Hess v. U.S.

Full title: MICHAEL HESS, Plaintiff, v. UNITED STATES OF AMERICA, Defendant. STIRLING…

Court: United States District Court, S.D. California

Date published: Jan 25, 2001

Civil No.: 00-2142-K(POR) (S.D. Cal. Jan. 25, 2001)

Opinion

Civil No.: 00-2142-K(POR)

January 25, 2001

ERIC A. DUPREE, SCOTT R. MACINNES, DUPREE GALICHON ASSOCIATES San Diego, CA, for Employer/Carrier.

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PROPOSED COMPLAINT IN INTERVENTION

JUDITH N. KEEP, U.S. District Judge

STIRLING COOKE INSURANCE SERVICES, INC., ("Stirling") respectfully submits the following Memorandum of Points and Authorities in support of its Application for Leave to File a Complaint in Intervention as a matter of right in the above entitled matter pursuant to Rule 24(a)(2) of the Federal Rules of Civil Procedure.

I . STIRLING HAS RIGHT TO INTERVENE

Stirling's Application to Intervene should be granted because:

• Stirling's Application is timely;

• Stirling invioble lien is a significant interest relating to the transaction that is the subject of this litigation;

• Absent intervention, Stirling's ability to protect its interest will be impaired; and

• Stirling's interests are not adequately represented by the current parties.

It is well established within the Ninth Circuit that an application to intervene pursuant to Rule 24(a)(2) of the Federal Rules of Civil Procedure should be granted if:

"(1) the applicant's motion is timely; (2) the applicant has asserted an interest relating to the property or transaction which is the subject of the action; (3) the applicant is so situated that without intervention the disposition may, as a practical matter, impair or impede its ability to protect that interest; and (4) the applicant's interest is not adequately represented by the existing parties."

SEC v. Navin (9^th Cir. 1995) 166 F.R.D. 435, 439.

In the instant case, all four established factors for intervention have been satisfied in favor of Stirling's intervention.

A . Stirling's Application is Timely and Without Prejudice

Stirling's application is timely and will not prejudice either of the current parties. In order to intervene an intervener's application must be timely. Banco Popular de Puerto Rico v. Greenblatt, 964 F.2d 1227, 1230 (1^stCir. 1992). Although the cases do not specifically define timeliness, the courts look to the following factors:

• Status of case at time of intervention;

• Foreseable prejudice of parties;

• Foreseable prejudice to intervener; and

• Exceptional circumstances militating in favor of, or against, intervention.

Stirling requests intervention prior to the Early Neutral Evaluation Conference and prior to the commencement of discovery. Not only will the parties not be prejudiced, but intervention at this time allows for:

• More comprehensive discovery;

• More fruitful settlement negotiations; and

• Judicial economy.

B . Stirling's Inviolable Lien is a Significant Protected Interest Warranting Intervention

Stirling has a significant protectable interest in the subject of the litigation pursuant to the Longshore and Harbor Workers' Compensation Act ("Longshore Act") 33 U.S.C. 901 et seq., 933. Intervenor must show a protectable interest "of sufficient magnitude to warrant inclusion in the action." Smith v. Pangilinan, 651 F.2d 1320, 1324 (9^th Cir. 1981). Stirling has a significant and growing lien for workers' compensation benefits paid pursuant to the Longshore Act.

The Courts and Congress have steadfastly held an employer who provides compensation benefits pursuant to the Longshore Act has an inviolable right to recover its compensation lien. Bloomer v. Liberty Mutual 445 U.S. 74, 79-88 (1980), 63 L.Ed.2d 215, 221-227, 100 S.Ct. 925, 928-933; Halcyon Lines v. Haenn Ship Corp. 342 U.S. 282 (1952), 96 L.Ed. 318, 72 S.Ct. 277; Davis v. Chas. Kurz Co., Inc., Inc. 483 F.2d 184 (9^th Cir. 1973). The U.S. Supreme Court in Jones Laughlin Steel Corp. v. Pfeiffer, 462 U.S. 523 (1983), 103 S.Ct. 2541, 76 L.Ed. 768 held an employer who had paid Longshore Act benefits. has a lien against any tort recovery from the third parties in the amount of the benefits paid.

In the instant case, Stirling has paid $15,824.72 in medical benefits to plaintiff and $30,652.41 in indemnity payments for a total of $46,477.13. Furthermore, Stirling continues to pay plaintiff indemnity at a rate of $538.86 per week. As Stirling's lien continues to grow, it is important that they are allowed to protect this interest by participating in the subject litigation. Therefore, Stirling has a significant and protectable interest in the instant litigation.

C . Absent Intervention Stirling's Ability to Protect its Interest Will be Impaired

An intervener must show that disposition of the pending action would have a potential adverse impact on the would-be intervenor's interest.Cunningham v. David Special Commitment Ctr. 158 F.3rd 1035, 1038 (9^th Cir. 1998). Stirling has a substantial and growing lien in the pending action. Without the ability to participate in the subject litigation Stirling's lien could be jeopardized. In particular, the intervenor may be bound by the nature and extent of any judgment or settlement obtained by the plaintiff without any opportunity to participate in the litigation or negotiate an appropriate settlement, and its subrogation rights may be impaired if payments are made by the defendant directly to the plaintiff. Absent intervention. Stirling's ability to protect its interest will be impaired.

SEC v. Navin 166 FRD 435, 440 (ND CA 1995

D . Stirling's Interests are Inadequately Represented by the Current Parties

In order to intervene the intervener's interests need to be inadequately represented by the current parties. Cabazon Band of Mission Indians v. Wilson 124 F.3d 1050, 1061 (9^th Cir. 1997). However, the burden of showing inadequacy is not a heavy one. A minimal showing of inadequacy is all that is required. Sagebrush Rebellion, Inc. v. Watt 713 F.2d 525, 528 (9^th Cir. 1983); Mille Lacs Band of Chippewa Indians v. State of Minnesota 989 F.2d 994, 999 (8^th Cir. 1993). This minimum burden is shown when the existing parties have adverse interests. United States v. Stringfellow 783 F.2d 821, 828 (9^th Cir. 1986), (vacated on other grounds 480 U.S. 370). Plaintiff in the present case, is attempting to maximize his recovery from both the Defendant and Stirling. In maximizing his recovery, plaintiff is not seeking to protect Stirling's interests. In fact, plaintiff has an interest in increasing his damages, while at the same time reducing Stirling's potential for lien recovery. Defendant is obviously adverse to Stirling, since Stirling's lien is defendant's responsibility if defendant is found liable.

Furthermore, given the high percentage of cases that settle prior to trial, it is important that Stirling is able to fully participate in discovery to have informed negotiations. Without the ability to fully participate, Stirling may be forced to accept deals that the current parties enter into. It is imperative that Stirling is allowed to join the instant litigation in order to protect their interests, interests which are not adequately protected without Stirling's participation.

II CONCLUSION

Stirling satisfies all requirements of Intervention as outlined by the Ninth Circuit and should be allowed to intervene. The request is timely and without prejudice, there is a protectable interest, without intervention the interest will not be protected, and the current parties do not adequately represent Stirling's interest. When all four factors are satisfied, the Ninth Circuit Court of Appeals has stated that Rule 24(a)(2) should be construed broadly in favor of intervention . County of Orange v. Air California, 799 F.2d 535, 537 (9^th Cir. 1986), (cert. denied, 480 U.S. 946) (emphasis added). Stirling requests this court allow it to intervene in the subject action.