Opinion
No. 00 Civ. 0648 (LAK).
December 21, 2000.
David Boies, Richard Drubel BOIES SCHILLER FLEXNER LLP., Plaintiffs' Lead Counsel.
Shepard Goldfein, Michael L. Weiner, SKADDEN, ARPS, SLATE, MEAGHER FLOM LLP., Attorneys for Defendants Christie's International plc and Christies, Inc.
Richard J. Davis, Steven A. Reiss and Howard B. Comet, WEIL, GOTSHAL MANGES LLP., Attorneys for Defendants Sotheby's Holdings, Inc. and Sotheby's, Inc.
Scott T. Kragie, Keith E. Dobbins, Squire, Sanders Dempsey L.L.P., Attorneys for Movants.
MEMORANDUM OPINION
These are consolidated class actions alleging price fixing in the fine art and antiques auction business. The nature of the cases is explained amply in prior opinions, familiarity with which is assumed. Movants Fataihi Company and its assignee, Swicorp, S.A., now seek leave to intervene in these actions in all proceedings relating to the proposed settlement, essentially on the theory that their interests may not be represented adequately by plaintiffs' Lead Counsel.
E.g., In re Auction Houses Antitrust Litig., 197 F.R.D. 71 (S.D.N.Y. 2000); id. 193 F.R.D. 162 (S.D.N.Y. 2000).
Facts
There now is pending before the Court a proposed settlement of these cases for $412 million in cash and an additional $100 million payable, at the option of the principal defendants, in cash or in discount certificates that may be used in payment of sellers' commissions and certain other charges at future auctions. The class has been notified and afforded an opportunity to opt out. In addition, the Court has appointed its own experts on matters relating to the proposed settlement, notably the valuation of the discount certificates, and solicited the views of the Antitrust Division of the Department of Justice.
Movants seek leave to intervene because they are unhappy with the proposed settlement. Their asserted grievances are three:
1. They contend that the release that would be given if the proposed settlement were approved would release claims against the defendants for overcharges in both foreign and domestic auctions whereas the compensation that class members would receive would be based exclusively on overcharges in connection with domestic auctions. As movants claim to have engaged in very substantial transactions in both foreign and domestic auctions, they claim that they would be treated unfairly and that their interests are not represented fairly by Lead Counsel.
2. They complain that the discount certificates that defendants propose to issue as part of the settlement are worthless to them.
3. They assert that their ability to protect their interests by opting out would be impaired by approval of the settlement because the settlement might deplete defendants' funds or its approval determine issues in a manner that would bind them adversely.
Discussion
Rule 24(a)(2) of the Federal Rules of Civil Procedure provides:
"Upon timely application anyone shall be permitted to intervene in an action. . . . when the applicant claims an interest relating to the property or transaction which is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant's ability to protect that interest, unless the applicant's interest is adequately represented by existing parties."
Rule 24 ((b), in relevant part, further provides that intervention may be permitted "when an applicant's claim or defense and the main action have a question of law or fact in common.
Movants' application is timely. There is no real doubt that they claim an interest in the transactions at issue here and that their claims share a substantial nucleus common to the main action. But the application founders on the other aspects of the rule.
Turning first to the subject of intervention as of right under Rule 24 (a)(2), movants have not show that they are so situated that "disposition of the action may as a practical matter impair or impede [their] ability to protect" their interests. Movants' grievances concerning the settlement may be raised in the form of objections. If they are, movants would be free to appeal from any judgment rejecting their position. Moreover, if they are dissatisfied sufficiently, they could opt out of the class and pursue their own action. Moreover, in view of the fact that movants claim to have been overcharged by some $6 million and already have retained a large, well known law firm, they have both the economic incentive and the ability to do so. Their suggestion that approval of the settlement would deplete defendants' assets or result in preclusive rulings adverse to their interests are unsupported by anything but their own speculation.
See, e.g., In re Painewebber Ltd. Partnership Litig., 94 F.3d 49, 53 (2d Cir. 1996); In re Agent Orange Product Liability Litig., 818 F.2d 145, 161-74 (2d Cir. 1987).
Nor is there any warrant for permitting movants to intervene as a matter of discretion. The same rights that permit them adequately to protect their interests demonstrate the lack of necessity for any intervention at all.
Conclusion
The motion for leave to intervene is denied.
SO ORDERED.