Cities can't intervene in state action

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Stare decisis is not a sufficient impediment to rights that would entitle a party to intervene in a pending lawsuit, a sharply divided Wisconsin Supreme Court held on Feb. 7.

As a result, a coalition of Wisconsin municipalities cannot intervene in a lawsuit filed by state employees contending that the state violates their equal protection rights by providing health insurance to employees' spouses, but not same-sex domestic partners.

In the case, six current or former state employees, and their same-sex domestic partners, brought suit against the Department of Employee Trust Funds (DETF) and others, challenging the constitutionality of sec. 40.02, which defines "dependent" for purposes of state employee health insurance.

Eight municipalities moved to intervene as parties, three of which administer their own employees' health plans through DETF.

Pursuant to sec. 803.09(1), a movant may intervene as a matter of right if it meets four requirements: (1) the motion to intervene is timely; (2) the movant claims an interest sufficiently related to the subject of the action; (3) disposition of the action may as a practical matter impair or impede the movant's ability to protect that interest; and (4) the existing parties do not adequately represent the movant's interest.

Subsection (2) governs permissive intervention, and provides that anyone may intervene if the question of fact or law is the same, and intervention will not unduly delay or prejudice adjudication of the rights of the original parties.

The basis of the request for intervention is that the municipalities would be directly affected by the outcome of the suit, because, should DETF lose, they would, like the State, have to provide health insurance to the same-sex domestic partners of their employees.

Dane County Circuit Court Judge David T. Flanagan denied the motion to intervene, either as a matter of right, or by permissive intervention.

The court of appeals affirmed in a published decision, Helgeland v. Wis. Municipalities, 2006 WI App 216, 296 Wis.2d 880, 724 N.W.2d 208. The court of appeals concluded that the municipalities met the first three requirements for intervention as of right, but that the state was adequately defending the case.

The court affirmed the denial of permissive intervention, because the municipalities sought to make a class action of the case, which would cause undue delay.

The Supreme Court accepted review, but affirmed in a decision by Chief Justice Shirley S. Abrahamson. Justice David T. Prosser wrote a dissent joined by Justices Patience Drake Roggensack and Annette Kingsland Ziegler. Justice Louis B. Butler, Jr., wrote a concurrence.

Right to Intervene

Although the Supreme Court affirmed the court of appeals, the majority concluded that the municipalities met only the first criteria — timeliness — which was not contested by the parties, and none of the final three.

The court first held that the municipalities' interests are insufficiently related to the action, because their interest is not "direct, immediate, or special."

The municipalities argued that inclusion of same-sex domestic partners in the DETF plan would impose additional costs on them, but the court dismissed this concern: "A relationship may exist between the plans that DETF offers to state employees and the DETF plans offered to the municipalities' employees. The relationship between the municipalities' interest and the subject of Helgeland's action is, however, too remote and speculative to support a right of intervention."

Impaired Interests

The court also rejected the municipalities' argument that their ability to protect their interests would be impaired if they could not intervene, because the doctrine of stare decisis would foreclose their opportunity to defend the exclusion of same-sex domestic partner coverage.

Finding no Wisconsin case on the effect of stare decisis on intervention, the court looked to federal law (federal Rule 24 is substantively identical), and found the Seventh Circuit's opinion in Bethune Plaza, Inc., v. Lumpkin, 863 F.2d 525 (7th Cir. 1988), instructive.
In Bethune Plaza, the court declared that stare decisis effects should establish impairment "infrequently" and "only when the putative intervenor's position so depends on facts specific to the case at hand that participation as amicus curiae is inadequate to convey essential arguments to the tribunal."

The majority adopted a two-factor analysis to determine whether that standard is met: whether any future action against the movant is likely to be factually distinguishable from the action into which the movant seeks to intervene; and the extent to which the action into which the movant seeks to intervene will result in a novel holding of law.

Although both factors weighed in favor of intervention, as the state employees conceded, the court nevertheless found this insufficient, reasoning, "If stare decisis were enough of a justification for the municipalities' intervention in the present case without an unusually strong showing with respect to other requirements for intervention as of right, then constitutional litigation would … become unwieldy with parties intervening as a matter of right."

Adequate Representation

Addressing the final factor, the court found that the attorney general was adequately representing the municipalities interests.

In the lower courts, the municipalities focused on former Attorney General Peg Lautenschlager's personal support of same-sex benefits. However, the court concluded that this objection was no longer relevant, since she is no longer attorney general, and insufficient in any event, because they relate solely to her personal beliefs, rather than her official conduct.

The court thus concluded that intervention as a matter of right was properly denied, because the municipalities met only the first of the four requirements.

Permissive Intervention

Turning to permissive intervention, the court held that was properly denied by the circuit court as well.

Although the question of law is identical, the court concluded that the circuit court did not erroneously exercise its discretion in concluding that the municipalities' intent to seek class certification would cause undue delay.

Accordingly, the court affirmed.

The Dissent

Three justices dissented, in an opinion by Justice Prosser, concluding that all four requirements for intervention as of right were met.

Like the majority, the dissenters looked to federal precedent for guidance. In contrast to the majority, the dissenters cited cases holding that the intervention statute is to be construed liberally, in favor of the proposed intervenor.

The dissent argued, "The fact that the plaintiffs have chosen strategically not to include in this suit any same-sex couples from Wisconsin local governments should not preclude representative municipalities from weighing in for a 'just and complete adjudication&
#39; of the controversy because, as 'a practical matter,' a decision for the plaintiffs will 'impair or impede' the municipalities' ability to protect their interests. As 'a practical matter,' this suit is equivalent to a class action."

Addressing the second requirement for intervention — that the intervenor claims an interest relating to the property or transaction which is the subject of the action — the dissent accused the majority of adding another requirement not found in the statute: that the interest be "sufficient."

The dissenters wrote, "In other words, it is not enough for a potential intervenor to satisfy all four elements or tests for intervention as of right; now, a potential intervenor must 'strongly' satisfy these elements."

The Concurrence

Justice Butler wrote a concurrence, criticizing the dissent.

Butler wrote, "simply because other entities who are not at all involved in this action are concerned that any decision rendered by a court of law might become binding precedent in some future legal action against them, the dissent asserts that as a matter of right, these uninvolved entities can essentially highjack this lawsuit from the parties and turn it into a political referendum unrelated to the action filed. Give me a break."

Analysis

Although the majority opinion affirms the Court of Appeals, the result is a much more restrictive precedent governing intervention than if the court of appeals' opinion been the final word.

The timeliness of the motion to intervene was not at issue, and a majority of both the Court of Appeals and Supreme Court agreed that the municipalities failed to meet the fourth criteria for intervention — that their interests were not being adequately represented by existing parties.

On the other two criteria, though, the two analyses' differ greatly.

The Court of Appeals stated it was "likely" that the municipalities could meet all of the first three elements of intervention as of right. 724 N.W.2d 208, 220-221.

The Court of Appeals suggested, without affirmatively deciding, that the three municipalities enrolled in the DETF health plans had a sufficient interest in the action.

By rejecting that suggestion, and labeling the interest "remote and speculative," the Supreme Court effectively requires that a party have a direct, as opposed to an indirect, interest in litigation.

As for the impaired interest element, the court of appeals also suggested that it agreed with the municipalities that the effect of stare decisis would impair their ability to protect their interests, while the Supreme Court rejected that argument.

The test the majority adopts appears to be substantively identical to what is called in federal courts the "direct, substantial, and legally protectable interest test," or the "DSL test," even though the majority uses the term, "direct, immediate, and special."

The most thorough and comprehensive discussion of this test can be found in a recent en banc opinion from the Tenth Circuit. San Juan County, Utah, v. U.S., 503 F.3d 1163, 1190 (10th Cir. 2007).

The court in San Juan County begins pithily: "The Supreme Court has directly addressed the impaired-interest requirement on only two occasions. Neither opinion is much help.

One contains merely a bare holding, with essentially no explanation. The other explains its holding but it is unclear how much it relies on Rule 24." Id., at 1190.

Later in the opinion, the Tenth Circuit described "interest" as the term is used in Rule 24 as "murky," and observed, "As one treatise has put it, 'There is not as yet any clear definition, either from the Supreme Court or from the lower courts, of the nature of the "interest relating to the property or transaction which is the subject of the action" that is required for intervention of right. Indeed, it may well be, as some courts have suggested, that this is a question not worth answering.'" Id., at 1192, quoting 7C Wright et al., supra, § 1908, at 263.

The lead opinion in San Juan County rejects the DSL test as "problematic," opining, "Whether an interest is direct or indirect could be a matter of metaphysical debate because almost any causal connection can be represented as a chain of causation in which intermediate steps separate the initial act from the impact on the prospective intervenor." Id., at 1192-1193.

The court added, "Furthermore, the DSL test misses the point. The central concern in deciding whether intervention is proper is the practical effect of the litigation on the applicant for intervention." Id., at 1193.

Nevertheless, the Tenth Circuit's lead opinion is a must-read for any attorney dealing with an intervention issue, even though because the court proceeded to engage in a very lengthy analysis of how the test is applied in numerous other federal appellate courts that have adopted it. Id., at 1193-1199.

In addition, the case includes a lengthy 6-judge concurrence defending the DSL test (Id., at 1207-1210), including citations to numerous other cases, both state and federal, applying the test. Id., at 1208, fn. 3.

As a result, both attorneys looking for guidance as to how to apply the Supreme Court's opinion in the case at bar to other cases, and those looking to distinguish it, both can find a wealth of authority in the Tenth Circuit's various opinions (the case also produced two dissents).

In the end, however, the lesson of both the case at bar, and San Juan County, may be that parties seeking to intervene need to focus more on permissive intervention than intervention as of right. In the case at bar, had the municipalities not sought to turn the case into a class action, they may well be participating in the case as parties right now as permissive intervenors.

In San Juan County, the intervenors did not even address the issue of permissive intervention except in one abbreviated footnote. Id., at 1207.