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Lindblom v. Santander Consumer USA Inc.

United States District Court, E.D. California

September 23, 2019

APRIL LINDBLOM, et al., Plaintiffs,
v.
SANTANDER CONSUMER USA, INC, Defendant.

          ORDER DENYING MOTION FOR LEAVE TO INTERVENE AS OF RIGHT (Doc. No. 164) ORDER DENYING MOTION FOR LEAVE TO SUBSTITUTE CLASS REPRESENTATIVE (Doc. No. 156) ORDER DENYING MOTION FOR CERTIFICATION OF INTERLOCUTORY APPEAL (Doc No. 177)

          BARBARA A. MCAULIFFE UNITED STATES MAGISTRATE JUDGE.

         I. INTRODUCTION

         Currently before the Court are a Motion for Leave to Intervene as of Right filed by Jason Crowley, Juanita Garcia, and Janice Teemer (the “Intervenors”), a Motion for Leave to Substitute Class Representative filed by Plaintiff April Lindblom (“Plaintiff”), and a Motion for Certification of Interlocutory Appeal filed by Plaintiff. (Doc. Nos. 156, 164, 177.)[1] Defendant Santander Consumer USA, Inc. (“Defendant”) opposed all three motions. (Doc. Nos. 160, 175, 180.) The Intervenors submitted a reply in support of the Motion for Leave to Intervene as of Right and Plaintiff submitted a reply in support of the Motion for Leave to Substitute Class Representative.[2] (Doc. Nos. 162, 177.)

         A hearing on the Motion for Leave to Intervene as of Right was held on September 6, 2019 before the Honorable Barbara A. McAuliffe. (Doc. No. 178.) Counsel John Norris and Wesley Barnett appeared by telephone on behalf of Intervenors. (Id.) Counsel David Reidy appeared in person on behalf of Defendant. (Id.) The Court deemed the Motion for Leave to Substitute Class Representative suitable for decision without oral argument pursuant to Local Rule 230(g). (Doc. No. 172.) The Court further finds the Motion for Certification of Interlocutory Appeal suitable for resolution without oral argument and the matter is deemed submitted pursuant to Local Rule 230(g).

         Having considered the motions, the oppositions, the replies, the arguments of counsel, as well as the entire record in this case, the Court DENIES the Motion for Leave to Intervene as of Right, the Motion for Leave to Substitute Class Representative, and the Motion for Certification of Interlocutory Appeal.

         II. FACTUAL AND PROCEDURAL BACKGROUND

         This action arises out of Plaintiffs April and Timothy Lindblom’s loan for the purchase of a vehicle. (Doc. No. 81.) The operative complaint alleges that they made payments to Defendant, who serviced the loan, using Western Union’s Speedpay service. (Id.) The Speedpay service required a flat fee per transaction (the “Speedpay Fee”) that was purportedly remitted to Defendant in violation of California’s Rosenthal Fair Debt Collections Act. (Id.)

         The initial putative class action complaint in this case was filed on October 30, 2014, in the United States District Court for the Northern District of Alabama. (Doc. No. 1.) That complaint, styled Woods v. Santander Consumer USA Inc., No. 2:14-cv-02104-MHH (N.D. Ala.), accused Defendant and Western Union Business Solutions (USA), LLC (“Western Union”) of illegally charging Speedpay Fees in violation of the Fair Debt Collections Practices Act. (Id.) On December 5, 2014, the initial plaintiffs amended the complaint to add April Lindblom as a named plaintiff. (Id.). On June 22, 2015, the Alabama District Court severed Plaintiff’s suit and transferred the matter to this Court. (Id.)

         Following transfer, this Court granted Western Union’s motion to dismiss with prejudice and denied Defendant’s motion for judgment on the pleadings. (Doc. Nos. 42-43, 71.) The Court subsequently entered a scheduling order and the suit proceeded to class discovery on June 22, 2016. (Doc. No. 76.) On August 30, 2016, the complaint was amended to name Timothy Lindblom as a plaintiff. (Doc. No. 81.) After being continued twice, the deadline for fact discovery closed on February 27, 2017. (Doc. Nos. 84, 87.)

         On October 13, 2017, Plaintiff[3] moved to certify a class composed of “[a]ll individuals in the state of California, who, during the applicable limitations period, paid a convenience fee through Western Union’s Speedpay service in connection with any consumer loan held and/or serviced by Santander.” (Doc. Nos. 87, 93, 105, 108.) Defendant opposed certification in part by challenging Plaintiff’s adequacy as a class representative, arguing that she could not be a member of the defined class because her claim fell outside of the applicable one-year statute of limitations period. (Doc. No. 119.) Defendant additionally moved for summary judgment on October 20, 2017. (Doc. No. 111.)

         At the hearing on the motions for class certification and summary judgment held on January 12, 2018, the Court expressed concern that Plaintiff was not a member of the class because she had not paid the Speedpay Fee within the applicable limitations period. (Doc. No. 130.) Plaintiff’s counsel acknowledged that he was “struggling to try to figure out a way” for Plaintiff to represent class given the applicable limitations period. (Id. at p. 25). Plaintiff’s counsel further indicated that he intended to file motions to allow other individuals to intervene and be substituted as class representative. (Id. at p. 15.) Following the hearing and while the motion for class certification was under submission, six individuals filed a motion for permissive intervention in this matter as class representatives. (Doc. No. 124.)

         On January 22, 2018, the Court denied Defendant’s motion for summary judgment. (Doc. No. 131.) On January 26, 2018, the Court also denied Plaintiff’s motion for class certification, finding that Plaintiff was not an adequate class representative and her claims were atypical of the class. (Doc. No. 132.) On February 2, 2018, four additional individuals filed a second motion to intervene. (Doc. No. 136). On June 6, 2018, while the two motions to intervene were pending, the proposed intervenors filed a separate action against Defendant known as Blakely et al. v. Santander Consumer USA, Inc., No. 2:18-cv-01647-WBS-EFB. On June 29, 2018, the Court entered an order denying both of the prior proposed intervenors’ motions for untimeliness. (Doc. No. 147, denying motions at Doc. 124, 127, 136.) Those proposed intervenors filed a notice of appeal on July 19, 2018.

         The case was stayed pending resolution of the appeal. (Doc. Nos. 152, 163.) Nonetheless, on July 24, 2018, Plaintiff filed the underlying Motion for Leave to Substitute Class Representative. (Doc. No. 156.) On September 17, 2018, while the matter was stayed, the Intervenors filed the underlying Motion to Intervene as of Right pursuant to Federal Rule of Civil Procedure 24(a). (Doc. No. 164.) On June 5, 2019, the Ninth Circuit issued an opinion and memorandum affirming the Court’s order denying the prior motions to intervene permissively. (Doc. Nos. 166, 167.) Following mandate from the Ninth Circuit, Defendant filed an opposition to the still pending Motion to Intervene as of Right (Doc. No. 164) on August 19, 2019, and the Intervenors filed their reply on August 27, 2019. (Doc. Nos. 175, 176.) On September 9, 2019, Plaintiff filed a Motion for Certification of Interlocutory Appeal requesting that the Court certify any order denying the Motion for Leave to Substitute Class Representative for interlocutory appeal. (Doc. No. 177.) Defendant opposed the Motion for Certification of Interlocutory Appeal on September 12, 2019. (Doc. No. 180.)

         The Court now turns to deciding the Motion for Leave to Substitute Class Representative, Motion to Intervene as of Right, and the Motion for Certification of Interlocutory Appeal. (Doc. No. 156, 164, 177.)

         III. DISCUSSION

         A. Motion to Intervene as of Right

         1. Legal Standard

         Federal Rule of Civil Procedure 24(a) governs a request to intervene as of right. Where an intervenor is not given an unconditional right to intervene by a federal statute, a putative intervenor must satisfy four elements to qualify for as-of-right intervention:

(1) the applicant's motion must be timely; (2) the applicant must assert an interest relating to the property or transaction which is the subject of the action; (3) the applicant must be so situated that without intervention 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 other parties.

United States v. Oregon, 839 F.2d 635, 637 (9th Cir. 1988). Each of these four requirements must be met to intervene as of right. Arakaki v. Cayetano, 324 F.3d 1078, 1083 (9th Cir. 2003.) The party seeking to intervene bears the burden of showing those four elements are met, although “the requirements of intervention are broadly interpreted in favor of intervention.” Prete v. Bradbury, 438 F.3d 949, 954 (9th Cir. 2006) (citation omitted).

         2. Timeliness

         “An application to intervene, whether as of right or permissive, must be timely.” Cohorst v. BRE Properties, Inc., 2011 WL 3475274, at *4 (S.D. Cal. Aug. 5, 2011.) The determination of timeliness is left to the sound discretion of the court. Yniguez v. Arizona, 939 F.2d 727, 731 (9th Cir. 1991). Timeliness is the “threshold requirement” for intervention as of right and if the motion is untimely the Court need not reach any of the remaining elements of Rule 24(a). League of United Latin American Citizens v. Wilson, 131 F.3d 1297, 1302 (9th Cir. 1997) (quoting United States v. Oregon, 913 F.2d 576, 588 (9th Cir. 1990)). In determining whether a motion for intervention is timely, the court considers three factors: “(1) the stage of the proceeding at which an applicant seeks to intervene; (2) the prejudice to other parties; and (3) the reason for and length of the delay.” Id. (quoting Orange County v. Air California, 799 F.2d 535, 537 (9th Cir. 1986)). “[A]ny substantial lapse of time weighs heavily against intervention.” League of United Latin American Citizens, 131 F.3d at 1302.

         i. Stage of the Proceeding

         The first factor in determining timeliness is the stage of the proceeding in which intervention is sought. “Although delay can strongly weigh against intervention, the mere lapse of time, without more, is not necessarily a bar to intervention.” U.S. v. Alisal Water Corp., 370 F.3d 915, 922 (9th Cir. 2004). Thus, to be timely, an applicant need not seek to intervene immediately. “[C]ourts consider whether there have been actual proceedings of substance on the merits in the underlying action.” CEP Emery Tech Investors LLC v. JPMorgan Chase Bank, N.A., 2010 WL 1460263, at *3 (N.D. Cal. 2010).[4]

         Between the initial lawsuit filed on October 30, 2014 (subsequently transferred to this Court on June 29, 2015) and the Intervenors’ motion, numerous important litigation milestones have passed. Several motions to dismiss, a motion for judgment on the pleadings, a motion for summary judgment, a motion for class certification, and numerous motions to intervene have been filed and extensively briefed by the parties. (See Doc. Nos. 19, 31, 53, 76, 105, 108, 111, 124, 136). The parties attended private mediation while the case was stayed, and the Court issued an amended scheduling order when mediation was ultimately unsuccessful. (Doc. Nos. 92, 94, 105). The parties conducted class discovery for a full year and, after the discovery deadlines were twice extended, class discovery closed on February 27, 2017. (Doc. No. 87). All other class related deadlines have long since expired. Class certification has been denied, and, importantly, this case now proceeds as an individual action. See United Airlines, Inc. v. ...


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