Tuesday, July 29, 2008

"Motion to Intervene should be denied for two reasons."

As reported by Greg Johns of the seattle PI, Howard Schultz's lawyer Richard Yarmuth has filed an answer to the Motion filed by the NBa to intervene in the case between Howard (BCOS & CANARSIE HOLDINGS LLC) and Clay Bennett (THE PROFESSIONAL BASKETBALL CLUB, LLC).

You can read is for yourself here, thanks PI.
Noted on Motion Calendar:
August 1, 2008
Here is the intorduction:

The National Basketball Association’s (“NBA”) Motion to Intervene should be denied for two reasons. First, the NBA’s submission fails to comply with Rule 24(c), which requires a prospective intervenor to file with its motion a pleading articulating the applicant’s proposed claims or defenses. The NBA’s failure to submit such a pleading, which would define the scope of the proposed intervention, violates Rule 24(c) and
compromises the ability of the Court and the parties to evaluate whether intervention is proper. The Motion should be denied on the basis of this defect alone.

Second, the NBA’s Motion should be denied because the NBA cannot satisfy Rule 24’s intervention requirements with respect to the liability component of this litigation, which should be tried first. By separate motion, plaintiff has moved the Court to bifurcate this case so that the parties first litigate the straightforward issue of PBC’s liability to BCOS, while reserving for a second phase the more complex issue of the appropriate remedy. Plaintiff respectfully submits that the Court should decide this Motion to Intervene after it decides Plaintiff’s Motion to Bifurcate because the decision on bifurcation will determine the shape of the litigation, thereby informing the Court’s decision on the NBA’s Motion.

The NBA is not entitled to participate in the liability phase of a bifurcated trial because its only interest is in the choice of remedy. It is well established that, in a bifurcated proceeding, an entity may intervene only in those phases for which the applicant can satisfy the intervention requirements of Rule 24. One of these requirements is the existence of a protectable interest in the issue to be tried. The NBA has no protectable interest in the issue to be tried in the liability phase: whether defendant is liable to plaintiff for fraud or breach of contract. The NBA’s only interest arises out of the potential transfer of the team to a third party, and that issue would be addressed exclusively in the remedy phase of a bifurcated trial. If plaintiff prevails on the issue of liability, it may be appropriate for the NBA to participate in the crafting of injunctive relief. Until that time, however, the Federal Rules do not permit the NBA to participate in a phase of the litigation in which it has no interest.

Finally, the NBA’s motion should be denied because the NBA intends by its intervention to unnecessarily make this litigation “very expensive” for BCOS and its members, as reflected by the NBA’s statements and demand that plaintiff pay the attorneys’
fees for both the NBA and the PBC, even if plaintiff prevails. This Court should deny the NBA’s request to intervene, at least in the liability phase, so that the NBA is not permitted to impose unreasonable, unnecessary, and punitive burdens and expenses on plaintiff’s prosecution of its claims.
For these reasons, plaintiff respectfully submits that the Court should deny the NBA’s Motion, with leave to file a renewed Motion (that complies with Rule 24(c)’s pleading requirement) at the outset of the second phase of this litigation.

But wait, there's more, the nugget:

The NBA’s Motion Should be Denied for Failure to Comply With Rule 24(c).
The NBA’s motion does not comply with Rule 24(c) because the motion is not accompanied by a pleading setting forth a claim for relief. Rule 24(c) provides that 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) (emphasis added).
An intervenor cannot become a party to a lawsuit without setting out its claims in a pleading any more than a plaintiff can commence litigation without a complaint. As is the purpose of a complaint or an answer, “the purpose of requiring an intervenor to file a pleading is to place the other parties on notice of the claimant’s position, the nature and basis of the claim asserted, and the relief sought by the intervenor.” Dillard v. City of Foley, 166 F.R.D. 503, 506 (M.D. Ala. 1996) (denying motion to intervene based on “procedural defect” of failure to file a pleading).
For this reason, courts routinely deny motions to intervene where the applicant fails to satisfy the pleading requirement. See, e.g., FTC v. Med Resorts Int’l, Inc., 199 F.R.D. 601, 606 (N.D. Ill. 2001) (intervenor’s “total dereliction” of Rule 24(c)’s “unambiguous” requirements “warrants dismissal of the motion”); Township of South Fayette v. Allegheny County Housing Auth., 183 F.R.D. 451, 453 (W.D. Pa. 1998) (“Because movants have not submitted pleadings setting forth the claim or defense for which intervention is sought, their motions are subject to dismissal”); Roberts v. Heim, No. 88-3373TEH, 1989 WL 80401 *1 (N.D. Cal March 30, 1989) (“the motion to intervene must be denied” for failure to submit a pleading); Associated Students v. Kleindienst, 60 F.R.D. 65, 68 (C.D. Cal. 1973) (denying motion to intervene for failure to file a claim for relief).1
The NBA’s noncompliance with Rule 24(c) is no mere technicality. Permitting the NBA free-floating participation in the litigation untethered to a claim for relief or a defense would leave the Court and BCOS with no way to evaluate the appropriateness of the NBA’s discovery requests, motions, and other litigation activities. This is of particular concern here in light of Mr. Stern’s statement that the NBA will impose “very expensive” litigation costs on BCOS and its members, and because the NBA’s belief that BCOS will pay the NBA’s legal fees removes the cost deterrent that would normally restrict an intervenor from overlitigating a case. The Motion should be denied for failure to comply with Rule 24(c).
. If Bifurcation is Granted, NBA Intervention Should Be Limited to the Remedies Phase.

In Bifurcated Litigation, an Applicant May Intervene Only in Phases For Which the Applicant Can Satisfy Rule 24. An entity applying to intervene bears the burden of establishing that (1) the applicant has a significant protectable interest in the litigation subject matter; (2) the disposition of the litigation may impair or impede that interest; (3) the application is timely; and (4) the existing parties may not adequately represent the interest. United States v. Alisal Water Corp., 370 F.3d 915, 920 (9th Cir. 2004). In determining whether intervention is appropriate, a court should be “guided primarily by equitable and practical considerations.” Donnelly v. Glickman, 159 F.3d 405, 409 (9th Cir. 1998).

Go read Greg John's story at the Seattle PI for the summary, and the filing is linked there, too.

There is always more.

No comments: