REPORT AND RECOMMENDATION ON MOTION TO INTERVENE
ECF No. 16
LISA PUPO LENIHAN, Magistrate Judge.
I. RECOMMENDATION
It is respectfully recommended that the Motion to Intervene as a defendant by the Pittsburgh Regional Building Trades Council, AFL-CIO (ECF No. 16), be granted.
II. REPORT
Pending before the Court is a Motion to Intervene as a defendant by the Pittsburgh Regional Building Trades Council, AFL-CIO (the "Council") pursuant to Federal Rule of Civil Procedure 24. The Council seeks to intervene as a defendant based on the grounds that it claims an interest relating to the transaction that is the subject of the action, and is so situated that disposing of the action may impair or impede its ability to protect its interest.
A. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
On May 26, 2016, the County of Westmoreland (the "County") entered into a project labor agreement (the "PLA") with the Council, which applies to all qualifying construction projects for the County costing more than $150,000. Compl. ¶¶ 17-18 (ECF No. 1). All contractors and subcontracts hired for these projects must agree to the terms of the PLA, which also compels all contractors and subcontractors to become dues-paying members of a union that is a member of the Council. Id. ¶¶ 20-22. The contractors and subcontractors must also contribute to the union's pension and health-care funds. Id. ¶ 23.
Plaintiffs are the Associated Builders & Contractors of Western Pennsylvania ("ABC"),S an organization of non-union contractors, contractors belonging to other unions and their employees, and a resident and taxpayer of the County. Id. ¶¶ 24, 32-39. On September 23, 2019, Plaintiffs filed suit challenging the validity of the PLA, claiming that it violates the individual employees' and members' rights to decide whether to associate with a union under the First and Fourteenth Amendments. Id. ¶¶ 40-46. Plaintiffs also claim that the PLA violates 29 U.S.C. § 157 of the National Labor Relations Act, which gives employees the right to decide whether they want union representation. Id. ¶ 47. By compelling contractor employees to become union members, Plaintiffs claim that the PLA violates 29 U.S.C. § 158(a)(3), which abolished compulsory union membership. Id. ¶ 53. Lastly, Plaintiffs claim that by discriminating against non-union contractors and contractors belonging to a non-Council union, the PLA violates Section 512(a) of the Pennsylvania Commonwealth Procurement Code, which requires all Commonwealth agency contracts to be awarded by competitive bidding. Id. ¶¶ 58-67. Plaintiffs seek a declarative judgment that the County is violating their constitutional rights, their federal rights under the NLRA, and Pennsylvania's competitive bidding laws, and to enjoin the County from enforcing the PLA. Id. ¶ 69.
The Council filed this Motion to Intervene on October 11, 2019. Plaintiffs oppose the Motion and filed their Brief in Opposition on October 22, 2019. (ECF No. 17). The Council answered with its Reply Brief on October 24, 2019. (ECF No. 18). On October 25, 2019, the County filed a Response in which they consented to the Council's Motion. (ECF No. 19).
B. Legal Standard
Under Federal Rule of Civil Procedure Rule 24:
(a) Intervention of Right. On timely motion, the court must permit anyone to intervene who:
(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.
Under Rule 24(a)(2), absent an applicable federal statute providing a right to intervene in intervention as of right cases, the applicant bears the burden to satisfy all four requirements of Rule 24(a)(2). Liberty Mut. Ins. Co. v. Treesdale, Inc., 419 F.3d 216, 220 (3d Cir. 2005) (citing Kleissler v. United States Forest Serv., 157 F.3d 964, 969 (3d Cir. 1998)). The four-part test requires: (1) timely application, (2) the applicant has a significantly protectable interest in the pending lawsuit, (3) disposition of the lawsuit may impair or impede his ability to protect applicant's interest absent intervention, and (4) the existing parties do not adequately represent applicant's interest. Id.
Under section 24(c), a motion to intervene "must state the grounds for intervention and be accompanied by a pleading that sets out the claim or defense for which intervention is sought." Fed. R. Civ. P. 24.
C. DISCUSSION
1. Compliance with FRCP 24(c)
ABC does not raise an issue with the Council's timeliness of application, nor whether it has a significantly protectable interest in the pending lawsuit. ABC first opposes the Council's motion because there was no pleading attached to the motion, nor did the Council identify a claim or defense for seeking intervention, per Rule 24(c). Pl.'s Br. in Opp. pp. 1-3 (ECF No. 17). ABC argues that the requirement of Rule 24(c) is mandatory, and that failure to comply procedurally is a fatal defect to the motion. Id.
The Council counters that it did comply with Rule 24(c). R. Br. pp. 1-2 (ECF No. 18). It states that in its Memorandum of Law in Support of its Motion to Intervene, attached at ECF No. 16-1, it sets out Plaintiff ABC's claims, and then its own justifications for intervention. Id. p. 3.
An intervening party must submit a pleading to ensure "that parties have advance notice of the claims that an intervenor plans to make." Sec. & Exch. Comm'n v. Inv'rs Sec. Leasing Corp., 610 F.2d 175, 178 (3d Cir. 1979). But "[d]espite the compulsory language of the rule, some federal circuits have held that whether `to permit a procedurally defective motion to intervene is within the sound discretion of the district court.'" U.S. ex rel. Frank M. Sheesley Co. v. St. Paul Fire & Marine Ins. Co., 239 F.R.D. 404, 408 (W.D. Pa. 2006). Sheesley provides a comprehensive overview of the current status of Rule 24(c) among the Circuits.
. . .even among courts adhering to this more strict reading of Rule 24, it is rare that only procedural grounds are proffered for denial. "In those cases in which a stern attitude has been taken toward procedural mistakes it is noteworthy that . . . the court also has discussed reasons of substance why intervention should not be allowed."
Id. at 410. The Council's Memorandum of Law in Support of its motion lays out why it has an interest in this matter and why the current defendant may not adequately represent its interests. Memo. In Supp. pp. 3-4 (ECF No. 16-1). This Court considers this to comply with Rule 24(c), in that it provides enough notice to Plaintiffs as to the reason for intervention. The Third Circuit case cited by ABC in support of Rule 24(c)'s mandatory nature found that certain owners of stocks were not proper intervenors because they did not serve a motion to intervene, and that merely filling a claim form could not give notice that they intended to intervene. See Sec. & Exch. Comm'n v. Inv'rs Sec. Leasing Corp., 610 F.2d 175, 177-78 (3d Cir. 1979). The parties in that case also did not receive a copy of any of the claims forms, thus there was no proper notice to those parties. Id.
Here, the intervenors did file a proper motion, and there is enough notice to the other parties of what their position would be in the litigation. Other circuits have held pleadings in other forms to be sufficient to satisfy the requirement of Rule 24(c), as the primary goal is to provide notice to the other parties. See United States v. Metro. St. Louis Sewer Dist., 569 F.3d 829 (8th Cir. 2009) (Proposed intervenor's statement of interest satisfied Rule 24(c), where the intervenor's statement of interest provided sufficient notice to the court and the parties of the intervenor's interests); see also Beckman Indus., Inc. v. Int'l Ins. Co., 966 F.2d 470, 474 (9th Cir. 1992) (Courts, including this one, have approved intervention motions without a pleading when the court was otherwise apprised of the grounds for the motion).
ABC also argues that the Council is not a "proper party to the lawsuit" because as a defendant it has no claim, nor does it have a defense, since it would not need to or refrain from doing anything by the relief that ABC is seeking. Pl.'s Br. in Opp. p. 3 (ECF No. 17). The Council maintains that it is indeed a proper party to the lawsuit, since ABC is suing to invalidate an agreement to which the Council is one of the parties. R. Br. pp. 3-4 (ECF No. 18). If the Court invalidates the PLA, it directly affects the Council. Id. p. 4.
No Third Circuit case law prescribes a "proper party to the lawsuit" requirement for intervention. The Fifth Circuit case relied on by ABC involved whether the intervenor properly asserted claims as an intervening plaintiff. See Pin v. Texaco, Inc., 793 F.2d 1448, 1450 (5th Cir. 1986) ("The determination of whether the proposed intervenor's complaint states a cause of action is controlled by the `general rules on testing a pleading'"). The case says nothing about what constitutes a sufficiently pleaded defense under Rule 24(c). It is also significant that the Council's rights as a signatory to the PLA are still at risk, regardless of its lack of obligations should the PLA be invalidated. ABC does not assert whether it would be prejudiced by the Council's intervention, and this Court does not find any reason why ABC would be prejudiced.
For these reasons, the Court recommends that this Motion to Intervene should not be denied based on procedural grounds. The substantive reasons for recommending that this Motion be granted are discussed below.
2. Adequate Representation of Intervenor's Interests
ABC does not dispute that the Council has a sufficient interest in this lawsuit. Rather, it argues that intervention is not warranted because the County adequately represents its interest. Pl's Br. in Opp. p. 4 (ECF No. 17). The burden is on the applicant to show that representation of its interests is inadequate based on "any of the following three grounds: (1) that although the applicant's interests are similar to those of a party, they diverge sufficiently that the existing party cannot devote proper attention to the applicant's interests; (2) that there is collusion between the representative party and the opposing party; or (3) that the representative party is not diligently prosecuting the suit." Brody By & Through Sugzdinis v. Spang, 957 F.2d 1108, 1123 (3d Cir. 1992). ABC maintains that the Council's motion does not allege collusion, lack of diligence, or that the County's interests are adverse to those of the Council. Pl.'s Br. in Opp. p. 5 (ECF No. 17). ABC further argues that the County is a government entity and is presumed to be an adequate representative of the Council's interests in this lawsuit. Id. p. 5. ABC maintains that since both the Council and the County want to uphold the legality of the PLA, there is no implication that the County will fail to mount a vigorous defense in both their interests. Id. pp. 5-6.
The Council responds that the County is not acting as a government entity, but a market participant, and the presumption of adequate representation usually granted to a government entity does not apply. R. Br. pp. 4-5 (ECF No. 18). The Council also states that the standard for meeting the burden to show inadequate representation is "minimal," and that it is sufficient to show that representation of the Council's interests by the County "may be" inadequate. Id. p. 4 (quoting Trbovich v. United Mine Workers, 404 U.S. 528, 538 n. 10, (1972)). The Council alleges that the County's interests in the PLA are to have projects completed on time, on budget and consistent with specifications. Id. p. 5. Meanwhile, the Council's interests are to maintain the pay, benefits, and working conditions of its members. Id. This divergence of interests, argues the Council, shows that representation may be inadequate. Id.
Generally, the burden of showing the inadequacy of representation is on the intervenor and "should be treated as minimal." [additional citation and quotation marks omitted]. Benjamin ex rel. Yock v. Dep't of Pub. Welfare of Pennsylvania, 701 F.3d 938, 958 (3d Cir. 2012) (quoting Trbovich v. United Mine Workers, 404 U.S. 528, 538 n. 10, 92 S.Ct. 630, 30 L.Ed.2d 686 (1972)). A general presumption of adequate representation arises when the representative is a governmental body or officer charged by law with representing the interests of the absentee. Com. of Pa. v. Rizzo, 530 F.2d 501, 505 (3d Cir. 1976). "When a government acts as a `market participant with no interest in setting policy,' as opposed to a `regulator,' it does not offend federal law [quotation marks omitted]." Associated Builders & Contractors Inc. New Jersey Chapter v. City of Jersey City, New Jersey, 836 F.3d 412, 418 (3d Cir. 2016). The Third Circuit recognizes a two-part test to determine whether a governmental body should be treated as a market participant: 1) whether it has a proprietary interests in a project or transaction as an investor, owner or financier; 2) whether the scope of the funding condition is specifically tailored to the proprietary interest; i.e., whether the action is so broad as to be considered regulatory in effect. Id. at 418. The County has not been charged by law to represent the Council's interests in this matter. The Council has alleged that its interests are not identical to those of the County, and thus its interests may not be adequately represented should the Court not allow it to intervene. More significantly, the County's agreement with the Council supports the contention that its role in relation to these construction projects is that of a market participant, rather than a regulatory entity. The County provides financing to these projects and is the owner. A government has a proprietary interest in a project when it "`owns and manages property' subject to the project or it hires, pays, and directs contractors to complete the project." See id.1 The conditions for funding these projects are limited to the PLA, which binds only the other party to the agreement. The PLA concerns construction projects costing over a certain amount. The terms of a contract are not broad enough to be regulatory. See Descutner v. Newmont USA Ltd., No. 3:12-CV-00371-RCJ, 2012 WL 5387703, at *3 (D. Nev. Nov. 1, 2012) (finding that the negotiated terms of an employment contract are distinct from the regulatory nature of labor laws). Thus, the County should be treated as a market participant with regard to its role as a party to the PLA. Such a role does not confer it with government obligations to represent the interests of the Council.
There are also district court decisions from this Circuit that reject the idea that because two parties may have the same goal, their interests are also identical. See Chester Water Auth. v. Susquehanna River Basin Comm'n, No. 1:14-CV-1076, 2014 WL 3908186, at *5 (M.D. Pa. Aug. 11, 2014) (rejecting assertion that defendant intervenor and governmental agency share the same ultimate objective to defend an approval for water use, as each party has separate and unique interests); Powell v. Ridge, No. CIV.A. 98-1223, 1998 WL 599387, at *3 (E.D. Pa. Sept. 10, 1998) (rejecting assertion that movant for intervention and the plaintiffs have a common "ultimate objective," as shown by their divergent interests in the collective bargaining agreement and based on the minimal standard for showing inadequate representation in Trbovich v. United Mine Workers [supra]); Land v. Delaware River Basin Comm'n, No. 3:16-CV-00897, 2016 WL 4771079, at *4 (M.D. Pa. Sept. 12, 2016) (finding that intervenor and defendant have similar interests, but are not entirely co-extensive, and that it is possible that their interests may conflict). The Court find this instance to be similar in that the Council has sufficiently alleged that its interests may diverge from those of the County enough to warrant intervention.2
Finally,
Once an applicant for intervention has established that he or she possesses a sufficient legal interest in the underlying dispute, the applicant must also show that this claim is in jeopardy in the lawsuit. Under this element of the test, the Fitzgerald group must demonstrate that their legal interests "may be affected or impaired, as a practical matter by the disposition of the action." [citations omitted]
Brody By & Through Sugzdinis v. Spang, 957 F.2d 1108, 1122 (3d Cir. 1992). Here, the Council has adequately pleaded that should the Court decide in ABC's favor and void the PLA, it will affect the Council as the other signatory to the PLA. In a labor context, the Eighth Circuit has found that a party to a contract should be allowed to intervene when the validity of that contract would be in jeopardy. Little Rock Sch. Dist. v. Pulaski Cty. Special Sch. Dist. No. 1, 738 F.2d 82 (8th Cir. 1984) (reversing District Court's denial of motion to intervene filed by teachers organizations representing teachers of three school districts, in action seeking consolidation of school districts, where if the districts consolidated, then the collective bargaining agreements the proposed intervenors had negotiated with districts may be invalidated).
Based on the timely application by the Council, its significantly protectable interest in the lawsuit, the fact that disposition of the lawsuit may impair or impede its ability to protect its interest absent intervention, and most significantly, that the current defendant does not adequately represent the Council's interest, this Court respectfully recommends that the Council's Motion to Intervene be granted as of right.
D. CONCLUSION
For the reasons discussed above, after due consideration of the Motion to Intervene by the Council (ECF No. 16), Plaintiff ABC's Brief in Opposition (ECF No. 17), and the Council's Reply Brief (ECF No. 18), it is respectfully recommended that the motion be granted.
In accordance with the Magistrate Judges Act, 28 U.S.C. § 636(b)(1)(B) and (C), and Rule 72.D.2 of the Local Rules of Court, the parties are allowed fourteen (14) days from the date of service of a copy of this Report and Recommendation to file objections. Any party opposing the objections shall have fourteen (14) days from the date of service of objections to respond thereto. Failure to file timely objections will constitute a waiver of any appellate rights.
