Opinion ID: 743868
Heading Depth: 2
Heading Rank: 2

Heading: Other Elements of the Four-part Test

Text: 22 The third element of the test for intervention as of right is whether the Youngbergs' ability to protect their interests will, as a practical matter, be impaired or impeded by the disposition of the Nickel action. Forest Conservation Council, 66 F.3d at 1497-98. The fourth element is whether the plaintiff in Nickel adequately represents the Youngbergs' interests. The district court found that the Youngbergs' motion to intervene failed on both counts. Appellants here contend that both are satisfied. To analyze these issues properly, it is important to distinguish among several different interests that the Youngbergs assert are relevant to the Nickel action. 23 1. Contractual Fee Trusts vs. Other Trusts: The Youngbergs, as previously stated, are beneficiaries of one contractual fee trust (the Eason Trust) and one other trust (the McDuffie Trust). The Youngbergs' interest as beneficiaries of the Eason Trust is distinct from their interest as beneficiaries of the McDuffie Trust. Because the Nickel class includes only beneficiaries of contractual fee trusts, the class representative in Nickel does not adequately represent the Youngbergs' interest as beneficiaries of the McDuffie Trust. On the other hand, the Nickel action is unlikely, as a practical matter, to impair the Youngbergs' ability to protect their interest as beneficiaries of the McDuffie Trust, because, to repeat, the scope of the Nickel action is limited to contractual fee trusts. Thus, the Youngbergs' interest as beneficiaries of the McDuffie Trust will not be impaired by the Nickel action nor would the class representative in the Nickel action adequately represent the Youngbergs' interest in that trust. Therefore, the Youngbergs' interest as beneficiaries of the McDuffie Trust cannot justify intervention as of right. 24 2. Refund Claims vs. Other Claims: With respect to contractual fee trusts in general, and the Eason trust in particular, the Youngberg action raises certain claims that relate to the refunds paid by BofA beginning in July 1993 (refund claims), as well as other claims unrelated to those refunds. The class representative in Nickel cannot adequately represent the Youngbergs' interests, insofar as those interests are unrelated to the refunds. These interests are unrelated to the refunds and are outside the scope of the Nickel action. It follows that these interests are outside the scope of Nickel. The Youngbergs' ability to protect those interests will not, as a practical matter, be impaired or impeded by the disposition of the Nickel action. Forest Conservation Council, 66 F.3d at 1497-98. Therefore, the Youngbergs' interest in claims unrelated to the refunds cannot justify intervention as of right. 25 3. Baseline Claims vs. Remedy Claims: BofA paid approximately $41.8 million in refunds, including $23.9 million in overcharges and $17.8 million in interest. Plaintiffs might raise two types of claims with respect to the adequacy of the refunds: (1) that the overcharges actually exceeded $23.9 million (baseline claims); or (2) that, assuming the $23.9 million figure is correct, refund of the overcharges plus $17.8 million in interest is an inadequate remedy (remedy claims). The Youngberg action raises both types of claims. 1 26 The Nickel action apparently also raised both baseline claims and remedy claims. But the district court, when it bifurcated the case, decided to focus the bench trial exclusively on the remedy claims. Moreover, in denying the Youngbergs' motion to intervene, the district court stated explicitly that the denial was without prejudice to the Youngbergs' ability to intervene in later phases of the case, after the bench trial. Because the bench trial relates only to remedy claims, and inasmuch as the denial of the motion to intervene relates only to the bench trial, the Youngbergs' ability to protect their interest in raising baseline claims, either in a subsequent phase of the Nickel action, or in the Youngberg action, will [not], as a practical matter, be impaired or impeded by denial of their motion to intervene. Forest Conservation Council, 66 F.3d at 1497-98. Therefore, the Youngbergs' interest in raising baseline claims cannot justify intervention as of right. 27 4. Inadequate Representation: Given the narrow scope of the Nickel action, the only interest of the Youngbergs that will, as a practical matter, be impaired or impeded by the disposition of the Nickel action, id., is the Youngbergs' interest as beneficiaries of the Eason Trust in remedy claims related to the refunds paid by BofA beginning in July 1993. That interest satisfies the third element (impairment of interests) of the four-part test. 28 However, that interest is precisely the interest that the plaintiff in the Nickel action seeks to vindicate. Moreover, the district court found explicitly that the representative in Nickel has done a more than adequate job of representing that interest. Indeed, the Youngbergs do not contest the fact that Ms. Nickel has adequately represented that particular interest. Instead, they attempt to satisfy the fourth element (inadequate representation) by arguing that Ms. Nickel cannot adequately represent their broader interests. 29 The Youngbergs, however, lack the right to intervene under F.R.C.P. Rule 24(a) unless they can identify a single interest that satisfies all four elements. 2 This they cannot do. Instead, they seek to satisfy the four-part test by relying on different interests to satisfy different elements of the test. Thus, they assert the set of interests (the remedy claims) that are directly related to the Nickel action, which they (implicitly) concede are adequately represented by Ms. Nickel. Those interests satisfy the third element of the four-part test (impairment of interests), but not the fourth element (inadequate representation). The Youngbergs also assert a different set of interests (the baseline claims) that Ms. Nickel does not adequately represent, but that are clearly distinct from the claims at issue in the bench trial in Nickel. Those interests satisfy the fourth element of the test, but not the third element. Thus, the Youngbergs have failed to identify a single interest that meets the criteria for intervention as of right.