Caterino v. Barry

• Citation: 922 F.2d 37
• Decision Date: 11 September 1990
• Docket Number: No. 122,No. 90-1525,122,90-1525
• Parties: , 19 Fed.R.Serv.3d 504, 13 Employee Benefits Ca 1403 Ronald W. CATERINO, et al., Plaintiffs, Appellees, v. J. Leo BARRY, etc., et al., Defendants, Appellees. Teamsters Local Union, et al. Intervenors, Appellants. . Heard
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

Page 37

922 F.2d 37

59 USLW 2463, 19 Fed.R.Serv.3d 504,

13 Employee Benefits Ca 1403

Ronald W. CATERINO, et al., Plaintiffs, Appellees, v. J. Leo BARRY, etc., et al., Defendants, Appellees.

Teamsters Local Union No. 122, et al. Intervenors, Appellants.

No. 90-1525.

United States Court of Appeals, First Circuit.

Heard Sept. 11, 1990.

Decided Dec. 26, 1990.

Stephen R. Domesick, for intervenors, appellants.

James T. Grady with whom John J. Kenney, Jr., and Grady and Dwyer were on brief for defendants, appellees J. Leo Barry, et al.

Marie P. Buckley with whom Anthony M. Feeherry and Goodwin, Procter & Hoar were on brief for plaintiffs, appellees Ronald W. Caterino, et al.

Before CAMPBELL, Circuit Judge, COFFIN, Senior Circuit Judge, and SELYA, Circuit Judge.

COFFIN, Senior Circuit Judge.

A local Teamsters union and two of its members sought to intervene in a class action lawsuit brought by United Parcel Service employees against the trustees of the New England Teamsters and Trucking Industry Pension Fund ("the Fund"). The district court left open the possibility of intervention at the remedial stage of the case--if one is required--but denied intervention for the liability proceedings on two grounds: appellants' motion was untimely and their interests were adequately represented by the existing parties. We find no abuse of discretion in the decision to deny intervention, and therefore affirm.

I.

Five UPS employees filed this lawsuit in December 1986, claiming that the Fund's trustees had breached their fiduciary duty by assigning the UPS workers an unreasonably low benefit level and by prohibiting transfer of assets contributed on the workers' behalf to a separate pension plan. Plaintiffs claim entitlement to a higher benefit than other employees whose employers contribute to the Fund at the same rate as UPS because of their uniquely favorable actuarial characteristics. See Affidavit of Steven H. Klubock at p 7, Appendix at 138. Plaintiffs argue that these actuarial attributes mean that contributions made on their behalf end up heavily subsidizing the pensions of non-UPS workers; plaintiffs argue that UPS dollars instead should be used to support an increased benefit for UPS pensioners. ¹

The prospective intervenors--two non-UPS employees and the local union that represents them, Teamsters Local 122--claim entitlement to the same benefit as the UPS class members because their employer pays into the Fund at the same rate as UPS. In light of their assertedly equal standing, the intervenors contend that any resolution of the present parties' claims without their participation presents a strong possibility of unfairness to them.

Appellants first sought to intervene as defendants in March 1990, more than three years after the action began. Discovery had closed in mid-1989, and in October of that year the court had scheduled trial for June 25, 1990. In addition, substantial other pretrial activity had occurred. In July 1987, the district court denied the defendants' motion to dismiss. In October 1988, the district court denied cross-motions for summary judgment. On March 29, 1989, the court granted plaintiffs' motion to certify the plaintiff class.

The district court denied the motion to intervene on May 8, 1990, with a brief notation written at the bottom of the first page of applicants' motion. The court's ruling was as follows:

Motion to Intervene is denied. The Court will entertain a renewed Motion to Intervene at the remedy stage of the case, if such a stage is required.

The proposed intervenors then appealed to this court. After oral argument, we remanded the case because, without a statement of reasons from the district court, we were unable to perform a meaningful review of that court's action. See Fed.R.Civ.P. 24(a) and (b) (enumerating requirements for intervention). We therefore directed the court to submit an explanation "specify[ing] which intervention requirement, or combination of requirements, it found that appellants have failed to meet" and "its reasons for so finding," Order of the Court, Sept. 24, 1990.

The district court responded by listing two requirements. First, it held that "[a]ppellants failed to establish that their interests would not be adequately represented at the liability stage by the [D]efendants." Memorandum, Sept. 27, 1990 (emphasis in original). Second, the court held that the intervention motion was not timely filed: "To have granted said Motion at that late date would have caused a delay in the trial of a 1986 case which had been scheduled since October 6, 1989 for trial on June 25, 1990. Fed.R.Civ.P. 24(b)(2)." Id.

We now resume consideration of the appeal.

II.

Appellants moved to intervene as defendants in this action either as of right under Rule 24(a) or permissively under Rule 24(b). We concentrate our discussion on Rule 24(a) because our conclusion that the court acted within its discretion in denying intervention as of right effectively disposes of the permissive intervention question as well. See International Paper Co. v. Town of Jay, 887 F.2d 338, 344 (1st Cir.1989) (A " 'district court has less discretion to limit the participation of an intervenor of right than that of a permissive intervenor.' ") (quoting Stringfellow v. Concerned Neighbors in Action, 480 U.S. 370, 382, 107 S.Ct. 1177, 1185, 94 L.Ed.2d 389 (1987) (Brennan, J., concurring)) (emphasis in International Paper).

Rule 24(a) provides that an applicant seeking intervention as of right must meet four requirements. First, the application must be timely. Second, the applicant must have a direct and substantial interest in the subject matter of the litigation. Third, the applicant must be so situated that the disposition of the action may as a practical matter impair or impede its ability to protect that interest. Finally, the applicant's interest must be inadequately represented by existing parties. Travelers Indemnity Co. v. Dingwell, 884 F.2d 629, 637 (1st Cir.1989); International Paper, 887 F.2d at 342.

An applicant's failure to meet any one of these requirements is a sufficient basis for denying intervention as of right, Travelers, 884 F.2d at 637, and our review is strictly limited to deciding whether the district court abused its discretion. International Paper, 887 F.2d at 344. In this case, although the district court gave two bases for its decision--adequacy of representation and untimeliness--we need go no further than the court's conclusion that intervention in the liability phase of the case should be denied as untimely sought.

The timeliness requirement "is of first importance," United Nuclear Corp. v. Cannon, 696 F.2d 141, 143 (1st Cir.1982), and the trial court's determination on that factor is entitled to substantial deference. See NAACP v. New York, 413 U.S. 345, 366, 93 S.Ct. 2591, 2603, 37 L.Ed.2d 648 (1973) (establishing abuse of discretion standard for timeliness factor); United States v. Metropolitan Dist. Comm'n, 865 F.2d 2, 5 (1st Cir.1989). Despite limited analysis by the district court, we are unable to say that its decision to reject the application as untimely fell outside the wide boundaries of its discretion.

In Culbreath v. Dukakis, 630 F.2d 15, 17, 20-24 (1st Cir.1980), we specified four factors to be considered in evaluating the timeliness of an intervention motion. These factors, as recently reiterated in Metropolitan Dist. Comm'n, 865 F.2d at 5, are:

(i) the length of time the prospective intervenors knew or reasonably should have known of their interest before they petitioned to intervene; (ii) the prejudice to existing parties due to the intervenor's failure to petition for intervention promptly; (iii) the prejudice the prospective intervenors would suffer if not allowed to intervene; and (iv) the existence of unusual circumstances militating for or against intervention.

We regret that the district court, in its response after remand, failed to address each of these factors. The court instead referred only to an anticipated delay in the trial if intervention were granted, a circumstance relevant to the prejudice factor. We nevertheless have chosen not to remand the case again and instead have examined whether the decision to deny intervention is supportable upon full application of the four-part Culbreath test to the facts contained in the record. See Fiandaca v. Cunningham, 827 F.2d 825, 833-35 (1st Cir.1987) (applying Culbreath test, "a step not taken by the district court," to determine whether that court could have found application to be untimely). We thus turn to the four Culbreath factors.

(i) The promptness of applicants' motion. The individual applicants claim not to have known anything about this case until the first week of March 1990. The union's chief executive officer, however, acknowledged in an affidavit dated March 15, 1990, that he had read about the litigation in a Boston newspaper "[s]ome time ago." The officer, John F. Murphy, recalled that the news story "indicated that several UPS employees were suing the Pension Fund to get a better pension." Murphy stated that he learned in November 1989 for the first time "that this lawsuit involved more than a few employees and could have an impact on the Union and its participants."

The applicants argue that their motion was prompt for purposes of the Culbreath test, despite the passage of more than three years since filing of the case, because they acted quickly after learning of the lawsuit's potential impact on themselves. At least with respect to the union, this argument is without merit.

Murphy admitted that he saw a newspaper report on the case long before March 1990. Even if the report Murphy saw referred only to the original five UPS plaintiffs, subsequent publicity and minimal investigation should have alerted him to the fact that this could become a substantial class action lawsuit. The plaintiffs' 1986 complaint requested class certification. Two articles in Boston...