The Threat of Intervention in Your State Court Class Action

The Threat of Intervention in Your State Court Class Action

Forum, Vol. 40, No. 1

January 2010

By: Ara Jabagchourian



A troubling yet growing threat is being raised by unscrupulous out-of-state counsel seeking to intervene with a non-California plaintiff into class actions properly filed in California state courts. This type of conduct threatens the California plaintiff’s selection of a forum and jeopardizes all progress made in the state court action. The reason such an intervention can threaten your client’s choice of a forum is because of the Class Action Fairness Act (“CAFA”) 28 U.S.C. §1332(d). Under CAFA, if the proposed plaintiff class consists of more than California residents and does not fall under an exception, the United States District Court has original jurisdiction over the action. Quite simply, by having a non-California plaintiff intervene into the action, the state court action now becomes subject to removal by the defendant.

Given the backlog of cases in United States Federal District courts here in California, especially in the Eastern District where the federal judges have the highest per capita case load in the country for federal district judges, getting your case to trial quickly depends in large part on where your case is venued. This article seeks to provide a brief analysis of the law of intervention in California and the interplay it has in today’s class action practice. Through the analysis described below, I hope to provide you with safeguards to keep your class action from being removed by an out-of-state intervener.


Intervention is a procedure that permits someone not named in an action to become a party by either joining the plaintiff or to unite with the defendant to resist the plaintiff. (Cal. Code Civ. Proc. § 387(a).) Intervention exists in two forms, either it is unconditional/matter of right or it is permissive. (Cal. Code Civ. Proc. § 387.) Where intervention is unconditional, the courts must allow the intervener into the case. Where it is permissive, the court performs a balancing test.

A. Unconditional Intervention

1. Interest in the property or transaction 
As indicated above, compulsory intervention can arise from either statute or where the intervener claims an interest in the property or transaction involved in the case. (See id., see Witkin, California Procedure (Fifth Ed. 2008) Vol. 4, p. 288 [§215].) The Consumer Legal Remedies Act is an example of a statute that provides a basis to intervene as a matter of right in a class action context, and requires the intervener to be an existing member of the proposed class. (See Cal. Civ. Code § 178I(e)(3).)

Compulsory intervention can also be sought if the intervener claims an interest in either “the property [or] transaction” involved in the underlying litigation. (Cal. Code Civ. Proc. §387(b).) Property claims are exactly what they mean, dealing with property – claims that are typically not made in a class action. (See Mylan Laboratories Inc. v. Terrence Soon-Shiong (1999) 76 Cal.App.4th 71, 79, citing California Physicians’ Service v. Superior Court (1980) 102 Cal.App.3d 91, 95-99 [“cause of action in tort does not qualify as property within the context of unconditional intervention”].)

It is usually the transaction prong that interveners use to inject themselves into the case. For this to be successful, the out-of-state intervener must show harm by the very transaction the putative in-state class seeks relief for. For instance, say your class is defined as “all California individuals who purchased product X from August 2004 through January 2009 in California.” The transactions at issue in the case only deal with those who purchased items and reside in California. Therefore, the intervener by definition has no interest in the transaction.

In addition to establishing either an interest in the property or transaction, the intervener must also demonstrate that any judgment rendered “may as a practical matter impair or impede his ability to protect that interest ….” ( Cal. Code Civ. Proc. § 387(b); see Hodge v. Kirkpatrick Development, Inc. (2005) 130 Cal.App.4th 540,554.) The basic argument here is that the intervener can bring an independent action. The standard cases supporting this prong would relate to subrogation claims.

2. Intervener must be diligent in making the motion

In order for intervention to be granted as a matter of right, the motion to intervene must be made on a timely basis. (Cal. Code Civ. Proc. § 387(a).) This means that “it is the general rule that a right to intervene should be asserted within a reasonable time and that the intervener must not be guilty of an unreasonable delay after knowledge of the suit.” (Allen v. California Water Tel. Co. (1947) 31 Cal.2d 104, 108.) The court is given discretion to detennine what is deemed timely. (Weil & Brown, California Practice Guide: Civil Procedure Before Trial (TRG 2007) ¶2:439.)The further along you are in your litigation, and the more information you have to show that the intervener knew about the litigation without bringing the motion, the stronger you are with this factor.

B. Permissive Intervention

California courts have established a multi-step procedure in order for intervention to be granted on a permissive basis. “Pursuant to section 387 the trial court has discretion to permit a non-party to intervene where the following factors are met: (1) the proper procedures have been followed; (2) the non-party has a direct and immediate interest in the action; (3) the intervention will not enlarge the issues in the litigation; and (4) the reasons for the intervention outweigh any opposition by the parties presently in the action.” (Reliance Insurance Co. v. Superior Court (1999) 84 Cal.App.4th 383, 386, citing Truck Ins. Exchange v. Superior Court (1997) 60 Cal.App.4th 342,346.)

1. Technical error

In Bowles v. Superior Court, the California Supreme Court held that it was proper to deny intervention based on the technical error of failing to allege in the complaint that “the applicants joined with plaintiffs or united with defendants or demanded anything adversely to both plaintiffs and defendants.” (Bowles v. Superior Court (1955) 44 Cal.2d 574, 589.) Failure to abide by the strict guidelines of California Code of Civil Procedure section 387 is a basis to deny tbe motion. (Id.) Although unlikely to be the sole basis of denial, a technical error will support your opposition to the motion to intervene.

2. A direct interest

The intervener must establish a direct and immediate interest in the outcome of the litigation. (Fireman’s Fund Ins. Co. v. Gerlach (1976) 56 Cal.App.3d 299, 303305; Cal. Code Civ. Proc. § 387(a).) If the intervener fails to establish this interest, the court can deny intervention. (California Assn. of Professional Scientists v. Schwarzenegger (2006) 137 Cal.App.4th 371, 380 [denying application for intervention brought by Public Employment Relations Board].) The intervener’s interest in the matter cannot be merely a consequential interest. (See Continental Vinyl Products Corp. v. Mead Corp. (1972) 27 Cal.App.3d 543, 550-551 [describing numerous instances of consequential or insufficient interest where intervention was denied].) Further, “the proposition that the outcome of litigation will have a precedential effect upon persons similarly situated does not give tbem a direct interest in its outcome.” (Id., citing Jersey Maid Milk Products Co. v. Brock (1939) 13 Cal.2d 661.)

In the class action context, only members of the putative class have the permissive right to intervene because each member is entitled to a share of any recovery in such an action; they have a direct and immediate interest in the outcome. (Mann v. Superior Court (1942) 53 Cal.App.3d 272,280; see also Lindelli v. Town of San Anselmo (2006) 139 Cal.App.4th 1499, 1505.) If the intervener is not impacted by the outcome of the settlement or judgment in tbe underlying action, there is no permissive right to intervene. Stated another way, if plaintiffs succeed or fail in the prosecution of their case, no effect will accrue on the intervener. (See also Jersey Maid Milk Products Co., supra, 13 Cal.2d at 663 [in order to intervene, the matter must be “of such a direct and immediate character that the intervener will either gain or lose by direct legal operation and effect of the judgment.”])

3. Cannot enlarge issues

Permissive intervention is not proper if it would enlarge the issues of the case. (Wright v. Jordan (1923) 192 Cal. 704, 714; Fireman’s Fund Ins. Co. v. Gerlach (1976) 56 Cal.App.3d 299, 303; Kuperstein v. Superior Court (1988) 204 Cal.App.3d 598,600-601.) Where an intervener seeks to add additional causes ofaction, they are seeking to enlarge the issues ofthe action, wbich would be a basis to deny intervention. Furthennore, iftbe intervener seeks to increase the proposed class by claiming to represent non-California plaintiffs, then the issues oftbe case are being enlarged. The intervener will have to bring a separate motion for class certification, as plaintiffs will not be required to file such a motion on behalf of the intervener.

4. Prejudice outweighs the reasons for permitting intervention

a. Original Jurisdiction of Intervener’s Complaint Is Federal Court 
Allowing intervention into a California only class action may well expose the action to a likely removal procedure. Pursuant to CAFA, a 2005 amendment to 28 U.S.C. §1332 related to Federal District Court jurisdiction, class actions now fall under the original jurisdiction of the federal court if certain factors are met. “The district courts shall have original jurisdiction of any civil action in which the matter in controversy exceeds the sum value of $5,000,000 … and is a class action in which any member of a class of plaintiffs is a citizen of a State different from any defendant.” (28 USC § 1332(d)(2)(A).) In what is known as the “home-state” exception, a district court shall decline to exercise jurisdiction if greater than two-thirds of the members of all proposed plaintiff classes are citizens of the state in which the action was originally filed and the primary defendant is also a defendant of that state. (28 USC § 1332 (d)(4).) When one plaintiff in the proposed class is from another state, the original action becomes subject to removal to federal court.

If permitted to intervene, an out-of state intervener will likely drag plaintiffs’ action along with them to federal court as the class plaintiffs will no longer be exclusively within California. (See 28 USC § 1332(d).) As discussed below, removal will cause prejudice to plaintiffs that outweighs the benefits of permitting intervention.

b. Prejudice vs. benefits 
“[I]ntervention must be denied if the reasons therefore ‘are outweighed by the rights of the original parties to conduct their lawsuit on theirown terms.'” (People ex reI. Rominger v. County of Trinity (1983) 147 Cal.App.3d 655, 661; quoting County of San Bernardino v. Harsh California Corp. (1959) 52 Cal.2d 341, 346.) The key to this argument should center on all the progress made in the case and demonstrating that it will all go to naught if the case is pulled into federal court. This would include hurdling the pleading stage, class discovery, filing for class certification, and the costs associated with those efforts amounting to nothing because the litigation will have to be restarted in federal court. Further, explain the delay that will incur and the prejudice the class will suffer if the case is moved to federal court, including the automatic stay on discovery when you seek to remand the case. Make sure to add as much factual context to this as you can in your opposition.

c. Interveners’ potential claims of prejudice 
The court may reject permissive intervention even when a “direct interest” is shown, if the interests of the original litigants outweigh the intervener’s concerns. (See Marriage of Kerr (1986) 185 Cal.App.3d 130, 134;City of Malibu v. California Coastal Comm ‘n (2005) 128 Cal.App.4th 897, 906) My office has seen arguments from intervener’s counsel claiming the effect of res judicata. In order for res judicata to apply to the intervener and the out-of-state plaintiffs, the same parties must have had a ruling against them. Res judicata, also known as “claim preclusion,” precludes the same parties from relitigating the same cause of action that has been finally determined by another court.

Three threshold requirements must be met for the doctrine to apply: 1. The issue decided in the prior adjudication must be identical with the one presented in the new action. 2. There must have been a final judgment on the merits in the prior action. 3. The patty against whom the plea is asserted must have been aparty or in privity with a party to the prior adjudication. (In re Marriage of Modnick (1983) 33 Cal.3d 897, 904;accord 40 Cal.Jur.3d Judgments §123 (1995).) In a class action, res judicata applies only to members of the certified class. (Henry v. Lee (1940) 311 U.S. 32,42.)

In Jersey Maid Milk Products Co. v. Brock, the California Supreme Court held that intervention into the underling case was improper. (Jersey Maid, supra, 13 Cal.2d at 664.) In so holding, the court held that: “[t]his judgment would in no way be binding upon the intervenors as long as they are not parties to said action, and they will be as free to pursue their business after rendition of said judgment, as they were before. They, therefore, would not gain or lose by direct operation of the judgment. The legal operation of said judgment will have no direct effect upon interveners.” (Id.; see also Kenney v. Woif.! (1948) 88 Cal.App.2d 163.)

As such, because your plaintiffs only seek to bring an action on behalf of a class of California residents, by definition, the intervener and the out-of-state class have no interest in the action -because they are not included in the proposed class. Therefore, the notion that res judicata may apply to the intervener has no basis in law or fact. The import of plaintiffs and the putative class prevailing has no legal effect on the intervener.

Furthermore, if the intervener believes that the underlying action will have a binding effect on its rights, it can further move to opt-out of the class action, thereby barring any purported claim of res judicata. Any unnamed class member who decides not to be part of the class action can move to be excluded and bring their own action. (Phillips Petroleum Co. v. Shutts (1985) 472 U.S. 797,811-812.)


Although not a prevalent practice, the practice of out-of-state interveners disrupting a state court class action has occurred. These out-of-state interveners are unsuspecting allies of defendants in these cases, as the defendants are the ones waiting to remove the case to federal court. By educating your judge to the threat the intervener poses in delaying justice to your class, the more likely the court will not disturb your choice of forum.