MacClelland v. Cellco Partnership d/b/a Verizon Wireless

Background

California Verizon Wireless customers sued Cellco Partnership d/b/a Verizon Wireless and Verizon Communications, Inc. over an administrative charge for wireless services. The complaint alleged that Verizon failed to disclose the charge and misrepresented that it was a tax or government-required fee. The court had previously denied Verizon’s motion to compel arbitration.

Class Counsel later filed additional actions in New Jersey state and federal courts involving plaintiffs from states across the country. The parties reached a $100 million settlement covering all states. Class Counsel filed a separate New Jersey Superior Court action, Esposito, to obtain approval of the settlement. That proceeding also sought an attorneys’ fee award of 33.3%.

Several unnamed plaintiffs in the New Jersey cases moved to intervene in this California case. They alleged that Class Counsel breached fiduciary duties to the class by negotiating in New Jersey to obtain a higher fee award and asked the court to order repayment of the allegedly improper fees. The Proposed Intervenors did not opt out of the settlement or object to it in the New Jersey proceeding. Other represented class members did object there on similar grounds, including the location of the settlement action and the requested fee percentage.

Rule for intervention

The Proposed Intervenors sought both intervention as of right under Federal Rule of Civil Procedure 24(a) and permissive intervention under Rule 24(b). Intervention as of right requires a timely applicant to show an interest related to the action’s subject matter, potential impairment of that interest, and inadequate protection by the existing parties. Permissive intervention allows a court to permit participation when the applicant’s claim or defense shares a legal or factual question with the main action. The court stated that failing to satisfy any one requirement defeats the motion.

Court’s reasoning

The court held that the Proposed Intervenors had no qualifying interest in the California action because no settlement was before that court for approval. The settlement and disputed fees were being considered by the New Jersey Superior Court. For the same reason, the proposed objections did not share the required connection with the California action under Rule 24(b).

The court also noted that the Proposed Intervenors cited no case allowing intervention in one court to challenge subject matter being contested in another court. Their proposed intervention could affect the potential judgment of the New Jersey court and raise concerns about one court interfering with an ongoing state-court proceeding.

The court further held that the Proposed Intervenors’ interests were represented by other class members who had already raised similar objections in the New Jersey case. The Proposed Intervenors had a forum there to present their objections, even though they chose not to participate. The court rejected their stated concern that the New Jersey court had failed to comply with notice requirements under the Class Action Fairness Act, explaining that they could have raised that issue in the New Jersey proceeding.

Disposition

The court denied the Proposed Intervenors’ Motion to intervene and stated that the order disposed of Docket Nos. 89 and 90. The court did not decide whether the Proposed Intervenors could succeed on an independent fiduciary-duty lawsuit against Class Counsel in a separate proceeding. It expressly stated that the order did not prevent such a claim.

Result

The motion to intervene was DENIED.