State Of New York v. Scalia

Background

Eighteen states challenged a final rule issued by the United States Department of Labor under the Administrative Procedure Act. The opinion identifies the challenged rule as the “Final Rule.” The five proposed intervenors were the International Franchise Association, the Chamber of Commerce of the United States of America, the National Retail Federation, the Associated Builders and Contractors, and the American Hotel and Lodging Association. They moved to intervene as defendants so they could participate in defending the Final Rule.

Intervention as of Right

Intervention is the process by which a person or organization that was not originally a party joins an existing lawsuit. Under Federal Rule of Civil Procedure 24(a)(2), intervention as of right requires a timely motion, an interest related to the lawsuit, a risk that the interest could be impaired without intervention, and a showing that the existing parties do not adequately represent that interest.

The court found that the motion was timely because the states had not shown that intervention would prejudice them or delay the case. The proposed intervenors also showed sufficient interests: some of their members could face a different, and possibly less employer-friendly, liability standard under the Fair Labor Standards Act if the court invalidated the Final Rule. They also showed that their interests could be impaired by invalidation of the rule.

The court nevertheless denied intervention as of right because the proposed intervenors did not rebut the presumption that the Department adequately represented their interests. The Department and the proposed intervenors shared the same objective—upholding the Final Rule—and the Department had already shown its intent to defend the rule vigorously. The court also reasoned that, because the case involved a challenge to the Department’s rulemaking, the proposed intervenors could not add evidence outside the administrative record relevant to that challenge. The court followed Second Circuit precedent requiring a particularly strong showing when a governmental party represents the public interest.

Permissive Intervention

The court separately considered permissive intervention under Rule 24(b). This form of intervention is discretionary and may be allowed when the proposed intervenor has a claim or defense sharing a common legal or factual question with the main action. Unlike intervention as of right, it does not require a finding that the existing party’s representation is inadequate.

The court granted permissive intervention. It found no palpable harm in allowing the organizations to participate because intervention would not unduly delay or prejudice the case. The proposed intervenors had not requested extensions of the summary-judgment deadlines, and the states would have received the organizations’ arguments even if they participated only as nonparty advisers.

Disposition

The court denied the proposed intervenors’ motion to intervene as of right and granted their motion for permissive intervention. The conclusion states that the motion to intervene is granted, and the Clerk of Court was directed to terminate the motion at docket number 76.