St. Bernard Parish v. Lafarge North America, Inc. , 914 F.3d 969 ( 2019 )

Case: 18-30029 Document: 00514819166 Page: 1 Date Filed: 02/01/2019
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
February 1, 2019
No. 18-30029
Lyle W. Cayce
Clerk
ST. BERNARD PARISH, Through the St. Bernard Parish Government,
Plaintiff–Appellee,
v.
LAFARGE NORTH AMERICA, INCORPORATED,
Defendant–Appellee,
v.
RICHARD T. SEYMOUR; LAW OFFICE OF RICHARD T. SEYMOUR,
P.L.L.C.,
Movants–Appellants.
Appeal from the United States District Court
for the Eastern District of Louisiana
Before STEWART, Chief Judge, and DENNIS and WILLETT, Circuit Judges.
DON R. WILLETT, Circuit Judge:
When Hurricane Katrina struck in 2005, a barge moored by Lafarge
wound up at large. According to New Orleans residents then represented by
Richard T. Seymour, the breakaway barge hurtled through a floodwall,
unleashing catastrophic flooding in the Lower 9th Ward before finally coming
to rest atop several homes and a yellow school bus. (It remains disputed
whether the barge caused the breach or surfed through it after the floodwall
gave way.)
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Seymour withdrew from the Barge Litigation in 2011. But when it
settled several years later, he moved to intervene in this related case to pursue
his fees and expenses. We agree with the district court that Seymour’s
intervention motion was untimely. As to intervention of right, we AFFIRM the
district court’s order. As to permissive intervention, we DISMISS Seymour’s
appeal for lack of jurisdiction.
I. BACKGROUND
A. Factual
In August 2005, Hurricane Katrina, the most destructive natural
disaster in United States history, inflicted cataclysmic damage on New
Orleans. According to many residents of the Lower 9th Ward, a predominantly
African-American neighborhood bordering the Industrial Canal, the damage
was worsened by a barge that broke free and allided with a floodwall before
crashing into the residential streets, unleashing a surge of water that ripped
homes from their foundations before scattering them in splinters. 1 The
residents alleged that the barge had been improperly moored at a facility
owned by Lafarge North America, Inc. The district court consolidated many of
the resulting cases into the Barge Litigation.
Appellants Richard T. Seymour and the Law Office of Richard T.
Seymour, P.L.L.C. represented plaintiffs in the Barge Litigation. Seymour
performed significant work in the consolidated cases, as noted in the order
granting his motion to withdraw. This work contributed to multiple cases
including, per Seymour, this one. But Seymour never represented a party in
this case because this action by St. Bernard Parish against Lafarge was not
consolidated into the Barge Litigation.
1 See generally St. Bernard Par. v. Lafarge N. Am., Inc., 550 F. App’x 184 (5th Cir.
2013) (earlier appeal of summary-judgment decision).
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B. Procedural
In 2011 Seymour withdrew from the Barge Litigation because of a fee
dispute with Baker Sanders, LLC, a firm that now represents the Parish. In
granting Seymour’s motion to withdraw, the district court explicitly recognized
his potential claim to fees in the Barge Litigation. The Parish filed this case on
August 23, 2011, the same day Seymour withdrew.
About six years later, in 2017, the Parish and Lafarge settled this case.
On July 20 Parish counsel called Seymour to tell him that the parties had
reached a settlement. The attorney told Seymour that at most he would be
compensated for only some of his expenses. On July 23 Seymour served Baker
Sanders with a Notice of Lien for fees and expenses in this case. Undaunted,
the Parish and Lafarge filed a joint stipulation of dismissal with prejudice.
Seymour, intending to pursue his claim for fees in the district court,
moved on August 9 to appear pro hac vice. The district court denied this motion
without prejudice because, before intervening in the case, Seymour would not
have been representing anyone. So Seymour moved to intervene on September
17. Meanwhile, a Baker Sanders attorney had filed an interpleader action in
New York state court that named Seymour as a defendant. The interpleader
action concerned the same funds that Seymour sought to pursue via
intervention.
The district court denied Seymour’s motion to intervene as untimely.
Seymour appealed.
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II. JURISDICTION AND STANDARD OF REVIEW
A. Jurisdiction
The district court had jurisdiction based on federal question; 2 diversity; 3
and the Multiparty, Multiforum Trial Jurisdiction Act of 2002. 4
We have jurisdiction under 28 U.S.C. § 1291 to review the denial of the
motion to intervene of right. 5 And we have “provisional jurisdiction” to review
the denial of permissive intervention. 6 This means that “[i]f the district court’s
denial of permissive intervention does not constitute an abuse of discretion, we
must dismiss the appeal for lack of jurisdiction.” 7
B. Standard of Review
“A ruling denying intervention of right is reviewed de novo.” 8 But the
timeliness of an intervention motion is reviewed for abuse of discretion, so long
as the district court gave reasons for its determination. 9
“Denial of permissive intervention, on the other hand, is reviewed for
clear abuse of discretion.” 10 “Under this standard, the Court will reverse a
district court decision only under extraordinary circumstances.” 11
III. DISCUSSION
Federal Rule of Civil Procedure 24 covers two types of intervention, one
mandatory (“the court must permit”) 12 and the other permissive (“the court
2 28 U.S.C. § 1331.
3 28 U.S.C. § 1332.
4 28 U.S.C. § 1369.
5 Sommers v. Bank of Am., N.A., 835 F.3d 509, 512 (5th Cir. 2016).
6 Id. (quoting Edwards v. City of Houston, 78 F.3d 983, 992 (5th Cir. 1996) (en banc)).
7 Id. (quoting Edwards, 78 F.3d at 992).
8 Edwards, 78 F.3d at 995.
9 Sommers, 835 F.3d at 513; Edwards, 78 F.3d at 1000.
10 Edwards, 78 F.3d at 995.
11 Id. (quoting Cajun Elec. Power Coop. v. Gulf States Utils., Inc., 940 F.2d 117, 121
(5th Cir. 1991)).
12 FED. R. CIV. P. 24(a).
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may permit”). 13 While the provisions cover different situations, both prize
punctuality, beginning with the same three words: “On timely motion . . . .” 14
A. Intervention of Right
Rule 24(a)(2) governs intervention of right based on an interest in the
action. We have distilled the rule into four elements:
(1) the application for intervention must be timely; (2) the
applicant must have an interest relating to the property or
transaction which is the subject of the action; (3) the applicant
must be so situated that the disposition of the action may, as a
practical matter, impair his ability to protect that interest; (4) the
applicant’s interest must be inadequately represented by the
existing parties to the suit. 15
“Failure to satisfy any one requirement precludes intervention of right.” 16
Timeliness was the only element the district court decided and is the only one
disputed here. In evaluating timeliness, a district court should consider four
factors:
(1) The length of time during which the would-be intervenor
actually knew or reasonably should have known of its interest in
the case before it petitioned for leave to intervene; (2) the extent of
the prejudice that the existing parties to the litigation may suffer
as a result of the would-be intervenor’s failure to apply for
intervention as soon as it knew or reasonably should have known
of its interest in the case; (3) the extent of the prejudice that the
would-be intervenor may suffer if intervention is denied; and
(4) the existence of unusual circumstances militating either for or
against a determination that the application is timely. 17
13 FED. R. CIV. P. 24(b).
14 FED. R. CIV. P. 24(a); FED. R. CIV. P. 24(b).
15 Sommers, 835 F.3d at 512 (quoting Texas v. United States, 805 F.3d 653, 657 (5th
Cir. 2015)).
16 Edwards, 78 F.3d at 999 (citation omitted).
17 Sommers, 835 F.3d at 512–13 (quoting Ford v. City of Huntsville, 242 F.3d 235, 239
(5th Cir. 2001)).
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1. Length of Time Elapsed
Seymour says he moved to intervene less than two months after
receiving notice that his claim would not be paid. But the relevant starting
point is “not when he knew or should have known that his interests would be
adversely affected but, instead, when he knew that he had an interest in the
case.” 18 Here, Seymour knew that he had an interest in the case when he
withdrew in 2011, six years before he moved to intervene.
Seymour counters that the “timeliness clock” does not begin until a
movant knows or should know that his interest is no longer represented by an
existing party. 19 But in 2011 he should have also known that no remaining
party represented his interest. Although a plaintiff adequately represents his
attorney’s interest during the attorney-client relationship, 20 no party in a case
represents the interest of a discharged attorney. 21 And in Keith v. St. George
Packing Co. and Gaines v. Dixie Carriers, Inc., discharged attorneys were
permitted to intervene when their motions came within a year of being
discharged. 22 Here, much more time lapsed—six years from withdrawal to
intervention. So the first timeliness factor weighs against permitting
intervention.
2. Prejudice to Existing Parties
Seymour says his intervention will not prejudice other parties because it
will not cause burdensome additional proceedings. He says the Parish cannot
18 Id. at 513.
19 See Edwards, 78 F.3d at 1000.
20 Valley Ranch Dev. Co. v. FDIC, 960 F.2d 550, 556 (5th Cir. 1992) (“His interest is
identical to [the client’s] until the agency relationship is broken.”).
21 See Keith v. St. George Packing Co., 806 F.2d 525, 526 (5th Cir. 1986) (“[N]either
party to the pending action is interested in representing [the attorney’s] interests.”); Gaines
v. Dixie Carriers, Inc., 434 F.2d 52, 54 (5th Cir. 1970) (“Neither of the existing parties is
concerned with protecting the appellant’s interest.”); see also Gilbert v. Johnson, 601 F.2d
761, 767 (5th Cir. 1979) (holding similar facts indistinguishable from Gaines).
22 Keith, 806 F.2d at 525; Gaines, 434 F.2d at 54.
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identify anything it would have done differently had Seymour been a party all
along. And his fee is to be taken from the existing settlement pool, not from a
renewed settlement negotiation.
Seymour is correct that opening a fee dispute between the plaintiff, its
current counsel, and former counsel would not necessarily relitigate the
underlying case. But it would at least hold up the distribution of settlement
funds, which could have been avoided had Seymour intervened when his
interest was no longer represented. So the second timeliness factor is neutral.
3. Prejudice to Seymour
Seymour says he will be prejudiced absent intervention because it will
be difficult to pursue his claim elsewhere. He has numerous objections to the
New York interpleader action, including lack of personal jurisdiction. And he
says that a federal interpleader action is unavailable. But this does not rule
out other possibilities, such as a state-law action against the Parish or Baker
Sanders to recover for his services. 23 At oral argument Seymour suggested that
he preferred not to bring a separate action because it would be difficult to
obtain discovery of a confidential settlement agreement. 24 But discovery of
confidential settlement agreements is generally available under an
appropriate protective order. 25 So the third timeliness factor weighs against
permitting intervention.
23 See, e.g., Gilbert, 601 F.2d at 767 (Rubin, J., specially concurring) (stating that
under Georgia law the attorney “may, however, if discharged from the case by his client, bring
an action under quantum meruit for the reasonable value of services rendered”).
24 Seymour cites Ford, 242 F.3d at 240, for the proposition that the presence of a
“confidentiality order” is a consideration in granting or denying intervention. In Ford we
granted a newspaper’s motion to intervene to challenge the confidentiality of a settlement.
242 F.3d at 241. But Ford did not address the discoverability of a confidential settlement
agreement in a separate private dispute.
25 E.g., Cleveland Const. Inc. v. Whitehouse Hotel Ltd. P’ship, No. Civ.A. 01-2666, 2004
WL 385052, at *1–2 (E.D. La. Feb. 25, 2004); Perez v. State Indus., Inc., 578 So. 2d 1018, 1020
(La. Ct. App. 1991).
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4. “Unusual Circumstances”
Finally, Seymour says that the Parish’s or Baker Sanders’s attempt to
withhold his fees, including filing a questionable interpleader action, are
special circumstances that favor intervention. Another special circumstance,
he contends: the difficulty of intervening in the Barge Litigation as it stood in
2011—that is, in multiple fragmented cases.
The Parish, for its part, cites precedent that moving to intervene after a
case is dismissed weighs against timeliness. 26 (We note, though, that the
dismissal did not deprive the district court of jurisdiction to grant intervention
or to grant the ultimate relief sought by Seymour. 27) Considering all of this,
the fourth factor is neutral.
* * *
Viewing the four timeliness factors together, the district court did not
abuse its discretion in concluding that Seymour’s motion to intervene came too
late.
B. Permissive Intervention
Like intervention of right, permissive intervention must be timely. 28 As
Seymour’s motion was untimely, no further analysis is needed. 29 The district
court did not clearly abuse its discretion in denying permissive intervention,
and this portion of Seymour’s appeal is dismissed for lack of jurisdiction. 30
26See Sommers, 835 F.3d at 513 (“Though the appellees are incorrect in suggesting
that intervention is always improper after a case has been dismissed, they are accurate in
asserting that it is a factor weighing against timeliness.”).
27 See id.; United States v. Transocean Air Lines, Inc., 356 F.2d 702, 705 (5th Cir. 1966)
(“[A] perfected charging lien of attorneys cannot be defeated by a dismissal by stipulation
under Rule 41.”).
28 FED. R. CIV. P. 24(b).
29 See, e.g., Lucas v. McKeithen, 102 F.3d 171, 173 (5th Cir. 1996) (denying
intervention of right and dismissing permissive intervention based on timeliness).
30 See Sommers, 835 F.3d at 512.
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IV. CONCLUSION
We AFFIRM the district court’s decision as to intervention of right and
DISMISS Seymour’s appeal for lack of jurisdiction as to permissive
intervention.
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