*1 EL GAS v. PASO CASCADE NATURAL CORP. GAS CO. NATURAL et al. February 27, Argued January 12, 1967.*
No. 4. 1967. Decided *Together El al., with No. Paso Natural Gas Co. et California Edison Southern Co. v. El Paso and No. Natural Gas California al., appeal from Co. et also on the same court. *2 argued appellant Hooper the cause for Richard B. Jr., Jones, H. him on the were B. and 4. With brief
No. n argued Wilbert Carl Anderson. William M. Bennett appellant Rollin E. brief for No. 5. cause filed Woodbury argued appellant for 24. the cause No. Sturges, Harry Jr., him on were W. With the brief William E. Marx.
Gregory argued Á. Harrison cause and filed brief appellee El Paso Natural Gas Co. in all cases. Daniel argued M. Friedman the cause for the United States Marshall, all On the were Solicitor General cases. brief Attorney Turner, General Assistant Richard A. Posner Milton J. Grossman. Attorney ; Sabin, Richard W. Assistant General of Ore- by special gon, argued leave of Court, cause for. *3 Oregon,
State as amicus curiae. With him on the brief Attorney Thornton, Robert was Y. General. opinion Douglas delivered of the Justice
Me. Court. this When case was here the last time,1
. held that we acquisition Pipeline Corpora- of Pacific Northwest Gas.Company § tion El Paso Natural violated of 7 Clayton Act; and we directed the District “to Court delay.” order divestiture without El United States v. Paso Natural Gas 376 U. S. That 651, 662. ,
April nearly years 6, 1964. It is now three and, later any meaningful as we shall see, no divestiture sense has been appellee, directed. The now an respecting maintains that the issues divestiture are v. Federal Commission, Power S.U. involved California aspect another merger; of.the same and we held that the Commission .(cid:127) approved should not have it until-the District Court decided whether it §-7--%f-the'Tllayton Act, violated 38 Stat. 15 U. S. C. 18. § question involve indeed does The threshold us.
before Appellants intervention denied were matter. another came, appeal, by way here Court District jurisdic- .probable § noted 29. We S. C. 823, U. Stat. S. 970. 382 U. tion.
I. concerning aon turns question The initial (a) of Civil Federal Rules of Rule construction Right.” time At the entitled Procedure “Intervention pro- Rule motions that on the ruled District Court anyone timely application “Upon part, in relevant vided (3) permitted when in an action ... to intervene be shall situated, adversely applicant affected as to be is so custody disposition property by'. in the which is . . disposition subject or control or of the court to the or July 1, 1966, As effective an officer thereof.” amended subsequent were to the time these to intervene motions (a) ('2) provides may inter- Rule 24 that there denied, right, applicant vention of “when the claims an interest relating property to' the or transaction which is the sub- ject disposi- action he is so situated that the practical impair tion of the action as matter impede ability protect his that interest, unless the applicant’s adequately represented by existing parties.” appellants,
California, one is a State where El gas purpose intervening Paso sells most of its its *4 illegally merged was to assure that Pacific Northwest, with El Pasó, or its successor, would be restored as an competitor effective in California. As we noted in the prior opinion, Pacific Northwest had been “a substantial acquired factor in the California market at the time it was by EÍ Paso.” 376 atS., 658. It was U. to restore that “competitive factor” that divestiture was ordered. Id., at 658-662. Southern California Edison, another user of large gas pur- is a industrial natural appellant, retaining from El Paso sources and of chasing desirous in competition California. Cascade Natural Gas is a dis- Oregon in Washington, supplier tributor and and its sole gas of natural Pacific Northwest and will be the New Company plan. created under the divestiture Cascade grossly maintains that there has been a unfair division El and gas Company, reserves between Paso the New particularly the southwest field known as the San Juan in Moreover, approved the District Court contracts Basin. El for Company delivery between Paso the New gas Basin, from and from the San Juan both Canada unilaterally applica- El Paso and without and allowed Commission, tion to the Federal Power to saddle new allegedly onerous and other conditions on the prices of' Company. Moreover, New the stock West Coast Co., Ltd., Transmission was ordered sold for benefit Elof Paso. Pacific Northwest owned about a fourth had stock, ownership Coast Transmission’s West that gave special Pacific it into Northwest, said, insight gas supply. factors, and access to Canadian These ability of Pacific Northwest implicating perform future, give Cascade, standing it is argued, intervene.^. (a) (3) “adversely those affected” Under old Rule usually would disposition property those who property.2 have an interest But we cannot read it exclusively group. to mean 24 (a) (3) merely
Rule was not a restatement of exist- at law and in ing practice equity. been, federal If it had argument there would be force rigidity older cases remains unaltered, restricting inter- right very as of narrowly, example vention where is a court to which a party there third asserts fund Bernardin, 816; Dowdy See Board Comm’rs v. 74 F. 2d . App. 241; 242, Hawfield, D. C. U. S. F. 2d 638 *5 134 be lost absent Credits right
a that would intervention. 316; S. Commutation Co. v. United 177 U. Co., I. P. R. 218 F. Chicago, Trust Co. v. R. & Central , Advisory 339. But the Committee stated 336 present “amplifies prac 24 the federal Rule restates equity.” tice law and in therefore know that some at We question is, was the how much. elasticity injected;3 and of for by Appeals As the Second Circuit stated Court always easy Co. to case, in Central Trust “It not line.” Ibid. draw the
In Line Co. Pipe Missouri-Kansas States in was a consent decree entered an anti.-' U. protect to from Columbia suit, designed trust Panhandle domination of former stifle acquired to which had Advisory making of Committee when a revision In 1966 (a) said: Rule 24 provided (a)(3) for in 1948
“Rule as amended adversely right applicant would of where the established that he be by disposition property the distribution involved affected party. Significantly, an action to which he had not been made a virtually language pro- disregarded 'some decided cases this concept Moore ‘The has Thus Professor states: a fund vision. loosely possible fund applied so that it for court to find been a any personam Moore’s Federal Practice almost action.’ 4 (2d see, g., Formulabs, ¶24.09[3], 1962), Inc. v. at ed. e. Hartley (9th 1960). development Pen 2d 52 Cir. This 275 F. n natural, (a) (3) unduly quite for Rule 24 was an restricted. If substantially practical be in a absentee would sense affected general rule, action, should, be determination made an he as a intervene, right depend his do on so should entitled disposed to be is a distributed or otherwise whether there of. fund counterpart be a right is here seen to kind of Intervention just (a) (2) (i) joinder persons adjudica- needed for a Rule 19 upon party where, action, tion: of a in an an absentee should motion joined' may protect practical be so that he his interest which substantially disposition impaired matter ought his action, he to have a to intervene in action on Pleading Hazard, See Louisell & and Procedure: State own motion. (1962).” Moore, (1966 Spec. and Federal.749-50 Federal Practice (Emphasis supplied.) 24, pp. Supp.), 1-2: c. . competition. sought'
its The decree opportuni- assure competition by A security ties Panhandle. holder *6 sought of Panhandle to on intervene Panhandle’s behalf when the consent decree was and was denied reopened right. noting reversed, We at the outset that “the circumstances under which interested outsiders be should allowed to participants litigation become a barring is, in very special a circumstances, matter the nisi prius court. But where the t .forcement of a public law also safeguarding demands distinct private interests giving them a formal status in the decree, power to rights enforce thus sanctioned is public not left to the put authorities nor in the keeping of district court’s Id., discretion.” at 506. ' n noted that We Panhandle’s economic independence was “at the heart of the controversy.” Ibid. In the present protection case of California in a com- interests petitive system at directing the heart of our mandate divestiture. For it absorption was the of Pacific North- by El Paso that competition west stifled that disad- vantaged the California interests. It was indeed their interests, part public in competitive system, designed that our mandate was In protect. present very that sense the case is close to Line Co. Pipe in Apart spirit from that but of Pipe Line Co. we think that California and Southern California Edison qualify as under (a)(3). intervenors Rule 24 Certainly appellants these two are “so situated” geographically as to be “adversely ú.aning affected” within the Rule (3) (a) by merger competitive that reduces the in factor gas natural available to Californians. We conclude that it deny was error to them intervention. We need not decide whether Cascade could have intervened as of under that Rule. For there is now in effect a new version of (a) (2) Rule which in subsection recognizes proper as a “ element i interest” in “transaction which is subject of the action.” applies This Rule 1031. actions. 383 U. pending proceedings”
“further reopened the case must merits of the entire Since oppor Edison an California and Southern California give right as we conclude intervenors, heard as of tunity to be (a)(2) enough to include Rule broad the new “existing parties” shall see also; and ás we Cascade its We representing far short of interests. have fallen ap in each therefore the District Court of these reverse appellant allow each peals and remand directions to as of right, to vacate the order of intervene divestiture hearings de novo type to have of divestiture opinion we plain envisioned made our U. S. 651 *7 necessity The for new hearings needs of a word explanation; argument United States on oral stated that the (cid:127)
decree to it agreed which urges ap which it tous prove was made in “settlement” litigation. of the We do question authority not the Attorney the General to settle after, suits as well as before, they reach here. The Department of Justice, by however, or stipulation authority otherwise has no power the circumscribe the courts see that our mandate carried out. No one, except this Court, has authority to alter modify or our mandate. United States du Pont & 366 U. S. 316, 325. Our direction was that the District pro Court vide for “divestiture without delay.”. That mandate the context the opinion plainly meant that Pacific Northwest or a new company be at once restored ato position where it compete could with El Paso the California market.
Wé do not undertake to write the decree. But we do suggest guidelines that should be followed:
(1) Gas gas Reserves. The granted reserves the New Company must be no less relation to present existing it was inde- had when Pacific Northwest reserves than. the developed since gas new reserves and the pendent; El Paso and between divided equitably merger must interveners that We are told Company. the New Juan Básin— in the San the new reserves gets El Paso propinquity to California geographical their which due to in that market. But to competition are critical represented them,. which discovered merged company, of El Paso and of Pacific Northwest. the interests both would re- know an division equitable We do riot whát by meticulous Hearings necessary, are followed quire. light competitive requirements findings made to which we have adverted. already indicated, proposed provides
As decree terms of imposed contracts4' re- Company the New specting purchase and gathering gas from various urged It is that sources. these contracts are detri- onerous, mental to the New Company, partial El inter- Paso ests. do pass upon desirability We the wisdom proposed enough they contracts. to note It proposed by were El Paso, changes, reluctantly the Government, will redound to the sub- acceded of El Paso, stantial benefit Company and that New has opportunity advisability had no to evaluate the negotiate or to terms for better terms. Nor has the Federal Power opportunity Commission had the to pass *8 example, reciprocal For one gas gathering to relates be contract Company tween the New El Paso in the San Juan Basin. Prior merger to the Pacific El entered into a con Paso.and Northwest providing they tract develop gathering that would lines the basin cooperatively, compány greater and that whichever made use of the gathering, pay gathering charge other’s lines would per of 1.3750 gas. of gathering Mcf. extra El Paso much did more for Pacific proposed Northwest than Pacific Northwest did for El Paso. The agreement gathering charge increases the The intervenors 4.50. substantially claim that the increased rate will increase the New Company’s impair ability compete. costs and its should of these contracts The terms
upon the contracts. such restric- by Company under negotiated New may impose. Natural Gas Act tions as the (cid:127) allowed As El noted, Paso Aspects. Financial (2) Co., Ltd., Coast Transmission stock of to sell the West keep Pacific merger Northwest, into the brought at time prices which if stock proceeds, it is might result, considered proposed are divestiture while-the of New profit $10,000,000 more, in a alleged, Production Co. Company gets the stock Northwest charged heavy which from 1960-1963 showed It losses. is'saving El the cream proposed that decree Paso “cats foisting dogs” itself and the New earnestly argued It is Company. also New Com- sorely pany fairly will liquid need the valuable and stock if working West Coast it is have the Transmission capital necessary competitive to restore the balance that the merger destroyed.' These highly argu- are relevant Certainly ments. a plan divestiture of the kind we envisaged must establish a New Company the same or comparable position that Pacific competitive Northwest was in the illegal merger when it. obliterated pointed
It is also out that $53,000,000 tax- some. able which losses Pacific Northwest were had utilized by El during years Paso following the ill-starred merger. argued It is that since carry-overs ttíese tax loss were in a real sense an asset of Pacific Northwest utilized by El Paso, New Company should receive other assets or a reduction in debt equivalent These allega- value.. if tions, proven, require remuneration of some kind to the n New Company. For it must be a healthy viable, unit, able compete as Pacific when it was Northwest acquired by El Paso.
(3) Control El Paso. The divestiture decree'pro- vides El Paso is to cause the formation of the New Company,- whose chief executive shall be approved By *9 com- court. The new and the Government, the Paso, El the Federal Power application file an is to pany practicable requesting the earliest date” “at Commission of convenience and public of a certificate issuance the own, operate the authorizing acquire, it to necessity from El the neces- to be received Paso.5 When properties are sary and orders obtained certificates, authorizations, Company New from El Paso is to transfer the FPC, plan assets forth in the divesti- properties set El from ture, generally those which Paso received Pacific In return, Company Northwest. the New is to assume El to El Paso certain of Paso’s indebtedness issue all its common stock. El Paso is transfer the New stock Company Company’s executive, chief New voting Company’s trustee. New chief executive only plan shall release the stock accordance with the El for divestment of Paso’s interest the stock. Under El plan, completely Paso ordered to divest itself of all New Company years within stock three after the transfer Company. assets to New Alternate are provided. methods divestment El (1) may, Paso within months of the transfer, distribute at least of the shares to holders El Paso common 80% willing stock who are to exchange their El Paso shares for New Company and who shall own shares, no other El Paso immediately shares after the exchange. The remainder of Company New stock disposed would be by- a public offering. (2) If El Paso dispose does not the New Company stock under the first alternative, it is dispose of the New Company “by stock one or more sales to public.” At such public offering no El Paso officer or. director and no owner of El capital stock, Paso’s 5We are Company’s informed the New chief executive has approved been and that Company applied New has to the Federal Power Commission for certification. The proceedings FPC have been continued until this Court has appeal. decided this percent of the total shares one-half of one
in excess of *10 Company purchase New to permitted shall be outstanding, ck.6 sto will El Paso-Pacific Northwest combination
Thus, the regulatory until begin approvals to be severed Complete been obtained. divestiture is not required have years after the transfer of An earlier until three assets. mandatory divestiture is but divestiture is permissible, only years. During interregnum, after between three entry regulatory approvals, and the decree between the transfer of assets and El eventual Paso’s disposition will con- Company stock, the New El Paso reap illegal tinue to the benefits combination. Moreover, prior disposition the eventual the New all Company stock, the stock is be to- voted the New Company’s chief executive. The chief is to executive be approved by El Paso, and El Paso is the beneficial owner of the stock voted though him. Even the chief' subject executive is to the ultimate control supervision of the. District Court, danger there he may Company vote the New stock in a manner n to perpetuate calculated the very conditions which led us to order severance oí the illegal combination.
Even after mandatory disposition of the new com pany, stock there danger considerable that El in Paso terests end up controlling the New Company. The decree, to be sure, provides that neither El Paso officers and directors nor owners of more than one-half of one percent of El Paso stock shall purchase New Company stock public at a offering. But the decree pro does -not enjoined 6 E1 Paso is also having from as an officer or director any person officer, who is director,-or also an employee of the New Company or any capital who owns stock of Company New or family whose immediate owns more than percent one-tenth of. one of the stock of the Company. New prohibited families of such pur- members hibit of.the (cid:127) obtaining Company from New stock. Further, chasers it for a decree, possible under the .terms of the would be group of El- Paso each with less than one- stockholders, half Eh percent stock, acquire of one Paso at the public offering enough Company initial New stock sub stantially or even New to dominate the Com influence such, a families =pany. Or, group could combine prohibited purchasers in order to control the New Company. exchange public offering, After the there is Company no of New shares restriction the number El may acquire. Thus, Paso shareholders there is danger El major may, subsequent Paso stockholders *11 public purchase large to the or blocks of offering, exchange and Company Thus, New stock obtain effective control. been no studied to- ensure swift attempt has the there of the illegal severance combination or to make sure controlled Company’s up the New stock does end not El of all of with Disposition Paso interests. the stock necessary all and must speed convenient is conditions to El imposed sure Paso interests do make controlling they For if New acquire do, a interest. might El Paso under Company masquer- well be only (cid:127) ade of a beard. bypasses completely prospect decree proposed
The of the assets of New outright purchase Company of an purchasers Two ap- stock outside interests. or its before the parently eager; are anxious and and litiga- knuckled under to El Paso and “settled” this States a a represented it to the District Court that “sale to tion, and, possible is a desirable alternative to party third both El Paso No alternative of that kind was plan.” El carried the day, Paso obtained decree that chosen. rather than terminate this un- perpetuate promises merger, and that threatens to turn loose on the lawful competi- to maintain the Company a New unable public illegal before this filled tive role that Pacific Northwest place. took transaction choice.
The El Paso would be the easier convenience of Clayton § mandate The enforcement our follow. we one; Act is the harder but that the criterion permeated with which the decree is proposed evil Court philosophy reflects the attitude District frankly after our remand as which stated follows: see, You plan proposes “The Court: this what country, market, a division of the a division of the reserves, to New Company division one area El and-another area to Paso. That’s what the root this'plan is. if you’re going get New “Now, down Company from competition here Southern California Basin, you’d upset To San Juan the whole scheme. situation, you’re going even that to have to up, put up El Paso in the in competition there; Northwest and that’s a kind of thing long ridiculous pipelines — from these various sources.
“It
seems me make a lot of sense that New
Company operating in the
very
Northwest
from
much closer
reserves,
Canadian
Northwest
re-
serves,
El
Paso down in
Southwest,
reserves
the San Juan Basin, serving the Southern
*12
California
among
area,
some other areas. That
seems to me to make a lot of sense.”
The proposed
decree
its various ramifications does
precisely that.
It
therefore does the
opposite
what
prior
our
opinion and mandate commanded.
more,
Once
nearly
years
three
after we first
we
spoke,
reverse
and remand, with directions that
there be divestiture
delay
without
and that
the Chief Judge of the Circuit
or the Judicial Council of the
(28
Circuit
332)
§
U. C.
Judge
assign
to hear the case. Cf.
District
a different
Hatahley,
and its
926,
v.
Reversed. no and Mr. Justice Fortas took Justice White Mr. part or in the consideration decision these cases. whom Mr. Harlan Justice Stewart, Justice Mr. dissenting.
joins, by only presented appeals, question these and the denying question, is whether the District Court erred parties. appellants’ motions intervene as Because question wrong, I think the Coúrt’s answer to that gone astray I because think the Court has further undertaking to address itself to which are here issues <(cid:127) respectfully adjudication, I dissent. right governed by
Intervention of Federal Rule of (a). Civil Procedure At the time the District Court passed appellants’ motions to intervene,1 that Rule provided as follows:
“Rule 24. Intervention
“(a) Right. Upon timely applica- Intervention of anyone permitted tion shall be in an intervene (1) action: when a statute the United States con- (2) fers an unconditional or intervene; when representation applicant’s by exist- ing parties may inadequate applicant is or be and the judgment is or bound in the action; (3) applicant or when the is so situated as to be adversely affected a distribution or other dis- position property custody which is in the 1The Rule has since been p. amended. See 153, infra.
144 disposition or court the control
subject officer thereof.” an or 24 nor (a)(1) that neither ground is common gather
I it cases. appellant these No claims applies to 24(a)(2) 24 statutory right (a)(1). to intervene under any And appellant any no has it is that to intervene clear for in order intervene under that 24(a)(2), under must show that applicant provision, Government’s judgment “may he bound” Publishing Co. Sam Fox judicata action in a res sense. States, Estates, Inc. Sutphen 683; v. United U. States, Commutation United S. 19. See Credits U. States, Co. v. United it S. 311. And is settled U. government has no judgment that a suit res claims. Sam Fox judicata private effect antitrust States, Publishing supra. Co. v. United Court, finds however, State California and Southern California Edison Co. have an absolute right to intervene (a) (3). under 24 I disagree for several reasons.
Analysis proper Rule’s scope must begin with an historical examination of intervention practice, for, the Court has stated, the Rule constitutes “codification of general doctrines of'intervention.” Missouri-Kansas Pipe Line Co. v. U. S. 508.2 In- tervention assert an interest in property within the court’s control custody derives from English doc- trine of appearance pro interesse suo. When a court acquired in rem jurisdiction over property, by admiralty libel, sequestration, receivership, or other process, per- son claiming title or some other legal or equitable 2 This statement is confirmed Advisory Rules Committee, which observed “amplifies the Rule present and restates the practice federal at equity.”' law .in Advisory Committee on Rules for Procedure, Notes, (March Civil 1938). property. his claim to assert come *14 allowed obvious, subjected to the have been would
Otherwise, he impaired having or injustice claim erased his of being Elements adjudication heard. ever without court’s gradually in this coun procedure assimilated were of this provided g., Coe, and try, 117, 23 How. Pennock v. e. in the federal doctrine for intervention foundation courts,3 generalizations of prop about the nature
Various
support
right
erty
under
will
interest that
attempted. This
has
Court
have been
doctrine
this
requisite
“of such a direct
interest must be
that the
stated
will either
that the intervenor
immediate character
and-
legal
gain
operation
direct
and effect
or lose
judgment.”
Gale,
claim being foreclosed under personal property part owner lien on a leasehold mortgage a mortgage,6 a purchaser forfeiture,7 and the claim the subjected to against proceedings of land involved foreclosure to pro like have Interests these continued the Seller.8 for intervention of since familiar basis vide a promulgation (a)(3).9 of Rule other traditional basis intervention under interpleader practice; from a derives when 24(a)(3) possess claims persons fund which are number mutually exclusive, intervention is allowed in Oliver v. Thus, claimant. F. 2d *15 (C. A. 8th Cir.), the United cer- acquired States had deposited tain purchase land and the in price court to among be divided the A various owners. title in- company surance which asserted a proceeds, claim to the based on rendered to sellers, services the was allowed to intervene.10 (a)(3)
Under
24
Rule
the federal courts have some
times allowed intervention
though
even
the interest
likely to
“adversely
be
affected” was not one that would
recognized
be
under
traditional
interpretations
of the
pro inter esse suo or interpleader
types of intervention.
A representative casé is Formulabs, Inc. Hartley
Pen
v.
Co.,
5Krippendorf
Hyde,
v.
But the claims beyond .in far reach Edison Co. these cases lie fornia. imaginable (a)(3). of even most construction “property To assets of El Paso sure, are which custody subject disposition to the control or purposes Sutphen Estates, for of the court” Rule. Inc. v. U. S. 19. But the “interest” upon by appellants justify these assets relied merely preference their that certain of particularly the assets, the San reserves, Basin end Juan up Company the hands of Paso, New rather El than theory on the that such an allocation be conducive greater gas competition general, in California. These remotely and indefinite interests do not even resemble litigation the direct required and concrete stake in right. only intervention of The Court’s decision not general principles *16 overturns established intervention, repudiates but, will be shown below in detail, also as. large long-established body specifi- and of decisions cally, correctly, denying government intervention in litigation. antitrust
This Court is all too familiar with the fact that anti- litigation inherently protracted. trust Indeed, it is just delay such which seems to so concern the Court in nothing this case. But could be better calculated to prolong litigation confuse and. antitrust than the rule foday which. the Court announces. The entrance of parties additional into only antitrust suits can serve 148 and further testimony, exhibits and trial multiply complicated out bring order attempt
confound have courts federal reasons, For these issues. economic (a)(3) 24 intervention under grant reluctant most been example, litigation. For antitrust private even Mfg. Allis-Chalmers Edison Co. v. Commonwealth 375 U. denied, cert. Cir.), (C. A. 7th 2d 564 315 F. in consumers’ Illinois, representing State of 834, interven denied rebate, rate possible terests in utility charging equipment brought by a in a tion suit fixing.11 price with manufacturers stronger' are even denying intervention for The reasons brought antitrust suit sought an when the would-be To the extent Government. private his own antitrust claims press intervenor seeks to be agáinst defendant, intervention must be denied statutory Congress carefully provided separate has cause private public litigation.12 antitrust procedures Borden As the Court observed United States v. Co ., S. 514, 518-519, Clayton 347 U. the thrust of the Act “is distinguish
sharply
suits,
between Government
either
private
criminal or civil,
injunctive
suits for
relief
damages.
for treble
policy
Different
or.
considerations
govern each of
They may
these.
proceed simultaneously
13
disregard
or in
of each other.”
has
Court
accord
ingly approved the “unquestionably
policy
sound
of not
11
Pipe
Cf. American Louisiana
Line Co.
Corp.,
Oil
v.
158
Gulf
Supp.
(D.
Mich.)
F.
13
(county
C. E. D.
not allowed to intervene
in,private
on behalf of
gas
consumers
dispute).
contract
See also
Philadelphia Electric
Westinghouse
Co.
Corp.,
Electric
308 F. 2d
(C.
Cir.),
856
A. 3d
denied,
cert.
It has been deny the consistent of this Court to person seeking general to assert some 14In United States v. Borden U. the Court stated: “The private-injunction action, like the treble-damage action under Act, supplements government §4 enforcement laws; antitrust but it Attorney is the General and the United States attorneys district who primarily are charged by Congress with the underjhese duty protecting public laws. The Govern injunctive ment seeks its general remedies on behalf of public; private plaintiff, though remedy his is made pursuant available public policy as determined Congress, may expected only.when personal exercise it his interest will be served.” *18 authority- public a in which in a suit interest public already that vindication charged Co., S. Sons 231 U. & Engelhard re In in Thus, party.. a seeking to to a subscriber denied was intervention 646, telephone a municipality and between suit- énter ordinance city’s rate validity of the utility involving in Similarly, overcharges. of rate disposition and York, Gas Co. New Consolidated v. City New York Tele- New York City York v. New 219, S. and 253 U. was Co., City of New York 261 S. phone U. on behalf of consumer residents to intervene allowed public' in authorities and city litigation between state regulation. The validity rate over the of state utilities many in principle wise of those decisions is reflected , other'federal cases both before and after decided 24 adoption (a)(3).15 .of Rule applicability principle of -this to intervention - brought by early
antitrust
suits
the Government was
15
Co.,
(C.
O’Connell
Gas &
v.
Electric
19
460
A
P. 2d
Pacific
.
Cir.)
(intervention
ratepayer
9th
protesting proposed
denied
settlement, of-litigation
utility
municipality);
between
Radford
Appalachian
Co.,
Iron Co. v.
(C.
Electric Power
62
940
A.
P. 2d
Cir.),
denied,
(business
4th
injured by utility’s
cert.
recognized Leaf enterprises denied U. S. brought defendants an antitrust suit tobacco to sold since, time we have Government. From by the consistently recognize the intervene refused to Calculators, Inc. Allen government antitrust suits.16 Partmar Register 137; National Cash 322 U. S. v. States, 804; Wometco Tele Corp. v. United U. S. States, 40; vision & Theatre Co. 355 U. Westinghouse Broadcasting Co. v. United 518, dismissing U. S. from 186 appeal 776; Supp. F. *19 Sam Publishing States, Fox Bardy Co. United supra; v. States, v. United upheld 371 U. S. And we have 576.17 16Intervention in this Court was allowed in United States v. Terminal, St. Louis 194, 23 U. but there the “intervenors” practical in were the status of defendants. Pipe States,
Missouri-Kansas Line Co. v. S.U. upon by Court, completely inapposite. relied the Panhandle Pipe competitor Eastern Line charged by Co. was a of defendants improperly exercising Government with control over Panhandle to competitor. weaken its nego- threat as a A consent decree was protect independence. tiated to provided Panhandle’s The decree jurisdiction by of retention to court enter such “further orders necessary and carry decrees” as were purpose, to out its and stated upon that Eastern, proper “Panhandle application, become party protect rights hereto” to its under the decree. When the sought Government later decree, of modifications we held that gave right the decree Panhandle the to intervene. The Court care- fully right noted that this to solely intervene was bottomed specific provisions general principles of the decree of inter- vention: “Its foundation is the consent decree. are not We here dealing with a S., conventional form of intervention . .” . . 312 U. concluded, “Therefore, at 506. general The Court the codification of (a) doctrines intervention contained in Rule 24 does not touch problem.” S., our 312 U. at 508. policy The behind these decisions stated in United States Composers, Publishers, American Authors Society 341 F. (C. Cir.), 2d A. denied, 2d cert. 382 U. S. in which ASCAP licensees were denied intervention to assert that ASCAP had violated
to claimed who party private to denial Government between negotiated a decree mandate carry out the failed to defendant an antitrust 802. 338 U. S. Ball v. United of this Court. rejection from the Court’s follow The results which are decisions in these embodied wisdom practical to intervene applications over 20 were There apparent. construc- The Court’s below. proceedings in decree Court to the District require (a) would (3) tion of gas goes El Paso all of them. if not grant most decision the Court’s and under consumers, millions right.' as of to intervene them are entitled any or all of sug- opinion which nothing in the Court’s there is And litigation right intervene is limited gests that this If and others have an interest remedy. consumers over meets antitrust decree making government that a sure they an even effectiveness, have their standards insuring that a violation is found. greater reasoning gives any consumer a Thus the Court’s government litigation intervene antitrust at very scope invites a of intervention outset. Court delays will ally make this case seem mer«n short.
The Court’s decision would not be of such concern,
*20
nor merit so much
if
discussion,
it were simply limited
to 24(a)(3),
provision
which has been superseded.
which,
But the same approach
right
creates a
to inter-
vene for California and the Southern California Edison
Co. under the
Rule 24 (a) (3)
old
appears in the Court’s
construction of the new Rule 24, under
says
which it
right
Cascade has a
to intervene. The
(a)(2)
new Rule 24
a decree in an
brought
antitrust
suit
the Government:
“The
seeks,
United
instituting
States in
litigation
antitrust
to vindicate
public
and,
interest
in
doing, requires
so
continuing
over
control
the suit
..
. .”
This and other amendments to the Federal of. Rules promulgated Civil Procedure were by this Court to “take July 1966, effect on . govern and . . all in proceedings brought actions thereaftér and in all’ also further pro ceedings actions then pending . . . .” 383 1031. U. S. Since District Court denied in Cascade’s motion to the. tervene in 1965, before the effective date of the amended the new Rule, Rule inapplicable to mot Cascade’s if ion.18 But even the new Rule were applicable, neither Cascade nor the other appellants claim could under it. purpose the revision was remedy to certain logical shortcomings the construction of former see Sam 24 (a)(2), Publishing States, Fox Co. v. United supra, give recognition and to decisions to such as
18 Klapprott In petitioner U. S. sought reopen judgment denaturalizing a default him, relying on (b). amendments thought Rule' 60 Several Justices petitioner should be able to obtain relief under the amended Rule though petitioner’s even the District applica Court had denied the tion before the effective date of the amendments. Cascade’s interest extraordinary here bears no hardship resemblance to the injus Klapprott, petitioner tice claimed per where it could be suasively argued that it equitable was “more consonant with consid judge erations the case on force, the basis Rule now éven though the lower court did not opportunity have the apply- it.” S., (dissenting opinion). 335 U. at
Formulabs, Hartley supra, Inc. v. Pen which had expanded (a) (3) beyond intervention under former an pro strict interesse suo model But it embodied.19 still required is to have an “interest” applicant litigation sufficiently direct and immediate to his justify entry right. general as a matter of The con- remote that appellants cerns State California and Southern government California Edison Co. have with this suit And already have been discussed. Cascade’s interest is gas even more insubstantial. purchases While it from Oregon, gas El Paso in it seeks intervention to vindicate thought it competition California.20 Even if should be might the amended Rule encompass such remote, in some interests it clear circumstances, conceivable is .such never justify interests in public litigation, Congress antitrust where has carefully government entrusted the conduct of suits Attorney the “direction of the General.” if But even Cascade should this pass hurdle, it would also have to show that there was a of “adequate representa- failúre - Department tion” the Justice in this case.
The Court states that the Government “knuckled El under Paso” and has “fallen far of represent- short ing” Cascade’s interest. Since the interest that Cascade representing to be is that public, claims the Court charging Department the Justice with dereliction' of duty incompetence. regard serious I_ charge this wholly The unjustified. did settle for less Government than all sought the relief that it at outset. But this familiar wholly phenomenon negotiation. Bar- of Advisory Rules, See Notes Committee on Fed. Rule Civ. 24, App. (1964 ed., Supp. II). Proc. 2S S. C. Rule 24 U. protect existing supply I will gas PC Cascade’s when Company applies See, g., Michigan New for certification. e. Con FPC, App. solidated 409, Gas Co. v. 108 U. S. D. C. 283 F. 2d denied, U. cert. *22 gaining stipulated consent decrees and a remedies is necessary normal and element the Government’s en- forcement of the laws. Moreover, perfectly antitrust it is negotiations conceivable that in the course of the Gov- ernment become aware of errors in its opening posi- If, tion. as the opinion Court’s to suggest, seems the is required press negotiating Government its original position unceasingly and to the end, bitter the number of cases which the Government can to undertake afford will sharply be reduced, and the of the anti- enforcement effective.; laws will of ultimately trust become less And delay litigation, course antitrust which so concerns the Court, markedly will increase. of
The Court’s standard “adequate representation” existing down to If, parties comes this: after the have litigation a or pursued settled case vol- end, some disagrees unteer comes who along parties’ assess- of way they ment the issues or pursued have their respective interests, granted intervention must be to that right. strange volunteer as of This only standard is unprecedented it is unwise, also unworkable. requirement inadequate representation by exist-
ing a parties precondition right to intervene the new 24 obviously under Rule an adaptation of the n similar standard contained 24 (a) (2). the former De- under cisions that standard allowed intervention of when the intervenor could show of interest conflict party between himself supposed represent his complete interest,21 failure of representation by existing parties,22 or collusion likelihood collusion be- (C. Amos, Cir.); v. 2d 425 Pyle-National Co. F. A. 7th Mack v. Passaic Nat. Bank & Trust 474, 154 F. 2d F. 2d 907 (C. Cir.); Light In Supp. A. 3d Corp., re Power & 48 F. Standard Del.). (D. C. (C. Cir.). Nesbit, F. 2d 463 A. 9th
22 Pellegrino disagreement over how tween Mere tactical them.23 obviously insufficient to litigation should conducted prece- right.24 ignoring In these support which dents, policies the sound the Court also overlooks into judges approach draws underlie them. The Court’s impossible into adversary arena and forces them pur- in the parties position trying second-guess pro- is also own It wasteful suit their interests. strange standard a under this delay, because ductive cannot be ascer- litigation person’s right to intervene *23 existing and the litigation is concluded tained until that parties’ conduct evaluated. liti- respect is with to approach
Wrong as the Court’s a wrong when would-be gation it is even more generally, of Gov- challenge, adequacy the the seeks intervenor public of interest. representation the ernment’s generates prin- in powers system our federal of separation courts peculiarly inappropriate make that it ciples of supervision policy over decisions role of the assume Jus- presumes to tell the Yet the Court the Executive. conducting it made tactical errors Department tice interest, public in its the failed assessment litigation, brought. it has This settle which and cannot lawsuit power not to second- does have Court constitutional 23 (C. 216 2d 336 A. Co., F. Cuthill v. Ortman-Miller Machine (C. 2d A. 160 984 Tilford, Schulte, Cir.); Park & Inc. v. F. 7th 761; Nu-Way Co., denied, S. Shoe Cir.), 332 U. Klein v. 2d cert. (C. Cir.); America v. Molybdenum Corp., 986 A. 2d 136 F. 2d (D. Y.); 415 S. 32 F. R. D. C. D. N. Mining Corp., International Jenkins, F. R. D. 197 Corp. v. Century-Fox Film 7 Twentieth Y.). (D. D. C. S. N. 24 (C- Cir.), 344 F. A. 2d cert. Kirby, v. 2d Alleghany Corp. 28; 2d 912 Co., 309 F. Electric dismissed, 384 U. v. Union S. Stadin 915; denied, United States v. Ameri (C. Cir.), S. A. 8th cert. U. Supp., 202 F. Composers, Publishers, Society Authors and can Bros., (D. Y.). cf. Ford Motor Co. v. Bisanz D. But C. S. N. 340 Cir.). (C. 8th A. 2d 249 F.
guess Attorney decisions made within the General bounds of his official responsi discretion. That bility and, of the President the electorate. ultimately, In appropriate long ago words we here, stated of an on context attack Government’s settlement an antitrust case: “. . . find we do not in the statutes defining the powers Attorney and duties of the General any such- on the limitation exercise of his discretion this authority contention involves. His to make deter power minations includes the make erroneous decisions Co. & v. as well as correct ones.” Swift S. 331-332. today gives only lip U. The Court principies. service to these states that It “We do authority question Attorney General to settle Ante, as well as after, before, they suits reach here.” at proceeds gov 136. But it then to take the direction of a ernment lawsuit out of the hands of Attorney General into its own.
The Court relies the fact that we previously have judgment rendered this case and cites from dictum in United States E. I. du Pont & opinion the. justify extraordinary U. course it takes. outright But the absence of fraud, it has never been thought the fact that parties have initially resorted *24 gives courts judges power to set aside later settle agreements ment and impose others on parties. And certainly when it is the Branch Executive Govern .the ment made has the settlement as representative of public interest, only grossest bad .the faith or malfea sance on part possibly its support could such a. step. saying Either the Court is the Government was guilty of charge such misconduct —a totally without support the record —or grossly the Court has per overreached the of judicial power. missible limit only
Not concern for the constitutional position of this but more Court, directly pragmatic considerations today’s disagreement . To my decision.
underlie second-guess permit and intervene volunteers inappropriate especially Department when Justice require field, antitrust like those in the involved, issues balancing experience and an and assessment technical political. essentially Formu- administrative interests government antitrust and consistent lation of effective unlikely “piecemeal policy to result from 25 litigation complainants” in of individual of a multitude ago brought years we six Less than the Government. fully recognized principle: this strongly policy lead
. . sound
would
us to decline
[the]
Gov-
invitation to assess the wisdom of the
negotiating
accepting
judgment
ernment’s
decree,
the . . . consent
any
at least
the absence
part
claim of bad faith or malfeasance on the
acting.”
of the Government in so
Sam Fox Pub-
lishing
supra,
States,
United
Co. v.
at 689.26
Today
ignores
grants
the Court
all this and
interven-
any
claiming
speak
tion of
volunteer
for the
public interest whenever he can convince a court that
might
judgment
the Government
have used bad
in con-
ducting
settling
I
lawsuit.
think
decision,
this
Department
which undermines the Justice
in the dis-
charge
responsibilities,
of its
invites
obstruction and
25United
Co.,
States
General
v.
Electric
Supp. 165,
95 F.
(D.
J.).N.C.
policy
given
This
continuing recognition
has been
by the lower
federal
Webb,
(C.
courts. Reich v.
336 F.
Cir.),
2d 153
A. 9th
cert. denied,
915;
380 U. S.
MacDonald
v. United
119 F.
(C.
Cir.), aff’d
2d 821
modified,
A. 9th
262;
315 U.
S.
Co.,
States
(D.
v. General Electric
Supp.
J.).
95 F.
C. N.
See
Wometco Television & Theatre Co. v. United States,
delay in the course any Rúle new Rule 24, of old provision interven- governing conceivably tolerable standard other deny- err in District Court right. The tion as of did appeals these appellants,27 to the ing intervention be dismissed.28 should therefore completely I am the Court wrong, even if
Rut
concluding
the District Court erred
right
denying
right
intervene,
proper
appellants
simply
course would
to remand the case to the Dis-.
be
appellants’
trict Court so that
contentions
bymet
Government or El
passed
Paso and
intimately
trial court that
familiar with the massive
Instead,
record
this case.
thé
Court brushes aside
“threshold”
question
appellants’
to intervene
in a few pages
opinion
and devotes most of its
to pro-
,gas
delivery
nouncements on
reserves,
contracts,, and'
gas
other intricacies of
competition in the western United
States. These issues were never
subject
of adversary
proceedings in the District
They
Court.
were never
through findings
resolved
by the
Ap-
District Court.
pellees
directly
did not
brief or argue them before this
parte
effect ex
Court. On the basis of what
are
criti-
cisms of thé decree entered below,
lays
the Court
down
“guidelines”
respect
to complex issues which will
shape the future of an important
segment of this Na-
appellants
also
challenge
seek .to
the District Court’s denial
of their
permissive
motions for
(b).
intervention under Rule 24
We
jurisdiction
have no
challenge.
consider this
Calculators,
Allen
Inc.
Register
v. National
Cash
28 See *26 large, roams at doing the Court In so commerce. tion’s record mundane as a factual anything so by unconfined adversary proceedings. in developed be We sit “The obvious must restated. do not de novo. This is a decrees draft antitrust court a trial We wit- not court. do not see the appeal, detail, appraise the evidence nesses, sift short, In this argument of extended .... course of the partake procedure does not Court of the charged responsibility with the demanded devising with details court entrusted the task a governance for the appropriate decree vastly arising complicated unique situation out United States E. du Pont & I. circumstances.” 371 (dissenting opinion). U. The Court has decided this case on little more than for “the repugnance philosophy attitude or of the Dis- trict unjustifiéd extraordinarily Court” and the op- probrious conclusion that the Government “knuckled under.” This is not a happy foundation for radical ex- tensions of intervention doctrine. Anddt is not proper basis for deciding how stock in the Company New should be marketed, or how gas reserves New Mexico should be In its divided. zeal to Judge censure the District reprimand the Justice Department, the Court has rushed headlong into a jurisprudential quagmire far more dan- gerous than the “evil” it purports to discern the decree by entered the trial court. I must my note emphatic disagreement
Finally,;
extraordinary
Court’s
action in directing that further
proceedings in this case must conducted
a different
district judge. Federal reviewing courts have taken this
serious
step only
the rarest circumstances, when the
trial judge’s personal or emotional involvement
in a case
has been demonstrated.
See
States,
v. United
Offutt
Occi
517;
S.U.
11; Cooke v.
U. S.
A.
Chandler,
(C.