New York News, Inc. v. Kheel, 1133
| Citation | 972 F.2d 482 |
| Decision Date | 11 August 1992 |
| Docket Number | No. 1133,D,1133 |
| Parties | 141 L.R.R.M. (BNA) 2075, 61 USLW 2158, 122 Lab.Cas. P 10,326, 23 Fed.R.Serv.3d 317, RICO Bus.Disp.Guide 8065 NEW YORK NEWS, INC. and Tribune Company, Plaintiffs-Appellees, v. Theodore W. KHEEL, Appellant, Newspaper & Mail Deliverers' Union of New York and Vicinity, Allied Printing Trades Council of New York, Nicholas Bianca, Albert A. DePompeis, Jr., Joseph Diconstanzo, Thomas Eisenbraun, Charles Esposito, Luke Fox, Mark Goldstein, Robert Greenberg, Williams Heslin, Gary Karger, Russell Kenngott, Glen LaChance, Joseph Martin, Todd A. Morse, Dennis J. Parmigiani, Donald Roberts, Alfred Santiago, James V. Sassano, Roman P. Sendrowski, Charles Sparacino, III, John P. Vitello, John G. Zeoli and Vincent Zeoli, Defendants. ocket 91-9185. |
| Court | United States Courts of Appeals. United States Court of Appeals (2nd Circuit) |
Theodore W. Kheel, pro se.
John F. Savarese, New York City (Norman Redlich, Herbert M. Wachtell, Marc Wolinsky, Scott E. Eckas, David M. Murphy, Wachtell, Lipton, Rosen & Katz, New York City, of counsel), for appellee Tribune Co.
Before: MESKILL, Chief Judge, TIMBERS and NEWMAN, Circuit Judges.
This appeal raises the issue whether a non-party may intervene in an action for the purpose of moving for Rule 11 sanctions Kheel argues that the district court erred in denying his motions for intervention as of right and permissive intervention and in ruling that, as a non-party and non-participant, he lacked standing to move for Rule 11 sanctions.
against parties to the action. Theodore W. Kheel, an attorney appearing pro se, appeals from orders of the United States District Court for the Southern District of New York, Freeh, J., denying his motion to intervene for the purpose of requesting sanctions, 139 F.R.D. 291 (S.D.N.Y.1991), and denying his motion for reconsideration of the district court's prior order, 139 F.R.D. 294 (S.D.N.Y.1991). Kheel sought to impose sanctions on plaintiff Tribune Company (Tribune) and plaintiff's counsel for making allegedly baseless allegations in a complaint filed by them
We affirm.
During the course of a bitter strike against the New York Daily News (Daily News ) by nine of the ten trade unions representing New York newspaper employees, plaintiffs New York News Inc. (the News), then-publisher of the Daily News, and Tribune, the News' parent company, commenced an action against defendants asking for damages and injunctive relief under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961 et seq., and on various state law grounds. They named as defendants the Newspaper and Mail Deliverers' Union of New York and Vicinity (Drivers' Union), which was one of the News' striking unions, the Allied Printing Trades Council of New York State (Allied Council), which is the umbrella organization for the News' ten newspaper workers' unions, and a number of individual officials and members of the Drivers' Union. Kheel was not named as a defendant. The complaint alleged that defendants participated in a criminal conspiracy that had as its object either (1) to coerce the News into settling the ongoing strike on unfavorable terms that would require it to continue to employ undesirable workers and to compensate workers for unearned overtime, or (2) to coerce Tribune into selling the News to a group of private investors with members of the unions representing the News' striking workers receiving a financial interest in the sale.
The complaint described defendants' participation in a "campaign of violence" directed against news dealers and advertisers in an effort to prevent the news dealers from selling the Daily News and advertisers from buying advertising space in the newspaper. Allegedly, the intended result of this campaign was to bring the News to the "verge of collapse." The complaint detailed various racketeering acts engaged in by defendants, such as conspiracy to commit extortion, attempted murder, arson, violence and extortionate threats of violence. The complaint also described the buyout plan in which Kheel, a non-party, allegedly participated.
Although Kheel was not named as a defendant, his name appeared throughout the complaint, particularly in the section alleging the buyout plan. According to the complaint, the Allied Council had acted as a spokesperson for the ten newspaper unions through its President, George McDonald, and its "purportedly unpaid advisor, Theodore W. Kheel," and had coordinated the negotiating strategies and strike-related activities of the unions.
The complaint alleged that as a part of and in furtherance of the unlawful plan defendants had sought to exploit the situation they had created through the campaign "for their personal benefit and the personal benefit of certain persons affiliated with them including Kheel." It alleged that within a week of the strike and the commencement of the violence
Kheel--operating behind a facade of respectability--embarked upon a plan and scheme to personally benefit from such campaign of violence and threats that he was condoning and facilitating. This plan and scheme envisioned utilizing the violence and threats to coerce the Tribune into selling the News to a group of unidentified private investors represented by him (and possibly including Kheel himself) and the unions.
The complaint proceeded to allege in detail Kheel's active participation in the unlawful buyout scheme through which defendants and others conspired to acquire an interest in the News through illegal means.
Kheel filed a motion to intervene for the purpose of moving under Rule 12(f) of the Federal Rules of Civil Procedure to strike from the complaint the allegations that referred to him. Kheel contended that these allegations had no basis in fact and that plaintiffs knew that the allegations had no basis in fact.
Before any action was taken on Kheel's motion, Tribune sold the Daily News to a subsidiary of Mirror Group plc, then a privately held company controlled by Robert Maxwell. The new owner reached new collective bargaining agreements with the nine striking Daily News unions. As part of these arrangements, the parties agreed to terminate the litigation underlying this appeal by signing reciprocal releases and stipulating to dismissal of the case with prejudice. The parties agreed "to refrain from all conduct inconsistent with the parties' intent of resolving all disputes arising out of the bargaining relationships that existed at the News."
Kheel requested that the district court treat his earlier motion as a motion for Rule 11 sanctions or, in the alternative, that the district court impose sanctions on its own initiative. Kheel suggested as an appropriate sanction that the district court order counsel and Tribune to make a public apology and to make a substantial contribution to the Legal Aid Society. The district court issued an order stating that it would treat Kheel's letter as a renewed motion to intervene under Rule 24 for the purpose of asserting a claim for Rule 11 sanctions against Tribune and one of the attorneys who had signed the complaint.
The district court denied Kheel's motion for intervention as of right because Kheel had not satisfied the requirements of Rule 24(a)(2), of the Federal Rules of Civil Procedure and denied permissive intervention because such intervention would have delayed resolution of the case and would have prejudiced the parties. In a footnote, the district court stated that when a non-party seeks to intervene in an action solely to pursue a motion for Rule 11 sanctions, the non-party must demonstrate that intervention is appropriate by satisfying the requirements of Rule 24. 139 F.R.D. at 293-94 n. 1. The district court also denied Kheel's motion for reconsideration of that ruling. 139 F.R.D. at 294-95. Kheel appeals from the denial of those motions.
Kheel contends that the district court erred in denying his motion to intervene for the purpose of seeking Rule 11 sanctions. We review the denial of both the motion for intervention as of right under Fed.R.Civ.P. 24(a) and the motion for permissive intervention under Fed.R.Civ.P. 24(b) for abuse of discretion. See Washington Elec. v. Mass. Mun. Wholesale Elec., 922 F.2d 92, 96 (2d Cir.1990); United States v. Hooker Chemicals & Plastics Corp., 749 F.2d 968, 990-91 (2d Cir.1984). Because a district court's order denying intervention is a final order, we have appellate jurisdiction. See Hooker Chemicals & Plastics Corp., 749 F.2d at 990 n. 19; Ionian Shipping Co. v. British Law Insurance Co., 426 F.2d 186, 189 (2d Cir.1970).
In order to intervene as of right under Fed.R.Civ.P. 24(a)(2), an applicant must (1) timely file an application, (2) show an interest in the action, (3) demonstrate that the interest may be impaired by the disposition of the action, and (4) show that the interest is not protected adequately by the parties to the action. See United States v. State of New York, 820 F.2d 554, 556 (2d Cir.1987). "Failure to satisfy any one of these requirements is sufficient grounds to deny the application." Id. (citations omitted).
The district court held that Kheel had not satisfied the requirements of Rule 24(a)(2) because Kheel's interest in protecting his reputation was not related to the conspiracy alleged in the proceedings and because In his motion for reconsideration, Kheel argued that the district court in denying his motion to intervene mistakenly had applied Rule 24 in disregard of the central purpose of Rule 11. Kheel asserted that the district court erroneously had assumed that he had moved to intervene for the purpose of protecting his reputation. He explained that he did not seek to protect such an interest because Rule 11 was not designed to protect personal interests; rather, he sought to intervene in order to champion Rule 11's central purpose--to protect the...
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