Opinion ID: 703200
Heading Depth: 4
Heading Rank: 1

Heading: Interest And Impairment Of Interest

Text: 36 Recognized interest. Although in Mille Lacs and Planned Parenthood, this court defined an interest sufficient to support intervention as a recognized interest in the subject matter of the litigation, the courts of appeals of other circuits have stated that intervention requires that the intervenor have an interest in the proceedings that is direct, substantial, and legally protectable. Alameda Water & Sanitation Dist. v. Browner, 9 F.3d 88, 90 (10th Cir.1993); Panola Land Buying Ass'n v. Clark, 844 F.2d 1506, 1509 (11th Cir.1988); United States v. Perry County Bd. of Educ., 567 F.2d 277, 279 (5th Cir.1978). These standards are not contradictory. The applicant for intervention must have an interest in the subject matter of the litigation, i.e., an interest that is direct, as opposed to tangential or collateral. Furthermore, that interest must be recognized, i.e., both substantial and legally protectable. See S.E.C. v. Flight Transp. Corp., 699 F.2d 943, 949 (8th Cir.1983) (interest asserted must be  'significantly protectable interest' in the primary litigation, quoting Corby Recreation, Inc., 581 F.2d at 177, in turn quoting Donaldson v. United States, 400 U.S. 517, 531, 91 S.Ct. 534, 542, 27 L.Ed.2d 580 (1971)). 37 In Mille Lacs, this court found a recognized interest in the subject matter of the litigation on the part of the applicants for intervention, because the litigation involved the rights of a band of Indians to use property owned by the applicants, and the applicants had an interest in protecting their property values. Mille Lacs, 989 F.2d at 998. The court in Mille Lacs cited its prior decision in Planned Parenthood, 558 F.2d at 869, as holding that an interest in protecting property values was a protectable interest. Mille Lacs, 989 F.2d at 998. In S.E.C. v. Flight Transp. Corp., 699 F.2d 943, 948 (8th Cir.1983), this court also held that an interest in maintaining market values in the proposed intervenors' homes was sufficient to support intervention. 38 Impairment of the interest. The second factor of the Mille Lacs analysis is whether the interest of the applicant for intervention is one that might be impaired by the disposition of the litigation. Mille Lacs, 989 F.2d at 997. In Kansas Pub. Employees Retirement Sys., this court noted that in 1966 the Supreme Court had amended the rule to eliminate a requirement that the proposed intervenor is or may be bound by the judgment in the action in favor of the requirement that the disposition of the action may as a practical matter impair or impede the applicant's ability to protect [its] interest. Kansas Pub. Employees Retirement Sys., 60 F.3d at 1307 (citing precedent of this circuit so holding since 1966). This court then reaffirmed that the applicant need not show that, but for its intervention, its interest 'would be' impaired by the operation of res judicata, collateral estoppel, or stare decisis, but rather only that its interest 'may be' so impaired. Id. (reversing district court for requiring that the intervenor show that its interest would or will be impaired, because that requirement conflicted with numerous holdings of the court, and listing cases so holding). 39 In Mille Lacs, the court found that a settlement favorable to the Indian Band might have impaired the recognized interests of the applicants for intervention, because it might have permitted Band members to exercise treaty rights upon the proposed intervenors' land, thereby affecting property values. Mille Lacs, 989 F.2d at 997. Even if the Band's treaty rights could only be exercised on public land, that result of the litigation could still affect intervenors' interests in property values by depleting stocks of fish and game on the proposed intervenors' property. Id.; see also Flight Transp., 699 F.2d at 948 (recognized interest that might be impaired where the litigation might have resulted in a loss in market value of the intervenors' homes). In J & N Logging Co. v. Rockwood Ins. Co., 848 F.2d 1438 (8th Cir.1988), this court described the necessary showing as a sufficient stake in the litigation. J & N Logging Co., 848 F.2d at 1439 (where a person was an insured by operation of the language of an insurance policy, the person had an interest in the payment of claims under the policy; the district court was therefore ordered to reconsider whether the person had a recognized interest in the subject matter of the litigation that might also be impaired in litigation to require payment of claims under the policy). 40 Contingent interests. Questions of the adequacy of an interest and its potential for impairment may overlap in cases in which the interest is in some way contingent. Although the intervenor cannot rely on an interest that is wholly remote and speculative, the intervention may be based on an interest that is contingent upon the outcome of the litigation. Jenkins by Agyei v. Missouri, 967 F.2d 1245, 1248 (8th Cir.), cert. denied sub nom. Clark v. Jenkins, --- U.S. ----, 113 S.Ct. 811, 121 L.Ed.2d 684 (1992); Little Rock Sch. Dist. v. Pulaski County Special Sch. Dist, 738 F.2d 82, 84 (8th Cir.1984); Flight Transp., 699 F.2d at 948. Furthermore, a tardy intervenor cannot breathe life into rights already foregone. Jenkins by Agyei, 967 F.2d at 1248 (quoting Little Rock Sch. Dist., 738 F.2d at 84, and finding application to intervene untimely because intervenors waited until school board vote actually impaired their interest and time for appeal had run). Thus, a person claiming an interest in the litigation does not have to wait until he or she has suffered irreparable harm before the requirements for intervention under Rule 24(a) have been met. Id. This court has emphasized that 41 [t]he rule does not require, after all, that appellants demonstrate to a certainty that their interests will be impaired in the ongoing action. It requires only that they show that the disposition of the action 'may as a practical matter' impair their interests. 42 Little Rock Sch. Dist., 738 F.2d at 84 (emphasis in original); see also Kansas Pub. Employees Retirement Sys., 60 F.3d at 1307-08 (listing cases confirming that the requirement is that the interest may be affected); Jenkins by Agyei, 967 F.2d at 1248 (quoting Little Rock Sch. Dist.). The court should be mindful that  '[t]he interest test is primarily a practical guide to disposing of lawsuits by involving as many apparently concerned persons as is compatible with efficiency and due process.'  Flight Transp., 699 F.2d at 949 (quoting Nuesse v. Camp, 128 U.S.App.D.C. 172, 385 F.2d 694, 700 (1967)). Thus, in Flight Transp., this court rejected an argument that inchoate interests are insufficient, because even where the precise moment of vesting is undetermined, the interest may be sufficiently certain to do so to support intervention. Id. at 948-49. 43 Other circuit courts of appeals have similar standards concerning purportedly speculative claims. For example, in Sierra Club v. Espy, 18 F.3d 1202 (5th Cir.1994), the Fifth Circuit Court of Appeals rejected the argument that the interest of representatives of the forest products industry in existing lumber contracts was too speculative and generalized to satisfy rule 24 where the litigation involved a potential bar on a particular kind of forest management. Sierra Club, 18 F.3d at 1207. The court found instead that the intervenors' interest in the contracts was legally protectable when threatened by the potential bar. Id. By way of contrast, the District of Columbia Circuit Court of Appeals found the interest of a power company unduly remote and too academic to allow intervention pursuant to Fed.R.Civ.P. 24(a)(2), where the company did not operate in the parties' geographical market or have any other economic relationship with the parties, but instead might at some time seek to reopen the proceedings concerning licensing of a competitor. City of Cleveland, Ohio v. NRC, 17 F.3d 1515, 1517-18 (D.C.Cir.1994) (equating interest sufficient for intervention as of right with standing under Article III of the Constitution). 44 The contingency of contribution claims under CERCLA. Whether an interest in contribution claims is sufficiently protectable, rather than excessively speculative or contingent, to support intervention in an action under CERCLA has concerned a remarkably small number of courts in view of the statutory authority to intervene in CERCLA actions. Nonetheless, the small group of resulting decisions has produced a split on the issue. In United States v. Alcan Aluminum, Inc., 25 F.3d 1174 (3d Cir.1994), the Third Circuit Court of Appeals reviewed denial of a motion to intervene by applicants who had settled with the government, but were seeking to intervene in litigation between the government and later settling parties. The court reasoned, in dicta, that where the intervenor has not yet settled with the government, thus establishing what if any liability it will have, its interest in contribution is contingent, and therefore insufficient to support intervention. Alcan, 25 F.3d at 1184. The court reasoned that any contribution right a non-settling PRP might have depends on the outcome of some future dispute in which the applicant may, or may not, be assigned a portion of liability. Id. The court contrasted the interest of a non-settling PRP in contribution with that of a settlor as follows: 45 When a PRP settles with the government it accepts a specific liability. Unlike the interest of an applicant who has not yet settled, which is contingent in the sense that it may never ripen, the interest of an applicant who has already settled is contingent only in the sense that it cannot be valued. However, the fact that the interest cannot be valued does not mean it does not exist. The act of settling transforms a PRP's contribution right from a contingency to a mature, legally protectable interest. 46 Id. Although it had earlier rejected reliance on legislative history, id. at 1181, the court then considered legislative intent as supporting this conclusion, finding that Congress intended non-settling PRPs to be expos[ed] ... to liability for the rest of the cleanup cost even if that exposure exceeds the amount the non-settlor's actions added to the overall cost of the cleanup. Id. at 1184 (citing United States v. Cannons Eng'g Corp., 720 F.Supp. 1027, 1040 (D.Mass.1989), aff'd, 899 F.2d 79 (1st Cir.1990)). Because the Third Circuit Court of Appeals believed that [p]ermitting intervention should encourage settlements, it held that PRPs who had earlier settled with the government have a sufficiently protectable interest in the litigation [in suing a non-settling PRP for contribution] to permit their intervention. Id. at 1185; see also United States v. Browning-Ferris Indus., Inc., 19 Chem. Waste Lit.Rep. 436 (M.D.La.1989) (holding that earlier settlor could not intervene to protect contribution claims in litigation for entry of a subsequent consent decree against other settling PRPs, because Sec. 113(f)(3)(C) subordinated rights of all others to the rights of the government). 4 The conclusions of the Third Circuit Court of Appeals in Alcan and of the district court in Browning-Ferris Industries are, of course, only dicta on the issue presently before this court, because the present case involves instead non-settling PRPs seeking to intervene. Compare Akzo Coatings, Inc. v. Aigner Corp., 30 F.3d 761, 770 (7th Cir.1994) (assuming in dicta that if the non-settlor before it were barred from pursuing an independent action for contribution after entry of a consent agreement between the government and the settling parties, in the future, other non-settling persons would seek to intervene pursuant to Sec. 113(i) in litigation between the government and settling parties for entry of a consent decree in order to protect their contribution rights). 47 Earlier decisions of district courts, however, in which non-settlors sought intervention, followed much the same reasoning as was stated by the Third Circuit Court of Appeals in Alcan, looking to legislative history and policy, to conclude that non-settling PRPs did not have a legally protectable interest in contribution claims to intervene in litigation between the government and settling PRPs to enforce a consent decree. See United States v. ABC Indus., 153 F.R.D. 603, 607-08 (W.D.Mich.1993) (finding disproportionate liability under CERCLA placed upon non-settling PRPs to be well-accepted, and holding that an interest in contribution claims, although it did not appear to be contingent or speculative here, was nonetheless not significantly protectable, because of CERCLA's express subordination of contribution claims by the desire for early de minimis settlements and finality of settlement judgments); United States v. Wheeling Disposal Serv., Inc., No. 92-0132-CV-W-1, slip op. at 1-3, 1992 48 WL 685724 (W.D.Mo. Oct. 1, 1992) (holding that non-settling PRPs do not have a protectable interest in contribution sufficient to support intervention); Motorola, Inc., 139 F.R.D. at 144-146 (relying on the evident legislative intent of CERCLA to encourage settlement and require non-settlors to bear disproportionate liability to deny intervention by non-settlors founded on an interest in contribution and fair settlement); United States v. Vasi, 22 Chem.Waste Lit.Rep. 218, 219 (N.D.Ohio 1991) (reviewing legislative history to find non-settling PRPs do not have an automatic right of intervention under Sec. 113(i) and that allowing intervention to protect contribution claims would result in parties refusing to enter into meaningful settlement negotiations); United States v. Beazer East, Inc., 22 Chem.Waste Lit.Rep. 218, 222-23 (N.D.Ohio 1991) (rejecting intervention to protect contribution as encouraging recalcitrance by PRPs in settlement negotiations); United States v. Mid-State Disposal, Inc., 131 F.R.D. 573, 576-77 (W.D.Wis.1990) (also relying on statutory incentive of settlement, and fear that allowing intervention would render negotiations between the original parties a waste of time and stall the implementation of the settlement as justifying denial of motion to intervene to protect contribution claims). 49 Against the clamor of this authority is heard a lone voice declaring that a different result is proper. In United States v. Acton Corp., 131 F.R.D. 431 (D.N.J.1990), the court first rejected the government's argument that Congress did not intend to permit dissatisfied non-settlors to intervene in order to challenge the entry of CERCLA consent decrees. Acton, 131 F.R.D. at 433. The court reasoned as follows: 50 [T]he Court need not consider the legislative history of the CERCLA provisions, as the statute's terms are unambiguous. See United States v. Ron Pair Enterprises, Inc., 489 U.S. 235, 240, 109 S.Ct. 1026, 1030, 103 L.Ed.2d 290 (1989); Malloy v. Eichler, 860 F.2d 1179, 1183 (3d Cir.1988). Section 113(i) gives the intervention rights to any person who satisfies the section's requirements. Accordingly, the Government's argument [that legislative intent indicated dissatisfied non-settlors should not be allowed to intervene in order to challenge entry of a CERCLA consent decree] will be disregarded. 51 Id. The court then applied the four requirements for intervention as of right--timeliness, existence of a protected interest, impairment of that interest, and lack of representation by an existing party--found in both Rule 24(a)(2) and CERCLA Sec. 113(i). Id. The court found the central issue in its inquiry, as in ours, to be whether the applicants had a protectable interest in either contribution or the fairness of the proposed consent decree. Id. 52 As to the protectability of the interest, the Acton court first concluded that the interest of the intervenors in contribution claims was neither merely economic nor so contingent as to be unprotectable. Id. The court found that the interest was statutory and would be extinguished if the consent decree was entered, and therefore was legally protectable. Id. The court then rejected the argument that the interest was contingent. Id. at 434. The court concluded that none of the identified contingencies go to the existence of the right itself. Id. The court also found that the government's position would vitiate the right to contribution in Sec. 113(f)(1), because, under the government's conception, non-settling PRPs could not seek contribution against PRPs who had signed an unapproved consent decree, because the interest was only contingent, but the right would be cut off as soon as the consent decree was approved. Id. Finally, the court rejected the notion that participation in negotiations or notice and comment proceedings before the drafting of the settlement agreement substituted for adequate representation in the litigation by an existing party. Id. at 436. The court found that whatever the non-settlors' representation in those prior proceedings had been, there was no existing party representing those parties in the current litigation. Id. 53