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Chester, NY v. Laroe Estates, Inc.

United States Court of Appeals for the Second Circuit · Civil Procedure

Civil ProcedureInterventionArticle III StandingRule 24Rule 24intervention as of rightpermissive interventionArticle III

Facts

Sherman sued the Town alleging a regulatory taking involving the MareBrook development property, and that suit remained pending after the Second Circuit previously remanded it. Laroe claimed it had contractual and equitable ownership interests in the same property through 2003 and 2013 agreements with Sherman and had advanced more than $2.5 million toward the project. After remand, Laroe moved to intervene under Rule 24, asserting that it owned the property at issue. The district court denied intervention without deciding the Rule 24 questions, concluding instead that Laroe lacked standing to assert its own takings claim.

Issue

Must a proposed intervenor independently demonstrate Article III standing when the original parties already present a genuine case or controversy? Relatedly, may intervention be denied as futile merely because the proposed intervenor may lack a stand-alone claim?

Rule

Where the underlying litigation already satisfies Article III's case-or-controversy requirement, a proposed intervenor need not independently establish standing to intervene. In addition, a proposed intervenor on the plaintiff's side need not possess an independent stand-alone claim if it advances the same legal theories and seeks substantially the same relief as the existing plaintiff. The proper inquiry is whether the applicant satisfies Rule 24, including timeliness, interest relating to the property or transaction, practical impairment, and inadequate representation.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Nadia Flores sued the City of Denver in federal court, alleging that a permit regime effected a regulatory taking of a parcel she had been developing. While that suit was still active, Red Mesa Development, LLC moved to intervene on Nadia's side, claiming a contract-based ownership interest in the same parcel and seeking the same takings remedy; Denver argues the motion must be denied because Red Mesa cannot independently satisfy Article III standing.

How should the court rule on Denver's Article III objection?

Explanation. The majority held that where the existing litigation already satisfies Article III's case-or-controversy requirement, there is no separate need to impose standing on the proposed intervenor. The proper inquiry is Rule 24, not whether the intervenor could independently establish constitutional standing. (Derived from Chester, NY v. Laroe Estates, Inc. (n.d.).)