State ex rel. Napolitano v. Brown & Williamson Tobacco Corp.

998 P.2d 1055, 196 Ariz. 382, 319 Ariz. Adv. Rep. 18, 2000 Ariz. LEXIS 24
CourtArizona Supreme Court
DecidedApril 13, 2000
DocketNo. CV-99-0444-T/AP
StatusPublished
Cited by12 cases

This text of 998 P.2d 1055 (State ex rel. Napolitano v. Brown & Williamson Tobacco Corp.) is published on Counsel Stack Legal Research, covering Arizona Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State ex rel. Napolitano v. Brown & Williamson Tobacco Corp., 998 P.2d 1055, 196 Ariz. 382, 319 Ariz. Adv. Rep. 18, 2000 Ariz. LEXIS 24 (Ark. 2000).

Opinions

OPINION

ZLAKET, Chief Justice.

¶ 1 We are asked to decide whether the trial court abused its discretion in denying a motion to intervene filed nearly two and one-half years after this litigation began, and fifteen days after a consent decree and final judgment were entered. We hold that it did not.

¶ 2 On August 20, 1996, the State of Arizona and the Arizona Health Care Cost Containment System (AHCCCS) (“the State”) filed suit against the tobacco industry and its trade associations (“the tobacco companies”) seeking damages as well as declaratory and injunctive relief. The State alleged, among other things, that the tobacco companies had conspired to mislead consumers about the adverse health effects of tobacco products. In late 1998, the State agreed to dismiss its lawsuit and join a global settlement agreement the tobacco companies had negotiated with forty-five other states. Under the agreement, Arizona would receive substantial injunctive relief and a $3.1 billion share of the total settlement. A consent decree and final judgment were entered against the tobacco companies on December 1, 1998. Fifteen days later, on December 16, 1998, a group of thirteen Arizona counties (“the Counties”) sought to intervene in the lawsuit, claiming an interest in the settlement proceeds.

¶3 Under the terms of the Master Settlement Agreement (MSA), the tobacco companies. agreed to compensate the State for expenses incurred by it and its political subdivisions as a result of tobacco-related illnesses.1 However, they would make payment only to the State; the MSA provided no mechanism for apportioning shares of the settlement fund and distributing them to individual counties. Moreover, according to the language of the MSA, the State purported to release any past, present or future claims that its political subdivisions might have against the tobacco companies.2 Fearing that their claims might barred by the MSA, and that the State would never pay them a fair share of the settlement, the Counties filed a motion to intervene pursuant to Rule 24 of the Arizona Rules of Civil Procedure.

¶4 The trial court denied the motion as untimely. It reasoned that to grant the motion “after the settlement has been negotiated and approved ... would cause delay, if not the unraveling of an historic settle-ment____” The Counties appealed and later filed a motion to transfer the ease to this [384]*384court. We granted the motion and now affirm.

¶ 5 Rule 24 of the Arizona Rules of Civil Procedure permits intervention in an action only “[u]pon timely application.” In determining whether a motion is timely, the trial court must consider several factors, including the stage to which the lawsuit has progressed when intervention is sought and whether the applicant could have attempted to intervene earlier. See State Farm Mut. Ins. Co. v. Paynter, 118 Ariz. 470, 471, 577 P.2d 1089, 1090 (App.1978). The most important consideration, however, is whether the delay in moving for intervention will prejudice the existing parties in the ease. See Winner Enters., Ltd. v. Superior Court, 159 Ariz. 106, 109, 765 P.2d 116, 119 (App.1988). Because granting a post-judgment motion to intervene is especially likely to prejudice the parties, such motions are disfavored, see In re One Cessna 206 Aircraft, FAA Registry No. N-72308, License No. U-206-1361, 118 Ariz. 399, 401, 577 P.2d 250, 252 (1978), and should be granted only in the most exceptional circumstances. See Weaver v. Synthes, Ltd. (U.S.A.), 162 Ariz. 442, 446, 784 P.2d 268, 272 (App.1989). We will not set aside the court’s ruling on the timeliness of a motion to intervene absent a clear abuse of discretion. See In re One Cessna 206 Aircraft, 118 Ariz. at 402, 577 P.2d at 253; William Z. v. Arizona Dep’t of Econ. Sec., 192 Ariz. 385, 387, 965 P.2d 1224, 1226 (App. 1998).

¶ 6 In this case, we cannot say that the trial court abused its discretion. This lawsuit had been going on for nearly two and one-half years and had settled by the time the Counties sought to intervene. The fact that they waited so long should “weigh heavily against [them].” County of Orange v. Air California, 799 F.2d 535, 538 (9th Cir.1986) (holding that a motion to intervene made shortly after settlement was properly denied as untimely); see also Aleut Corp. v. Tyonek Native Corp., 725 F.2d 527, 530 (9th Cir. 1984) (holding that a motion to intervene made on the eve of settlement was properly denied as untimely).

¶ 7 We agree that the prejudice to the State and the tobacco companies would have been too great to permit intervention at such a late date. Under the MSA, the State will not begin receiving payments until “State Specific Finality” is achieved. This occurs once the trial court approves the settlement and either (i) the time to appeal has run; or (ii) all appeals have been exhausted. Arizona must achieve State Specific Finality by December 31, 2001, or lose the $3.1 billion settlement. If the Counties were allowed to intervene, the State quite possibly would not receive payment until after it litigated the apportionment issue with each of them. Given today’s legal culture, this would likely involve extensive discovery, motion practice, and possibly a trial, followed by multiple rounds of appeals. It would be expensive and time-consuming, to say the least. Further, the litigation could drag on past the December 31, 2001 deadline. In that case, the State would lose not only the monetary settlement, but also substantial injunctive relief that, it asserts without challenge, was far greater than could have been achieved without the tobacco companies’ consent.

¶ 8 Having litigated this case for two and one-half years, the State would suffer an immense burden if it were required to delay receipt of the settlement funds until the apportionment claims of the Counties are resolved. It would also prejudice the tobacco companies to keep them in this litigation while the State and the Counties settled their disputes. On this record, the trial court was well within its discretion to deny the motion.

¶ 9 The Counties argue that they had no reason to intervene until after they reviewed the Master Settlement Agreement. They essentially contend that prior to such time, they did not know the Attorney General was not adequately representing their interests. We disagree. The day the Counties reviewed the MSA may have been when they first “realized that the end result of the protracted litigation would not be entirely to [their] liking.” Air California, 799 F.2d at 538. However, they should have recognized long before then that intervention might be necessary.

¶ 10 In the first place, the Counties were not named as plaintiffs in this lawsuit. They [385]*385point to a single allegation in the State’s 164-page complaint in which the Attorney General purported to bring the action on behalf of “all of the political subdivisions of the State.” This language, they say, shows that the State advanced the action on their behalf.

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Cite This Page — Counsel Stack

Bluebook (online)
998 P.2d 1055, 196 Ariz. 382, 319 Ariz. Adv. Rep. 18, 2000 Ariz. LEXIS 24, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-napolitano-v-brown-williamson-tobacco-corp-ariz-2000.