completion of a four year apprenticeship in the Minnesota State Voluntary Apprenticeship Program established b y Minn esota Statute, Chapter 178, and passage of competency examination s administe red by the boards. State rules declare that pay rates fo r appren tices be based on preexisting pay rates and that journeyme n partic ipants in the apprenticeship programs be paid according to an y applicable collective bargaining agreement, the state prevailing wage, or existing apprenticeship rates. Minnesota Rules Part 5200.0390.

## -3- Th e companies are engaged in the installation, repair, an d maintenance of heating, air conditioning, refrigeration, and ventilation units and employ individuals subject to the requirements and testing of th e boards. The companies sued to enjoin the city and its boards fro m enfo rcing rules which require participation in a state-approve d apprenticeship program and which govern wages an d conditions of employment in such programs. They seek a declaratory judgment that the stat e apprenticeship program and other requirements are preempted by th e Employment Retirement Income Security Act of 1994, 29 U.S.C. §§ 1001, et seq., a nd exceed the authority granted to the boards by the city. The y als o assert various claims under 42 U.S.C. § 1983 arising from th e admini stration of the rules for competency exams and examinatio n applications, as well as equal protection claims and violations of state and federal antitrust law.

The thre e trade associations sought to intervene in this action i n order to defend the r egulations. Their members are businesses of various sizes which together employ approximately 9,500 to 11,500 workers, a subs tantial number of whom work regularly in Minneapolis. They hir e individuals who have completed the challenged apprenticeship program and who submit to the testing and licensing procedures. The associations clai m the challenged regulations serve vital safety and economic interests and help maintain high quality work in the affected trades. They argue that resolution of the case in their absence may impair their ability to protec t their int erests so they are entitled to intervene under Fed. R. Civ. P

. 24(a). Otherwise they should be permitted to intervene under Rule 24(b) because their defenses would present common issues of law and fact wit h those already in the case.

## The Honorable Jonathan Lebedoff, United States Magistrate Judge for th e 2 

## District of Minnesota. The Honorable David S. Doty, United States District Judge for the District of 3 

## Minnesota.
-4- The motion to intervene was denied by the magistrate judge who ruled 2 that the attempted in tervenors did not qualify under either Rule 24(a) or (b). S ince plaintiffs did not seek elimination of the apprenticeshi p requirement, they did not implicate a legally cognizable interest of the intervenors. The safety interests asserted by the associations were the
same as those of the public and were therefore adequately represented by the defendants, and the intervenors did not alle ge real concerns about the testing requirements. Intervenors were also denied permissive interventio n because they had failed to identify a claim or defense different from thos e already in the case o r to show they had a substantial stake in the issues raised by the plaintiffs. The associations appealed to the dist rict court 3 which affirmed.
On appeal to this court the trade as sociations raise the same points again. The companies challenge their standing as well as their right to intervene. Article III standing is a prerequisite for intervention in a federal lawsuit, Mausolf v. Babbitt , 85 F.3d 1295, 1300-01 (8th Cir. 1996) , and we review the den ial of mandatory intervention de novo, United States

v. Union Elec. Co. , 64 F.3d 1152, 1158 (8th Cir. 1995). If a party ca n establish standing, i t is entitled to intervene when it has made a timely application and it

clai ms an interest relating to the property or transactio n which i s the subject of the action and the applicant is s o situated that the dispos ition of the action may as a practical matter impair or impede the applicant’s ability to protect that int erest, unless the applicant’s interest is adequatel y represented by existing parties.
Fed. R. Civ. P. 24(a). As a practical matter, this means that a part y seeking

## Counselindicated at oral argument that the trade associations have bee n 4 

## participating in ongoing settlement negotiations despite their lack of intervenor status.
-5- mandatory intervention must establish that it:
(1) ha[s] a recognized interest in the subject matter of th e litigation that (2) might be impaired by the dispos ition of the case and that (3) will not be adequately protected by th e existing parties.

Mausolf , 85 F.3d at 1299.
Appellants claim that they have established the injury and causa l connection necessary for Article III standing and the interests required for Rule 24(a) intervention since they have an economic interest in th e subject matter of the litigation. If participat ion in apprentice programs
were voluntary, employers like them who hire participating workers would have an economic disadvantage because employers could pay lower wages to hire non-participants. Appellants also say thei r members have invested in the existing education system which is dependent on the regulations, and elimination of the regulations would present safety risks on their members ’ job sites. Lastly, they claim that the interest s they assert may conflict with t hose of the city and that they therefore should be able t o participate in settlement negotiations. 4

The ci ty and the other defendants have not taken any position o n intervention, but the plaintiff companies conten d that in addition to lack of standing the trade associations have mischaracterized the complaint by saying it seeks elimination of the apprenticeship requirement and th e test ing and licensing regulations. Plaintiffs say they only seek t o prevent participation in a “State Approved Voluntary Apprentice Program” frombeing a precondition to take a licensing test for the constructio n trades. The companies claim that the associations have identified n o protectable interest in the operation of a mandatory apprentice program, and that the asserted interests in safe and

## -6-

competent work are no different from those of the public, and that th e defendants adequately represent any articulated interest.

Th e interests asserted by the associations concerning th e apprenticeship requir ement are too speculative to be “direct, substantial and legally protectable” interests as required by Rule 24(a)(2). Unio n Elec. Co. , 64 F.3d at 1161 (quoting Alameda Water & Sanitation Dist. v

. Browner , 9 F.3d 88, 90 (10th Cir. 1993)). “An interest that is remote fro m the subject matter of the proceeding, or that is contingent upon th e
occurrence of a sequence of events before it becomes colorable, will not satisfy the rule.” Washington Elec. v. Massachusetts Mun. Wholesale Elec. , 922 F.2d 92, 97 (2d Cir. 1990).

A sequenc e of events would have to occur for the interests of th e associations to be impacted by a successful challenge to the rules, and th e
asso ciations have not made an adequate showing that these events ar e likely. E ntities accepting bids may be wary of hiring companies wit h workers who have not gone through the state apprenticeship program, and a successful challenge to the rules could cause the city to enact new rules that w ould affect labor costs similarly to the current regulations

. Moreove r, the associations have presented no evidence of how much th e companies could save by using cheaper labor and by how much they would be able to underbid association members. These facts are critical t o evaluating the likelihood that the associations’ interests will b e implicated. Although association members may fear the loss of business or difficulties in recruiting qualified applicants, they have not submitted evidenc e to support their fears other than the speculative beliefs o f several association officers. Their general reliance on economic forces is insufficient to constitute a legally protectable claim.

The a sserted interest in safety on job sites also is insufficien t becaus e the suit does not threaten to eliminate the apprenticeshi p requir ement completely, and the associations will still remain free t o defend their safety interest by hiring only those

## -7-

who ha ve completed a state approved apprenticeship program. Th e associations may also appeal to the government for more stringent safety regulations. See Wade v. Goldschmidt , 673 F.2d 182, 186 (7th Cir. 1982) (applicants should present economic, safety, and environmental interests to the government bodies since they and “not the courts, are required by statute to evaluate and make decisions as to the priority of the various considerations”).

The associations also contend that the challenge to th e administration of the competency examinations im plicates their interest in not un dercutting the effort of members’ employees who will hav e unnecessarily complie d with the testing requirements, and other interests not yet apparent due to the vague complaint. The associations, however, have not presented any affidavits or other evide nce of employees it claims would be adversely affected by changes in test procedures, and thi s asserted interest is therefore speculative. Cf. United States v. City of Chicago , 870 F.2d 1256, 1260 (7th Cir. 1989) (qualified applicants entitle d to intervene in suit involving racially altered test results). Moreover, the companies’ challenge is only to the administ ration of the examinations and not to the defend ants’ power to test applicants, and the associations have not explained how their interests would be impaired by any changes in administration alone. The associations therefore have failed to identify any interest in the challenge to test administration.

Parties who are able to assert an interest in the subject matter of the litigation still may not intervene if the existing parties adequately represent their interests. Fed. R. Civ. P. 24(a). Where the interest s asserted fall within the realm of “sovereign interests,” and the governmen t is a party, a presumption that the government adequately represents th e in terests of its citizens arises. See Mausolf , 85 F.3d at 1303 ; Environmental Defense Fund, Inc. v. Higginson , 631 F.2d 738, 740 (D.C. Cir

. 1979). This presumption will be overcome, however, where the state must balance the applicants’ “narrower and more parochial interests” that are “not shared by the general citizenry” against the broad public interest, and the balance may compromise the

## -8-

applicants’ interests

. Mille Lacs Band of Chippewa Indians v. Minnesota , 989 F.2d 994, 1001 (8th Cir. 1993); see also Dimond v. District o f Columbia , 792 F.2d 179, 193 (D.C. Cir. 1986). The city shares th e appellants’ interests in safety on job sites and in a regulatory syste m that guarantees quality work in the trades. These sovereign interest s raise the presumptionof adequate representation and prevent intervention unless the associations can demonstrate that they have an interest which cannot be subsumed wi thin the general interest of the citizenry. See id

.

The asso ciations claim that if the action results in a terminatio n of the training and testing requirements they will incur increased costs frominjuries on job sites and that these costs are different from th e
co sts to the general public and that the presumption of adequat e repres entation therefore should not apply. These potential costs ar e insufficient to overcome presumption that the city adequately represents the appellants’ inter ests, however, because costs arising from on the job injury are the type of costs the government seeks to reduce with it s regulatory system. Furthermore, these increasedcosts to the associations present “no possibl[i lity of] divergence between their position” and that of the city because both take the same position in the litigation

. Environmental Defense Fund , 631 F.2d at 740.

The appellants assert that their interest in participating i n potential settlement negotiations concerning the administration of testing requ irements overcomes the presumption of adequate representation. I n order to prevail on these grounds the associations must show that thei r position in the negotiations is not the same as that of the defendants, or that they would represent the asserted interests differently than the city

. See Mille Lacs , 989 F.2d at 1001. Testing administration does not force the go vernment to reconcile two opposing sets of interests durin g set tlement. Settlement may result in changes in the way tests ar e conducted, but the associations and the city share any interest in fai r test ing procedures that ensure competent workers in the trades. Cf

. Mausolf , 85 F.3d 1303-04 (intervenors’ interests were inadequatel y represented

## -9-

becaus e the government faced the possibility of having to reconcil e competing demands on the use of public land).

The associations assert that they can overcome the presumption o f adequate representati on because the city has not been a very active party in this case. See Ma usolf , 85 F.3d at 1303 (citing 7C Charles A. Wright, Arthur R. Miller, & Mary Kay Kane, Federal Practice and Procedure § 1909 (2d ed. 1986)). They argue the city has not pursued discovery or attempte d to clarify the plaintiffs’ claims or the relief sought. The city ha s respon ded to the complaint and is actively participating in settlemen t negotiations, however, and the associations offe red no example of the type of discovery they mig ht conduct or why it would be superior to the city’s representation. Furthermore, there is no indication that a failure to tak e discovery has rendered the defendants at a disadvantage in the litigation. This record is not like the situation in Mausolf

. See id. at 1303.
The associations assert in the alternative that they should hav e been granted permissive intervention under Rule 24(b)(2) because their claims raise common questions of law and fact to the defenses of the boards and the city. The standard of review for denial of permissive intervention is abuse of discretion. Arrow v. Gambler’s Supply, Inc. , 55 F.3d 407, 41 0 (8thCir. 1989). A party may be allowed to intervene in an action where “an applicant’s claim or defense and the main action have a question of la w or fact in common.” Fed. R. Civ. P. 24(b)(2). The magistrate judg e concl uded that the economic impact of the regulatory scheme was not a t issue and that the appellants’ proposed answer to the complaint did no t raise any claim or defense that was different from those of the existing partie s. The magistrate judge concluded therefore that the additiona l parties would only be a source of repetition and delay. Both the orders of the magistrate and the district court were based on an accurat e assessment of the law and the facts at issue, and it was not an abuse of discretion to deny the motion for permissive intervention.

## -10- For the reasons discussed, the interests asserted by the associ ations
are insufficient to require intervention as of right, and the distric t court did not abuse its discretion in denying the motion for permissiv e intervention. The order of the district court is affirmed.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.