Emqore Envesecure Private Capital Tr. v. Singh

• Decision Date: 14 April 2022
• Docket Number: Civ. 20-07324 (KM) (JBC)
• Parties: EMQORE ENVESECURE PRIVATE CAPITAL TRUST, Plaintiff, v. BHAVDEEP SINGH, et al., Defendants.
• Court: U.S. District Court — District of New Jersey

EMQORE ENVESECURE PRIVATE CAPITAL TRUST, Plaintiff, v. BHAVDEEP SINGH, et al., Defendants.

Civ. No. 20-07324 (KM) (JBC)

United States District Court, D. New Jersey

April 14, 2022

OPINION

KEVIN MCNULTY UNITED STATES DISTRICT JUDGE

This matter comes before the Court on the motion (DE 94) of Balaji Great Lotus Glory (“BGLG”) to intervene as plaintiff in this action pursuant to Federal Rule of Civil Procedure 24.^[1] See Fed.R.Civ.P. 24(a)(2) (intervention as of right); Fed.R.Civ.P. 24(b) (permissive intervention). The plaintiff, Emqore Envesecure Private Capital Trust (“Emqore”), does not oppose BGLG's intervention. Defendants New York Life Investment Management, LLC (“NYLIM”), Bhavdeep Singh Siguler Guff & Company, LP (“Siguler Guff”) Lakshmi Vilas Bank (“Lakshmi Vilas”), and Ares SSG Capital Management (Hong Kong) Ltd. (for purposes of this motion, the “Defendants”) jointly oppose BGLG's motion.

For the reasons stated herein, I will DENY BGLG's motion to intervene.^[2]

I. BACKGROUND

Emqore initiated this action by filing the Initial Complaint on June 16, 2020. (DE 1.) On September 18, 2020, NYLIM moved to dismiss the Initial Complaint. (DE 25.) Siguler Guff and Bhavdeep Singh moved to dismiss the Initial Complaint on October 19, 2020. (DE 33, 34.) Finally, on September 13, 2021, Lakshmi Vilas moved to dismiss the Initial Complaint. (DE 80.)

Prior to Lakshmi Vilas filing their motion to dismiss, Emqore filed a motion for leave to amend the Initial Complaint on May 25, 2021. (DE 57). Magistrate Judge Clark granted Emqore's motion to amend on November 30, 2021, thus mooting the initial motions to dismiss filed by the Defendants. (DE 99.) On December 3, 2021, Emqore filed the Amended Complaint. (DE 102.)

The Amended Complaint alleges that the defendants “conspired to engage in a pattern of racketeering activity, hav[ing] each committed numerous criminal acts as part of [a] scheme to defraud and extort the Plaintiff, ” in a fraud perpetuated by Malvinder and Shivinder Singh (the “Singh Brothers”). (Am. Compl. at ¶6-7.) Because of this alleged scheme, Emqore and various assignors under an assignment deed were purportedly deprived of the benefits of certain contracts that Emqore's predecessors executed with various Indian companies. (Am. Compl. at ¶¶ 97, 121, 161.) The Amended Complaint also alleges that the defendants attempted to “cover-up” their complicity in the Singh Brothers' fraud by “concot[ing] an illegal fraudulent scheme of their own to conceal their wrongdoing, shirk their responsibility and criminally deprive creditors their rightful dues.” (Am. Compl. at ¶160.)

The Amended Complaint asserts the following causes of action: (1) Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. 1962(c);^[3] (2) conspiracy to violate RICO, 18 U.S.C. § 1962(d); (3) common-law fraud; (4) tortious interference with contract; (5) trespass to chattels; (6) unjust enrichment; (7) civil conspiracy; and (8) breach of the implied covenant of good faith and fair dealing. Emqore seeks damages, along with declaratory and injunctive relief. On January 28, 2022, Defendants IHH Healthcare Berhad, Khazanah Nasional Berhad, NYLIM, Bhavdeep Singh, and Siguler Guff moved to dismiss the Amended Complaint. (DE 115, 116, 118, 121.) Emqore filed their opposition brief on March 7, 2022. (DE 130.) Reply briefs were filed on April 5, 2022. (DE 135, 136, 137, 138, 139.)

On November 5, 2021, BGLG filed the pending motion to intervene. BGLG contends that intervention is necessary and appropriate for the following reasons:

• BGLG has an actual interest as an assigned beneficiary of funds Emqore may or will receive as a result of this Court's judgment;

• This action, the India Arbitration, ^[4] and related labor disputes all have common questions of law and involve the “same questioned funds and activity in dispute”; • “[BGLG] is not appropriately represented in this matter and as such, the funds to which [BGLG] rightfully claim assignment are at stake”;

• And any determinations or rulings by this Court “will likely affect the outcome of the India Arbitration as well as ongoing labor disputes.” (DE 94-1 at 2.)

The Court addresses BGLG's motion to intervene below.

II. LEGAL STANDARDS

Federal Rule of Civil Procedure 24 governs intervention by nonparties. A party may intervene as of right if it “(1) is given an unconditional right to intervene by a federal statute; or (2) claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant's ability to protect its interest, unless existing parties adequately represent that interest.” Fed.R.Civ.P. 24(a). A private party may be given permission by the court to intervene if it “(A) is given a conditional right to intervene by a federal statute; or (B) has a claim or defense that shares with the main action a common question of law or fact.” Fed.R.Civ.P. 24 (b).

III. DISCUSSION

A. Rule 24(a) Intervention

The Third Circuit has established that “a litigant seeking intervention as of right under Rule 24(a)(2) must establish 1) a timely application for leave to intervene, 2) a sufficient interest in the underlying litigation, 3) a threat that the interest will be impaired or affected by the disposition of the underlying action, and 4) that the existing parties do not adequately represent the prospective intervenor's interests.” Liberty Mut. Ins. Co. v. Treesdale, Inc., 419 F.3d 216, 220 (3d Cir. 2005) (citing Kleissler v. U.S. Forest Serv., 157 F.3d 964, 969 (3d Cir. 1998)). “Each of these requirements must be met to intervene as of right.” Id. (quoting Mountain Top Condo. Ass'n v. Dave Stabber Master Builder, Inc., 72 F.3d 361, 366 (3d Cir. 1995)).

BGLG has established that their motion is timely within the meaning of Rule 24(a)(2). To determine whether a motion to intervene is timely, courts consider the following factors: “(1) the stage of the proceeding; (2) the prejudice that delay may cause the parties; and (3) the reason for the delay.” Mountain Top, 72 F.3d at 369. In making this determination, courts are mindful that “‘[s]ince in situations in which intervention is of right the would-be intervenor may be seriously harmed if he is not permitted to intervene, courts should be reluctant to dismiss a request for intervention as untimely, even though they might deny the request if the intervention were merely permissive.'” Id. (quoting 7C Wright, Miller & Kane, Federal Practice & Procedure § 1916, at 424 (1986)). Courts also recognize that “[t]he mere passage of time ... does not render an application untimely.” Mountain Top, 72 F.3d at 369 (citations omitted). Ultimately, the delay in seeking to intervene is “measured from the time the proposed intervenor knows or should have known of the alleged risks to his or her rights or the purported representative's shortcomings.” Benjamin ex rel. Yock v. Dep't of Pub. Welfare of Pa., 701 F.3d 938, 950 (3d Cir. 2012).

In arguing that BGLG's motion is untimely, the Defendants primarily contend that granting the motion after various defendants moved to dismiss in October 2020 “would prejudice Defendants by further delaying this action and requiring that [Defendants] respond to yet another meritless pleading.” (DE 97 at 4.)^[5] Moreover, Defendants assert that BGLG could have filed its motion earlier given that it “obtained an interest in the proceeds of this action in September 2020, ” and has failed to “explain why it could have come forward” earlier. (DE 97 at 4.)

On one hand, the Court acknowledges the Defendants' concerns. Per the declaration of Ravi Pratap Singh, attached to BGLG's motion, BGLG was unsuccessful in its attempts to hold “meaningful discussions” with Emqore from January 1, 2021 through June 30, 2021.^[6] (DE 94-4 at 5.) Despite this, and the fact that BGLG was already assigned an interest in Emqore's recovery in September 2020, BGLG still waited until November 5, 2021 to apply for intervention in this action.

Nevertheless, the Court recognizes that Emqore was ultimately granted leave to file the Amended Complaint, thereby mooting the initial motions to dismiss filed by the Defendants. (See DE 109 at 4.) Indeed, BGLG filed its motion to intervene almost a month before Emqore filed the Amended Complaint. Ultimately, the Court cannot say that this action has substantially progressed to a stage necessitating a finding that BGLG's motion is untimely; the Court has not ruled on any dispositive motions and no discovery schedule has been set. This case is still generally in the initial stages and accordingly, the Court finds that the first prong of Rule 24(a)(2) has been satisfied.

The Court finds, however, that BGLG has not demonstrated that it has a “sufficient interest” in the pending litigation. While the Third Circuit has stated that there is “no precise and authoritative definition of interest, ” generally the “mere economic interest in the outcome of litigation is insufficient to support a motion to intervene.” In re Stone & Webster, Inc., 335 Fed.Appx. 202, 204 (3d Cir. 2009); see also Treesdale, 419 F.3d at 221(citations omitted); U.S. v. Alcan Alum., Inc., 25 F.3d 1174, 1185 (3d Cir. 1994) (“Some courts have stated that a purely economic interest is insufficient to support a motion to intervene.”) However, a proposed intervenor's “interest in a specific fund is sufficient to entitle intervention in a case affecting that fund.” Mountain Top, 72 F.3d at 366.

To determine whether the proposed intervenor has an identifiable interest in a specific fund, as opposed to a more general purely economic interest, courts analyze whether the proposed intervenor “seeks to recover from the general assets of ...