660 F.3d 980
7th Cir.2011Background
- Six airlines sought to intervene in City of Chicago v. FEMA under Fed.R.Civ.P. 24(a)(2) and 24(b) in a suit challenging FEMA’s deobligation of disaster funds.
- Airlines’ contracts with the City (Use Agreements) tie airline payments to net operating and maintenance expenses at O’Hare and Midway; City previously received about $6 million from FEMA for snow-removal costs.
- FEMA paid 75% of those costs under the Stafford Act and later claimed duplicate benefits when the City used Use Agreements to seek reimbursement from the airlines.
- The City argued FEMA’s deobligation was improper; FEMA and the City had stipulated that the Use Agreements could entitle reimbursement from airlines for certain costs, creating a potential duplicate-benefits scenario.
- Airlines argued the Use Agreements cover only ordinary operating expenses, not disaster-related costs, and that the district court should not allow intervention because it would complicate the litigation.
- The district court denied intervention; the Seventh Circuit reversed, holding that permissive intervention was appropriate and that the case should be allowed to proceed with the airlines as participants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Intervention as of right under Rule 24(a)(2) not required? | City contends airlines lack an indispensable immediate interest at risk. | FEMA argues intervention as of right is not warranted given the posture and representation. | Court did not decide 24(a) entitlement; reversed on 24(b) grounds |
| Permissive intervention under Rule 24(b) available when common questions exist? | City and airlines share questions about Use Agreements' meaning but not necessarily a common defense. | FEMA contends intervention would be unwieldy and duplicative. | Yes; district court erred by denying permissive intervention; reverse and remand to grant intervention |
Key Cases Cited
- Hawaii v. FEMA, 294 F.3d 1152 (9th Cir. 2002) (duplication of benefits and insurer-like considerations for disaster aid)
- Flying J, Inc. v. Van Hollen, 578 F.3d 569 (7th Cir. 2009) (intervention standards; remoteness and benefits of consolidation)
- Solid Waste Agency v. United States Army Corps of Engineers, 101 F.3d 503 (7th Cir. 1996) (standing and intervention principles within the circuit)
- Diamond v. Charles, 476 U.S. 54 (Supreme Court, 1986) (standing limitations and intervention in related contexts)