Meridian PO Finance LLC v. OTR Tire Group Incorporated

Opinion

1 WO 2 3 4 5

9 Meridian PO Finance LLC, No. CV-20-00446-PHX-MTL

10 Plaintiff, ORDER

11 v.

12 OTR Tire Group Incorporated, et al.,

13 Defendants. 14 15 I. 16 Pending before the Court is the Motion to Intervene as a Matter of Right filed by 17 movants RRJ Ventures, LLC, Arnold Reeb Funding, LLC, and Charles Alternative 18 Finance, LLC (collectively “Movants”). (Doc. 98.) The Movants are investors in Plaintiff 19 Meridian PO Finance LLC (“Meridian”). Defendants XPO Logistics, Inc. and XPO Global 20 Forwarding, Inc. (the “XPO Defendants”) oppose the Motion. 21 Movants assert that, in May 2022, the Arizona Superior Court entered a judgment 22 against Meridian and in favor of non-party Moore Alternative Funding, LLC. Movants 23 claim that the Superior Court judgment is related to the OTR transaction at issue here. 24 Movants argue that intervention is necessary “to recover against Meridian for payments 25 due under the [Movants-Meridian] Financing Agreements arising out of the OTR 26 Transaction and the Midwest Transactions.” (Doc. 98 at 6.) The Court concludes that 27 Movants have failed to satisfy their burden to intervene as a matter of right. 28 /// 1 II. 2 Rule 24(a)(2), Fed. R. Civ. P., permits a party to intervene as a matter of right 3 where— 4 (1) it has a significant protectable interest relating to the property or transaction that is the subject of the action; (2) the 5 disposition of the action may, as a practical matter, impair or 6 impede the applicant’s ability to protect its interest; (3) the application is timely; and (4) the existing parties may not 7 adequately represent the applicant’s interest. 8 9 United States v. Alisal Water Corp., 370 F.3d 915, 919 (9th Cir. 2004). The prospective 10 intervenor bears the burden of showing that each of these requirements are satisfied. Id. 11 A. 12 Movants’ objective is securing a priority position vis-à-vis Moore Alternative 13 Funding, LLC, for collection of amounts allegedly owed pursuant to financing 14 arrangements with Meridian, should Meridian prevail in this lawsuit. “To trigger a right to 15 intervene, however, an economic interest must be concrete and related to the underlying 16 subject matter of the action.” Id. The Ninth Circuit, in Alisal, held that a prospective 17 intervenor’s economic interest in collecting a debt is “several degrees removed” from the 18 issues presented in the underlying litigation. Id. at 920. Although the underlying issue in 19 that case concerned “public health and environmental policies,” id., many subsequent cases 20 have uniformly applied the Alisal rule beyond those specific facts in denying intervention 21 as of right. See, e.g., Orient Gate Enter. Ltd. v. Matrix Int’l Textiles, Inc., 19-CV-07745- 22 DSF-MAA, 2020 WL 4196871, at *3 (C.D. Cal. May 15, 2020) (“Like the prospective 23 intervenor in Alisal, UCI’s interest in the prospective collectability of its money judgment 24 is not sufficiently related to the subject of the underlying cause of action—the breach of 25 contract.”); Wellington Hills Park, LLC v. Assurance Co. of Am., C10-0916-JLR, 2011 WL 26 1344249, at *2 (W.D. Wash. Apr. 7, 2011) (“Turnaround asserts that as custodial receiver 27 it has a protectable interest in any insurance proceeds Wellington may collect. The court 28 finds that this interest does not relate to the subject matter of the instant litigation as 1 required for intervention to be appropriate.” (Record citation omitted.)). 2 Here, Movants do not even have a judgment against Meridian. Their sole interest is 3 the possibility of obtaining relief for the breach of their financing agreements, as asserted 4 in their proposed Third-Party Complaint in Intervention. (Doc. 98-1.) Nor can Movants be 5 certain that Moore Alternative Funding, LLC will successfully “intercept” any potential 6 recovery in this case. Movants’ sole basis for believing so is that representatives of Moore 7 Alternative Funding, LLC made “representations” during “litigation, to the extent Meridian 8 recovers an award in this lawsuit, then MAF, as Meridian’s judgment creditor, intends to 9 intercept that entire recovery . . . .” (Doc. 98 at 5–6.) The Court finds that the interest 10 Movants assert is entirely speculative. This finding alone compels that the Motion should 11 be denied. 12 B. 13 The Court further finds that Movants have failed to satisfy their burden under the 14 second and third factors. The disposition of this case will not impair or impede Movants’ 15 interests. They could have and, presumably still can, file a separate action against Meridian. 16 Indeed, years ago, in October 2018, Moore Alternative Funding, LLC did just that and later 17 obtained a judgment in its favor. 18 The Motion to Intervene is not timely. As the XPO Defendants convincingly argue, 19 this case has existed for several years, and Movants’ representatives have known about it 20 for years. (Doc. 102 at 7–10; Doc 103-1 Exh. A& B.) Movants could have sought 21 intervention at any time early in this case. They did not. And now, fact discovery is closed. 22 All that remains is expert discovery, which is in-process and scheduled to end on October 23 31, 2022. 24 Movants disclaim their need for expert discovery, but they ask to reopen fact 25 discovery for 45-days. (Doc. 98 at 8.) On the surface, Movants’ request coincides with the 26 remaining expert discovery period. But their claim to minimize any additional burden on 27 the parties and this Court fails scrutiny. Reopening fact discovery will, of course, impose 28 additional litigation cost for Meridian and the XPO Defendants. Movants also oversimplify 1 || how their eleventh-hour presence will impair the Court’s ability to manage this aging case || to a timely conclusion. Meridian will either answer the Third-Party Complaint or file a || motion to dismiss. If the latter, additional time for briefing and consideration of the motion under advisement will be necessary. Movants overlook that Meridian and the XPO || Defendants may want to conduct their own fact and expert discovery into the newly || asserted claims. Doing so will certainly lengthen discovery and dispositive motion briefing 7\| schedule. And, finally, there is no certainty that Movants’ additional 45-day discovery 8 || period will be sufficient to complete their planned written discovery, given the inevitability 9|| of responding party objections, let alone avoiding burdensome and time-consuming 10 || discovery disputes involving the Court. 11 Il. 12 Accordingly, IT IS ORDERED that the Motion to Intervene as a Matter of Right 13 || (Doc. 98) is denied. 14 Dated this 25th day of July, 2022. 15 Michal T. Shurde Michael T. Liburdi 18 United States District Judge 19 20 21 22 23 24 25 26 27 28

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