Suzanne Clarke v. Baptist Memorial Healthcare Corp ( 2011 )

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 11a0432n.06
No. 10-5164
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
SUZANNE C. CLARKE; CONISE DILLARD, ) FILED
On behalf of themselves and all others similarly ) Jun 29, 2011
situated, )
) LEONARD GREEN, Clerk
Plaintiffs, )
)
and )
) ON APPEAL FROM THE
ANNA BACHELDER, ) UNITED STATES DISTRICT
) COURT FOR THE WESTERN
Intervenor Plaintiff-Appellant, ) DISTRICT OF TENNESSEE
)
v. )
)
BAPTIST MEMORIAL HEALTHCARE )
CORPORATION; METHODIST HEALTHCARE, )
)
Defendants - Appellees. )
)
BEFORE: COLE, McKEAGUE, and GRIFFIN, Circuit Judges.
GRIFFIN, Circuit Judge.
Anna Bachelder appeals an order of the district court denying her motion to intervene. We
affirm.
I.
Plaintiffs registered nurses Suzanne Clarke and Conise Dillard filed this antitrust suit against
defendants Baptist Memorial Healthcare Corporation and Methodist Healthcare of Memphis,
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Tennessee, on behalf of “[a]ll persons employed by any defendant or co-conspirator to work in a
hospital in the Memphis [area] as [a registered nurse] at any time from June 20, 2002 until the
present,” alleging that defendants illegally conspired to depress the wages paid to registered nurses
in Memphis-area hospitals in violation of Section 1 of the Sherman Act by regularly exchanging
detailed, non-public data about the compensation each is paying or will pay its registered nurses; by
not competing with each other over compensation; by paying all registered nurses nearly the same;
and by jointly recruiting registered nurses to avoid competition.
From the outset of the litigation, there was some concern that Suzanne Clarke would not be
able to adequately represent the class because she had worked for the Nurse Alliance, an advocacy
group affiliated with the Service Employees International Union (“SEIU”). (Memorandum in
Support of Motion to Intervene at 1 (noting that counsel knew of this potential conflict “[f]rom the
outset of this litigation”).) That concern deepened when, during her deposition, Clarke “declared
that she would resist any monetary settlement in this case if it did not also reduce the nurse-to-patient
ratio in Memphis-area hospitals,” which was a primary goal of the Nurse Alliance and the SEIU.
Clarke v. Baptist Mem’l Healthcare Corp., 264 F.R.D. 375, 377 (W.D. Tenn. 2009).
The other named plaintiff, Conise Dillard, began as a viable candidate to serve as a class
representative. In August 2007, however, Dillard filed for bankruptcy protection, raising questions
regarding her adequacy. Although the deadline to add parties was August 28, 2007, plaintiffs waited
until January 4, 2008, to file a motion to amend the scheduling order to add Anna Bachelder, a
member of the plaintiff class, as a party. Clarke, 264 F.R.D. at 377. However, on February 13,
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2008, the magistrate judge denied the motion as untimely, concluding that “Plaintiffs have not
affirmatively demonstrated that they acted with due diligence in seeking to amend the scheduling
order.” Plaintiffs claim that they recognized that Dillard’s bankruptcy could pose an adequacy
problem, but they did not think it was fatal, mostly because Dillard possessed an exemption that
would allow her to personally recover at least a portion of any settlement in this case.
Plaintiffs thereafter proceeded to litigate their motion for class certification with Clarke and
Dillard as the named plaintiff putative class representatives. On September 4, 2009, the district court
denied the motion for class certification on the basis that Clarke and Dillard were inadequate class
representatives. The district court based its ruling on Clarke’s testimony, her former affiliation with
SEIU, and Dillard’s bankruptcy. Thereafter, on September 18, 2009, Bachelder filed the motion to
intervene at issue in this appeal. The district court denied the motion as untimely because “three [of
the five timeliness factors] weigh strongly in favor of finding that the intervention motion is
untimely”; “one factor . . . moderately tilts in favor of finding the motion untimely”; and the “final
factor, the point to which the suit has progressed, emphasizes the tardiness of Bachelder’s motion.”
Clarke, 264 F.R.D. at 382.
Bachelder timely appeals.
II.
Bachelder argues that the district court abused its discretion in three ways: (1) it applied the
wrong legal standard for timeliness by requiring her to intervene at the first sign that defendants
could challenge both named class representatives’ adequacy, rather than after it became “clear” that
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her interests would no longer be protected by the named class representatives; (2) it relied on
erroneous findings of fact regarding Clarke’s and Dillard’s adequacy in determining that her motion
to intervene was untimely; and (3) it misapplied the standards for timeliness by not finding that the
balance of the timeliness factors weighed in favor of granting her motion to intervene.” We address
these claims in turn.
A.
Under Fed. R. Civ. P. 24(a), intervention is proper where: (1) the application is timely; (2)
the applicant’s legal interest in the case is substantial; (3) absent intervention, the applicant’s ability
to protect her interest will be impaired; and (4) the parties already before the court cannot adequately
represent the applicant’s interests. Stupak-Thrall v. Glickman, 226 F.3d 467, 471 (6th Cir. 2000).
At issue here is the timeliness of the motion to intervene, which we assess by considering: (1) the
point to which the suit has progressed; (2) the purpose for which intervention is sought; (3) the
length of time preceding the application during which the proposed intervenor knew or reasonably
should have known of her interest in the case; (4) the prejudice to the original parties due to the
proposed intervenor’s failure after she knew or reasonably should have known of her interest in the
case to apply promptly for intervention; and (5) the existence of unusual circumstances militating
against or in favor of intervention. Triax Co. v. TRW, Inc., 724 F.2d 1224, 1228 (6th Cir. 1984). We
review a district court’s decision regarding the timeliness of a motion to intervene for an abuse of
discretion. Stupak-Thrall, 226 F.3d at 471.
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Bachelder claims that the district court applied the wrong legal standard under the third
timeliness factor because it found that she failed to intervene once she was “aware of significant and
potentially fatal obstacles to the adequacy of Clarke and Dillard” as potential class representatives
rather than after it became “clear . . . that her interests [we]re not being protected adequately by the
named plaintiff.” In support of this argument, Bachelder relies on United Airlines, Inc. v. McDonald,
432 U.S. 385, 394 (1977), where a class of airline stewardesses challenged a rule requiring them, but
not stewards, to remain unmarried as a condition of employment. After the named plaintiffs failed
to appeal the trial court’s denial of their request for class certification, McDonald, a member of the
plaintiff class, filed a motion to intervene for purposes of prosecuting the appeal. The Supreme
Court eventually granted certiorari on the timeliness question, and held that McDonald’s motion was
timely because “as soon as it became clear to [her] that the interests of the unnamed class members
would no longer be protected by the named class representatives, she promptly moved to intervene
to protect those interests.” 432 U.S. at 394.
We find Bachelder’s reliance on McDonald misplaced. Here, the district court’s
determination that Bachelder was “aware of significant and potentially fatal obstacles to the
adequacy of Clarke and Dillard as potential class representatives” on August 28, 2007, Clarke, 264
F.R.D. at 379, and thus reasonably should have known of her interest in the case at that time for
purposes of filing a motion to intervene, is not inconsistent with the Supreme Court’s finding in
McDonald. The McDonald Court was not setting an “it must be clear that an intervenor’s interests
are not being adequately protected” standard; it was applying the “reasonably should have known
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of one’s interest in the case” standard to the facts of the case.1 See also Triax Co., 724 F.2d at 1229
(finding a motion timely where “[the patent owner], upon learning of [the plaintiff’s] decision not
to appeal the judgment rendering the two patents invalid, promptly sought to file for intervention”);
Jansen v. City of Cincinnati, 904 F.2d 336, 341 (6th Cir. 1990) (finding a motion timely because it
was filed shortly after “[t]he City’s arguments in response to plaintiffs’ summary judgment motion
. . . alerted the proposed intervenors that their interest was not being adequately protected.”).
Contrary to Bachelder’s contention, it was not necessary for Clarke’s and Dillard’s alleged
conflicts to have compelled the conclusion that they were inadequate representatives, or for the
district court to have decided as much, before she should have intervened. Rather, as the district
court correctly stated, Bachelder should have intervened when she knew or reasonably should have
known of her interest. See Michigan Ass’n for Retarded Citizens v. Smith, 657 F.2d 102, 105 (6th
Cir. 1981); cf., e.g., In re Troutman Enters., Inc., 286 F.3d 359, 365 (6th Cir. 2002) (finding a
motion to intervene untimely where “[t]he Trustee began contesting the Shareholders’ standing
. . . thereby notifying the reorganized Troutman Enterprises of the possibility that its Shareholders
might not be able to adequately protect its interests”) (emphases added); In re Sonus Networks, Inc.
Sec. Litig., 229 F.R.D. 339, 346 (D. Mass. 2005) (holding that a motion to intervene was untimely
1
Indeed, the former Fifth Circuit’s decision in Stallworth v. Monsanto Co., 558 F.2d 257 (5th
Cir. 1977) cited McDonald for the proposition that courts should consider “[t]he length of time
during which the would-be intervenor actually knew or reasonably should have known of his interest
in the case before he petitioned for leave to intervene.” Id. at 264. And this court, in turn, cited
Stallworth for that proposition in Michigan Ass’n for Retarded Citizens when it laid out the third step
of the timeliness analysis applied by the district court in this case. Michigan Ass’n for Retarded
Citizens v. Smith, 657 F.2d 102, 105 (6th Cir. 1981).
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because class counsel and the intervenor had ample “notice that there was a real risk that class
certification would be denied”). Accordingly, we reject Bachelder’s claim that the district court
abused its discretion by applying the wrong legal standard for timeliness.
B.
Next, Bachelder argues that the district court abused its discretion by relying on clearly
erroneous “finding[s] of fact when it found that [she] should have known that her interests were
unprotected.” See generally Mapother & Mapother, P.S.C. v. Cooper (In re Downs), 103 F.3d 472,
480-81 (6th Cir. 1996). This argument has two parts, neither of which is persuasive.
First, Bachelder asserts that the district court’s conclusion that “Dillard’s bankruptcy filing
somehow created obligations to her creditors that conflicted with her obligations as a class
representative” is a clearly erroneous finding of fact. However, this was not a fact relied on by the
district court in making its determination that the motion to intervene was untimely; it was part of
the district court’s legal conclusion regarding Dillard’s adequacy as a class representative, which
plaintiffs have not appealed. The only facts relevant to whether Bachelder should have known of
her interest because of Dillard’s potential conflict are (1) before the deadline to add additional
parties, Bachelder’s counsel learned that Dillard had filed for bankruptcy; (2) Bachelder’s attorneys
“researched” the implications of Dillard’s bankruptcy and concluded “that Defendants had potential
avenues for challenging Ms. Dillard’s adequacy as a class representative” because of it; and (3)
“[o]ut of an abundance of caution,” Bachelder’s counsel filed a motion for leave to amend the
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scheduling order to add Bachelder as a plaintiff. These facts are undisputed, and the district court
did not abuse its discretion in relying upon them.
Second, Bachelder claims that the district court’s determination that Clarke’s testimony
showed that she would not accept a settlement that was purely monetary was clearly erroneous. In
support of this argument, Bachelder quotes Clarke’s deposition testimony at length and opines that
the only “fair characterization of [that testimony] . . . is that [Clarke] would refuse an individual
settlement, or refuse any monetary settlements that provided too little back pay to deter future
collusion or that were unaccompanied by an agreement to stop fixing wages.” However, because
Clarke was asked “If you were confronted with choosing whether or not to take a monetary
settlement in this case that did not impact the nurse-to-patient ratio, could you accept that?” and she
responded “No, I would not,” the district court’s determination that Clarke would not accept a
settlement that was purely monetary was not clearly erroneous.
C.
Finally, Bachelder asserts that the district court abused its discretion by “not finding that the
balance of the timeliness factors weighed in favor of granting [her] motion to intervene” because it
failed to consider “the purpose for which intervention was sought” and improperly analyzed “the
point to which the suit has progressed” and “the prejudice to the original parties.” We disagree.
Bachelder is correct that the district court should have evaluated the “purpose of intervention” in
terms of the importance of the legal interests asserted, see Blount-Hill v. Zelman, 636 F.3d 278, 285
(6th Cir. 2011), rather than simply concluding that the factor weighed “strongly against a finding of
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timeliness” because Bachelder and her attorneys had not made maintaining a viable class
representative “a first priority.” Clarke, 264 F.R.D. at 380. However, the district court reasonably
analyzed the “point to which the suit has progressed,”2 as well as “the prejudice to the original
parties.”3 Given the totality of the circumstances, including the facts that Bachelder employed the
same counsel as Clarke and Dillard, failed to gain admission as a party through amendment of the
scheduling order because of a lack of diligence, and waited many months until after the close of
class-certification discovery and a decision on the merits of certification before seeking to intervene,
we hold that the district court did not abuse its discretion in ruling that Bachelder’s motion to
intervene was untimely.
III.
For these reasons, we affirm the order of the district court.
2
The district court found that “several important litigation milestones have passed,” e.g.,
during the three years between the filing of Clarke’s and Dillard’s complaint and Bachelder’s motion
to intervene, it had denied defendant’s motion to dismiss; set a deadline for joining additional
parties, which elapsed; scheduled discovery as to class certification, which closed; and denied
plaintiffs’ request for class certification. Clarke, 264 F.R.D. at 379.
3
The district court noted that Bachelder admitted that upon intervention she anticipated (i)
filing a renewed motion for class certification, (ii) filing a report by a new expert, and (iii) seeking
an alternative certification of another class. Clarke, 264 F.R.D. at 380-81. It also found that the
timing of the motion would force defendants to “start from scratch” on class certification, while
plaintiffs would gain “the benefit of hindsight,” having already seen the arguments in opposition, the
district court’s “prior order denying class certification,” and “the orders of other courts in related
litigation around the country.” Id.
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