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Konica Minolta Business Solutions, U.S.A., Inc. v. Lowery Corp.

United States District Court, E.D. Michigan, Southern Division

April 23, 2018

KONICA MINOLTA BUSINESS SOLUTIONS U.S.A., INC. Plaintiff,
v.
LOWERY CORPORATION, et al., Defendants,

          Honorable Victoria A. Roberts, Judge

          REPORT AND RECOMMENDATION TO DENY MOTION TO INTERVENE [ECF NO. 221]

          ELIZABETH A. STAFFORD, UNITED STATES MAGISTRATE JUDGE

         I. Introduction

         Nearly three years after Plaintiff Konica Minolta Business Solutions U.S.A., Inc., filed it complaint against Defendant Lowery Corporation and seven of Konica's former employees, Philadelphia Indemnity Insurance Company (PIIC) filed a motion to intervene. [ECF Nos. 1, 9, 221]. In its motion, PIIC stated that it wished to intervene “for the purpose of permitting it to participate in discovery, to monitor and participate in motion practice as needed, and to submit special verdict questions addressing possible coverage defenses.” [ECF No. 221, PageID 3978]. It stated that, if permitted to intervene, it would “file a motion to bifurcate and stay, requesting that its coverage defenses be determined after a judgment on Plaintiff's claims, ” and that it would abide by the currently existing scheduling order. [Id.].

         In its reply, PIIC “clarifies” that it seeks only to attend discovery proceedings and receive discovery documents. [ECF No. 231, PageID 4206, n. 2]. And at the hearing held on April 20, 2018, PIIC stated that it only wished to monitor discovery, and did not anticipate filing any motions, although it might seek leave to do so. [ECF Nos. 227, 231].

         For the reasons that follow, the Court recommends that PIIC's motion to intervene be denied.

         II. Scope of Referral Authority

         The Honorable Victoria A. Roberts referred the motion to the undersigned for hearing and determination under 28 U.S.C. 636(b)(1)(A). [ECF No. 224]. Consistent with this referral, two courts have in published opinions treated motions to intervene as nondispositive. United States v. Marsten Apartments, Inc., 175 F.R.D. 265, 267-69, n. 1 (E.D. Mich. 1997); Oakland Cty. v. Fed. Nat. Mortg. Ass'n, 276 F.R.D. 491, 493, n. 1 (E.D. Mich. 2011). The applicable local rule also does not identify a motion to intervene as being dispositive. E.D. Mich. L.R. 7.1(e).

         But some courts have regarded the denial of motions to intervene as being functionally equivalent to the dispositive motions identified under Section 636(b)(1)(A) as requiring a magistrate judge to issue a report and recommendation, allowing for de novo review by the assigned district judge. See, e.g., Meeks v. Schofield, No. 3:12-CV-545, 2013 WL 1826438, at *2 (M.D. Tenn. Apr. 30, 2013); Washington Mut. Bank v. Chiapetta, No. 1:07CV00683, 2011 WL 1743389, at *1 (N.D. Ohio May 6, 2011). These courts reasoned that the denial to intervene is dispositive for the party seeking to intervene.[1] Id. This reasoning applies here; the denial of the motion to intervene will be dispositive for PIIC. The Court will therefore issue a report and recommendation, allowing PIIC to seek de novo review by Judge Roberts.

         III. Analysis

         Federal Rule of Civil Procedure 24 authorizes interventions of right and permissive interventions. “Rule 24 should be broadly construed in favor of potential intervenors . . . . But this does not mean that Rule 24 poses no barrier to intervention at all.” Stupak-Thrall v. Glickman, 226 F.3d 467, 472 (6th Cir. 2000) (citation and internal quotation marks omitted). PIIC's motion does not meet the requirements of an intervention of right, and its request for permissive intervention should be denied because it is without merit, is untimely, and would unduly prejudice defendants.

         A.

         PIIC has a right to intervene under Rule 24(a)(2), which applies to a party who “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.” PIIC must establish four elements in order to establish that it has a right to intervene:

(1) that the motion to intervene was timely; (2) that the intervenor has a substantial legal interest in the subject matter of the case; (3) that its ability to protect that interest may be impaired in the absence of intervention; and (4) that the parties already before the court may not adequately represent its interest.

Northland Family Planning Clinic, Inc. v. Cox, 487 F.3d 323, 343 (6th Cir. 2007). For the reasons that follow, the Court finds that PIIC's motion is untimely and that it does not have a substantial legal interest in the subject matter of this action. PIIC has thus failed to meet the first two elements for an intervention of right, rendering ...


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