Court Opinion

ID: 9488090
Source: CourtListenerOpinion
Date Created: 2023-08-05 12:36:01.627362+00
Date Added: 2024-06-11T17:52:41.206283
License: Public Domain

HEANEY, Senior Circuit Judge,
dissenting.
I respectfully dissent because I believe the Tribe has a right to intervene to present arguments to the district court that the proposed settlement between Arrow and Gambler’s Supply is an improvident one.
As the majority correctly points out, determining the timeliness of a motion to intervene requires consideration of the reason for the prospective intervenor’s delay in seeking to intervene, the progress of the litigation, and the likely prejudice to other parties if intervention is allowed. See Mille Lacs Band of Chippewa Indians v. Minnesota, 989 F.2d 994, 998 (8th Cir.1993). The district court’s ruling on the timeliness of the motion is reviewed for abuse of discretion.
The Tribe sought to join the action in early September 1994 after it received notice of the parties’ motion to enter judgment in thé action in the amount of $126,500. This occurred a few weeks before the scheduled trial date of September 27, 1994. The action was filed by plaintiff Shirley Arrow in October 1992. She sought recovery of $3,332,455 paid by the Tribe to Gambler’s Supply pursuant to two agreements that had not been approved by the United States government and therefore were null and void under 25 U.S.C. § 81. Arrow filed her complaint about a month after the Tribe paid Gambler’s Supply $1,420,000 in conjunction with the Tribe’s termination of their contract.
*411It undoubtedly would have been better for the Tribe to seek to join the litigation before any settlement had. been reached between Arrow and Gambler’s Supply. The only reason offered by the Tribe for its delay was-that it expected the matter to go to trial and result in a “substantial” judgment, in light of the over three million dollars it paid to Gambler’s Supply. Sept. 12, .1994, Hrg. Tr. 4. The Tribe did, however, intervene shortly after learning the amount of the proposed settlement. The district court stated at the hearing that “the settlement figure wasn’t arrived at until relatively recently.” Id. at 13.
The fact that the litigation had progressed to within a month of the scheduled trial date, and a proposed settlement had been reached between Arrow and Gambler’s Supply, does not weigh strongly against the Tribe in light of the limited purpose for which I would allow intervention, ié., to give the Tribe an opportunity to demonstrate to the district court that a settlement of $126,500, of which $26,500 is for attorney’s fees, is improvident given the very large sum it paid to Gambler’s Supply under two agreements that the parties knew were void unless approved by the United States government. The Tribe also informed the district court that, if allowed to intervene, it would not seek a continuance of the September 27,1994, trial date and that it waived any sovereign immunity that might apply. Id. at 7.
Allowing the Tribe to present its arguments against the proposed settlement would not unduly prejudice the existing parties. This court has pointed out that there is a certain amount of prejudice whenever a proposed intervenor opposes an existing party’s position. Mille Lacs Band, 989 F.2d at 999. Such prejudice, however, results not from the fact of the delay in seeking intervention but rather from the proposed intervenor’s presence in the suit. Id. “Rule 24(a) protects precisely this ability to intervene in litigation to protect one’s interests.” Id. Finding no undue prejudice from the Tribe’s delay in seeking to intervene, I would hold that the district court abused its discretion in finding the Tribe’s motion untimely.
Having thus resolved the timeliness issue, I conclude that the-Tribe is entitled to intervene as of right. Rule 24(a) is satisfied if the proposed intervenor has an interest in the subject matter of the litigation, the “disposition of the action may as a practical matter impair or impede the applicant’s ability to protect that interest,” and its interest is not adequately represented by existing parties. The majority concedes that the first two conditions are satisfied. The Tribe clearly has an interest in recovering money it paid pursuant to the contracts that were never approved, and indeed it could have pursued its own action under section 81. Further, the settlement here may prevent the Tribe from obtaining relief in any future lawsuits. In a federal court action in South Dakota brought by the Tribe to recover the money paid pursuant to these contracts, Gambler’s Supply asserted the defense of res judicata based on this settlement. The parties and the district court below expressed uncertainty over whether the Tribe would be bound by a settlement it was not party to, but Rule 24(a) only inquires whether the proposed in-tervenor’s interests “may” be impaired if it is not allowed to intervene. This condition is certainly satisfied.
I am also persuaded that the Tribe’s interests were not adequately protected by Arrow. The Tribe’s burden in showing inadequate representation is a “minimal” one. Mille Lacs Band, 989 F.2d at 999. Unlike the majority, I do not find that the Tribe’s interest is identical to Arrow’s. Although under section 81 Arrow and the Tribe share equally in any recovery from Gambler’s Supply, the fact remains that Arrow individually has paid nothing to Gambler’s Supply whereas the Tribe had paid over three million dollars that it has an interest in recovering. The Tribe therefore has a much greater incentive to pursue a higher amount of recovery.
The September 12, .1994, hearing transcript shows almost no inquiry into the settlement proposed by Arrow and Gambler’s Supply. The district court’s only comment was that “certainly the settlement in this case is small in relation to the amount of the contract involved, but the right of recovery is *412not, in my view, clear-cut.” Sept. 12, 1994, Hrg. Tr. 22. Looking at all the circumstances, I would allow intervention for the limited purpose of permitting the Tribe, to present- arguments to the district court that the proposed settlement was not a provident one. At that time all parties could present relevant evidence on this issue, and the Tribe would bear the burden of persuading the court that the settlement was improvident.