United States v. Detroit International Bridge Company, Walter H. Lubienski and Commodities Export Company, Proposed Intervenors-Appellants

7 F.3d 497

• Court: Court of Appeals for the Sixth Circuit
• Decided: November 3, 1993
• Docket: 92-1687
• Status: Published

Opinions

KEITH, Circuit Judge.

Proposed Intervenors-Appellants, Walter H. Lubienski (“Lubienski”) and Commodities Export Co. (“Commodities”), appeal the district court’s decision denying their motion to intervene and their motion for a preliminary injunction in a condemnation proceeding involving Plaintiff-Appellee, the United States of America (“United States”) and the Detroit International Bridge Company (“DIBC”). For .the reasons stated below, we REVERSE the decision of the district court.

I.

This case arises from a 1979 condemnation proceeding initiated by the United States, as to land owned by the DIBC. The land at issue is located near the Ambassador Bridge in Detroit, Michigan, which connects Detroit to Windsor, Ontario, Canada. The United States sought DIBC’s land for the purpose of expanding a Customs cargo facility, located adjacent to the Ambassador Bridge. On May 21,1991, the United States (through the General Services Administration) entered into a settlement agreement with DIBC concerning the 1979 condemnation proceedings. This settlement agreement is entitled “GSA-DIBC Memorandum of Agreement” (the “MOA”), and was executed by the United States and DIBC on March 28, 1991, and May 21, 1991.

Commodities operates a duty-free store on the Detroit side of the Ambassador Bridge. Lubienski owns a parcel of land near the Ambassador Bridge which is the subject of a separate condemnation proceeding. On December 30,1991, Commodities and Lubienski filed motions in district court to intervene and for a preliminary injunction against the implementation of the MOA. Commodities and Lubienski contend that the MOA contemplates the condemnation of their land. On April 6, 1992, the district court denied both motions. On May 29, 1992, Commodities and Lubienski filed a Notice of Appeal with this Court. On appeal, they challenge the district court’s denial of their motions to intervene and for preliminary injunction. These issues are discussed seriatim below.

II.

Applying the standards set forth in the Federal Rules of Civil Procedure 24 (“Rule 24”), the district court ruled that Commodities and Lubienski were not entitled to either intervention as of right or permissive intervention. Rule 24 provides, in pertinent part:

(a) Intervention of Right. Upon timely application anyone shall be permitted to intervene in an action (1) when a statute of the United States confers an unconditional right to intervene; or (2) 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,

(b) Permissive Intervention. Upon timely application anyone may be permitted to intervene in an action: (1) when a statute of the United States confers a conditional right to intervene; or (2) when an applicant’s claim or defense and the main action have a question of law or fact in common. ... In exercising its discretion the court shall consider whether intervention will unduly delay or prejudice the adjudication of rights of the original parties.

As the district court correctly noted, to qualify for intervention as a matter of right, Commodities and Lubienski must show four things:

1) an interest related to the property or transaction which is the subject of action;

2) that the disposition of the action may, as a practical matter, impair or impede the intervenor’s ability to protect that interest;

3) that the intervenor’s interest is not adequately represented by existing parties; and

4) that their application to intervene is ' timely

(R211: Opinion and Order of Trial Court, p. 6). This Court held in Grubbs v. Norris, 870 F.2d 343, 345 (6th Cir.1989), that “failure to meet one of the [four] criteria will require that the motion to intervene be denied.” The district court ruled that Commodities and Lubienski failed to meet the four requirements for intervention as of right.

We review the court’s ruling on intervention as of right de novo, except for the timeliness requirement which we review for an abuse of discretion. Id.

A.

Relying on Donaldson v. United States, 400 U.S. 517, 531, 91 S.Ct. 534, 542, 27 L.Ed.2d 580 (1971), the district court stated that in order to satisfy the first requirement, “a proposed intervenor must show ‘a direct, significant legally protectable interest in the property or transaction subject to the action’ in which intervention is sought.” (R211: Opinion and Order of Trial Court, p. 6) (emphasis in original). Applying the Donaldson test, the district court concluded that “it is clear that Commodities and Lubienski do not have such a ‘direct, legally protectable interest’ in the Segoian/DIBC property which is at issue in the instant action to entitle them to intervention as of right.” Id. at 8.

Commodities and Lubienski are seeking to intervene in this action because they object to the MOA entered into between DIBC and the United States. The MOA provides, in pertinent part:

(1.1) The “GSA Site” means an area for an expanded Federal clearance facility that is generally bounded by Porter Street on the north, 20th Street on the east, Fort Street on the south, and the general vicinity of the Bridge span and Bridge plaza on the west, including the Overland Site as defined in paragraph (1.3).

(1.2) The “Expanded GSA Site” means an area including the GSA Site and additional land to the north and east of the GSA Site as set forth on the Approved Plan. Acquisition by GSA of the Expanded GSA Site represents the extent of GSA’s land acquisition under the terms of this Agreement. It is the intention of the parties that future modification(s) of Federally-owned clearance facilities shall occur within the boundaries of the Expanded GSA Site.

(1.3) The “Overland Site” is the property which is the subject of the existing litigation between the United States of America and DIBC. This property is generally described as being south of Porter Street, north of Howard Street, west of 20th Street and east of 21st Street, excluding four lots in the northeast corner of the block....

(1.9) “Approved Plan” shall be defined to mean the plan to be developed by GSA, and acceptable to DIBC under the terms and conditions of this Agreement. The Approved Plan shall incorporate land within the Expanded GSA Site and provide for an enlarged Federal clearance facility.

(6.1) GSA has been authorized to acquire the property defined as the GSA site. GSA shall act promptly to acquire and develop the Expanded GSA Site subject to compliance with applicable laws....

(R208: GSA-DIBC Memorandum of Agreement, pp. 2-3, 5, 10).

The terms of the MOA indicate that it is designed to operate as the final judgment regarding the 1979 condemnation proceedings between the United States and DIBC. The MOA provides, in pertinent part:

This Memorandum of Agreement (“Agreement”) is made between the United States of America, acting by and through the General Services Administration (“GSA”); and the Detroit International Bridge Company (“DIBC”), and its successors and assigns, and is made to set forth certain principles to be applied in resolving an eminent domain lawsuit now pending between the parties hereto, United States of America v. Certain Land Situated in the City of Detroit, et. al., Civil No. 79-73984, United States District Court, Eastern District of Michigan. This Agreement envisions, is intended to lead to, and shall be part of the considerations for settlement of the lawsuit by a stipulation and further agreements of the parties incorporating the principles set forth herein.

(8.4)It is understood by the parties that all agreements between GSA and DIBC as consideration for settlement of this litigation are subject to the review of the Attorney General and although settlement by utilizing said Agreement will be recommended, entry of a stipulation cannot be guaranteed. It is further understood that DIBC shall not be bound by this Agreement until and unless GSA is so bound. GSA agrees to negotiate in good faith with DIBC to achieve satisfactory compliance with or overcome any legal objections that the Attorney General may have to this Agreement.

(R203: GSA-DIBC Memorandum of Agreement, pp. 1, 29)

The United States concedes that the MOA “provides for the future condemnation of an area which includes property owned by Commodities.” (United States’ Opposition to Motion to Intervene, p. 7,5). In their motions to intervene and for a preliminary injunction, Commodities and Lubienski explained their interest in this action:

6. There are three condemnations pertaining to this case. The first is this case which stems from 1979. The second started towards the end of 1900 and was to expand the 1979 site to include land bounded by Porter on the north, 20th Street on the east, Fort Street on the south, and the Ambassador Bridge on the west. The third is in the Environmental Assessment stage and is an L-shaped wedge of land extending north of Porter to the east-west alley between 21st and 20th Streets which line is extended to Ste. (sic) Anne Street and then south to Fort Street. Commodities and Lubiensld are the principal land-ovmers in the strip of land north of Porter in the third condemnation. Lubienski also owns land in the second condemnation which abuts and is south of Porter.

7. The three condemnations together are to constitute the site of the US Customs Cargo Inspection Facility. Although other federal agencies are involved, Customs is the key decision and policy maker for these condemnations. The third condemnation, unlike the first and second which were initiated by the General Services Administration ("GSA") acting for Customs, was proposed to GSA by DIBCO.

(R203: Motion to Intervene, pp. 2-3).

The United States and DIBC argue that Commodities and Lubienski have no "interest relating to the property or transaction which is the subject of this action" because the subject matter of this action is limited to the land and the parties involved in the original 1979 complaint. We disagree. The MOA clearly provides for the condemnation of Commodities and Lubienski's property and serves as a final settlement of the 1979 condemnation action. Therefore, we believe Commodities and Lubienski have a "direct, significant legally protectable interest" in the condemnation proceedings between the United States and DIBC.

B.

We now turn to the second requirement for intervention as of right. Here, we must determine whether the disposition of the condemnation proceedings between the United States and DIBC, as a practical matter, impairs or impedes Commodities' and Lubienski's ability to protect their interests. See FecLR.Civ.P. 24(a).

The district court held that "Commodities has not demonstrated how the condemnation of the subject property would impair its interest in its duty free shop and that Lubienski already has a forum to contest the condemnation of its property by virtue of the on-going condemnation suit pending before Judge Zatkoff." (R211: Opinion and Order of Trial Court, p. 8-9). The court went on to state that even if Commodities and Lubien-ski's interests would be impaired by the disposition of this action, "the terms of the proposed settlement agreement themselves adequately protect Commodities and Lubien-ski's interests." Id.

We do not believe the terms of the MOA protects Commodities and Lubienski's interests when it provides for the condemnation of their land, and is subject to being implemented without their input or approval. In fact, Commodities and Lubienski would be unfairly disadvantaged if their land is condemned by the United States before being given the opportunity to assert their interests in this matter. This result would place Commodities and Lubienski at a serious disadvantage, because once a condemnation suit is commenced, they would have no constitutional right to a hearing on questions relating to necessity and expediency. See Bragg v. Weaver, 251 U.S. 57, 58, 40 S.Ct. 62, 63, 64 L.Ed. 135 (1919). Therefore, we hold that the disposition of the condemnation proceedings at issue would impair the ability of Commodities and Lubienski to protect their interest.

C.

To satisfy the third requirement for intervention as of right, Commodities and Lubienski must show that their interesin in this action are "not adequately represented by existing parties." Fed.R.Civ.P. 24. In Stadin v. Union Elec. Co., 309 F.2d 912 (8th Cir.1962), cert. denied, 373 U.S. 915, 83 S.Ct. 1298, 10 L.Ed.2d 415 (1963), the Eighth Circuit stated that the inadequate representation requirement may be shown in the following manner: ■

[B]y proof of collusion between the representative and an opposing party, by the representative having or representing an interest adverse to the intervener, or by the failure of the representative in the fulfillment of his duty.

Id. at 919. We find the Eighth Circuit’s reasoning helpful in determining whether Commodities and Lubienski’s interest are adequately represented by any of the parties involved in the condemnation proceedings between the United States and DIBC.

The following pleadings from Commodities and Lubienski’s motion to intervene demonstrates that their interests are not adequately represented by the existing parties in this action.

2. The defendant Detroit International Bridge Company (“DIBCO”) owns the Ambassador Bridge and formerly the Overland Freight Terminal which is the chief piece of land constituting the subject matter of this condemnation suit. The same people — the Manuel J. Moroun family— who own and control DIBCO also own the Ammex duty-free store on the Ambassador Bridge which is in direct competition with Commodities. Commodities is Ammex’s only competitor. The Ammex duty-free store at the Detroit-Windsor Tunnel has no competition. According to articles published in the Detroit News, May 19-21, 1991, Moroun controls a $550 million fortune. See attached chart from page 14A, Sunday Detroit News, May 19,1991, which shows the Ambassador Bridge and Ammex as Moroun holdings.

3. Over the past few years, Commodities has rebuffed offers to sell out from Mor-oun representatives.

4. Duty-free stores are supervised by the US Customs Service (“Customs”). Since March, 1988, Commodities and Customs have been involved in bitter litigation against each other. Background to this litigation is to be found in the Sixth Circuit’s decision in Commodities Export Co v US Customs Service, 888 F.2d 431 (6th Cir 1989) (sic)....

7. The three condemnations together are to constitute the site of the US Customs Cargo Inspection Facility. Although other federal agencies are involved, Customs is the key decision and policy maker for these condemnations. The third condemnation, unlike the first and the second which were initiated by the General Services Administration (“GSA”) acting for Customs, was proposed to GSA by DIBCO.

(R203: Motion to Intervene, pp. 2-3)

It is clear from Commodities and Lubien-ski’s motion to intervene that neither the United States nor DIBC will adequately represent their interests in this action. Accordingly, we find that Commodities and Lubien-ski have satisfied the third requirement for intervention as of right.

D.

As for the timeliness of Commodities and Lubienski’s motion to intervene, the district court stated that it was “not satisfied that the proposed intervenors have established that they had no way of learning of the proposed agreement before December 1991 so as to render the instant December 30, 1991 motion to intervene timely.” We review this decision for an abuse of discretion.

The Ninth Circuit’s decision in Legal Aid Soc. of Alameda Co. v. Dunlop, 618 F.2d 48 (9th Cir.1980), is helpful in reviewing the district court’s ruling on the timeliness question. The Dunlop Court held that “[a]ll of the circumstances of a case must be considered in ascertaining whether or not a motion to intervene is timely under Fed.R.Civ.P. 24.” Id. at 51. We believe the district court failed to consider all of the circumstances of this case in ruling on the timeliness of Commodities’ and Lubienski’s motion to intervene.

The MOA is dated March 28, 1991. Commodities and Lubienski filed their motion to intervene on December 30, 1991. In their motion to intervene, they concede that they were aware of “talk and speculation in the media about an agreement between DIBCO and GSA,” but that they were unaware of the “actual terms of the agreement” or the fact that the agreement “was to settle this particular lawsuit” until December 9,1991. (R203: Motion to Intervene, p. 3). Commodities and Lubienski also stated in their motion that during their negotiations with GSA they “were told by Michael Gelber, the GSA project manager for the third condemnation, that no plan was final yet and that GSA would consider alternate plans proposed by Commodities.” Id. Lubienski also filed a motion to compel discovery of certain documents regarding the condemnation proceedings involving his land. Id. at 4. The United States objected to this request on May 1, 1991, on the grounds that the documents sought were not relevant to the condemnation proceeding. Id. Lubienski argues that had the United States complied with his discovery requests, he “would have discovered the existence of [the MOA] and would have been able to move for intervention earlier.” Id.

In ruling on the timeliness of Commodities and Lubienski’s motion to intervene, the district court focused on Lubienski’s contention that he would have filed for intervention earlier had the United States disclosed the MOA pursuant to his discovery request. The district court dismissed this argument by stating that there is “no indication when [Lubienski’s] motion was filed.” (R211: Opinion and Order of Trial Court, p. 10). The court minimally addressed the timeliness issue in its written opinion, merely stating that it was “not satisfied that the proposed intervenors have established that they had no way of learning of the proposed agreement before December 1991 so as to render the instant December 30, 1991 motion to intervene timely.” Id. We think the court’s analysis and consideration of the circumstances surrounding this case was inadequate and falls below the Dunlop standard. Our review of the relevant circumstances indicates that neither Commodities nor Lubien-ski were delinquent in filing their motion to intervene. Accordingly, we hold that the district court abused its discretion in ruling that Commodities and Lubienski’s motion to intervene was untimely.

Commodities and Lubienski’s motion to intervene satisfies the four requirements for intervention as of right. Therefore, we reverse the district court’s ruling and remand for the court to enter an order permitting intervention.

III.

The district court denied Commodities and Lubienski’s motion for preliminary injunction. We review the district court’s decision for an abuse of discretion. See International Resources, Inc. v. New York Life Ins. Co., 950 F.2d 294, 302 (6th Cir.1991), cert. denied, — U.S. -, 112 S.Ct. 2941, 119 L.Ed.2d 565 (1992).

In determining whether the district court abused its discretion in denying Commodities and Lubienski’s motion for preliminary injunction we must consider four factors:

1) Whether the plaintiffs have shown a strong or substantial likelihood or probability of success on the merits;

2) Whether the plaintiffs have shown irreparable injury;

3) Whether the issuance of a preliminary injunction would cause substantial harm to others;

4) Whether the public interest would be served by issuing a preliminary injunction.

Mason County Medical Ass’n v. Knebel, 563 F.2d 256, 261 (6th Cir.1977).

Because we hold that Commodities and Lubienski are entitled to intervention as a matter of right, the question of whether they are also entitled to a preliminary injunction must be reconsidered. Therefore, we reverse the district court’s decision denying the motion for a preliminary injunction and remand for the court to reconsider this motion in light of our decision granting intervention.

IV.

For the foregoing reasons, we REVERSE the decision of the district court and REMAND for proceedings consistent with this opinion.