Airlines Should Have Been Allowed To Intervene In Suit Between City And FEMA

Posted on December 13, 2011 by Michael Rigney

CITY OF CHICAGO v. FEDERAL EMERGENCY MANAGEMENT AGENCY (October 17, 2011)

The airlines that use O'Hare and Midway Airports have Use Agreements with the City of Chicago that define the rights of the parties. Pursuant to the Agreement, the City estimates its operating and maintenance expenses each year for the upcoming year. Each airline is obligated to pay its proportionate share of these expenses, based on its projected landings. At the end of each year, the City compares its actual costs to its projected costs and either collects additional funds from the airlines or refunds any excess money. The City only projects for ordinary snow removal expenses. In 1999 and 2000, the City spent approximately $8 million in extraordinary snow removal costs. The Federal Emergency Management Agency picked up almost $6 million of that amount pursuant to federal law. FEMA's generosity, however, was short-lived. Relying on another provision of federal law that requires recipients of federal assistance to repay the United States if the assistance duplicates other benefits available, FEMA asked the City to return the funds. It took the position that the federal assistance duplicated the funds available to the city under the Use Agreements. The City brought suit against FEMA under the Administrative Procedure Act on the ground that the duplicate benefits provision relied on applies only to available insurance proceeds. But, as alternative protection, the City stipulated that the airlines were responsible for the snow removal costs under the Use Agreements. The airlines moved to intervene either as a matter of right or permissively in order to argue the position that the Use Agreements are limited to ordinary snow removal expenses. Judge Norgle (N.D. Ill.) denied the motions. The airlines appeal.

In their opinion, Seventh Circuit Judges Cudahy, Posner, and Williams reversed. The Court discussed at length, without deciding its applicability, intervention as a matter of right under Rule 24(a). It declined to decide that issue because it decided that the airlines should have been permitted to intervene permissively under Rule 24(b). Permissive intervention is about economies of litigation and is allowed when a party has a claim or defense sharing a common question of law or fact and when the intervention would not unnecessarily delay or prejudice the underlying adjudication. The Court concluded that the intervention might cause some delay and require some limited additional discovery. On the other hand, it might eliminate the need for subsequent litigation between the airlines and the City. The Court concluded that there was no basis to deny permissive intervention.

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Independent Standing Is Required To Support Permissive Intervention After Case Is Dismissed

Posted on January 20, 2010 by Michael Rigney

BOND v. UTRERAS (November 10, 2009)

Diane Bond filed a § 1983 action against the City of Chicago and several police officers in 2004. The parties settled. The court entered an agreed order of dismissal on March 23, 2007. About a week earlier, however, journalist Jamie Kalven filed a petition to intervene. Kalven sought to modify a protective order in the case and to obtain access to documents produced during discovery. The City opposed access -- Bond did not substantively respond to the petition. The court granted the motion to intervene and rescinded the protective order. The City appeals.

In their opinion, Judges Kanne, Sykes and Tinder (concurring) vacated and remanded. Although the Court recognized its earlier decisions allowing permissive intervention to challenge a protective order, it emphasized that those cases involved ongoing litigation or access to records in the court file. Here, neither of those conditions is present. The case was over and none of the records sought were ever filed with the court. Therefore, stated the Court, the lower court should have addressed Kalven’s standing. Standing requires that an actual controversy exist at all stages of the proceeding. The Court noted that the circuit had never addressed the relationship between Article III standing and the rule for permissive intervention. This is not a typical permissive intervention case -- where the party seeks to come into an ongoing case on the side of one of the parties. Specifically not addressing whether standing is required for permissive intervention in an ongoing case, the Court concluded that independent standing was required to intervene in a case to challenge a protective order after the case was dismissed. The Court then rejected Kalven's standing on both right to discovery and First Amendment grounds. The Court based the former on the fact that none of the discovery sought had been filed with the court. The general right of public access to court documents is not implicated. The latter was based on the fact that the parties in the litigation stipulated to the protective order. No one placed any limitation on another's speech. Finally, the Court rejected any notion that the revocation of the protective order was within the lower court's inherent power.

Judge Tinder concurred in the result. He got there differently, however. Judge Tinder believed that Kalven had standing based on the public's general right of access to judicial proceedings. He concluded, however, given the timing of the request and the lack of a sufficient showing of abuse with respect to the protective order, that the district court erred on the merits.

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