Opinion ID: 427655
Heading Depth: 1
Heading Rank: 2

Heading: intervention of fmnb.

Text: 8 The threshold question presented by this appeal is whether FMNB had standing to challenge the settlement entered into by Southern Leasing and IMT. 2 Before addressing this issue, however, it is necessary for us to consider the effect of FMNB's failure to comply with the procedure for intervention established by Federal Rule of Civil Procedure 24(c). 3 Although some courts have held that it is reversible error to conduct any proceedings at the behest of parties who have failed to intervene formally pursuant to rule 24(c), see, e.g., Spangler v. Pasadena City Board of Education, 552 F.2d 1326 (9th Cir.1977), other courts have been willing to ignore technical flaws in the intervention process, see, e.g., Smartt v. Coca-Cola Bottling Corp., 337 F.2d 950 (6th Cir.1964), cert. denied, 380 U.S. 934, 85 S.Ct. 941, 13 L.Ed.2d 822 (1965), or have been willing to overlook a total failure to comply with Rule 24(c). See, e.g., SEC v. Lincoln Thrift Association, 577 F.2d 600 (9th Cir.1978); Roach v. Churchman, 457 F.2d 1101 (8th Cir.1972). 9 We have been lenient in hearing the appeals of parties who have failed to fulfill the provisions of Rule 24(c). See In re Beef Industry Antitrust Litigation, 589 F.2d 786, 789 (5th Cir.1979) (trial court implicitly authorized intervention of nonparties when it denied nonparties' motion to modify protective order so that party could comply with House of Representatives subpoena for documents); United States v. United Fruit Co., 410 F.2d 553 (5th Cir.), cert. denied, 396 U.S. 820, 90 S.Ct. 59, 24 L.Ed.2d 71 (1969) (nonparty allowed to appeal denial of motion for permission to inspect and copy reports sealed under protective order); Caswell v. Manhattan Fire & Marine Insurance Co., 399 F.2d 417 (5th Cir.1968) (nonparty allowed to appeal denial of motion to quash subpoena). 10 When FMNB first learned that IMT and Southern Leasing had settled their dispute, it asked that a conference be held in chambers. During this conference, the district court concluded that the case should be reopened for consideration of the bond. The court then directed FMNB to submit a brief on this issue, giving IMT ten days to respond. Record Vol. V at 1143. This could be construed as an invitation to FMNB to file its motion without first seeking formal intervention. See In re Beef Industry Antitrust Litigation, supra, at 789. Compare Roach v. Churchman, supra, at 1104 (affording relief to a participant without formally naming it as a party deemed equivalent to authorizing intervention). In view of our lenience in the past and the fact that the district court's act might be considered equivalent to authorizing intervention, we will not dismiss for failure to comply with Rule 24(c). Instead, we will assume that the district court implicitly allowed FMNB to intervene. 4 We stress, however, that FMNB should have filed a formal motion for intervention pursuant to Rule 24(c), and that future litigants should not rely upon this decision as a means to circumvent the clear requirements of the rule. 11 We now turn to IMT's assertion that FMNB lacked standing to interpose an objection to the stipulation filed with the district court. IMT contends that FMNB is a mere surety for any in rem judgment rendered against Southern Leasing for IMT and, as such, had no right to intervene. In support of its position, IMT cites several cases purportedly standing for the proposition that sureties on a stipulation for the release of a vessel have no right to defend the bond and thus may not intervene. The L.I.R.R. No. 18, 67 F.2d 290 (2d Cir.1933); The Cartona, 297 F. 827 (2d Cir.1924); The Lydia, 1 F.2d 18 (2d Cir.), cert. denied, 266 U.S. 616, 45 S.Ct. 97, 69 L.Ed. 470 (1924); Perriam v. Pacific Coast Co., 133 F. 140 (9th Cir.1904); The New York, 104 F. 561 (6th Cir.1900); The Glide, 72 F. 200 (4th Cir.1896). Most of these cases, however, do not support the position that a surety cannot appear; the cases instead stand for the proposition that the claimant of a vessel may appeal alone, without the participation of its surety. See, e.g., The L.I.R.R. No. 18, supra; The Lydia, supra; Perriam v. Pacific Coast Co., supra; The New York, supra; The Glide, supra. Moreover, these cases would be more apposite if the Federal Insurance Company, surety of the release bond posted by FMNB, had sought to intervene. Here, FMNB has a direct interest in the outcome of IMT's suit, as it posted the bond as principal and will bear the cost of an in rem judgment against Southern Leasing. 5 12 Therefore, we hold that FMNB had sufficient standing to intervene in the action between IMT and Southern Leasing, and that FMNB is a party to the case. 13