Cochran v. Accellion, Inc.

Background

After Accellion notified clients of a data breach, plaintiffs filed a proposed class action alleging that the defendants failed to protect sensitive personal information in violation of state and federal laws. The plaintiffs later sought preliminary approval of a nationwide class-action settlement.

James Jones, Tina Govaert, Lenora Doty, Tracy Simpson, Elizabeth Shaw, Ann Marie Strohm, Kevin Corbett, Eula Douglas, Delilah Parker, Alexander Buck, Caren-Butler Alexander, Karen Godovchik, Eula Douglas, Delilah Parker, Alexander Buck, Caren-Butler Alexander, Karen Godovchik, and Michael Godovchik are identified in the opinion as Proposed Intervenors; the opinion also lists Kevin Corbett and the other named individuals as Proposed Intervenors. They asked to join the lawsuit and oppose preliminary approval of the settlement. The plaintiffs and defendants opposed the motion.

Legal standards

Under Federal Rule of Civil Procedure 24(a)(2), a nonparty may intervene as of right if it has a significant protectable interest connected to the case, the case’s resolution may impair that interest, the request is timely, and the existing parties may not adequately represent the interest. Failure to satisfy any one requirement defeats the request.

Under Rule 24(b)(1)(B), the court may permit intervention when the applicant has a claim or defense sharing a common legal or factual question with the main case, provided the request is timely and the court has an independent basis for jurisdiction. Even when those requirements are met, permissive intervention is discretionary.

Court’s reasoning

The court held that the Proposed Intervenors had not identified a protectable interest that would be impaired if they could not intervene. An opportunity to object to preliminary approval does not itself create the required interest because the court would decide whether to grant final approval based on the law and facts available at that time.

The court also noted that the Proposed Intervenors had already presented their objections at two hearings. In addition, courts in the circuit had held that intervention as of right is unavailable when a settlement allows people to protect their interests by opting out of the settlement class or participating in the fairness-hearing process. The court therefore denied intervention as of right.

For permissive intervention, the court recognized that the decision is discretionary. Because the Proposed Intervenors had already been able to participate in fairness hearings, the court declined to exercise its discretion to allow them to intervene.

Disposition

The court denied the motion to intervene as of right and declined to permit intervention. The conclusion states: “Fonseca’s request to intervene is DENIED.” The opinion does not explain the connection between Fonseca and the Proposed Intervenors identified earlier.