When class certification is denied because the named plaintiff’s claim fails for some reason, sometimes an absent class member will try to intervene rather than filing their own separate suit. Their goal is usually to attempt to certify a class for a longer time period than would otherwise be possible. If the new plaintiff files a new suit, the statute of limitations period for the proposed class claims would be shorter than if they join a suit that was pending for years. The Sixth Circuit recently addressed this issue, holding that the proposed intervenor could not demonstrate that his rights would be impaired without intervention because he could bring his own separate suit.
Grainger v. Ottawa County, – F.4th –, 2024 WL 64093 (6th Cir. Jan. 5, 2024), is one of various cases seeking to recover against counties or municipalities that foreclosed on properties for nonpayment of taxes and then kept proceeds exceeding the amount owed. (For more background, see my blog post on another Sixth Circuit case involving this issue and the juridical link doctrine.) The district court denied class certification under the Supreme Court’s decision in China Agritech, Inc. v. Resh, 138 S. Ct. 1800 (2018) (see my blog post). Under that decision, the named plaintiff (Grainger) could rely on the pendency of an earlier class action to toll the statute of limitations on his individual claims, but Grainger could not “piggyback” on that earlier class action to bring another class action where, absent class action tolling, his individual claims would have been untimely. Three days later, a new proposed plaintiff (Behovitz) who had a timely claim because his foreclosure proceeding was more recent in time, moved to intervene in Grainger’s case. For various reasons, the district court denied both intervention as of right and permissive intervention.
The Sixth Circuit affirmed, focusing on two of the four requirements for intervention: (1) whether Behovitz had a “substantial interest” in the subject matter of the case; and (2) whether his ability to protect his interest may be impaired without intervention. Behovitz argued that he had a substantial interest in seeking to pursue class claims. The Sixth Circuit concluded that this “likely does not” constitute a sufficient interest to warrant intervention after denial of class certification, noting that “carrying Behovitz’s argument to its logical endpoint could result in ‘multiple bites at the certification apple’ for class counsel” in a manner that seemed improper, but the court declined to decide the case on that basis. Instead, the Sixth Circuit ruled based on the impairment requirement, holding that Behovitz could not demonstrate impairment because he was entitled to bring his own separate suit, which would be timely, and could allege class claims (albeit for a shorter time period). To the extent Behovitz was concerned about a class action settlement that had been approved in another case, his remedy was to appeal that decision or opt out.
The Sixth Circuit also held that the district court did not abuse its discretion in denying permissive intervention. Allowing intervention would further delay the case and potentially require adding more plaintiffs who had properties in other counties, or relitigating issues about whether Behovitz could represent putative class members in counties where his property was not located.
Grainger may aid defendants in seeking to fend off or narrow the scope of successive class actions.
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