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Renewable Land, LLC, et al. v. Rising Tree Wind Farm LLC

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA Sacramento Division


March 11, 2013

RENEWABLE LAND, LLC, ET AL.
v.
RISING TREE WIND FARM LLC, ET AL.

The opinion of the court was delivered by: The Honorable Robert J. Timlin, Judge

CIVIL MINUTES - GENERAL

Patricia Gomez None

Courtroom Clerk Court Reporter

PRESENT FOR PLAINTIFFS: ATTORNEYS PRESENT FOR DEFENDANTS: None None

PROCEEDINGS: (IN CHAMBERS) ORDER GRANTING ADDISON ENERGY RESOURCES LLC'S MOTION TO INTERVENE

The court has read and considered Addison Energy Resources LLC's ("Addison") motion to intervene, opposition to the motion, Addison's reply, and Plaintiffs' (collectively "Roberts") joinder in

motion. It also heard oral argument by counsel for the proposed intervenor and the parties. Based on consideration, the court rules as follows:

Addison Energy Resources LLC moves to intervene in this action, as of right under Federal Rules of Civil

Rule 24(a)(2) ("Rule 24(a)(2)") or, in the alternative, requests that the court exercise its discretion Federal Rules of Civil Procedure, Rule 24(b)(1)(B) to permit Addison to intervene.

INTERVENTION AS OF RIGHT

In the absence of a statute conferring an unconditional right to intervene, Rule 24(a)(2) governs a party's for intervention as of right in the federal courts. Rule 24(a)(2) 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.

24(a)(2). The Ninth Circuit has recognized that the requirements of Rule 24(a)(2) may be broken into four elements, each of which must be demonstrated in order to provide a non-party with a right to the application must be timely; (2) the applicant must have a "significantly protectable" interest to the transaction that is the subject of the litigation; (3) the applicant must be so situated that the of the action may, as a practical matter, impair or impede the applicant's ability to protect its interest; the applicant's interest must be inadequately represented by the parties before the court. See Northwest Resource Council v. Glickman, 82 F.3d 825, 836 (9th Cir. 1996). In their opposition, Defendants only addressed the fourth factor, the adequacy of the representation, arguing that Addison's interests are more than represented by the Plaintiffs in this lawsuit and that their arguments to the contrary in their motion to a dispute over litigation tactics, which is not recognized as a sufficient ground for intervention as a of right. Although Defendants have essentially conceded that Addison has made a sufficient showing as to three factors, the court will address each in turn.

When evaluating whether the requirements for intervention of right are met, a court normally follows and equitable considerations and construes the governing rule broadly in favor of proposed intervenors, policy in favor of intervention serves both efficient resolution of issues and broadened access to the Fed.R.Civ.P. 24(a)(2); Wilderness Soc. v. U.S. Forest Service, 630 F.3d 1173, 1179 (9th Cir. 2011); Cayetano, 324 F.3d 1078, 1083 (9th Cir. 2003). In evaluating whether Addison satisfies these this court must "take all well-pleaded, nonconclusory allegations in the motion to intervene, the proposed complaint . . . in intervention, and declarations supporting the motion as true absent sham, frivolity, or objections." Southwest Center, 268 F.3d at 820.

A. Timeliness

Timeliness is the "threshold requirement" for intervention as of right. United States v. Oregon, 913 F.2d

(9th Cir. 1990). In determining whether a motion for intervention is timely, courts consider three "(1) the stage of the proceeding at which an applicant seeks to intervene; (2) the prejudice to other and (3) the reason for and length of the delay." County of Orange v. Air California, 799 F.2d 535, 537 1986).

This lawsuit was filed on April 30, 2012, approximately nine months before Addison filed its motion to Although "any substantial lapse of time weighs heavily against intervention," League of United Latin American Citizens v. Wilson, 131 F.3d 1297, 1302 (9th Cir. 1997) (quoting United States v. Washington, 96 F.3d 1503 (9th Cir. 1996)), this case remains in the early stages of litigation. Rising Tree filed its answer and on May 25, 2012, and on June 15, 2012, Plaintiffs filed a motion to dismiss Rising Tree's That motion was pending at the time Addison filed its motion to intervene. Since the motion to filed, the court has granted in part and denied in part the motion to dismiss. Further, at the time filed its motion to intervene, no scheduling conference order had issued and no mandatory scheduling conference had occurred. Therefore, the parties had not begun conducting any discovery. Since the motion to filed, a mandatory scheduling conference order issued, and a scheduling conference will occur on 11, 2013.

The court finds that, although a significant amount of time elapsed before Addison filed its motion to the court has not yet "substantively-- and substantially-- engaged the issues in this case" and that the in the nascent stages. League of United Latin American Citizens, 131 F.3d at 1303. The court is persuaded by Addison's proffered reason for the delay in entering the case, because of project deadlines that approaching in 2013 and the fiscal impact it will have on them if this litigation is not resolved. As for the court notes that intervenors are permitted to litigate fully once admitted to a lawsuit, and therefore Addison's admission as a party will have the inevitable effect of prolonging the litigation to some degree. because of the preliminary stages of the litigation, particularly the fact that the parties have yet to discovery, the court finds the prejudice to the parties to be minimal. Therefore, the court finds that intervention is timely.

B. Significant Protectable Interest

Rule 24(a)(2)'s requirement that the proposed intervenor have a "significant protectable interest" relating the transaction that is the subject of the litigation does not require a specific legal or equitable interest, and the test has been construed by the Ninth Circuit to be "primarily a practical guide to disposing of lawsuits by as many apparently concerned persons as is compatible with efficiency and due process." Wilderness 630 F.3d at 1179 (quoting County of Fresno v. Andrus, 622 F.2d 436, 438 (9th Cir. 1980)). "It is generally that the interest is protectable under some law, and that there is a relationship between the legally and the claims at issue." Sierra Club, 995 F.2d at 1484. Furthermore, a prospective "has a sufficient interest for intervention purposes if it will suffer a practical impairment of its interests of the pending litigation." California ex rel. Lockyer v. United States, 450 F.3d 436, 441 (9th Cir.

Contract rights are traditionally considered significant protectable interests. Southwest Center, 268 F.3d (citing Sierra Club, 995 F.2d at 1842) (holding that construction contractor and building trade who were owners of ongoing projects that were on an approved negotiated project list pursuant to implementation agreemetn entered in connection with a city's land management plan had a significantly protectable interest relating to suit under Endangered Species Act); see also Hook v. State of Arizona, 972 F.2d 1015 (9th Cir. 1992) (holding that intended third-party beneficiaries of an agreement have rights to enforce that grants them beneficiary status).

On March 8, 2012, Roberts entered into an Options and Development Agreement with Addison, which Addison an option to acquire leasehold and other related rights in and to the property which is currently of the option agreement between the parties to this lawsuit, and it also grants Addison the option to certain environmental data necessary to develop a wind farm on that property. The Options and

Agreement recognizes that Addison's option to acquire certain rights in the property arises from agreement with Rising Tree, and the right to environmental data granted in the Addison Option depends upon Roberts's ability to obtain possession of that data from Rising Tree. The court that Addison's contractual interests under its option agreement are a significant protectable interest to the transaction that is the subject of the litigation.

C. Impairment of Addison's Interest

The next requirement that the court must consider is whether the disposition of this lawsuit may, as a matter, impair or impede Addison's ability to protect its interest. The standard is a practical one: follow the guidance of Rule 24 advisory committee notes that state that '[i]f an absentee would be affected in a practical sense by the determination made in an action, he should, as a general rule, be intervene.'" Sw. Ctr. for Biological Diversity v. Berg, 268 F.3d 810, 822 (9th Cir. 2001) (quoting 24 advisory committee note to 1966 amendment). It is clear to this court that, practically speaking, of this lawsuit will significantly impact Addison's interests under its option agreement with as its rights under the contract are contingent on the resolution of the claims in this lawsuit concerning option agreement and whether Rising Tree has in fact validly exercised its option under that to extend the term for another two years. As Addison notes in its motion, the practical effect of the ruling on the complaint and counter-complaint will have the effect of either nullifying Addison's option under its option agreement, if it finds that Rising Tree validly exercised its option to extend its option for two years, or removing the cloud on title that currently exists because of this litigation and allowing it to environmental data necessary to proceed with the development of its own wind farm on the property. the court finds that Addison has made a sufficient showing with regard to the third factor of the four for intervention under Rule 24(a).

D. Whether Existing Parties Adequately Represent Addison's Interest in this Litigation

The court finally considers the last factor, whether a proposed intervenor's interest is currently being represented by the parties in the litigation. Addison contends that, although its interests are aligned Roberts as to the ultimate objective of this lawsuit, its interests are not being adequately represented alone stands to lose substantial money in tax credits if the project does not move forward in a timely that it has a substantial financial investment in the project already, and that, more generally speaking, it be the party to lose the ability to build the project on what it argues is unique land with proximity to to be shared with some of its affiliates. Therefore, according to Addison, because of its unique in having this litigation resolved urgently, its interests are different than Roberts, and Addison will likely arguments than Roberts. It cites as an example the motion for preliminary injunction that it has which Plaintiffs had not filed. As noted above, while Rising Tree did not contest the other three factors in opposition, it does contend that Addison's interests are in fact being adequately represented by the plaintiffs share the same ultimate objective and that any differences raised by Addison in its motion amount more than differences in litigation strategy. Finally, the court has also considered Roberts' joinder in motion to intervene, in which Roberts states that the plaintiffs "cannot and will not guarantee that it adequately represent Addison's interests in this action; such interests may diverge from Roberts' own

In determining whether a would-be intervenor's interests will be adequately represented by an existing the courts consider: (1) whether the interest of a present party is such that it will undoubtedly make all the arguments; (2) whether the present party is capable and willing to make such arguments; and (3) the would-be intervenor would offer any necessary elements to the proceedings that other parties would NFRC, 82 F.3d at 838. The prospective intervenor bears the burden of demonstrating that the existing may not adequately represent its interests. Southwest Center, 268 F.3d at 823. However, the burden of inadequacy is "minimal," and the applicant need only show that representation of its interests by existing "may be" inadequate. Trbovich v. United Mine Workers, 404 U.S. 528, 538 n.10 (1972). In assessing of the representation, the focus should be on the "subject of the action," not just the particular before the court at the time of the motion. Southwest Center, 268 F.3d at 824.

While it is true that the burden on the would-be intervenor is minimal, the Ninth Circuit has observed that an applicant for intervention and an existing party have the same ultimate objective, a presumption of of representation arises." Arakaki v. Cayetano, 324 F.3d 1078, 1086 (9th Cir. 2003). Here, the court both Addison and Roberts have the same ultimate objective, a declaration that Rising Tree's option Therefore, Addison must rebut that presumption. The court is satisfied that it has made a sufficient to both rebut the presumption and satisfy its "minimal" burden of showing inadequate representation. the slightly divergent interests of Addison and Roberts, the court finds that the interests of the present are such that it will not "undoubtedly" make all the arguments Addison would and not in the time frame Addison would desire. The pending motion for preliminary injunction is an example of exactly how these interests might result in these parties presenting different arguments to the court. Further, Roberts has the court in its joinder that it will not guarantee it will represent Addison's interests. Although Roberts has an interest in having Addison present in the litigation, the court finds the representations of to be credible and in good faith..

The court finds the present issue concerning Roberts' adequacy of representation to be similar to that the Ninth Circuit in Southwest Center for Biological Diversity v. Berg, 268 F.3d 810 (9th Cir. There, environmental groups brought suit against city and various federal departments and officials, that the city's land management plan and species conservation program did not comply with the of the Endangered Species Act, and a construction contractor and building trade associations to intervene in the suit as of right. The Ninth Circuit held that, although the defending governmental and the intervenors had the same ultimate objective, "the priorities of the defending government are not simply to confirm the Applicants' interests in the Plans, the IA, and the City's ITP. The of government and private sector may diverge. On some issues, Applicants will have to express their unique private perspectives and in essence carry forward their own interests." Here, similarly, Addison and interests may diverge, and at that time, Addison will have to carry forward its own interests.

Rising Tree's contention that this amounts to a mere difference in litigation strategy is not persuasive. As Southwest Center, "[i]t is sufficient for [Addison] to show that, because of the difference in interests, it that Defendants will not advance the same arguments as [Addison]. Resolution of this case will affect [Addison's] legally protectable interests and 'there is sufficient doubt about the adequacy of to warrant intervention.'" Southwest Center, 268 F.3d at 824 (citing Trbovich, 404 U.S. at 538).

For the foregoing reasons, the court GRANTS Addison's motion to intervene as of right under Rule

Therefore, the court need not reach the alternative grounds for intervention raised by Addison, permissive intervention under Rule 24(b)(1)(B).

IT IS SO ORDERED.

20130311

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