Flynn v. Hubbard ( 1986 )

BOWNES, Circuit Judge.

The question in this case is whether intervention under Federal Rule of Civil Procedure 24(a)(2) or 24(b)(2) was properly denied where the sole named defendant has, as yet, failed to appear. The plaintiff-appellee, Michael J. Flynn, is a Massachusetts attorney who has sued various Churches of Scientology and individual Scientologists over a number of years. L. Ron Hubbard, the defendant, is the founder of Scientology. On September 7, 1983, Flynn brought the complaint in this case naming Hubbard as the sole defendant and alleging that Hubbard had caused a wide range of torts to be committed against him.

The complaint alleges a written conspiracy by Hubbard and his individual and organizational agents and employees “to destroy” Flynn. This conspiracy was carried out, it is alleged, by various named Scientology organizations and individuals over which Hubbard has absolute authority. The torts alleged to have been committed at Hubbard’s direction are: malicious abuse of process; malicious prosecution; intentional infliction of emotional distress; trespass; conversion; interference with contractual rights; invasion of privacy; unfair or deceptive practices in violation of Mass.Gen.Laws Ann. ch. 93A; assault and battery; and violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961-68. There are no allegations in the complaint that Hubbard, acting by himself, committed any torts against Flynn; all torts it is alleged were committed by Hubbard’s agents and/or employees.

The putative intervenors are the Church of Scientology of California (CSC) and Mary Sue Hubbard, wife of the defendant. Both are named in the complaint as eoconspirators. In addition to filing motions to intervene, CSC and Mary Sue Hubbard filed answers to the complaint. Mary Sue Hubbard also filed a counterclaim for malicious prosecution, abuse of process and libel. We note in passing that the tone, tenor, and language of the voluminous pleadings, affidavits and exhibits filed in this case (over 1,500 pages) is, at times, so accusatory, emotional and vitriolic as to make the reading of them a decidedly unpleasant chore.

CSC identified four “interests” that would be impaired or impeded unless intervention was allowed:

1. an interest in preventing its own actions, many of which it claims are protected under the first amendment or state law, from serving as a predicate for a judgment against the founder of the church and its spiritual leader;

2. an interest in defending both its own reputation and that of its revered founder;

3. an economic interest based on its fear that plaintiff will attempt to enforce any judgment by levying on church property;

4. an interest in preventing plaintiff from making offensive collateral estoppel use of a default judgment in the present action in other litigation now pending elsewhere against the church.

We note that all of these interests are based on the assumption that the defendant will not appear and there will be a default judgment against him.

Mrs. Hubbard asserted two interests that would be impaired unless she could intervene:

1. an economic interest based on the claim that she is wholly dependent on the defendant for her support and that a depletion or diminution of his assets will have an adverse effect on her and deprive her of her inheritance;

2. an interest in protecting her reputation which she claims is impugned by the allegations in the complaint.

Her interests, as with those of CSC, are based on the assumption that defendant will not appear and there will be a default judgment.

After a lengthy hearing on April 15, 1985, the district court, on April 22, 1985, denied the motions to intervene. No written opinion stating the reasons for the decision issued. Plaintiff’s motion for substituted service on defendant was granted on May 31, 1985, and service was made accordingly.

In this circuit, an immediate appeal lies from the denial of a motion to intervene under Rule 24(a)(2). Kartell v. Blue Shield of Massachusetts, Inc., 687 F.2d 543, 548 (1st Cir.1982). The parameters of appellate review are, however, not so clear. We have held that “[t]he district court is to exercise its discretion in determining timeliness, and its ruling will not be disturbed on review unless there is an abuse of discretion.” Chase Manhattan Bank v. Corporación Hotelera de Puerto Rico, 516 F.2d 1047, 1049 (1st Cir.1975). The Second Circuit has applied the abuse of discretion standard to all 24(a)(2) findings because of “the great variety of factual circumstances in which intervention motions must be decided.” United States v. Hooker Chemicals & Plastics Corp., 749 F.2d 968, 991 (2d Cir.1984). But here, we are faced with a question of law: Can intervention be granted when the only defendant in the case has not appeared. This means that the standard of review is whether the court committed legal error in denying intervention.

Both putative intervenors make it clear that it is the failure of defendant to appear that has prompted their motions to intervene. They argue that Hubbard will not appear, a default judgment will be entered against him and they will be irreparably harmed if they cannot intervene. In her counterclaim, Mary Sue Hubbard states: “8. Scientology Founder L. Ron Hubbard went into seclusion in approximately March, 1980, and has not been seen by his family, or by any Church office, since that date.” Plaintiff, on the other hand, asserts that Hubbard will appear to prevent a default judgment.

We are in no position to determine whether Hubbard will or will not appear. We do know, however, that failure of a defendant to appear is a unique reason for intervention. We have been unable to find any federal cases in which intervention has been allowed or denied under Rule 24 because the defendant has failed to appear. This does not, of course, automatically preclude intervention; it does mean, however, that we must examine the law carefully to determine if intervention is warranted.

Federal Rule of Civil Procedure 24(a)(2) provides:

(a) Intervention of Right. Upon timely application anyone shall be permitted to intervene in an action: ... (2) when the applicant claims an interest relating to the property or transaction which is the subject of the action and he is so situated that the disposition of the action may as a practical matter impair or impede his ability to protect that interest, unless the applicant’s interest is adequately represented by existing parties.

There is nothing in the Notes of The Advisory Committee on Rules adverting to intervention when the defendant has failed to appear. The wording of the rule itself suggests that it may only apply when the named defendant has appeared and is protecting his or her interests. The last phrase, particularly, referring to “existing parties” suggests a case cast in the traditional mold with a viable dispute between plaintiff and defendant.

We now turn to the case law to determine whether intervention should be permitted when the sole defendant has by deliberate choice failed to appear.¹ The seminal case on the scope and meaning of Rule 24 is Cascade Natural Gas Corp. v. El Paso Natural Gas Co., 386 U.S. 129, 87 S.Ct. 932, 17 L.Ed.2d 814 (1967). In that case, the Court reversed the district court’s denial of intervention in a divestiture suit arising from violations of § 7 of the Clayton Act. The Court explored the differences between the present rule and its predecessor. It held that intervention should be granted because Rule 24(a)(2) “recognizes as a proper element in intervention ‘an interest’ in the ‘transaction which is the subject of the action,’ ” id at 135, 87 S.Ct. at 936, and because the existing parties “have fallen far short of representing ... [the intervenor’s] interests.” Id. at 136, 87 S.Ct. at 937. Giving Cascade the broadest possible reading, we do not think it affords any basis for the proposition that if an individual has an interest in a case, as defined by the rule, he or she can intervene absent a defendant. The Court gave two reasons for allowing intervention, “an interest in the transaction” and the failure of the “existing parties” to represent the intervenor’s interests. Here, Hubbard has not appeared to date; until or unless he does, it cannot be determined whether he will or can represent adequately the interests of the putative intervenors.

Donaldson v. United States, 400 U.S. 517, 91 S.Ct. 534, 27 L.Ed.2d 580 (1971), also focused on the scope and meaning of Rule 24(a)(2). Donaldson’s income tax returns were under investigation by the Internal Revenue Service. A special agent of the IRS served summonses on the former corporate employer of Donaldson and its accountant ordering them to testify and produce records pertaining to Donaldson. Shortly prior to the issuance of the summonses, the United States District Court, acting on petitions filed by Donaldson, issued temporary restraining orders and then a preliminary injunction restraining the corporation and its accountant from complying with the summons until the court acted. The government and the IRS agent filed petitions in the same district court for judicial enforcement of the summonses. Id. at 518-20, 91 S.Ct. at 536-37. After a show cause order issued, Donaldson sought to intervene in the enforcement proceedings pursuant to Rule 24(a)(2). The district court denied the motion to intervene and ordered that the summonses be enforced. Id. at 521-22, 91 S.Ct. at 537-38. The Court held that a taxpayer may not intervene of right “simply because it is his tax liability that is the subject of the summons.” Id. at 530, 91 S.Ct. at 542. After considering Donaldson’s particular situation, the Court concluded that he did not have an interest in the enforcement proceedings within the meaning of Rule 24(a)(2). Id. at 531, 91 S.Ct. at 542. Neither the holding nor reasoning of Donaldson is of help to the putative intervenors here.

Mrs. Hubbard relies on SEC v. Flight Transportation Corp., 699 F.2d 943 (8th Cir.1983), as authority for her right to intervene based on her economic interest in the assets of her husband. In that case, the SEC commenced an action against Flight Transportation Corp., two subsidiary corporations, and William Rubin, President and Chairman of the Board of Directors and Chief Executive Officer of the three corporations. Shortly thereafter, a class action by Flight Transportation’s securities holders was commenced. This was followed by an involuntary bankruptcy petition against Flight Transportation. A stay of the bankruptcy proceedings and all proceedings in any state or federal court against the corporations and William Rubin was ordered. Joyce Rubin, wife of William, had filed a state action for divorce. She moved to intervene and for a modification of the stay order so that her divorce action could proceed. The district court denied her motion to intervene. The court of appeals reversed. It held that “Joyce Rubin may be unable, as a practical matter, to protect her interests if she cannot intervene” and that “the existing parties cannot be expected to represent Joyce Rubin’s interests adequately.” Id. at 949. William Rubin was at all times one of the defendants.

That case may be good authority for the proposition that a wife who has instituted a divorce action has a right to intervene to protect her economic marital interests in a SEC action with bankruptcy overtones against her husband and his corporations. It has no bearing, however, on a tort action like this, where the husband has failed to appear.

As already noted, we have found no federal cases allowing or denying intervention where the defendant has failed to appear. There is, however, one state case directly on point. Not surprisingly, the defendant is the same person as in the case before us, L. Ron Hubbard. In Samuels v. Hubbard, 71 Or.App. 481, 692 P.2d 700 (1984), the court held that the Church of Scientology of California, Inc., and Church of Scientology, Mission of Davis, had no right, under Oregon law, to intervene as of right in a tort action against Hubbard. As here, the plaintiff in the Oregon case alleged that Hubbard directed and controlled others to commit torts against him. The torts alleged are similar to the ones alleged here: conversion, outrageous conduct, defamation and fraud. And, as here, defendant failed to appear and the putative intervenors asserted that he would not appear. The Oregon court was careful to point out: “The record shows only that he [Hubbard] has not yet appeared.” 692 P.2d at 703 n. 1.

What CSC and Mrs. Hubbard really seek here is not intervention, but to be substituted as defendants for the defendant plaintiff chose to sue. There can be no question that plaintiff has stated a cause of action against the defendant. Plaintiff could have sued both CSC and Mrs. Hubbard but deliberately decided not to do so. If we were to allow intervention, despite defendant’s failure to appear, we would be forcing our choice of defendants on plaintiff. We see no reason why, in a tort action, the plaintiff’s choice of defendant should be nullified by substituting under the guise of intervention different joint tort-feasors than the one against whom the suit was brought. Under Federal Rule of Civil Procedure 19, the companion to Rule 24, joint tort-feasors need not be joined since each is liable for the entire amount of the recovery. State of Maine v. United States Department of Labor, 669 F.2d 827, 832 (1st Cir.1982); 7 C. Wright & A. Miller, Federal Practice and Procedure § 1623 at 241 (1972). The same reasoning applies to intervention under Rule 24(a)(2).

It would be premature to decide now whether the interests asserted by CSC and Mrs. Hubbard meet the requirements of Rule 24. Although we disagree with both intervenors as to the effect of a default judgment on them,² it is the defendant’s willful action in failing to appear that has subjected them to whatever risks such a judgment may pose. There is and can be no suggestion that this is a collusive suit between plaintiff and defendant in an attempt to somehow indirectly impose liability on CSC and Mrs. Hubbard. Plaintiff has made defendant the sole target of his action. Whatever carom effect may occur is the direct result of defendant’s failure to appear. We hold that because the sole defendant has chosen not to appear in this tort action, there can be no intervention by the joint tort-feasors under Rule 24(a)(2) until and unless the defendant appears.

Intervention is also sought under Rule 24(b)(2). This allows intervention “when an applicant’s claim or defense and the main action have a question of law or fact in common.” The rule further states: “In exercising its discretion the court shall consider whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties.” Our opinion makes it clear that the district court did not abuse its discretion in denying permissive intervention.

Affirmed. Costs to appellee.

1 . No suggestion has been made that defendant’s physical or mental condition has prevented his appearance. We take judicial notice that a science fiction book by him, The Invaders Plan, was published after oral argument and received a favorable review in the Sunday Book Review section of the New York Times.

2 . It is black letter law that those not a party to an action are not bound by an adverse judgment against the named defendant.