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New Plaintiffs Must Intervene to Join A Class Action

January 26, 2018

What is the proper way for a new plaintiff to join a class action, and should it matter to defendants? Defendants often do not give these questions the consideration they should, even though the joinder of new plaintiffs is a commonplace of class action practice.

In an ordinary case, the proper way for a new plaintiff to join as a party is by intervening pursuant to Rule 24. A putative or certified class action is no different, and many plaintiffs’ counsel will follow the proper procedure, but others try to skip intervention and add plaintiffs merely by filing an amended complaint adding the new plaintiffs’ names. That is, the original plaintiff or plaintiffs simply files a motion under Rule 15 for leave to file an amended complaint that includes new plaintiffs.

It should be obvious that a mere Rule 15 motion is an improper way to add plaintiffs to a pending case. Rule 15 governs amendment of pleadings, not joinder or addition of parties. It is Rule 24 that permits the joinder of new parties, and the procedure is intervention. Think of Am. Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974), where new plaintiffs intervened after class certification was denied.

Plaintiffs’ counsel also sometimes want to “substitute” a new plaintiff for the original one when a problem with the original plaintiff’s claim is found. The rules do provide for substitution of parties, but only in cases of death, incompetency, or transfer of interest – all situations in which the new plaintiff steps into the shoes of the original one to prosecute the same claim. See Fed. R. Civ. P. 25. The tactical replacement of one putative representative plaintiff is not a substitution. Members of an alleged class are separate parties with separate claims, and Rule 25 does not apply to such a change.

There is a folklore belief among some lawyers that intervention is unnecessary when a new plaintiff is represented by the same attorneys as an original one, but joint clients are still separate persons and parties, and a nonparty still must move to intervene to become a party before he or she can file any pleading like an amended complaint. If a prospective new plaintiff is represented by the same counsel, that only means counsel can file pleadings on his or her behalf. Any filing that seeks to join the new plaintiff as a party, however, tacitly seeks intervention even if it is not styled as a motion to intervene.

Should any of this matter to a defendant? Yes, it should. As a defendant, you might or might not oppose the addition or “substitution” of a new plaintiff or plaintiffs in a case  – a topic on which I have opinions I do not share here – but you should always think carefully about the process.

Why? Because the standards for intervention under Rule 24 (and those for joinder of parties under Rule 20) can have important strategic implications. Rule 24 provides for intervention as of right and by permission. Plaintiffs’ counsel typically seek to add or substitute plaintiffs because the original plaintiff(s) will not adequately represent the proposed class. Rule 24(a)(2) applies to such situations, allowing intervention as of right to a party who “is so situated that disposing of the action may as a practical matter impair or impede the movant’s ability to protect its interest, unless existing parties adequately represent that interest.” Sound familiar? Right. Rule 23(a)(4) requires a class representative to show adequate representation. In fact, the notes to Rule 24 explicitly refer to class members seeking to become parties to protect their interests.

Setting aside whether this rule has different implications for putative versus certified classes, it makes clear that a person seeking to join a class action as a new plaintiff must show that the original one is an inadequate representative of his or her interests. In some cases, when plaintiffs’ counsel seek a “substitution” of plaintiffs, they may candidly admit that the original plaintiff is an inadequate representative. Other times, however, they will resist arguing that intervention should be allowed because the original plaintiff is an inadequate representative, even though it plainly is the motivation for bringing new plaintiffs into a case. Sometimes, that is, plaintiffs’ counsel want to have their cake and eat it, too. Sometimes, an original plaintiff wants to remain a plaintiff.

In that situation, the new and old plaintiffs may have a direct conflict that is highly relevant to the defense. If discovery has shown that the original plaintiff’s claim is defective, the intervening plaintiff must move to intervene on that ground, while the original plaintiff of course must deny it. What if they are represented by the same attorneys? In situations like this, failing to require plaintiffs to follow the right procedure by moving to intervene can be a huge missed opportunity for defendants.

Rule 24(b) also provides for permissive intervention, but, under that part, a court must consider delay and prejudice. If a defendant is opposed to the addition or substitution, this may be the best ground for opposition. Rule 15’s amendment standard is the more “liberal” one that leave should be “freely granted when justice so requires.”

I once lost this argument that new plaintiffs in a class action must intervene in a federal court, when old circuit precedent had, without any real argument or analysis of this issue, affirmed the “addition” of a plaintiff by amendment. Even so, filing an opposition to the motion for leave to file an amended complaint “adding” plaintiffs provided an excellent opportunity to explain the conflicts of interest between the new and old plaintiffs to the court and lay the foundation for the defense to come. In the long run, class certification was denied, and my client was victorious for the same factual reasons we presented in opposing the “addition” of plaintiffs. The fight over procedure and standards was worthwhile. We lost the battle but won the war. And you should be alert to the issue as well. No defendant should thoughtlessly let plaintiffs skip over the motion to intervene just because a case was filed as a class action. Let’s eliminate the folklore that “class plaintiffs” can come and go as they please.

Welcome to My Legal Blog

January 14, 2012

Welcome to Litigation Complex, my blog to share insights about issues in complex litigation. My intention is to share insights about developments, strategy, and problems in the world of complex business litigation, centered around class actions, shareholder, consumer, antitrust, and other complex business disputes. I might venture into constitutional issues now and then. If you find my commentary useful, I’d love to hear from you.

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