MICHAEL F. URBANSKI, Chief District Judge.
This matter is before the court on a motion to intervene filed by Juan Valoy, Edgar Alfredo Ramos-Ramos, Marcelino Ramirez-Sanchez, Cesar Augusto Gramajo, and Gerson Castro Segeda. ECF No. 8. The matter has been fully briefed. The court dispenses with oral argument because the legal contentions are adequately presented in the materials before the court and argument would not aid the decisional process. For the following reasons, the motion to intervene is
RLI Insurance Company ("RLI") and Nexus Services, Inc. ("Nexus") entered into an indemnity agreement on January 20, 2016 ("Indemnity Agreement") as consideration for RLI's agreement to issue immigration bonds. As detailed in the court's opinion on the extensively litigated preliminary injunction, RLI alleges that Nexus breached the Indemnity Agreement for a variety of reasons, including failure to provide access to Nexus' books, records and accounts. ECF No. 59. The court granted RLI a preliminary injunction that required Nexus to give access to a selection of its books, records and accounts. ECF No. 60.
During the course of briefing and argument for the preliminary injunction, Juan Valoy, Edgar Alfredo Ramos-Ramos, Marcelino Ramirez-Sanchez, Cesar Augusto Gramajo, and Gerson Castro Segeda (the "Intervenors") moved to intervene as defendants in this action. ECF No. 8. The Intervenors claim they have a right to intervene under Federal Rule of Civil Procedure 24(a) because (1) they have a legally protected interest at stake—their sensitive and confidential personal information located in documents held by Nexus and requested by RLI; (2) their interest is impaired once the personal information is disclosed; and (3) neither RLI nor Nexus adequately represents their interests because of the parties' financial interests in compliance with the bond terms. ECF No. 8, at 3-10. The Intervenors also argue that the court could grant permissive intervention under Rule 24(b) because they intend to directly oppose the relief sought by RLI and their defenses share the same questions of law and fact at issue in this action. ECF No. 8, at 10-12. Additionally, the Intervenors note that they have standing because disclosure of their personal information is an injury directly caused by RLI's request, which would be redressed by a favorable decision by this court. ECF No. 8, at 12-13.
RLI objects to the intervention as a Nexus-created strategy to frustrate RLI's enforcement of its contractual rights. ECF No. 71, at 2. RLI argues that the Intervenors have not carried their burden of demonstrating their right to intervention or that circumstances support permissive intervention. ECF No. 71, at 4-14. RLI claims: (1) the alleged harm of the information's future use is speculative; (2) the Intervenors and Nexus have nearly identical interests in opposing enforcement of the Indemnity Agreement for privacy purposes, as well as defenses and relief sought; (3) orders in this proceeding preclude RLI from disclosing this information to most third parties; (4) the Intervenors have not shown adversity of interest, collusion, or nonfeasance; and (5) the Intervenors have not pled facts connecting them to the Indemnity Agreement or the immigration bonds, including for purposes of standing.
In response, the Intervenors denied RLI's accusations that their proposed intervention was a litigation tactic benefiting Nexus. ECF No. 75, at 2. Nexus, for its part, agreed with the Intervenors' motion and notes that counsel for the Intervenors possesses knowledge about immigration proceedings and Nexus' clients. ECF No. 78.
Rule 24(a)(2) governs intervention by right, and provides as follows,
Fed. R. Civ. P. 24(a)(2). Thus, in addition to demonstrating timeliness of the motion, an applicant must show: (1) interest in the subject matter of the action; (2) that the protection of this interest would be impaired because of the action; and (3) that the applicant's interest is not adequately represented by existing parties to the litigation.
Rule 24(b) provides for permissive intervention of parties. Rule 24(b)(1)(B) states that on timely motion, the court may permit anyone to intervene who "has a claim or defense that shares with the main action a common question of law or fact." Fed. R. Civ. P. 24(b)(1)(B). The court enjoys substantial discretion over allowing or rejecting motions to intervene under Rule 24(b).
The Intervenors argue that they are entitled to intervene as a matter of right under Federal Rule of Civil Procedure 24(a), or alternatively, that the court should permit them to intervene under Rule 24(b). The court finds that the Intervenors fail to demonstrate their need to intervene under either Rule 24(a) or (b).
Under Rule 24(a), the Intervenors cannot establish each element required for intervening as a matter of right. The Intervenors do satisfy the timeliness requirement. The Intervenors moved to intervene within two weeks of RLI filing its complaint and the motion for preliminary injunction. The case is still in its early stages, with only the initial pleadings filed and discovery recently commencing per the Joint Discovery Plan.
The Intervenors fail to explain how they have an interest in the subject matter of this action, which is the alleged breached of the Indemnity Agreement. To demonstrate intervention by right, the Intervenors need to show "a significantly protectable interest," as "a general interest in the subject matter of pending litigation does not constitute a protectable interest within the meaning of Rule 24(a)(2)."
Moreover, "[t]he Fourth Circuit has held that an interest contingent on the outcome of other pending litigation qualifies as `significantly protectable.'"
The Intervenors also have not demonstrated that this action may practically impair or impede their alleged interest in this information. The court has implemented privacy protections for the disclosures made to date in this action. The court further notes that Nexus' current and former clients, which may include the Intervenors, have waived their privacy rights to at least some of the information held in Nexus' books, records and accounts. For example, the GPS Addendum to the Contract for Immigration Bond Securitization and Indemnity Agreement
Additionally, as noted above, the Intervenors' interests would not be impaired because they have the opportunity to litigate whether their privacy interests are violated in another action. A separate action regarding these privacy interests is far more appropriate than defending against a breach of contract action in which the Intervenors are neither a signatory to the contract nor alleged to be in breach of said contract. Ultimately, the Intervenors offer no more than conclusory allegations as to how their interest would be impaired by this breach of contract action.
Perhaps most importantly, the Intervenors have not shown that Nexus may inadequately represent their interests. The Intervenors "need not show that the representation by existing parties will definitely be inadequate,"
"When the party seeking intervention has the same ultimate objective as a party to the suit, a presumption arises that its interests are adequately represented, against which the petitioner must demonstrate adversity of interest, collusion, or nonfeasance."
Any concern that Nexus may change course is entirely speculative at this juncture.
The Intervenors failed to show that they have a significantly protectable interest in the subject matter of the action, that the protection of this interest would be impaired because of the action, or that the their interest is not adequately represented by Nexus.
Under Rule 24(b), the court may permit intervention "[o]n timely motion" by anyone who "has a claim or defense that shares with the main action a common question of law or fact." Fed. R. Civ. P. 24(b)(1)(B). In determining whether to permit intervention, the court must "consider whether the intervention will unduly delay or prejudice the adjudication of the original parties' rights." Fed. Civ. P. 24(b)(3). Thus, where movants seek permission to intervene under Rule 24(b), they must establish each of the following elements: (1) that their motion is timely; (2) that their claims or defenses have a question of law or fact in common with the main action; and (3) that intervention will not result in undue delay or prejudice to the existing parties.
As explained previously, the Intervenors satisfy the timeliness requirement. However, based on the papers presented, the Intervenors do not have a claim or defense that shares a question of law or fact with this action. The Intervenors acknowledge that they do not advance new claims, but "intend to directly oppose [RLI's] requests for relief. . . ." ECF No. 8, at 11. These defenses include challenging the enforceability and interpretation of the Indemnity Agreement, and relying on the equitable defenses of unclean hands, waiver, and estoppel. ECF No. 8, at 11-12. The Intervenors do not claim to be third-party beneficiaries of the Indemnity Agreement and do not present a clear argument as to how a third-party could challenge a private contract. Moreover, all of these defenses are ones advanced by Nexus and are not specific to the Intervenors. It is unclear how the Intervenors substantively could add to the case given the advancement of the same defenses and Nexus' active and zealous pursuit of safeguarding its books, records and accounts in this action.
The Intervenors may have an equitable privacy interest in the highly personal information subject to the Indemnity Agreement. However, assessing whether current and former clients of Nexus may have some equitable privacy interest in the information held by Nexus is a remarkably different inquiry than whether Nexus or RLI breached the Indemnity Agreement. In fact, denying intervention is unlikely to lead to inconsistent rulings as it is conceivable that this court could find the Indemnity Agreement enforceable while another court considers the Intervenors' interest in Nexus' books, records and accounts without even addressing the validity of the agreement.
The Intervenors' lack of clear defenses as nonparties to the Indemnity Agreement also risks unduly delaying this action and prejudicing RLI. The Intervenors' proposed defenses overlap with Nexus, but they have no clear stake in the Indemnity Agreement and thus the Intervenors' approach inherently differs from Nexus.
Ultimately, intervention would prejudice RLI by requiring it to defend this action on multiple fronts and undoubtedly delay and complicate this action through expanded discovery and additional pretrial motions. The court will not allow that to happen. This case already has been remarkably complex with a number of hearings for the preliminary injunction, the appointment of a special master, and now a motion for a second preliminary injunction. If the Intervenors want to challenge their privacy interests in the information covered by the Indemnity Agreement, they may separately pursue a case against RLI or Nexus. This action remains a dispute between the two parties that signed the Indemnity Agreement and will be limited to a breach of contract action.
The court recognizes that "liberal intervention is desirable to dispose of as much of a controversy involving as many apparently concerned persons as is compatible with efficiency and due process."
For these reasons, the court will
An appropriate Order will be entered.