Court Opinion

ID: 9475221
Source: CourtListenerOpinion
Date Created: 2023-08-05 05:20:11.466712+00
Date Added: 2024-06-11T17:44:34.369830
License: Public Domain

SETH, Circuit Judge,
dissenting:
I must respectfully dissent from the majority opinion in an appeal from a denied motion to intervene in an action in the United States District Court for the Western District of Oklahoma. Appellant, Kenneth Foster, sought to participate in an action commenced by Clifford Bottoms against Dresser Industries, Inc. in which Mr. Bottoms sought royalties allegedly due him from Dresser under a contract for the sale of certain patent rights. Dresser had crossclaimed against Mr. Bottoms for royalties it had allegedly paid by mistake. The appellant claimed an interest in the patent rights which were the subject of the contract and sought to intervene as of right under Fed.R.Civ.P. 24(a)(2). The district court denied appellant’s motion to intervene and thereafter dismissed the underlying action when Mr. Bottoms and Dresser settled their claims against each other. Mr. Foster now appeals his denied motion to intervene.
In addition to pursuing this appeal Mr. Foster filed an action in state district court against Mr. Bottoms and Dresser. Dresser was successful in obtaining a dismissal in that action by arguing that patent infringement actions lie exclusively within the jurisdiction of the federal courts. Dresser has also filed an action in the United States District Court for the Western District of Oklahoma against Mr. Foster seeking a declaratory judgment that Mr. Foster has no claims against Dresser by reason of the patents.
The basis for Mr. Foster’s claimed interest in the Bottoms-Dresser patent infringement dispute is explained by the following version of facts. Mr. Foster alleges that in early 1965 he and Clifford Bottoms entered into an agreement by which Mr. Foster would design and construct an oil field tool called a “bumper sub” and Mr. Bottoms would use his lawyer to obtain a patent on the tool. They were to share equally in all profits from the “bumper sub” and its ap*875plications. After constructing the “bumper sub” and delivering it to Mr. Bottoms in California appellant returned home to Oklahoma to await the patent application process. Shortly thereafter Mr. Foster received a call from Mr. Bottoms who told him that the “bumper sub” had failed, that it would not merit a patent application and that Mr. Foster should forget all about it. The appellant followed this advice.
However, in August of 1965 Mr. Bottoms made an application to the Patent Office and later received a patent on the “bumper sub” which was subsequently reissued in late 1969 as U.S. Patent No. RE 26,745. In 1971 Mr. Bottoms entered into an agreement with Dresser whereby he assigned the rights to that patent and any future patents in return for 5% of net sales and rentals of devices infringing on the patent in addition to a $1,000 per month retainer fee. The scope of the patent, its applicability to Dresser’s equipment and the amount of any royalties thereby due to be paid or refunded were the central elements of the action in which Mr. Foster sought to intervene. Mr. Foster claimed a property interest in the patent by reason of the alleged partnership agreement and moved to intervene to recover one-half of any royalties and interest found still to be due from Dresser and to recover from Clifford Bottoms one-half of the royalties already paid. The motion was denied with the district court concluding Mr. Foster’s interest would not be impaired and, in any event, he was adequately represented by Mr. Bottoms.
Rule 24(a)(2) provides for intervention as of right in an action where:
“the applicant claims an interest relating to the property or transaction which is the subject of the action and he is so situated that the disposition of the action may as a practical matter impair or impede his ability to protect that interest, unless the applicant’s interest is adequately represented by existing parties.”
In Natural Resources, Etc. v. U.S. Nuclear Regulatory Comm’n, 578 F.2d 1341 (10th Cir.1978), and National Farm Lines v. I.C.C., 564 F.2d 381 (10th Cir.1977), on the subject of what interest is necessary to permit intervention, we pointed out that the interest of the applicant seeking intervention need be significant but need not be direct. Here the intervenor has alleged facts which if true would support his claim of rights to the patent. Accordingly, I agree with the district court’s conclusion that the appellant here did allege a sufficient interest relating to the property that is the subject of the action. However, I must disagree with the district court’s determination that Mr. Foster did not establish the existence of the second and third elements necessary to permit intervention.
As we noted in Natural Resources, Etc., the question of the impairment of the applicant’s interest is difficult to separate from the question of the existence of an interest. 578 F.2d at 1345. In a situation where it has already been determined that the applicant for intervention has alleged a sufficient interest in the litigation it is also useful to recall that the rule refers to impairment “as a practical matter.” Thus the court is not limited to a consideration of strictly legal consequences. 578 F.2d at 1345. With the additional standard in the rule that the impairment of interest criterion is something which “may” occur I must conclude that the possibility of the plaintiff pressing purely individual or personal claims at trial or in settlement negotiations at the expense of claims shared with Mr. Foster does in fact suggest a potential impairment. Where a potential impairment is raised, the applicant need not wait until it comes to fruition. Even at this point where a settlement has been reached by the original parties to the action it cannot be shown that Mr. Foster’s interests have not been impaired.
Finally, I reach the question of whether Mr. Foster’s interest was adequately represented in the litigation by Mr. Bottoms. In National Farm Lines v. I.C.C., 564 F.2d 381 (10th Cir.1977), we stated that although the burden is upon the applicant to show that representation by existing parties may be inadequate, that potential is all that *876need be shown and the burden is minimal. See Trbovich v. United Mine Workers, 404 U.S. 528, 92 S.Ct. 630. This potential has certainly been shown to be present. We cannot remove this potential by in this court resolving the dangers by advancing what are acknowledged as only possibilities, speculations and assumptions. In these circumstances I think it is misleading to apply an overly mechanistic test of determining whether the entire scope of Mr. Foster’s claims lies entirely within the complaint of the original plaintiff.
Where the essence of Mr. Foster’s sought participation in the litigation is to protect his rights in the patent allegedly denied by Mr. Bottoms’ long concealed fraud I find little to suggest that the plaintiff will adequately represent Mr. Foster’s interests. The settlement between Dresser and Mr. Bottoms involved several patents and several interests between them. It also appears that a cross-claim against Mr. Bottoms was resolved in the litigation.
I would hold that the motion to intervene should have been granted.