Opinion ID: 3050320
Heading Depth: 4
Heading Rank: 2

Heading: Summary proceedings in securities actions

Text: The Receiver also relies on Wencke for the related proposition that, where there has already been an underlying securities action, a district court may permit the receiver to obtain relief through summary proceedings ancillary to the main action. See Wencke, 783 F.2d 829. In other words, the Receiver argues that where a securities proceeding has established liability, a receiver may simply file a motion for disgorgement in the underlying action against non-parties who also may have violated the securities laws to effect relief. Although Wencke provides some support for the Receiver’s claim, ultimately we think it is distinguishable. Wencke arose out of summary proceedings ancillary to an SEC enforcement action. The receiver alleged that the defendant in the underlying action, one Walter Wencke, had funneled the proceeds from his securities violations involving certain corporations into the Ramapo Corporation, in which Wencke held a 60-percent stake. The receiver filed an application for disgorgement against the Ramapo shareholders, including deLusignan, a minority shareholder who held 25 percent of the stock, and Ramapo, seeking to disgorge the shares from the former and the charter from the latter.13 Wencke, 783 F.2d at 832. Eventually, the receiver gained possession of 75 percent of Ramapo’s shares but continued to 13 Meanwhile, the receiver also filed a complaint directly against deLusignan, the Hansa Trust (the Wencke-family trust in which Wencke held his 60-percent stake), and Ramapo for disgorgement of the shares and the establishment of a constructive trust over their holdings. The receiver later removed Ramapo as a defendant from this action, and it appears that no final judgment was entered. See Wencke, 783 F.2d at 832. 13928 SEC v. ROSS seek disgorgement of Ramapo’s assets and of deLusignan’s shares. Id. at 832 & n.2. Ultimately, the district court deemed Ramapo a constructive trustee for the benefit of the defrauded shareholders of the other corporations and ordered Ramapo, not deLusignan, to disgorge its assets. Id. at 833. This order, although not directed at deLusignan, had the effect of destroying the value of deLusignan’s interest in Ramapo. He appealed, contesting the use of summary proceedings and arguing that the court did not have jurisdiction over him. We rejected the shareholder’s appeal. First, we noted that we had previously approved the use of summary proceedings in “adjudicating in summary post-judgment proceedings the claims of nonparties to property claimed by securities receivers.” Id. at 836. Second, we noted that the district court’s disgorgement order was directed only at Ramapo, not at deLusignan, and that deLusignan could still bring an action asserting his rights as a minority shareholder. Id. at 839 n.10. Third, we emphasized that because deLusignan had received actual notice, participated in extensive discovery, had been deposed, and was permitted to file briefs with the court, the use of summary proceedings did not violate his due process rights. Id. at 836-37. Finally, we noted that it was not necessary to the entry of the disgorgement order against the corporation to decide any issues or claims deLusignan might have had based on fraud or breach of contract by Wencke. Id. at 839 n.10. Wencke differs from the instant case in several ways. First, and most importantly, because the disgorgement order was ultimately entered only against Ramapo Corporation, the district court did not need to obtain jurisdiction over deLusignan.14 DeLusignan’s objections were simply irrelevant to the ques14 The receiver held 75 percent of Ramapo’s shares by the time of disgorgement, and it appears that Ramapo either waived any jurisdictional objection or consented to the district court’s exercise of personal jurisdiction over it. SEC v. ROSS 13929 tion whether Ramapo’s assets should be disgorged, and as we pointed out, his relief, if any, would come in the form of a minority shareholder suit because deLusignan’s injury was nothing more than the devaluation of his shares. Second, as in the nominal defendant cases noted earlier, the receiver in Wencke alleged no wrongdoing against either Ramapo or deLusignan; the only claim to the funds was that Wencke had funneled the proceeds of his wrongdoing into the corporation. Id. at 832-33. Consistent with this allegation, the district court declared Ramapo a constructive trustee for the benefit of the defrauded investors. Id. at 833. In other words, the district court in Wencke was simply exercising its authority “to decide the legitimacy of ownership claims made by non-parties to assets alleged to be proceeds from [the actual defendant’s] securities laws violations.” Cherif, 933 F.2d at 414 n.11 (discussing Wencke, 783 F.2d 829). The use of summary proceedings in such cases is unremarkable because the purpose is simply to “obtain equitable relief from a non-party against whom no wrongdoing is alleged” and can succeed only “if it is established that the non-party possesses illegally obtained profits but has no legitimate claim to them.” Id. (emphasis added). Despite the Receiver’s attempts to characterize it as such, this case does not involve Bustos’s “claim[ ] . . . to [receivership] property claimed by” the Receiver. Wencke, 783 F.2d at 836. Rather, the case arises out of the Receiver’s claims against Bustos for his alleged sale of unregistered securities. As we stated above, because the Receiver’s disgorgement claim turns on Bustos’s own violation of the securities laws, the Receiver cannot treat Bustos as a nominal defendant, nor can the Receiver plausibly claim that Bustos is a constructive trustee on behalf of Alpha Telcom or the defrauded investors. In other words, this is not a case involving the mere determination of who is entitled to possession of the funds where the minimal notice requirements of Mullane would suffice. Rather, the Receiver had to obtain the full in personam juris13930 SEC v. ROSS diction that would permit adjudication of Bustos’s substantive liability. Third, Bustos did not receive all of the benefits of being formally served with process and joined as a defendant in the underlying action. As a condition for intervention, the district court required him to waive any argument regarding whether the pay phone investments constituted securities and whether their sale violated § 12 of the Securities Act. Given the district court’s ultimate conclusion that Bustos had to disgorge his commissions because he had unlawfully sold unregistered securities, this use of summary proceedings improperly deprived him of the opportunity to fully litigate the question of his liability. [8] In sum, given that the Receiver alleged that Bustos himself had violated the securities laws—and this is both the central allegation of the Receiver’s disgorgement motion and the basis of the district court’s order—the Receiver could not style Bustos as a nominal defendant or employ summary proceedings against him. The Receiver—and the SEC, to the extent it is involved—had to decide whether Bustos merely had no right to the funds because he was an empty vessel into which the true wrongdoers funneled their proceeds or because he had violated the securities laws. He has chosen the latter (and given the district court’s skepticism of the fraudulent conveyance claim, the Receiver likely had no other option). Bustos is thus, as the Receiver admitted below, the real partyin-interest. The Receiver therefore had to proceed against Bustos as a plaintiff would proceed against any defendant potentially liable under § 12 of the Securities Act, “appris[ing him] of the nature of the allegations against him and [permitting him to] make use of the possible defenses available to him under the securities laws.”15 Cherif, 933 F.2d at 415. 15 For example, had the Receiver brought an action directly against Bustos, he might have challenged the Receiver’s standing to bring a § 12 action, argued that the Receiver’s claim was barred by the statute of limitations or by laches, or, as he attempted to do here, challenged the Receiver’s action on jurisdiction and venue grounds. SEC v. ROSS 13931 Because the Receiver did not so proceed, he failed to obtain in personam jurisdiction over Bustos under the Securities Act. B. Jurisdiction and Service of Process in Receivership Actions The Receiver also argues that, independent of the Securities Act, formal service of process was not required here because federal receivers have broad equitable powers and, pursuant to those powers, they can use summary proceedings to recover from third parties. See Hardy, 803 F.2d 1034; United States v. Arizona Fuels Corp., 739 F.2d 455 (9th Cir. 1984); SEC v. Universal Fin., 760 F.2d 1034 (9th Cir. 1985) (per curiam). According to the Receiver, our cases—which rely on 28 U.S.C. §§ 754 and 1692—hold that actual notice with the opportunity to “file responsive pleadings” satisfies the requirements of due process. The Receiver insists that these cases justify the use of summary proceedings here as well, because obtaining jurisdiction over each sales agent would unreasonably deplete the assets of the receivership and diminish returns to the investors. See Hardy, 803 F.2d at 1040 (noting efficiency as one rationale supporting the use of summary proceedings). Congress has authorized federal receivers to exercise broad powers in administering, retrieving, and disposing of assets belonging to the receivership. In 28 U.S.C. § 754, Congress has granted receivers authority to protect receivership “property, real, personal or mixed, situated in different districts.” Once appointed, in order to preserve his claims, a receiver is to “file copies of the complaint and [the] order of appointment in the district court for each district in which the property is located.” By doing so, a receiver obtains “complete jurisdiction and control” over receivership property in any district. Id. However, failure to file in any given district within ten days of the receiver’s appointment generally “divest[s] the receiver of jurisdiction and control over all such property in that district.” Id. Section 1692 compliments § 754. It provides that 13932 SEC v. ROSS when “a receiver is appointed for property, real, personal, or mixed, situated in different districts, process may issue and be executed in any such district as if the property lay wholly within one district.” 28 U.S.C. § 1692. [9] Some courts have held that the interplay between § 754 and § 1692 operates analogously to statutes that confer the power to effect service of process nationwide: Just as those statutes permit the district court to exercise nationwide jurisdiction, §§ 754 and 1692 permit the district court to obtain jurisdiction in a district where receivership property is located so long as the receiver has properly filed pursuant to § 754. See, e.g., SEC v. Bilzerian, 378 F.3d 1100 (D.C. Cir. 2004); SEC v. Vision Comm’ns, Inc., 74 F.3d 287 (D.C. Cir. 1996); Haile v. Henderson Nat’l Bank, 657 F.2d 816 (6th Cir. 1981). We agree with the D.C. and Sixth Circuits that § 1692 extends “the territorial jurisdiction of the appointing court . . . to any district of the United States where property believed to be that of the receivership estate is found, provided that the proper documents have been filed in each such district as required by § 754.” Bilzerian, 378 F.3d at 1103-05; accord Haile, 657 F.2d at 823. As with the nationwide service provision in the Securities Act, where a party has been properly served by the Receiver, the Due Process Clause is satisfied because the party has minimum contacts with the United States as a whole. See Omni Capital Int’l, 484 U.S. at 104-06; see also Haile, 657 F.2d at 824 (noting that “[i]n an action where service of process is effected pursuant to a federal statute which provides for nationwide service of process, the strictures of International Shoe do not apply”). The cases upon which the Receiver relies presume that the district court has jurisdiction by virtue of the district court’s investment of ownership and/or control of the receivership entity in the receiver or by virtue of the receiver’s filing in compliance with § 754. For example, in SEC v. Hardy, 803 F.2d 1034, non-party investors challenged the receiver’s administration of receivership assets, claiming that the use of SEC v. ROSS 13933 summary proceedings was inappropriate vis-à-vis the investors, because it deprived them of due process. Id. at 1040. We rejected this argument, noting that the district court had the authority to employ summary proceedings “to determine appropriate relief in equity receiverships” where multiple creditors laid claim to receivership assets. Id.; see also SEC v. Universal Financial, 760 F.2d 1034, 1038-39 (9th Cir. 1985) (per curiam) (in an earlier piece of litigation in the Hardy case, holding that the district court’s exercise of summary jurisdiction over claims to receivership assets presented by non-party investors was proper). In SEC v. Am. Capital Invs., Inc., 98 F.3d 1133 (9th Cir. 1996), we rejected jurisdictional challenges by non-party partners to the forced sale of certain partnership assets, noting that the receiver had obtained jurisdiction over the assets pursuant to its § 754 filing, id. at 1142-43, and that its disposition of the property was within the receiver’s powers to exercise the “complete control” vested in it by that section. Id. at 1144. We held that the receiver’s disposition of the property pursuant to this jurisdiction did not violate any rights of the partners because they had both actual notice and an opportunity to be heard. Id.; see also In re San Vicente Med. Partners, 962 F.2d 1402 (9th Cir. 1992). [10] It should be obvious that these cases provide no basis for the Receiver’s attempted use of summary proceedings against Bustos. Even assuming the Receiver could overcome the preliminary difficulty of establishing that Bustos’s earned commissions are receivership assets, he has not given any evidence that the proceeds of these commissions are located in the District of Oregon, or that he has attempted to establish control over out-of-district assets pursuant to § 754. Absent some evidence that he has obtained jurisdiction over these assets, these cases cannot justify his use of summary proceedings. Furthermore, given his apparent failure to comply with § 754, it follows, a fortiori, that he could not have served process pursuant to § 1692. See Vision Commc’ns, Inc., 74 F.3d 13934 SEC v. ROSS at 289, 291 (expressly rejecting the exercise of in personam jurisdiction over a party in a district outside the district of appointment because the receiver had failed to comply with the filing requirements of § 754). In sum, the Receiver failed to obtain in rem jurisdiction over any assets or in personam jurisdiction over Bustos himself, and without such jurisdiction, the use of summary proceedings was improper. We should note that although receivers usually obtain jurisdiction in the manner described above, in one case we held that strict compliance with § 754 was not necessary even where the property was located outside the district of appointment. However, we excused the failure to file under § 754 because an independent basis for the district court’s jurisdiction over the objecting party already existed. In United States v. Arizona Fuels Corp., 739 F.2d 455 (9th Cir. 1984), the receiver appointed to manage the assets of Arizona Fuels moved for an order to show cause regarding certain assets claimed by the receiver that were in the possession of Tenneco, one of Arizona Fuels’ suppliers. After Arizona Fuels was placed into receivership, Tenneco had attempted to use advance payments received from Arizona Fuels to offset prereceivership deficiencies. The receiver claimed that Tenneco held those funds on behalf of Arizona Fuels against future deliveries, and as such, upon appointment of the receiver, they became receivership property. Id. at 458. The district court applied the rule barring the use of receivership assets to set off pre-receivership debts and, determining that the receiver was entitled to possession of the funds, ordered Tenneco to disgorge the funds. On appeal, Tenneco argued that the district court had erroneously ordered disgorgement after summary proceedings because, as a non-party, Tenneco was entitled to full plenary proceedings “with all the procedural trimmings” (including formal service of process). Id. Tenneco also argued that the receiver lacked jurisdiction over the funds because it did not comply with the filing requirements of 28 U.S.C. § 754. Id. at 458. SEC v. ROSS 13935 We rejected these arguments. First, we reasoned that the use of summary proceedings against a non-party could be proper “where the third person is made a party to the suit or where the third person becomes sufficiently involved in the receivership action, for example by intervening.” Id. at 459. Tenneco had participated in the receivership proceedings from their inception: it was specifically named in and served with the receiver’s order of appointment and counsel had appeared on its behalf at various hearings. Id. Because Tenneco had “ample opportunity” from the outset to participate in the proceedings and to contest the receiver’s claims, the use of summary procedures did not violate due process. More importantly, however, we held that through its active participation, Tenneco had submitted to the in personam jurisdiction of the district court. Thus, even though Tenneco claimed that it held the disputed proceeds in Houston, Texas, the failure of the receiver, who was appointed by the District of Arizona, to file in that district pursuant to § 754 did not divest the district court of the jurisdiction it already exercised over Tenneco itself. In this context, compliance with § 754 served no purpose other than to provide notice. Since Tenneco had received actual notice and had participated in the proceedings, it had no due process claim. We think that Arizona Fuels does not govern this case. Nothing in the record suggests that the district court ever obtained in personam jurisdiction over Bustos. He was not named as a party to the underlying proceedings, and although he intervened, as we discuss in more detail below, that intervention did not constitute consent to the jurisdiction of the district court. Moreover, the receiver in Arizona Fuels was simply attempting to recover receivership assets—there was no allegation that the legitimacy of Tenneco’s claim to the assets depended on its liability for some illegal activity. The Receiver in our case is alleging that Bustos himself violated the Securities Act. Bustos thus does not fall within this exception to the filing requirements of § 754. 13936 SEC v. ROSS C. Intervention of Right as Consent to Jurisdiction The Receiver has one remaining jurisdictional argument that merits close attention. Bustos responded to notice of the Receiver’s disgorgement motion by filing a motion to intervene as of right under FED. R. CIV. P. 24(a)(2). In his intervention motion, Bustos made clear that he contested the court’s exercise of personal jurisdiction, the sufficiency of process he had received, and the propriety of venue in the District of Oregon. He filed similar objections in the first responsive pleading (his answer) filed after the court granted his motion to intervene. Nevertheless, the Receiver argues that by intervening Bustos consented to the jurisdiction of the district court. Although there is some support for the Receiver’s view, upon careful consideration of the framework governing intervention, we decline to adopt a per-se rule that an intervenor consents to the court’s personal jurisdiction. We hold that Bustos did not consent to the jurisdiction of the district court when he intervened. Few courts have directly addressed whether a non-party who intervenes in ongoing proceedings pursuant to Rule 24(a)(2) can raise personal jurisdiction objections in conjunction with a motion to intervene. However, those that have addressed this question have generally concluded that a party who intervenes, consents, as a matter of law, to the jurisdiction of the court permitting the intervention. See In re Ford Motor Co., 471 F.3d 1233 (11th Cir. 2006); County Sec. Agency v. Ohio Dept. of Commerce, 296 F.3d 477 (6th Cir. 2002); Pharm. Research & Mfrs. v. Thompson, 259 F. Supp. 2d 39 (D.D.C. 2003); City of Santa Clara v. Kleppe, 428 F. Supp. 315, 317 (N.D. Cal. 1976). Wright and Miller concurs in this view: “[T]he intervenor submits himself to the personal jurisdiction of the court by seeking to intervene in the action and cannot move to dismiss on that ground.” 7C WRIGHT, MILLER & KANE, FEDERAL PRACTICE AND PROCEDURE, CIVIL 3D § 1920, at 612 (3d ed. 2007) (citing Kleppe, 428 F. Supp. 315). SEC v. ROSS 13937 These courts, and even Wright and Miller, devote little space to analyzing this issue, but the conclusion derives from the principle that a party cannot simultaneously seek affirmative relief from a court and object to that court’s exercise of jurisdiction. In Ford Motor, the Eleventh Circuit held that a party that intervened to challenge the district court’s injunction against a parallel state court proceeding had “acquiesced” to the district court’s jurisdiction over its person. 471 F.3d at 1248. Similarly, in County Security Agency, the Sixth Circuit dismissed the intervenor’s jurisdictional objections because “a motion to intervene is fundamentally incompatible with an objection to personal jurisdiction.” 296 F.3d at 483. The Eleventh Circuit suggested that as an alternative to intervention, a third party can either file an amicus brief or ignore the proceedings and collaterally challenge the jurisdiction of the rendering court in his home jurisdiction when the prevailing party attempts to enforce the judgment. Ford Motor, 471 F.3d at 1248 n.34. It seems apparent to us that in some cases an intervenor must necessarily acquiesce to the district court’s jurisdiction. Indeed, in many cases an intervenor will have no objection to the district court’s jurisdiction over her. On the other hand, consent to jurisdiction sometimes occurs unwillingly or even inadvertently. As the Court wrote in Insurance Corp. of Ireland, “[a] variety of legal arrangements have been taken to represent express or implied consent to the personal jurisdiction of the court.” 456 U.S. at 703. For example, the parties may consent to jurisdiction through a forum selection clause in a contract, Nat’l Equip. Rental, Ltd. v. Szukhent, 375 U.S. 311, 315-16 (1964); Dow Chem. Co. v. Calderon, 422 F.3d 827, 831 (9th Cir. 2005); by filing a proof of claim in a bankruptcy proceeding, Tucker Plastics, Inc. v. Pay ‘N Pak Stores, Inc., 99 F.3d 910, 911(9th Cir. 1996) (per curiam); or by filing an original complaint, a counterclaim or a crossclaim, Adam v. Saenger, 303 U.S. 59, 67-68 (1938); Schnabel v. Lui, 302 F.3d 1023, 1037-38 & n.5 (9th Cir. 2002); cf. Smith v. Salish Kootenai Coll., 434 F.3d 1127, 1138-40 (9th Cir. 2006) 13938 SEC v. ROSS (en banc) (holding that a non-member who files a civil claim in an Indian tribal court consents to tribal jurisdiction). [11] The rules governing consent are not as immutable as they may appear. We have held that a party who files a compulsory counterclaim under Rule 13(a) does not thereby waive any jurisdictional defenses he has previously or concurrently asserted, Dragor Shipping Corp. v. Union Tank Car Co., 378 F.2d 241, 244 (9th Cir. 1967), nor has a party who files a permissive counterclaim under Rule 13(b) when objection to “personal jurisdiction . . . [is] asserted in the same pleading.” Gates Learjet Corp. v. Jensen, 743 F.2d 1325, 1330 n.1 (9th Cir. 1984); cf. Teyseer Cement Co. v. Halla Mar. Corp., 794 F.2d 472 (9th Cir. 1986) (holding there was no consent to in personam jurisdiction where the defendant’s counterclaim followed a restricted appearance in a quasi in rem admiralty proceeding). In general, we have held that a party has consented to personal jurisdiction when the party took some kind of affirmative act—accepting a forum selection clause, submitting a claim, filing an action—that fairly invited the court to resolve the dispute between the parties. By contrast, where a party has filed a timely and unambiguous objection to the court’s jurisdiction, we have concluded that the party has not consented to jurisdiction. This is true even if the party has preserved its own options by simultaneously asserting whatever claims or defenses it has against the plaintiff. Our commonsense approach avoids the pitfalls of a more formalistic era in which a defendant had to choose between contesting the forum’s jurisdiction through a special appearance and entering a general appearance and defending himself on the merits. See Gates Learjet Corp., 743 F.2d at 1330 n.1; LARRY L. TEPLY & RALPH U. WHITTEN, CIVIL PROCEDURE 209-10 (3d ed. 2004). [12] We do not think that Bustos consented to the court’s jurisdiction. To the contrary, Bustos “objected to in personam jurisdiction as effectively as [he] could have” at every turn. Teyseer Cement Co., 794 F.2d at 478. Bustos sought to interSEC v. ROSS 13939 vene as of right because he correctly believed that “the disposition of the action [might] as a practical matter impair or impede [his] ability to protect [his] interest” and that his interest was not “adequately represented by existing parties.” FED. R. CIV. P. 24(a)(2). One means of protecting his interest— perhaps his best—was to object to the court’s lack of jurisdiction over his person or to the propriety of venue, and he objected to personal jurisdiction, venue and insufficiency of service of process promptly and unambiguously when he filed his answer in accord with Rule 12. See FED. R. CIV. P. 12(b)(2), (3), (5); see also Wencke, 783 F.2d at 835 (suggesting that appellant, who challenged the court’s personal jurisdiction, should have formally intervened). [13] We do not think that anything in the Federal Rules suggests that a non-named party cannot intervene of right and then contest the federal court’s exercise of in personam jurisdiction. First, in the standard alignment, where a plaintiff sues a defendant, the defendant is entitled to object to the court’s exercise of personal jurisdiction in its first responsive pleading. FED. R. CIV. P. 12(b)(2). Similarly, where the defendant seeks to join a necessary party under Rule 19, joinder is premised on the district court’s ability to obtain jurisdiction over that party. FED. R. CIV. P. 19(a) (“A person who is subject to service of process and whose joinder will not deprive the court of jurisdiction over the subject matter of the action shall be joined as a party . . . .”). In the event that the court cannot obtain jurisdiction, it must dismiss the case if it cannot be tried without the third party. FED. R. CIV. P. 19(b) (“If a person as described in subdivision (a)(1)-(2) hereof cannot be made a party, the court shall determine whether in equity and good conscience the action should proceed among the parties before it, or should be dismissed . . . .”). In these cases— where either the plaintiff or a named defendant brings a partyin-interest to the action—the party may defend himself on both jurisdictional and substantive grounds. 13940 SEC v. ROSS Rule 24 permits a third party to enter the proceedings in order to protect his own interests. Rule 24(a) permits intervention of right where “the disposition of the action may as a practical matter impair or impede the applicant’s ability to protect that interest.” FED. R. CIV. P. 24(a). Rule 24(b) authorizes permissive intervention where there is some kind of common question of law or fact.16 If the third party is intervening of right, as Bustos was here, we see little reason to deprive him of any of his procedural defenses merely because the original plaintiff failed to name him as a defendant or because no other party sought to have him joined pursuant to Rule 19. [14] We do not see why an intervenor should be considered to have automatically consented to the jurisdiction of the court. The intervenor has consented to something, but it is not personal jurisdiction. Rather, the quid pro quo for his intervention is that he consents to have the district court determine all issues in the case, including issues of jurisdiction, venue and service of process. See Ins. Corp. of Ireland, 456 U.S. at 706 (“By submitting to the jurisdiction of the court for the limited purpose of challenging jurisdiction, the defendant agrees to abide by that court’s determination on the issue of jurisdiction.”). Intervention of right simply puts the intervenor into the position he would have been in had the plaintiff (or another party) properly named him to begin with. This case demonstrates the wisdom of the rule. If the Receiver had played the game straight-up, named Bustos as a defendant, and served him with a complaint and summons pursuant to Rule 4, Bustos could have objected to personal jurisdiction in the district court, including in any appeal to this court. He also could have made an informed decision between (1) litigating both the jurisdictional and substantive issues in the District of Oregon and the Ninth Circuit or (2) sitting out 16 Our opinion is limited to the case where a party seeks to intervene of right. SEC v. ROSS 13941 the Oregon proceedings and mounting a collateral challenge to jurisdiction when the Receiver appeared in Texas with a judgment in hand.17 The Receiver’s argument would leave Bustos with the second option only.18 The Federal Rules do not require, and the Due Process Clause ought not to countenance, such an unfair election of defenses.