Axis Energy Corporation v. St. Paul Surplus Lines Insurance Company, 3:16-cv-00672

Axis Energy and Occidental sued their insurers (St. Paul Surplus Lines and St. Paul Fire & Marine) seeking a declaratory judgment that the insurers must defend/indemnify them in an underlying state-court suit by Louisiana Farm and Livestock Company, Inc. (LFLC).
The state-court action by LFLC alleges property damage in Calcasieu Parish; Axis/Occidental seek coverage determinations in federal court after removal based on diversity.
LFLC moved to intervene in the federal declaratory action to assert its rights under the Louisiana Direct Action Statute (La. R.S. 22:655) and to obtain a declaration that the insurers’ policies cover LFLC’s alleged damages.
The motion to intervene was filed May 5, 2017; the case remained in early stages (discovery ongoing, trial not for over a year). No party opposed timeliness.
The magistrate judge evaluated intervention under Fed. R. Civ. P. 24(a)(2) (intervention of right) and 24(b)(1) (permissive intervention), found LFLC’s interests tied to the insurance-coverage dispute, and concluded existing parties did not adequately protect LFLC’s interest.
The court granted intervention as of right, ordered LFLC’s complaint in intervention filed, and required initial disclosures within seven days.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Timeliness of intervention	LFLC filed promptly in early-stage litigation; timely because discovery and trial distant	Defendants did not assert untimeliness	Motion was timely given stage of case and absence of prejudice
Right to intervene under Rule 24(a)(2)	LFLC claims a direct interest under La. R.S. 22:655 in coverage determination; disposition could impair LFLC’s rights	Plaintiffs/Defendants argued coverage is main dispute; representation by existing parties adequate (not asserted strongly)	LFLC qualifies for intervention of right: interest related to subject policies and potential impairment if excluded
Adequacy of existing parties’ representation	LFLC contends its direct-action statutory rights differ and require its own representation	Existing parties (Axis/Occidental) seek similar declaration but may not protect LFLC’s direct-action interests	Court found burden to show inadequate representation minimal and concluded LFLC’s interest may not be adequately represented
Need to evaluate permissive intervention under Rule 24(b)	LFLC alternatively sought permissive intervention	Not necessary if intervention of right granted	Court did not reach permissive-intervention analysis because intervention of right was satisfied

Stallworth v. Monsanto Co., 558 F.2d 257 (5th Cir. 1977) (timeliness of intervention judged from all circumstances and multiple-factor test)
McDonald v. E.J. Lavino, 430 F.2d 1065 (5th Cir. 1970) (timeliness is within trial court’s discretion)
Ross v. Marshall, 426 F.3d 745 (5th Cir. 2005) (articulates four-factor test for timeliness in intervention context)
Ford v. City of Huntsville, 242 F.3d 235 (5th Cir. 2001) (elements for intervention of right under Rule 24(a)(2))