### In the 

# United States Court of Appeals For the Seventh Circuit

____________________ N o. 20

- 1350
D RIFTLESS A REA L AND C ONSERVANCY and W ISCONSIN W ILDLIFE F EDERATION , Plaintiff s

- Appe llee s ,

v.

M ICHAEL H UEBSCH , et al. , Defendant s

- Appellee s

.

A PPEAL OF : A MERICAN T RANSMISSION C OMPANY LLC, et al ., Intervenor s

- Defendants

- Appellants.

____________________ Appeal from the United States District Court for the Western District of Wisconsin

. No. 19

- cv

- 1007

- wmc

— William M. Conley , Judge

.

____________________
S UBMITTED J U LY 2, 2020

— D ECIDED A UGUST 11, 2020

____________________

Before S YKES , C hief Judge , and F LAUM and R OVNER , Circuit Judges

. S YKES , C hief Judge

. T he Wisconsin Public Service Commission issued a permit authorizing the construction of a $500 million electricity transmission line in southwestern2 No. 20

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Wisconsin. Two environmental groups sued the Commission to invalidate the permit . T he permit holders moved to intervene to protect their interest in the permit ; without it the pow er line cannot be built . Th e district court denied the motio n , and t h e permit holder s appeal ed

. B riefing was completed a t the end of June , and w e s et the case for oral argument on September 22, 2020. The permit holders move d for expedited review without oral argument ; they want an earlier ruling because the case continues without them in the district court. The environment al groups respon ded in opposit ion , and the matter is ready for decision

. We grant the motion . T he briefs and record adequately address the single issue raised on appeal , and oral argument would not significantly assist the court. S ee F ED

. R. A PP

. P. 34 (a) (2) (C) . The case is submitted on the briefs, and we

now reverse the district court . The permit holders are entitled to intervene under Rule 24(a)(2) of the Federal Rules of Civil Procedure

. In many respects this is a paradigmatic case for intervention as of righ t.
I. Background The plaintiffs are two Wisconsin environmental groups , Driftless Area Land Conservancy and Wisconsin Wildlife Federation. The defendants are the Wisconsin Public Service Commission of Wisconsin and its three commissioners (collectively, “t he Commission”). The Commission regulates public utilities in the state. Two of the p ro posed intervenors

— A merican Transmission Company LLC and ITC Midwest LLC

— are Wisconsin electric

- power utilit ies

. TheNo. 20

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third , Dairyland Power Cooperative , is a cooperative association that furnishes electricity to its members

. In April 2018 the two utilities and the c ooperative filed

a n appli cation with the Commission for permi ssion to construct a high

- voltage transmission line running from Madison through the southwestern part of the state and ending in Dubuque County, Iowa. A project of this type is subject to heavy regulatory oversight and requires a special permit from the Commission known as a “certificate of public convenience and necessity

. ” W IS

. S TAT . § 196.491(3). T he two utilit ies each own 45.5 % of the project; the c oop erative own s the remaining 9 %. ( W e refer to the utilities and the cooperative collectively as “the transmission companies .”) The estimated cost of the project is $500 million. The permitting process r equire s a “ c lass 1 ” contested case hearing

. Id. § 227.01(3)(a)

. An e xhaustive administrative proceeding ensued , spann ing almost 18 months and drawing more than 50 intervenors

. At the end of September 2019, the Commission approved the project and issued a permi t authoriz ing the transmission companies to construct the proposed power lin e and acquire easements through eminent domain as necessary to complete construction

. In Decem ber 2019 Driftless Area Land Conservancy and the Wisconsin Wildlife Federation filed this law suit against the Commission seeking to invalidate the permit. Both groups had participated in the permit proceedings as intervenors in opposition , but their views obviously did not carry the day

. T he complaint raise s three constitutional claims under 42 U.S.C. § 1983 . The first alleges that the adjudicative process was tainted by the appearance of bias because two of the three commissioners had app arent conflicts of interest ,4 No. 20

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depriving the plaintiffs and their members of due process. The second and third claims challenge the authorization to

use eminent domain as an unlawful taking of private property in violation of the Fifth Amendment’s takings cl ause. The Commission filed a motion to dismiss in January 2020. A week later the transmission companies moved to intervene , seeking intervention as of right under Rule 24(a)(2), or alternatively, permissive intervention under Rule 24(b). As required by Rul e 24(c), t hey tendered proposed pleading s

— answers and a motion to dismiss

— with the intervention motion. The district judge rejected intervention as of right, concluding that the transmission companies and the Commission have the same goal

— dismissal of the lawsuit

— and the Commission adequately represents t hat shared objective

. The judge also declined to authorize permissive intervention, saying that adding the transmission companies as parties would “almost certainly and needlessly complicate and delay this case.” The judge denied the motion without prejudice and invited the transmission companies to renew their request if “a concrete, substantive conflict or actual divergence of int erests should emerge ” later in the litigation

. Alternatively, he invited a “standby” application to intervene

— essentially a placeholder motion that could be activated if circumstances changed

. See Solid Waste Agency of N

. Cook Cty

. v. U.S. Army Corps of En g ’ rs ( SWANCC ) , 101 F.3d 503, 509 (7th Cir. 1996).

N ot content to rely on governmental regulators to protect their $500 million private in vestment , the transmission companies appealed

.No. 20

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II. Discussion
A. Appellate Jurisdiction We begin by addressing a skirmish over appellate jurisdiction

. 1 It will not take long. It is well established that “from the perspective of a disappointed prospective intervenor, the denial of a motion to i nterven e is the end of the case, so an order denying interv ention is a final, appealable decision under 28 U.S.C. § 1291.” CE Design, Ltd. v. Cy’s Crab House N., Inc. , 731 F.3d 725, 730 (7th Cir. 2013). Notwithstanding this rule , the plaintiffs moved to dismiss for lack of appellate jurisdiction , a rgu ing that the judge’s order i s not final because he left open the possib ility of a new intervention motion if things change later in the litigation

. Th e possibility of a new motion if circumstances change does not block an immediate appeal. The contingency that the judge ha s in mind might never arise , leaving the transmission companies on the sideline s of the litigation with out appellate review of their i nterve n tion claim

. Nor does the incantation of the words “without prejudice” automatically defeat finality ; w hat matters is that the judge addressed the substan tive merits of the intervention motion and conclusively denied it, freezing the transmission companies out of th e c ase

. See United States v. City of Milwaukee , 144 F.3d 524, 531 n.14 (7th Cir. 1998)

. Finally, the judge’s invitation to file a

1 There is also a minor debate about standing. We do not understand why. The transmission companies hold v aluable rights under a government

- issued permit authorizing them to build a major power line that will yield a return on their investment for many years to come. Th e permit

— and thus the entire power

- line project

— is at risk of n ullification in this litigation. A favorable decision will prevent that injury. No more is ne eded for Article III standing.6 No. 20

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“standby” motion does not prevent finality . Th e availability of th at optional p rocedure

— a n innovation mentioned in SWANCC but not specified in any procedural rule

— does not foreclose an a ppeal. Nothing we said in SWANCC eliminates a disappointed intervenor’s right to immediate ly appeal an order denying intervention.

T he plaintiffs rely on City of Milwaukee , but that case actua lly supports rather than defeats appellate jurisdiction

. There the district court denied an intervention motion based on a purely technical error : the intervenor f a iled to include a proposed pleading with his intervention motion as required by Rule 24(c). Id . at 527. The judge denied the motion without prejudice to give the intervenor an opportunity to refil e it with the required pleading ; the judge did not address the merits of the intervention question

. Id . at 528

– 29. We dismissed the appeal, explaining that “a decision denying intervention on strictly procedural grounds is not a final judgment when the district court expressly contemplates that the putative intervenor subsequently will file a procedurally correct motion .” Id . at 530. This case is not remotely analogous. As we specifically observed in City of Milwaukee ,the circumstances would be different if a district court denied a motion to intervene on the ground that the putative intervenor’s interests were adequat ely protected by the existing parties but entered the denial “ without prejudice ” in recognition of the fact that the circumstances of the case may change such that intervention at a later date would be appropriate.No. 20

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Id . at 531 n.14. That describes th is cas e

. The judge’s order is final and appealable under § 1291. CE Design , 731 F.3d at 730. Appellate jurisdiction is secure.

B. Intervention as of Right With the jurisdictional hurdle cleared, we move to the intervention question. The rule governing intervention as of right provides: (a) Intervention of Right. On timely motion, the
court must permit anyone to intervene who :

... (2) c laims an interest relating to the property or transaction that is the subject of the action [] and is so situated that disposing of the action may as a practical matter impair or impede the movant’s ability to protect its interest, unless existing parties adequately represent that interest.

F ED

. R. C IV

. P. 24(a)(2) (emphasis added)

. Th e rule is straightforw ard: the c ourt must permit intervention if (1) the motion is timely; (2) the moving party has an interest relating to the property or transaction at issue in the litigation ; and (3) that interest may, as a practical matter, be impaired or impeded by disposition of t he case

. A proposed intervenor who satisfies these three elements is entitled to intervene unless existing parties adequately represent his interest s

. Everyone agrees that t he three basic criteria for intervention are satisfied : t he intervention motion was timely ; the transmission companies hold a valuable property interest in8 No. 20

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the permit that is under attack in this litigation ; a nd th eir interest will be extinguished (not just “impaired” or “impeded”) if the plaintiffs prevail

. The on ly dispute d question is whether the existing defendant s

— the Commission and its members

— adequately represent the ir interest s . The district
court answered “yes” an d denied interven tion as of right

. We review that determination de novo. Wis

. Educ

. Ass’n Council v. Walker ( WEAC ) , 705 F.3d 640 , 658 (7th Cir. 201 3 ). “The most important factor in determining adequacy of representation is how the interest of the absentee compares with the interests of the present parties.” 7C C HARLES A LAN W RIGHT , A RTHUR R. M I LLER & M ARY K AY K ANE , F EDERAL P RACTICE AND P ROCEDURE § 1909 (3d ed. 2007). O ur recent decision in Planned Parenthood of Wisconsin, Inc. v. Kaul d escribes our circuit’s three

- tiered methodology for evaluating adequacy of representation under Rule 24(a)(2). 942 F.3d 793, 799 (7th Cir. 2019)

. “ T he default rule ,” we explained, “ is a liberal one

. ” Id

. It derives from t he Supreme Court ’s decision in Trbovich v. United Mine Workers of America , which explain ed that “ the requirement of the Rule is satisfied if the applicant shows that representation of his interest ‘may be’ inadequate ; and the burden of making that showing should be treated as minimal. ” 404 U.S. 528, 538 n.10 (1972).
However, i f the interest of the absente e is identical to that of a n existing party, or if a governmental party is charged by law with representing the absentee’s interest, then the standard for measuring adequacy of representation changes. In both situations

— where the absentee and an existing p arty have identical interests, or the existing party is a governmental agency or official with a legal duty to represent the absentee’s interest

— a rebuttable presumption of adequateNo. 20

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representation a rises, and the prospective intervenor must carry a heighte ned burden to establish inadequacy of representation

. The degree of this heightened burden varies.
I n Planned Parenthood we explained th e presumption in this way : Where the prospective intervenor and the named party have the same goal,

... there is arebuttable presumption of adequate representation that requires a showing of some conflict to warrant intervention. This presumption of adequacy becomes even stronger whe n the representative party is a governmental body charged by law with protecting the interests of the proposed intervenors; in such a situation the representative party is presumed to be anadequate representative unless there is a showing of gross neglige nce or bad faith. 942 F.3d at 799 (quotation mark s and citation omitted). In the district court, t he plaintiffs advocated for the highest standard , which applies when a governmental party is legally required to represent the absentee’s interests . This
sta ndard sets a nearly insurmountable bar : the absentee
must show that the existing representation is gross ly negligen t or in bad fait h

. The judge dec lined to go that far ; he was not convinced that the Commission is charged by law with protecting the transmis sion companies ’ interests. Still, he applied the presumption of adequa cy in its weaker form

. H e first concluded that the transmission companies and the Commission share the same goal : d ismiss al of the plaintiffs’ suit. Extrapolating f rom that conclusion , t he judge applied10 No. 20

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the presumption of adequacy and required the transmission companies to satisfy the intermediate burden to overcome it

. That is , he required them to show an actual , concrete conflict with the Commissio n ’s representation and det ermined that they had not done so

. T he transmission companies challenge the judge’s use of the intermediate standard. They argue instead for the lenient default standard, w hich involves no thumb on the scale and requires only a minimal showing that the exi sting party ’s representation “may be” inadequate . Alternatively, they argue that the judge misapplied the intermediate standard. T he plaintiffs , for their part, no longer advocate for th e gross

- negligence/bad

- faith standar d. The y adopt a more moderate stance and simply defend the judge’s application of the intermediate standard

. Under a correct reading of Rule 24(a)(2) a s glossed by our three

- tier ed approach , the transmission companies are entitled to intervene. The rule cal ls fo r a contextual, case

specific analysis , and resolving q uestions about the adequacy of existing representation require s a discerning comparison of interest s

. That did not occur here. To trigger the presumption of adequacy under the intermediate standard , it ’s not enough that a defense

- side intervenor “share s the same goal” as the defendant in the brute sense that they both want t he case dismissed. Th e judge seemed to think i t was, but that mode of analysis operate s a t too high a level of generality. Needless to say, a prospective intervenor must intervene on one side of the “v

. ” or the other and will have the same general goal as the party on that side. If that ’s all it takes t o defeat intervention, then intervention as of right will almost always fail. T he judge’sNo. 20

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analysis essentially boils down to this: T he Commission
wants the c ase dismissed

. T he transmission companies do
too

. T herefore, they share the same goal , and the presumption of adequate representation applie s . If that’s truly how the presumption works , then the default standard will rarely apply.

T hat’s not how the presumption works. Rule 24(a)(2) requires a more disc riminating comparison of the absentee’s interests and the interest s of existing parties

. Wh en that kind of contextual analysis is done here, it quickly becomes clear that the transmission companies are entitled to participate as parties to this litigation to protect their privat e investment in this massiv e energy project. Th eir interest s are independent of and different from the Commission’s in several important respects

. To name a few: They own , finance , and will operate the transmission line in question, and have obligations t o their investors in connection with its cons truction and operation

. They have substantial sunk and anticipated future investment s in the power line , and a valid expectation of a return on th eir investment pursuant to the ratemaking regulatory regime administered by the Federal Energy Regulatory Comm ission. See 16 U.S.C. §§ 824(d), 824d(a), 824e(a). As public utilities, t hey have a legal obligation to maintain the power grid and provide adequate and reliable electricity services to the public. See W IS

. S TAT . § 196.03. (The cooperative’s obligation to furnish electricity flows to its members, not the general public.) And t hey hold the right to use eminent domain as needed to construct the power line.

T he Commission’s interests and objectives overlap in certain respects but are importantly different. The Commission is a regulatory body , and its obligations are to the general12 No. 20

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public , not to the transmission companies or their investors

. The Commission can be expected to defend the procedural regularity of its proceedings, which is the focus of the due

process challenge raised in count one. The other two counts , however, attack the use of eminent domain , and that authority belongs to the transmission companies. More broadly , the Commission regulates the transmission companies , it does not advo cate for them or represent their interests. The transmission companies cannot be forced to rely entirely on the ir regulators to protect their investment in this enormous project , which they stand to lose if the plaintiffs are successful

. For these reasons , th eir intervention request is not controlled by the line of cases involving intervention motion s by individual members of the public , citizen groups, or other units of government that hold identica l or closely aligned interests and objectives as existing governmental parties. See, e.g. , Planned Parenthood , 942 F.3d at 810 (Sykes, J., concurring); WEAC , 705 F.3d at 658

– 59; SWANCC , 101 F.3d at 508. Instead, this case falls within a line of cases invol ving permit holders that have successfully invoked Rule 24(a)(2) to intervene in litigation challenging the ir permit s

. See, e.g. , Sierra Club, Inc. v. EPA , 358 F.3d 516, 517

– 18 (7th Cir. 2004); Wal

- Mart Stores , Inc. v. Tex

. Alcoholic Beverage Comm’n , 834 F.3d 562, 568

– 69 (5th Cir. 2016); Wild E arth Guardians v. U.S. Forest Serv

. , 573 F.3d 992, 996

– 97 (10th Cir. 2009); Sierra Club v. E PA , 995 F. 2 d 1478, 1486 (9th Cir. 1993). The plaintiffs cite no appellate case, and we know of none, that affirmed a deni al of intervention in similar circumstances.Because the transmission companies’ interests and objectives are materially different than the Commission’s, theNo. 20

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presumption of adequate representation does not apply. Under the lenient default standard, they ne ed only show that the Commission’s representation “may be ” inadequate , “and the burden of making that showing should be treated as minimal.” Trbovich , 404 U.S. at 538 n.10. They have satisfied this burden. As we’ve noted, the Commission can be expected to mount a vigorous defense against the plaintiffs’ attack on the integrity of the permitting process and the impartiality of the commissioners. But the power

- line project itself , and the permit necessary to construct it , belong to the transmission companies , as does the authority to use eminent domain , which is the subject of counts two and three. The Commission may be content to move slowly in th is litigation ; but the transmission companies want to move quickly , begin using eminent domain as soon as possibl e , and otherwise keep the construction project on schedule. D ifferent defenses have been raised. In the ir proposed motion to dismiss submitted with the intervention motion, the transmission companies argue that even if two commissioners had conflicts, the permit was lawfully issued on the vote of the remaining commissioner or would have issued as a matter of lawregardless. The Commission raised neither of these arguments in its motion to dismiss. These are not mere “ quibbles with ... litigation strategy.” WE AC , 705 F.3d at 659. Rather,
t hey reflect very real differences in the interests at stake

. Accordingly, the transmission companies cannot be kept out of this case. The basic prerequisites for intervention under Rule 24(a)(2) are un questionably satisfied, and the transmission companies have carried their burden to show that the Commission’s representation may be inadequate to14 No. 20

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protect their interests. We therefore reverse the district court’s order and remand with instructions to permit the
transm ission companies to intervene

. R EVERSED AND R EMA NDED
W ITH INSTRUCTIONS

.