DocketNumber： Civil No. 06-1645 (JP)
Citation Numbers： 277 F.R.D. 73
Judges： Fusté
Filed Date： 3/30/2011
Status： Precedential
Modified Date： 11/26/2022
ORDER
Before the Court is José Nieves-Trilla, Eugenio Alemañy-Fernández, Quintín Morales-Ramirez, Carlos Sotomayor-Rodríguez, Ramón Quiñones, José Arsuaga, R.A. De Castro, David Vélez, Judith Torres-Medina, Federico Cedó-AIzamora, Carlos M. Franco, Peter Trías-Grimes (represented by attorney Héctor Meléndez-Cano), Carlos Ríos-Her-nández, Carlos Rivera-Davis, Rubén Vélez-Torres, Pablo Valentín-Torres, and Carlos Pérez-Zavala’s (“Putative Intervenors”) motion (No. 508) requesting intervention as a matter of right, an extension of the opt-out
I.
INTRODUCTION
On June 27, 2006, Class Plaintiffs filed the instant class action against Colegio de Abo-gados de Puerto Rico (“Colegio”) alleging that Colegio had violated the First Amendment rights of its members. Thereafter, Class Plaintiffs moved to certify two classes, one for declaratory relief and one for damages, and moved for summary judgment arguing that the decision in Romero v. Colegio de Abogados de Puerto Rico, Civil Case No. 94-2503, had preclusive effect in the instant action.
On July 31, 2008, the Court certified both of the requested classes. The damages class, certified under Fed.R.Civ.P. 23(b)(3), consists of all attorneys practicing in the Commonwealth of Puerto Rico local courts from 2002-2006, who were obligated to pay Colegio their yearly annual membership renewal fee in order to practice law in this jurisdiction. The Court then entered summary judgment and Final Judgment for the Class Plaintiffs on September 25, 2008, finding that Colegio’s compulsory life insurance program violated the federal constitution.
Colegio appealed. On July 23, 2010, the First Circuit Court of Appeals issued an opinion in which it affirmed this Court’s finding of liability, that Colegio breached its members federal constitutional rights, and the Court’s decision to grant injunctive relief. The First Circuit also affirmed the classes certified in this case. However, the First Circuit vacated this Court’s Judgment insofar as it determined the amount of damages. The First Circuit ordered the Court to provide class members with notice including their right to opt-out. After the expiration of the notice period, the First Circuit authorized the Court to reinstate the damage award as calculated before but this time excluding damages otherwise attributable to those who opted-out of the class.
After the case was remanded, the parties and the Court began, on September 2, 2010 (No. 168), the process of preparing a notice to be issued to class members with the Court-approved opt-out procedures. Prior to the Class Action Notice establishing the opt-out procedures being issued and as early as October 18, 2010, various petitions were filed with the Court requesting to opt-out of the damages class. Also, prior to the issuance of the Class Action Notice and to the Court approving the procedures for opting-out, Co-legio began issuing communications (Nos. 183 and 188) to class members requesting that they opt-out through a form distributed by Colegio.
As such, Class Plaintiffs filed a motion for a protective order arguing that the communications being disseminated by Colegio were misleading. After considering the arguments, Judge Jaime Pieras, Jr. determined that the communications issued by Colegio were both misleading and aimed at coercing class members into opting-out (No. 202). Judge Pieras also determined that the opt-out forms submitted through the electronic filing system would not be considered valid since class members had not had the opportunity to receive the neutral Class Action Notice with the Court-approved opt-out procedures and since class members could have easily have been misled by Colegio’s communications. Accordingly, Judge Pieras entered a narrowly tailored protective order precluding Colegio from communicating di
The Class Action Notice in this case was officially mailed on January 26, 2011 to class members utilizing the addresses produced by Colegio. Said notice established a simple Court-approved procedure for opting-out and provided class members with a neutral and accurate account of the proceedings in this case.
After the Class Action Notice was sent, Colegio decided to violate the protective order in this case and began disseminating more inaccurate and misleading information to class members. There is no need to go into the misinformation disseminated by Co-legio as said misinformation has been accurately summarized in multiple orders including the Court’s order finding Colegio in civil contempt (Nos. 319, 384, and 398).
Putative Intervenors filed their motion on March 25, 2011. In it, they argue that: (1) they should be allowed to intervene as a matter of right; (2) the opt-out period should be extended or, alternatively, that the Court should permit them to consign with the Court any damages they are entitled to in lieu of requiring Colegio to pay said damages; (3) the damages class should be decer-tified for failure to comply with the adequate representation requirement;
II.
INTERVENTION AS A MATTER OF RIGHT
To intervene as a matter of right under Rule 24(a)(2), “a putative intervenor must establish (i) the timeliness of its motion to intervene; (ii) the existence of an interest relating to the property or transaction that forms the basis of the pending action; (iii) a realistic threat that the disposition of the action will impede its ability to protect that interest; and (iv) the lack of adequate representation of its position by any existing party.” R & G Mortgage Corp. v. Federal Home Loan Mortgage Corp., 584 F.3d 1, 7 (1st Cir.2009). Failure to meet any one of these requirements will doom the attempt at intervention. Id. Also, a motion to intervene “must state the grounds for intervention and be accompanied by a pleading that sets out the claim or defense for which intervention is sought.” Fed.R.Civ.P. 24(c) (emphasis added).
A. Federal Rule of Civil Procedure 24(c)
Putative intervenors argue that they meet all the requirements for intervention as a matter of right. Said argument fails. As the Court already made clear in this case, Rule 24(c) requires that any motion to intervene must be accompanied by a pleading setting forth the claims or defenses against Colegio for which intervention is sought.
The requirements under Rule 24(c) are mandatory. Public Citizen v. Liggett Group, Inc., 858 F.2d 775, 783-84 (1st Cir.1988). Even though the Court had previously made clear that Rule 24(c) had to be complied with (No. 480), the Putative Intervenors surprisingly failed to comply with the requirement of accompanying their motion to intervene with any pleading setting forth their claims and defenses against Colegio. Because the
B. Timeliness of Motion for Intervention as a Matter of Right
Even though the Court had denied Putative Intervenors’ motion to intervene, the Court will analyze another requirement for intervention which Putative Intervenors fail to meet.
Four factors are generally involved in “the timeliness inquiry: (i) the length of time that the putative intervenor knew or reasonably should have known that his interests were at risk before he moved to intervene; (ii) the prejudice to existing parties should intervention be allowed; (iii) the prejudice to the putative intervenor should intervention be denied; and (iv) any special circumstances militating for or against intervention.” R & G Mortgage Corp., 584 F.3d at 7.
Said factors weigh against allowing intervention in this case. This case has been ongoing for close to five years and is near its conclusion. The motion to intervene was filed on March 25, 2011. That is around two months after Class Action Notice was provided and one month after the opt-out period concluded.
1. Length of time
Timeliness is an issue that is fact-sensitive and depends on the totality of the circumstances. Banco Popular de Puerto Rico v. Greenblatt, 964 F.2d 1227, 1230-31 (1st Cir.1992). Of high relevance in said timeliness inquiry is the status of the litigation at the time of the request. Id. at 1231. As the litigation approaches its conclusion, the scrutiny attached to the request for intervention intensifies. Id.
This case is near its conclusion. The opt-out period has concluded and the Court is finalizing the process of compiling the final opt-out list. In essence, all that is remaining is to complete the process of recalculating damages and then Final Judgment can be entered. The Court has established liability and entered injunctive relief, and has been affirmed by the First Circuit on these matters.
In the instant case, the Court finds that Putative Intervenors were either aware or should have reasonably been aware that the membership fees they paid Colegio were implicated in this case prior to issuance of the Class Action Notice. As early as December 8, 2006, Putative Intervenors should have been aware of this class action and that it implicated the membership fees they paid to Colegio. On said date, Colegio’s President at the time, Celina Romany-Siaca, sent a letter to all of Colegio’s members, such as the Putative Intervenors, informing them that this class action had been filed and that it implicated the use of Colegio’s membership fees to pay for the life insurance (No. 368-1).
Also, the Court notes that the Putative Intervenors’ claims would fail even if Putative Intervenors did not become aware or should not have become aware of their interest in this case until the issuance of the Class Action Notice. The Class Action Notice, issued around two months prior to the filing of the instant motion, set out the procedures to be followed in order to opt-out, including that the opt-outs had to be postmarked on or before February 26, 2011. The Class Action Notice further clarified, at section XII, that any class member who did not timely postmark their opt-out would remain in the class. As such, Putative Intervenors were aware or should have been aware at least two months prior to the filing of their motion of the strict deadline for opting-out, of the exact procedures for opting-out, and of the consequences of staying in the class.
However, Putative Intervenors did not file the instant motion to intervene, requesting that the time period for opting-out be extended, until almost a month after the period for opting-out had concluded. Such delay is unacceptable. This is especially the case in a situation such as this one, where Putative Intervenors were aware or should have been aware of the deadline prior to the expiration to said deadline and yet they did nothing. Also mitigating against a finding of timeliness is the fact that a party in this case filed a motion for an extension of time to opt-out on February 18, 2011 (No. 359). Unlike Putative Intervenors’ motion, said motion was filed prior to the expiration of the opt-out period. As such, the Court finds that the instant motion should not have been filed almost two months after Putative Interve-nors should have been aware of the deadline for opting-out and one month after the deadline for opting-out had passed.
2. Prejudice to existing parties should intervention be allowed and prejudice to Putative Intervenors should intervention not be allowed
The Court notes that the prejudice to existing parties would greatly outweigh any prejudice suffered by the Putative Intervenors. Specifically, class members who have chosen to stay in the class would be greatly prejudiced by any further delay. They have been the victims of Colegio’s willful violations of their First Amendment rights since 2002. However, Colegio has not provided them with the compensation they deserve for the damages suffered. Any further delays, such as the one requested by Putative Intervenors, would prejudice them.
On the other hand, the Court finds that Putative Intervenors would suffer almost no prejudice by the denial of their request for an extension of time to opt-out. If their motion is denied, then they would be forced to receive the damages they are entitled to. However, any prejudice that could arise from receiving damages would be severely limited when one considers that Putative Intervenors are responsible for the situation they are in. Putative Intervenors were provided with a clear deadline for opting-out. They failed to
Based on the previous discussion, the Court finds that in addition to failing to meet the requirements set forth at Fed.R.Civ.P. 24(c), Putative Intervenors’ motion fails to meet the timeliness requirement for intervention as a matter of right. Accordingly, Putative Intervenors’ motion is hereby DENIED.
III.
ARGUMENTS OF PUTATIVE INTERVENORS
Even though the Court has already determined that Putative Intervenors have failed to meet the requirements for intervention as a matter of right, the Court will analyze them arguments on the merits.
Putative Intervenors present three main arguments supporting their request for relief: (1) that their interest have not been adequately represented; (2) that the opt-out period was not long enough; and (3) that they disagree with the Court’s decision at docket number 504.
A. Lack of Adequate Representation
Putative Intervenors’ arguments lack merit. As the Court had already explained in response to a previous motion filed by Putative Intervenors’ counsel, the representation provided by Class Plaintiffs to the entire class has been more than adequate (No. 464). Class Plaintiffs have successfully litigated the merits of this action and ensured that Colegio will no longer be able to violate the First Amendment rights of its members.
Putative Intervenors blame Class Plaintiffs for the protective order entered against Co-legio and argue that said protective order was against their interests. Putative Inter-venors attempt to lay the blame for their inability to communicate with Colegio on Class Plaintiffs. They are mistaken. Cole-gio is the only party responsible for the inability of Putative Intervenors to communicate with Colegio regarding the issues in this case. As explained in many other orders in this case, since the Romero decision in 2002, Colegio has been engaging in a campaign to mislead and misinform class members about their rights and about this case (Nos. 202, 319, and 398). Colegio is also the party who had been violating the First Amendment rights of its own members. Said deceptive tactics left the Court with no alternative other than entering a narrowly-tailored protective order to protect the interest of every class member in making an informed decision about whether to opt-out.
Putative Intervenors also argue that their interests have not been adequately represented by Class Plaintiffs because they opposed Colegio’s request to send out an opt-out form and because they contributed to the development of a confusing Class Action Notice. With regard to Colegio’s request for an opt-out form, Putative Intervenors are referring to the request made by Colegio on January 31, 2011 (No. 297). That is five days after the Class Action Notice with the Court-approved opt-out procedures had been mailed. Putative Intervenors’ are incorrect. The objections raised by Class Plaintiffs to the proposed form were raised in the interests of all class members, such as the Putative Intervenors, because they helped prevent confusion among class members.
As the Court explained when denying Co-legio’s request (No. 305), providing an opt-out form after the Class Action Notice had been mailed with specific instructions for opting-out would have created confusion. The Class Action Notice provides instructions on how to opt-out and no mention is made of an opt-out form. Confusion would have been created by providing an opt-out form because class members would be asked to follow a different procedure than that set out in the Class Action Notice. Aso, class members who had complied with the procedures set out in the Class Action Notice would face uncertainty as to whether they have properly opted-out since they did not mail the form. Contrary to Putative Intervenors’ argument, the only way Class Plaintiffs could have been said to inadequately represent Putative In-tervenors’ interests would have been if they had done what Putative Intervenors suggest.
The suggestion that Class Plaintiffs advocated for a Class Action Notice that was confusing is ridiculous. The first section on the first page of the Class Action Notice is entitled “Summary of Important Points.” The entire section is in bold to capture the attention of class members. The first two sentences of said section make it clear that those who received the Class Action Notice are part of a class and that they have to exclude themselves if they do not want to be part of the class. Aso, said section makes clear that there is a form attached to the Class Action Notice to change addresses and that the procedures for opting out are found in this form.
Section XII of the Class Action Notice is clearly titled “How do I exclude myself from the judgment[.]” In said section, the procedures for opting-out are explained. The procedures are incredibly simple. Aso, the Class Action Notice has a Change of Address Form attached to it which states “[b]y submitting this Change of Address Form, I am requesting that any amount collected in satisfaction of the judgment in my favor in Brown v. Colegio de Abogados de Puerto Rico be sent to the New Address listed above.” Said statement could not make it any clearer that it was not an opt-out form, but instead was for class members to change their address to ensure that payment was received. The Class Action Notice also provided them with all the information on this case, on class members’ rights, and on the consequences of not opting-out. Said Class Action Notice provides everything that the First Circuit made clear was required to comply with due process and the Federal Rules of Civil Procedure. Brown, 613 F.3d at 51 (explaining what needed to be included in the Class Action Notice).
The Class Action Notice was mailed to class members, published on Colegio and this Court’s website, and information on opting-out was made available via website and a toll-free phone.
For the reasons explained above, the Court finds that Putative Intervenors’ arguments regarding lack of adequate representation fail.
B. Length of Opt-Out Period
Putative Intervenors also request an extension to the opt-out period. They argue that the time given to opt-out was insufficient. The Court need not waste time on this issue. Said request is DENIED. An explanation as to why the length of the opt-out period was more than sufficient is provided in the section below.
C. Denial of Attorney Carlos Del Valle’s Motion
On March 23, 2011, Attorney Carlos Del Valle (“Del Valle”) filed a motion (No. 503) on behalf of Judge Jaime B. Fuster (“Judge Fuster”), who passed away in December 2007, requesting to be opted-out of the class or, alternatively, requesting the creation of a subclass of attorneys who failed to opt-out and who wish to cede to Colegio any damages they are entitled to.
The Court denied (No. 504) the motion explaining that the Class Action Notice provided the procedures for opting-out including the deadline for postmarking opt-outs. The Court then explained that if his heirs complied with said procedures, then Judge Fus-ter would be opted-out. The Court also made clear that it would not create the proposed subclass. Class members or the heirs of class members who failed to opt-out would receive damages and, thereafter, said class members or their heirs could do as they wish with the money.
The Putative Intervenors argue that such a remedy does not conform to the interests of the Putative Intervenors and to those of Del Valle’s proposed subclass. They argue that it makes no sense for the Court to issue an award on their behalf when they have no interest in receiving the money. Putative Intervenors state that a more equitable result would be to either extend the opt-out period or to allow the Putative Intervenor to consign the damages they are entitled to with the Court.
Putative Intervenors’ argument fails. Putative Intervenors had the chance, like every other class member, to opt-out by complying with the Court-approved procedures. From the Putative Intervenors’ motion, it is clear that they did not.
An extension of time to opt-out makes no sense. As has already been explained, the opt-out procedures were extremely simple and could have been complied with. Further, the month long period was more than sufficient for Putative Intervenors to opt-out. This is evidenced by how around 6,000 class members managed to opt-out. The Putative Intervenors have no one to blame for not opting-out but themselves. Granting any extensions would only serve to delay the interests of the large number of class members who chose to stay in the class and who had their rights trampled by Colegio. Also, said
The Court also clarifies that the alternative relief suggested by Del Valle and sought by the Putative Intervenors is illogical. In essence, they argue that those class members who did not opt-out by complying with the Court-approved procedures should be given a second chance to opt-out by ceding their damages to Colegio. This is ludicrous. If the Court were to adopt said remedy, then it would render the opt-out process utterly worthless. It makes no sense for the Court to establish procedures for opting-out if it will then allow class members who fail to comply with said procedures to opt-out. As the Court has made clear, it will not provide special treatment to the Putative Intervenors for their own non-compliance.
IV.
CONCLUSION
Thus, the Court hereby DENIES the motion (No. 508) filed by the Putative Interve-nors and the motion (No. 509) to join filed by Varela and Fernós.
IT IS SO ORDERED.
. Also before the Court is Antonio Fernós ("Fer-nós”) and Pedro Varela's ("Varela”) motion to join (No. 509). Said motion is DENIED.
. The Court also notes that Colegio was aware since the Romero decision in 2002 that its compulsory life insurance program violated the First Amendment. However, Colegio ignored said decision and continued to make the payment of the life insurance mandatory. Further, Colegio did not fully advise its members that they no longer had to purchase the insurance, threw obstacles in front of those trying to opt-out, delayed refunds, and even moved to disbar one individual who refused to pay that portion of his dues attributable to the insurance program. Brown v. Colegio de Abogados de Puerto Rico, 613 F.3d 44, 49 (1st Cir.2010).
. Such a neutral and accurate notice was necessary in order to rectify the misleading information previously disseminated by Colegio.
. The Court notes that some of the arguments raised by attorney Judith Berkan regarding de-certification were already raised by her in a separate motion attempting to represent other attorneys (No. 341) and rejected because they lacked merit (No. 464).
. The Court clarifies that the fact the Court will address only one of the other requirements for intervention should not be interpreted as implying that Putative Intervenors meet the other requirements for intervention. The Court will limit its analysis to the timeliness issue for the sake of brevity. A particularly-weak argument is that their position has not been presented by any of the parties. In presenting said argument, the Putative Intervenors’ counsel in particular questions the legal strategy chosen by Colegio’s counsel. This attack is unwarranted. Colegio’s counsel has vigorously represented Colegio to the best of their abilities. However, no attorney could change the simple truth that has become clear in this case: Colegio willfully violated the First Amendment rights of it own members. Furthermore, the same legal representation that Putative Intervenors’ counsel questions is composed of the same attorneys who raised essentially the same arguments raised by Putative Intervenors in this motion, that the opt-out period should be extended, over a month prior to the Putative Intervenors filing the instant motion (Nos. 359, 365 and 449).
. Further evidence that Putative Intervenors should have been aware of this case and that their membership fees were implicated comes from another letter, dated June 5, 2009, made available to the public in Colegio’s website (No. 480-2). Said letter was prepared by Colegio’s attorneys and directed at Colegio’s President.
. The Court notes that consigning the funds with the Court would not alter this calculus because to do so would serve to reward Putative Interve-nors for their non-compliance. Furthermore, if the Court were to allow Putative Intervenors to consign the funds after failing to opt-out, the Court would be undermining the opt-out process established in this case hy allowing class members who did not opt-out to opt-out. That is essentially what Putative Intervenors’ proposed alternative relief would accomplish. It makes no sense to allow a class member to opt-out, even though he or she did not comply with the opt-out procedures.
. The Court also has to comment on an "allegation” made by Putative Intervenors in their motion. Specifically, they argue that, "[o]n information and belief," the number of attorneys similarly situated to Putative Intervenors could be in the thousands (No. 508, p. 9). The basis for such statement is that in addition to the 17 Putative Intervenors there were allegedly around two dozen other attorneys who also wanted to cede their damages to Colegio. Accepting such an allegation would require quite a leap of faith on the part of the Court. The Court respectfully declines Putative Intervenors’ invitation. Quite frankly, the argument that the number could be in the "thousands” based on the information presented by Putative Intervenors seems more like an uneducated guess than a reasonable inference or anything that could be classified as arising from "information and belief."
. Had Class Plaintiffs not performed their duty of informing the Court of Colegio’s tactics, then Putative Intervenors would have an argument that Class Plaintiffs have not adequately represented their interests. Also, the Court's decision to enter the protective order was further justified by how Colegio willfully violated the protective order in an attempt to mislead class members (No. 319).
. The Court notes that had Class Plaintiffs done as Putative Intervenors suggest and not objected to the proposed form, then the Court would be in the same situation of Putative Intervenors arguing that Class Plaintiffs failed to adequately represent their interest. Except that their argument would be that Class Plaintiffs failed to adequately represent their interest by not objecting to Cole-gio’s proposed opt-out form which confused Putative Intervenors by contradicting the instructions found in the Class Action Notice.
. Putative Intervenors suggest that some of them either did not receive the notice or did not have the means to access the electronic information. When they called Colegio for information, they argue that they were left without recourse because Colegio could not provide them with any
. The Court notes that one of the Putative Inter-venors, R.A. De Castro, alleges that he mailed an opt-out but that he does not appear on the opt-out list. The Court is not aware as to whether he is or is not on the opt-out list. However, if he is not on the list, it is likely because he failed to comply with some of the requirements for opting-out or he mailed it to the incorrect address.