UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 98-30146
BILLY COOK; BARRY KUPERMAN,
Plaintiffs-Appellees,
and
ALFRED GORHAM; EVA FAYE AGNELLY;
MICHAEL J. THOMPSON; CATHERINE THOMPSON,
Intervenors-Appellees,
versus
POWELL BUICK, INC.; HUB CITY FORD, INC.;
LOUISIANA AUTOMOBILE DEALERS ASSOCIATION,
WILLIAM WATSON, JR., doing business as Bill
Watson Ford, Inc., doing business as Bill Watson Nissan,
Incorporated,
Defendants-Appellees,
SPINATO CHRYSLER PLYMOUTH, INC.; MARSHALL
BROTHERS LINCOLN MERCURY INC.; LAMARQUE
FORD INC.,
Intervenors-Defendants-Appellees,
MOFFITT VOLKSWAGEN,
Appellee,
versus
HARRY T. COLE, III; MEDICAL HERITAGE, INC.,
LINDA MEANY; PRESSLEY A. KIBBE; SCOTT SIMMONS;
ELMO J. PITRE, III; DANIEL J. DAIGLE; LEO M. PRANGE, JR.,
Appellants.
Appeal from the United States District Court
for the Western District of Louisiana
October 5, 1998
Before POLITZ, Chief Judge, WIENER and DENNIS, Circuit Judges.
POLITZ, Chief Judge:
Harry T. Cole, III, Medical Heritage, Inc., Linda Meany, Pressley A. Kibbe,
Scott Simmons, Elmo J. Pitre, III, Daniel J. Daigle, and Leo M. Prange, Jr. moved
to intervene in this class action. The district court denied their motion. The
proposed intervenors now appeal that denial and the final judgment approving a
negotiated settlement agreement. For the reasons assigned, we dismiss the appeal
as to the settlement agreement and affirm as to the denial of intervention.
BACKGROUND
In 1994 Billy Cook and Barry Kuperman filed this action seeking
certification of a plaintiff class of motor vehicle purchasers and a defendant class
of dealers of new motor vehicles. The purchasers challenged the dealers’ practice
of charging the ad valorem tax owed on the vehicles. On March 11, 1996, the
district court certified the plaintiff and defendant classes.
In October 1996, the parties agreed to mediation. Prior to the mediation the
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plaintiff class had conducted exhaustive discovery, and the court had ruled on
numerous motions, including motions to stay, to dismiss, to intervene, and for
summary judgment. Settlement negotiations continued over several months,
including five formal mediation sessions lasting a total of fourteen days. On
June 16, 1997, the parties jointly moved for preliminary approval of a settlement
agreement. On September 10, 1997, the court preliminarily approved the
Settlement Agreement, approved the form and method of notice to the plaintiff
class and proposed plaintiff settlement class,1 and appointed a claims administrator,
and set November 6, 1997 as the deadline for objection to the settlement or
application for compensation. On October 7, 1997, counsel for the plaintiff class
filed an application for attorneys’ fees.
Over 937,000 settlement notices were mailed to Louisiana residents, and
notice was published in 102 Louisiana newspapers, as well as in Stars and Stripes
and USA Today. On November 6, 1997, the proposed intervenors filed objections
and a notice of intention to appear at the scheduled fairness hearing.2 On
November 19, 1997, the proposed intervenors filed the motion to intervene at issue
1
The plaintiff settlement class broadened the previously certified plaintiff class to
include purchasers and lessees of used vehicles from new motor vehicle dealers.
2
The proposed intervenors filed a petition to intervene on November 6, 1997 which
was refused by the court as not in compliance with Local Rules.
3
herein.
At the fairness hearing on December 1, 1997, the proposed intervenors were
represented by counsel. The court gave their counsel an opportunity to cross
examine the witnesses, present witnesses, offer other evidence, and make
arguments in support of the proposed intervenors’ position. Counsel failed,
however, to offer any evidence that challenged the fairness of the Settlement
Agreement. The court expressed doubts about the proposed intervenors’ intentions
and whether their objections were made in good faith. After giving the proposed
intervenors the opportunity to opt out of the settlement class, which they declined,
the court denied the motion to intervene as untimely. The court ultimately
concluded that the proposed settlement was fair, adequate, and reasonable. Written
minutes of court issued subsequently, setting forth the court’s rulings, including its
denial of the motion to intervene. No appeal was taken at that time.
On January 15, 1998, the court issued a memorandum opinion setting forth
written reasons to supplement its previous rulings. In support of its denial of the
motion to intervene, the court found that the proposed intervenors’ interests were
adequately represented by the existing parties, that their objections were without
merit, and that the motion to intervene was untimely. The court issued a final
judgment on the same date, certifying the settlement class and approving the
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Settlement Agreement, including the attorneys’ fees provision. The proposed
intervenors appeal this judgment.
ANALYSIS
As noted, the proposed intervenors challenge not only the denial of their
motion to intervene, but also the final judgment approving the Settlement
Agreement. It is well-settled, however, that nonnamed class members of a certified
class may not appeal the final judgment in a class action.3 Because the proposed
intervenors were denied leave to intervene and, thus, never obtained the status of
party litigants in this suit, we must dismiss their appeal as to all issues except the
denial of their motion to intervene.
The denial of a motion to intervene as of right is a final order appealable by
nonnamed class members.4 The named class members contend, however, that the
proposed intervenors failed to designate the denial of the motion to intervene in
their notice of appeal and further failed to obtain a Rule 58 separate document
judgment, depriving this court of jurisdiction. We have held that where a party
designates in the notice of appeal particular orders only, and not the final judgment,
3
Walker v. City of Mesquite, 858 F.2d 1071 (5th Cir. 1988); Edwards v. City of
Houston, 78 F.3d 983 (5th Cir. 1996) (en banc).
4
Id.
5
we are without jurisdiction to hear challenges to other orders not specified.5
Although the proposed intervenors listed in their notice of appeal specific issues to
be raised, they also designated the January 15, 1998 final judgment. In addition,
the intervention issue was briefed by all the parties, evidencing it as an issue in this
appeal.6 “An appeal from a final judgment preserves all prior orders intertwined
with the final judgment” and, thus, Rule 58 of the Federal Rules of Civil Procedure
does not preclude review of the order denying intervention.7 Accordingly, we have
jurisdiction to review the denial of the motion to intervene.8
5
Trust Co. of Louisiana v. N.N.P. Inc., 104 F.3d 1478 (5th Cir. 1997).
6
New York Life Ins. Co. v. Deshotel, 142 F.3d 873 (5th Cir. 1998).
7
Id. at 884. Although the district court retained jurisdiction for the limited purpose
of accepting the database to be used in calculating the face value of the settlement
certificates, it did so without effecting the finality of its judgment.
8
We note our concern over the review of an order denying a motion to intervene at
the conclusion of the proceedings. Although a denial of a motion to intervene is immediately
appealable, in this circuit a party may wait and appeal after a final judgment, as done here.
In such instances, any settlement would be made contingent on the appeal’s outcome and,
if the intervenor prevailed on appeal, the entire matter might have to be relitigated. Further,
the proposed intervenor will never be able to appeal in the underlying action unless the order
denying intervention is first reversed. There are thus strong efficiency reasons to mandate
an immediate appeal. See Credit Francais Int’l v. Bio-Vita, Ltd., 78 F.3d 698 (1st Cir.
1996) (holding that an appeal from the denial of a motion to intervene must be taken within
thirty days of the entry of the order, or not at all); United States v. City of Milwaukee, 144
F.3d 524 (7th Cir. 1998) (same). We would have imposed an immediate appeal requirement
for the denial of a motion to intervene in this case, and joined our sister circuits in this
regard, if we were not bound by our precedent’s strict application of the Rule 58 separate
document requirement, even to interlocutory rulings. See Theriot v. A.S.W. Well Serv.,
Inc., 951 F.2d 84 (5th Cir. 1992) (holding that a minute entry does not constitute an
6
The proposed intervenors challenge only the denial of intervention as a
matter of right. Such is reviewed de novo.9 To intervene of right, “(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 or impede his ability to protect that interest; [and] (4) the applicant’s
interest must be inadequately represented by the existing parties to the suit.”10 The
district court found that the motion to intervene was untimely, and that the
proposed intervenors were adequately represented by the existing parties.
Turning to the latter requirement first, we find and conclude that the
proposed intervenors are represented adequately by the existing parties. The
burden of establishing inadequate representation is on the applicant for
appealable interlocutory decision for purposes of the Rule 58 separate document
requirement). Under our current precedent, the district court’s oral denial of the motion to
intervene and subsequent written minutes do not satisfy Rule 58, a requirement not waived
by the parties. See Barnhardt Marine Ins., Inc. v. New England Int’l Sur. of America,
961 F.2d 529 (5th Cir. 1992) (separate document requirement is not jurisdictional and may
be waived). Given the unique nature of a motion to intervene, an exception to the Rule 58
requirement in such instances would be warranted. Pending rule change or en banc review,
the district court may avoid this conundrum by entering a Rule 58 document when denying
intervention.
9
Edwards, 78 F.3d 983.
10
Id. at 999.
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intervention.11 Although the applicant’s burden is minimal, “it cannot be treated
as so minimal as to write the requirement completely out of the rule.”12 When, as
here, the parties seeking to intervene have the same ultimate objective as the parties
to the suit, the existing parties are presumed to represent adequately the parties
seeking to intervene unless those parties demonstrate adversity of interest,
collusion, or nonfeasance.13
The proposed intervenors make several unpersuasive allegations of collusion
in brief but offered no evidence at the fairness hearing that the plaintiff class
representatives were operating in bad faith or were in any way not representative.
In addition, the record contains no evidence that the plaintiff class representatives
had any motivation or interest that was different from that of the proposed
intervenors. Although incorporated into the Settlement Agreement, the record
reflects that the attorneys’ fee amount was not agreed to until after the liability
settlement had been reached, and there was no challenge of same at the fairness
hearing. In response to questions from the district court, counsel for the proposed
intervenors conceded that the settlement was not arrived at by fraud or collusion.
11
Id. at 1005.
12
Id. (quoting Cajun Elec. Power Co-op., Inc. v. Gulf States Utilities, Inc., 940
F.2d 117, 120 (5th Cir. 1991)).
13
Id.
8
The record, particularly the testimony of the impartial mediator,14 establishes that
the plaintiff class representatives acted in good faith and for the best interests of the
plaintiff class. Accordingly, we are persuaded beyond peradventure and now
conclude that the proposed intervenors were adequately represented by the existing
parties and class counsel.
Because the failure to meet an essential requirement precludes intervention
of right, we need not review the district court’s timeliness determination. 15 The
district court’s order denying intervention as of right is AFFIRMED and the appeal
of the judgment approving the settlement agreement and setting attorneys’ fees is
DISMISSED.
The appellees’ motion for sanctions against the appellants is DENIED. The
appellants’ motion to strike the motion for sanctions is DENIED AS MOOT.
14
The mediator was indisputably exquisitely qualified, having served in seriatim on
a federal district court, a federal circuit court of appeals, as Director of the Federal Bureau
of Investigation, and as Director of the Central Intelligence Agency, the Honorable William
H. Webster.
15
Edwards, 78 F.3d at 999; Sierra Club v. Espy, 18 F.3d 1202 (5th Cir. 1994).
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