Nat'l Fire & Marine Ins. v. United Policyholders

• Court: Court of Appeals for the Ninth Circuit
• Decided: May 6, 2019
• Docket: 18-15229
• Status: Unpublished

Opinion

FILED NOT FOR PUBLICATION MAY 06 2019 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

KAREN COSGROVE, a single person, No. 18-15229

Plaintiff, D.C. No. 2:14-cv-02229-HRH

v. MEMORANDUM* NATIONAL FIRE & MARINE INSURANCE COMPANY, a foreign insurer,

Defendant-Appellee,

v.

UNITED POLICYHOLDERS, proposed Intervenor,

Movant-Appellant.

Appeal from the United States District Court for the District of Arizona H. Russel Holland, District Judge, Presiding

Argued and Submitted April 16, 2019 San Francisco, California

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Before: THOMAS, Chief Judge, M. SMITH, Circuit Judge, and VRATIL,** District Judge.

United Policyholders (“United”) appeals from the district court’s denial of

its motion for permissive intervention following the dismissal of the case with

prejudice. United sought permissive intervention to unseal and reinstate a partial

summary judgment order that was sealed and vacated according to the terms of the

settlement agreement resolving the case.

“Permissive intervention is committed to the broad discretion of the district

court.” Orange County v. Air Cal., 799 F.2d 535, 539 (9th Cir. 1986). Thus, we

review a district court’s denial of a motion for permissive intervention for abuse of

discretion. Blum v. Merrill Lynch Pierce Fenner & Smith Inc., 712 F.3d 1349,

1352 (9th Cir. 2013). We have jurisdiction under 28 U.S.C. §1291. We conclude

that the district court did not abuse its discretion in denying United permissive

intervention for the purpose of reinstating a vacated order. However, we conclude

that the district court should have considered additional factors in considering the

motion for permissive intervention for the purpose of unsealing the court record.

Therefore, we affirm in part and remand in part. Because the parties are familiar

with the history of the case, we need not recount it here.

** The Honorable Kathryn H. Vratil, United States District Judge for the District of Kansas, sitting by designation. 2 I

The district court did not abuse its discretion in denying United’s motion to

intervene for the purpose of reinstating the vacated partial summary judgment

order. Non-parties seeking permissive intervention in a civil case under Federal

Rule of Civil Procedure 24(b) generally must show: “(1) an independent ground

for jurisdiction; (2) a timely motion; and (3) a common question of law and fact

between the movant’s claim or defense and the main action.” Beckman Indus., Inc.

v. Int’l Ins. Co., 966 F.2d 470, 473 (9th Cir. 1992). Rule 24(b)(3) specifically

instructs that “[i]n exercising its discretion, the court must consider whether the

intervention will unduly delay or prejudice the adjudication of the original parties’

rights.” Even if an applicant satisfies those threshold requirements, the district

court has discretion to deny permissive intervention. Donnelly v. Glickman, 159

F.3d 405, 412 (9th Cir. 1998).

United has no independent basis for jurisdiction, nor does it possess a

common question of law and fact with the claims or defenses involved in the main

action. The district court determined that granting permissive intervention would

prejudice the parties because the case had been dismissed pursuant to a settlement

of the parties. The district court did not abuse its discretion in denying United

permissive intervention for the purpose of attempting to reinstate a vacated order,

3 given that such an action would have “prejudice[d] the adjudication of the original

parties’ rights.” Reinstating a vacated order, at the behest of a third party, six

months after dismissal of the action with prejudice would have impaired the

original parties’ right to appeal the original order or seek certification for appeal,

and would have the potential effect of negating the settlement. See Empire Blue

Cross & Blue Shield v. Janet Greeson’s A Place For Us, Inc., 62 F.3d 1217, 1220

(9th Cir. 1995) (highlighting that a “potential prejudice to the parties is the

possibility that modification would ‘unravel’ the original settlement.”). Thus,

seeking permissive intervention for the purpose of reinstating a substantive merits

order is not, as United claims, a purely collateral challenge, but is instead

substantive in nature. See id. In short, United did not establish independent

jurisdiction or a common issue of law or fact, and the district court did not abuse

its discretion in determining that intervention for the substantive purpose of

reinstating a vacated order would prejudice the parties.

II

To the extent that United sought only to unseal the original partial summary

judgment order and the order vacating it, different considerations apply. See San

Jose Mercury News, Inc. v. U.S. Dist. Court, 187 F.3d 1096, 1100–01 (9th Cir.

1999) (describing requirements). A third party seeking permissive intervention

4 purely to unseal a court record does not need to demonstrate independent

jurisdiction or a common question of law or fact. Beckman, 966 F.2d at 473. And

there is a “strong presumption” in favor of the public’s right of access to judicial

records. San Jose Mercury News, 187 F.3d at 1102. In ruling on a motion to

intervene for this purpose, a court must evaluate whether the countervailing

interests opposing public disclosure can overcome the presumption in favor of it.

Id. It is not clear from the record that the district court undertook this inquiry and

balanced the public interest with potential prejudice to the parties and the other

factors to be considered in deciding a permissive intervention motion. Therefore,

we vacate that portion of the district court order addressing only the motion to

unseal records, and we remand it for reconsideration and the entry of appropriate

findings by the district court. We do not prejudge the outcome of that inquiry.

The parties shall bear their own costs.

AFFIRMED in part; VACATED and REMANDED in part.