Cochran v. Accellion, Inc.

[3] 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION [7] 8 RICKY COCHRAN, et al., Case No. 5:21-cv-01887-EJD 9 Plaintiffs, ORDER DENYING MOTION TO INTERVENE 10 v. 11 ACCELLION, INC., et al., Re: Dkt. No. 57 Defendants. [12] 13 Following an unauthorized data breach of Plaintiffs’ sensitive personal information, 14 Plaintiffs filed a putative class action alleging that Defendants failed to secure their information in 15 violation of various state and federal laws. Complaint ¶¶ 1–11, Dkt. No. 1. James Jones, Tina 16 Govaert, Lenora Doty, Tracy Simpson, Elizabeth Shaw, Ann Marie Strohm, Kevin Corbett, Eula 17 Douglas, Delilah Parker, Alexander Buck, Caren-Butler Alexander, Karen Godovchik, and 18 Michael Godovchik (hereinafter “Proposed Intervenors”) seek to intervene in this action and 19 oppose preliminary approval of the Parties’ proposed settlement. Notice of Motion and Motion to 20 Intervene (“Mot.”), Dkt. 57. Plaintiffs and Defendants both oppose Proposed Intervenor’s motion 21 to intervene. Having considered the Parties’ papers and having had the benefit of oral argument 22 on October 28, 2021, the Court DENIES Proposed Intervenor’s motion to intervene. 23 I. BACKGROUND 24 In December 2020, Defendant Accellion notified its clients that it had experienced a data 25 breach. First Amended Complaint (“FAC”) ¶ 31, Dkt. No. 27. In February 2021, Kroger publicly 26 confirmed that the personal information of its pharmacy customers and employees was 27 compromised in the data breach. FAC ¶ 39; see also FAC ¶ 42 (Kroger confirmed that “names, 1 email addresses, phone numbers, home addresses, dates of birth, Social Security numbers, 2 information to process insurance claims, prescription information such as prescription number, 3 prescribing doctor, medication names and dates, medical history, as well as certain clinical 4 services, such as whether [the customer] ordered an influenza test” were released (alteration in 5 original) (citation omitted)). 6 Several lawsuits, including this action, were filed after the data breach was announced. On 7 June 30, 2021, Plaintiffs moved for preliminary approval of a nationwide class action settlement. 8 See Motion for Settlement, Dkt. No. 31. Thereafter, Proposed Intervenors moved to intervene in 9 this action. See Mot. at 1–4. Both Plaintiffs and Defendants have filed opposition briefs. Brief of 10 the Kroger Co. in Opposition to Motion to Intervene and in Opposition to Preliminary Approval of 11 Class Settlement, Dkt. No. 85; Plaintiffs’ Opposition to Proposed Intervenors’ Motion to Intervene 12 and in Opposition to Preliminary Approval of Class Action Settlement, Dkt. No. 87. On 13 September 9, 2021, Proposed Intervenors filed their reply brief. Reply in Support of Motion to 14 Intervene and in Opposition to Preliminary Approval of Class Action Settlement, Dkt. No. 89. 15 II. LEGAL STANDARD 16 A court must permit a nonparty to intervene in a pending lawsuit and gain party status if a 17 federal statute confers an unconditional right to intervene. Fed. R. Civ. P. 24(a)(1). Where, as 18 here, the nonparty does not claim a right to intervene by a federal statute, the party must show that: 19 (1) it has a ‘significant protectable interest’ relating to the property or transaction that is the subject of the action; (2) the disposition of the 20 action may, as a practical matter, impair or impede the applicant’s ability to protect its interest; (3) the application is timely; and (4) the 21 existing parties may not adequately represent the applicant’s interest. 22 Donnelly v. Glickman, 159 F.3d 405, 409 (9th Cir. 1998) (citation and quotation marks omitted); 23 see also Fed. R. Civ. P. 24(a)(2); U.S. ex rel. McGough v. Covington Techs. Co., 967 F.2d 1391 24 (“Generally, Rule 24(a)(2) is construed broadly in favor of proposed intervenors and ‘we are 25 guided primarily by practical considerations.’” (quoting United States v. Stringfellow, 783 F.2d 26 821, 826 (9th Cir. 1986))). [27] 1 If a party cannot meet the standard to intervene as of right, the Court may still allow 2 permissive intervention. See Fed. R. Civ. P. 24(b)(1)(B) (allowing intervention if the party has a 3 claim or defense that shares with the main action a common question of law or fact). An applicant 4 who seeks permissive intervention must prove that it meets three threshold requirements: “(1) it 5 shares a common question of law or fact with the main action; (2) its motion is timely; and (3) the 6 court has an independent basis for jurisdiction over the applicant's claims.” Donnelly, 159 F.3d at 7 412. Even if an applicant satisfies those threshold requirements, the court retains discretion to 8 deny intervention. See Orange Cty. v. Air Cal., 799 F.2d 535 , 539 (9th Cir. 1986) (“Permissive 9 intervention is committed to the broad discretion of the district court . . . .”). 10 III. DISCUSSION 11 Proposed Intervenors argue that this Court must permit them to intervene under Rule 12 24(a)(2) because the Parties’ proposed settlement is deficient and does not protect Proposed 13 Intervenor’s interests. See Reply at 4–5. In the alternative, Proposed Intervenors argue that they 14 should be allowed to permissively intervene under Rule 24(b)(1)(B). The Court addresses each 15 request in turn. 16 A. Intervention as of Right 17 As noted, to show a right to intervene, a party must show it has (1) a significant protectable 18 interest, (2) which may be impaired or impeded, (3) the application is timely, and (4) lack of 19 adequate representation by the existing parties. “Failure to satisfy any one of the requirements is 20 fatal to the application, and [the court] need not reach the remaining elements if one of the 21 elements is not satisfied.” Perry v. Proposition 8 Official Proponents, 587 F.3d 947, 950 (9th Cir. 22 2009). 23 Proposed Intervenors fail to identify a protectable interest that will be impaired if they are 24 unable to intervene. Proposed Intervenors argue that intervention is required because the terms of 25 the settlement are unfair. Problematically, there is no “significantly protectable interest incumbent 26 in an opportunity to object to preliminary approval,” because “the Court will make its 27 determination as to whether final approval should be granted based on the law and facts before it 1 at that point in time . . . and [will] not be influenced by previously granted preliminary approval.” 2 Lane v. Facebook, Inc., 2009 WL 3458198 , at *5 (N.D. Cal. Oct. 23, 2009) (emphasis added). 3 Thus, even assuming Proposed Interveners possess a protectable interest in the final settlement, 4 that interest alone does not support intervention at this stage. But, even assuming it did, this Court 5 has already twice heard Proposed Intervenors’ objections to the proposed settlement—first at the 6 August 2021 hearing regarding preliminary approval of the settlement and again at the hearing 7 regarding this motion. It is thus impossible for Proposed Intervenors to maintain that intervention 8 is necessary to protect their ability to object to the settlement. See Arakaki v. Cayetano, 324 F.3d 9 1078, 1083 (9th Cir. 2003). Finally, courts in this circuit have consistently held that “intervention 10 of right is unavailable” where, as in this case, the settlement agreement allows the putative 11 intervenors to protect their interests by opting out of the settlement class or participating in the 12 fairness hearing process. See, e.g., Zepeda v. PayPal, Inc., 2014 WL 1653246 , at *4, 8 (N.D. Cal. 13 Apr. 23, 2014) (“Allowing the Putative Interveners to opt out or object to the settlement in the 14 fairness hearings would be far less disruptive than allowing them to intervene, and it would still 15 preserve their interests.”). 16 Because the Proposed Intervenors have not demonstrated a significantly protectable 17 interest, the Court DENIES their motion to intervene as of right.1 18 B. Permissive Intervention 19 In the alternative, Proposed Intervenors move for permissive intervention pursuant to Rule 20 24(b). Mot. at 9. A court may grant permissive intervention when the applicant for intervention 21 shows (1) independent grounds for jurisdiction, (2) that the motion is timely, and (3) a common 22 question of law or fact with the applicant’s claim or defense and the main action. Nw. Forest Res. 23 Council v. Glickman, 82 F.3d 825 , 839 (9th Cir. 1996). 24 Although the availability of permissive intervention turns on the existence of a common 25 question of law or fact rather than the potential impairment of a significantly protectable interest, it [26] 27 1 The Court does not reach any timeliness, protectability of interest, or impairment arguments. Proposition 8 Official Proponents, 587 F.3d at 950 . 1 is discretionary. For the reasons discussed above as to why intervention is unnecessary in this 2 || case—namely that Proposed Intervenors already have been able to participate in the fairness 3 hearings—the Court declines to exercise its discretion to permit intervention. 4 IV. CONCLUSION 5 For the foregoing reasons, Fonseca’s request to intervene is DENIED. 6 IT IS SO ORDERED. 7 Dated: November 5, 2021 [9] EDWARD J. DAVILA 10 United States District Judge [16] = 17 Z 18 [27] 28 || Case No.: 5:21-cv-01887-EJD ORDER DENYING MOTION TO INTERVENE