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GPI AL-N, Inc. v. Nissan North America, Inc.

United States District Court, S.D. Alabama, Southern Division

September 10, 2018

GPI AL-N, INC., Plaintiff,



         This matter comes before the Court on the Motion to Intervene by MB Nissan West Mobile, LLC (doc. 30). The Motion has been extensively briefed and is now ripe.[1]

         I. Background.

         Plaintiff, GPI AL-N, Inc. d/b/a Nissan of Mobile (“Nissan of Mobile”), commenced this action by filing suit against defendant, Nissan North America, Inc. (“NNA”), on November 6, 2017. According to the Amended and Restated Complaint (doc. 46), Nissan of Mobile and NNA are parties to a Nissan Dealer Sales & Service Agreement, whereby Nissan of Mobile sells Nissan brand vehicles and parts, and provides service for Nissan brand vehicles, in Mobile County, Alabama. This lawsuit arises from NNA's decision in February 2017 to enter into a Nissan Dealer Sales & Service Agreement with another entity (non-party MB Nissan West Mobile, LLC) to operate a Nissan dealership in west Mobile, Alabama, at a location less than ten miles from Nissan of Mobile's dealership. Plaintiff alleges that NNA's conduct violates Alabama's Motor Vehicle Franchise Act, Ala. Code §§ 8-20-1 et seq., because (i) the appointment of an additional Nissan dealer is unreasonable under the circumstances, in violation of Ala. Code § 8-20-4(3)(l); (ii) NNA has coerced Nissan of Mobile to adhere to performance standards that are not fair, reasonable or equitable, in violation of Ala. Code § 8-20-4(1)(h); (iii) NNA's actions in appointing a new dealer were arbitrary, unconscionable, unreasonable and/or not in good faith, in violation of Ala. Code § 8-20-4(2); and (iv) NNA's actions breached its duty of good faith and fair dealing owed to Nissan of Mobile, in violation of Ala. Code § 8-20-4.1. Plaintiff also brings claims against NNA for breach of contract, alleging that NNA breached the Dealer Agreement by failing to notify Nissan of Mobile of the results of its market study and final decision, failing to provide Nissan of Mobile an opportunity to object, and failing to utilize reasonable criteria in evaluating Nissan of Mobile's sales performance.

         The ad damnum clause of the Amended Complaint reflects that Nissan of Mobile seeks considerable equitable relief, including “issuance of a permanent injunction prohibiting NNA from entering into a Dealer Agreement pursuant to the notice issued to Nissan of Mobile, ” and “issuance of a permanent injunction prohibiting NNA from taking any action based upon its creation of an open point in west Mobile in 2017.” (Doc. 46, at 8.) In short, Nissan of Mobile seeks to enjoin NNA from appointing MB Nissan West Mobile, LLC (“Nissan West Mobile”) or anyone else to operate a Nissan dealership in west Mobile. Plaintiff further demands “a declaratory judgment that the economic and marketing conditions of the Mobile, Alabama market do not reasonably justify the addition of a second Nissan brand dealership” in that market area. (Id.) The natural outcome and plain effect of a ruling granting Nissan of Mobile's requested relief on these issues would be to prevent Nissan West Mobile from being able to enter into a Dealer Agreement with NNA and to operate a Nissan dealership in west Mobile.

         Originally, Nissan West Mobile was not a party to these proceedings, despite the potentially debilitating ramifications of plaintiff's claims on that entity. On August 2, 2018, however, Nissan West Mobile filed a Motion to Intervene (doc. 30), requesting leave to intervene in this matter as a defendant both as a matter of right, pursuant to Rule 24(a)(2), Fed.R.Civ.P., and permissively, pursuant to Rule 24(b), Fed.R.Civ.P. Accompanying Nissan West Mobile's Motion is its Proposed Answer and Defenses (doc. 30-1) to plaintiff's original Complaint (which plaintiff subsequently amended). Defendant, NNA, has filed a memorandum of law in support of the Motion to Intervene. (See doc. 39.) Plaintiff, Nissan of Mobile, has filed a memorandum of law in opposition to that Motion. (See doc. 40.)

         II. Analysis.

         A. Intervention as of Right under Rule 24(a)(2).

         “Rule 24 provides two avenues for a nonparty to intervene in a lawsuit; intervention as of right and intervention with permission of the court.” In re Bayshore Ford Trucks Sales, Inc., 471 F.3d 1233, 1246 (11th Cir. 2006). To intervene as of right pursuant to Rule 24(a)(2), a person “must show that: (1) [its] application to intervene is timely; (2) [it has] an interest relating to the property or transaction which is the subject of the action; (3) [it is] so situated that disposition of the action, as a practical matter, may impede or impair [its] ability to protect that interest; and (4) [its] interest is represented inadequately by the existing parties to the suit.” Technology Training Associates, Inc. v. Buccaneers Limited Partnership, 874 F.3d 692, 695-96 (11th Cir. 2017) (citation omitted). Plaintiff's position is that Nissan West Mobile cannot intervene as of right because the Motion is untimely, it lacks any interest in the subject matter of the suit, and the existing parties can adequately protect whatever interest Nissan West Mobile might have. The Court considers each of these arguments in turn.

         First, the parties dispute whether Nissan West Mobile's Motion to Intervene is timely. “In determining whether a motion to intervene was timely, we consider (1) the length of time during which the proposed intervenor knew or reasonably should have known of the interest in the case before moving to intervene; (2) the extent of prejudice to the existing parties as a result of the proposed intervenor's failure to move for intervention as soon as it knew or reasonably should have known of its interest; (3) the extent of prejudice to the proposed intervenor if the motion is denied; and (4) the existence of unusual circumstances militating either for or against a determination that their motion was timely.” Georgia v. U.S. Army Corps of Engineers, 302 F.3d 1242, 1259 (11th Cir. 2002) (citation omitted). In applying these factors, courts must bear in mind that “[t]he requirement of timeliness must have accommodating flexibility toward both the court and the litigants if it is to be successfully employed to regulate intervention in the interest of justice.” Id. (citations omitted).

         Upon careful consideration of the court file and the parties' respective arguments, the Court readily concludes that the Motion is timely. It was filed more than two weeks prior to the August 17, 2018 deadline fixed by the Scheduling Order for amending pleadings or adding parties. (See doc. 26.) It was filed four months prior to the discovery cutoff date, and nine months before the trial setting. (See doc. 17.) Although some discovery has taken place, the parties have apparently taken just three depositions to date. (Doc. 39, at 4.) There appears to be substantial discovery left to be done, and adequate time in which to complete it in accordance with existing Scheduling Order deadlines. To be sure, Nissan West Mobile did not move for intervention as expeditiously as it could have, but Rule 24(a)(2) does not impose such a stringent obligation on a would-be intervenor. Contrary to plaintiff's objections, it does not appear that either delay to this litigation or prejudice to Nissan of Mobile would result if the Motion were granted.[2] The timeliness of the Motion to Intervene is underscored by the fact that plaintiff successfully moved to amend the Complaint to add five new causes of action against NNA (as contrasted with the one claim asserted in the original Complaint) on August 17, 2018, more than two weeks after the Motion to Intervene was filed. (See docs. 44, 46.) If plaintiff was not too late in multiplying the legal claims at issue by six (with concomitant expected effects on discovery), then it is hard to see how Nissan West Mobile was too late in moving to intervene in this matter. The interests of justice do not favor denying Nissan West Mobile leave to intervene on timeliness grounds.

         Next, the parties spar over whether Nissan West Mobile has an interest relating to the property or transaction which is the subject of the action, as required for intervention as of right under Rule 24(a)(2). Once again, the proposed intervenor has the better argument. To establish the sufficiency of its interest under Rule 24(a)(2), Nissan West Mobile “must demonstrate an interest relating to the property or transaction which is the subject of the action.” Bayshore, 471 F.3d at 1246 (internal quotation marks and emphasis omitted). This “flexible” test examines whether the proposed intervenor is asserting an interest that is “direct, substantial, and legally protectable, ” such that the intervenor is “at least a real party in interest in the transaction which is the subject of the proceeding.” Huff v. Commissioner of IRS, 743 F.3d 790, 796 (11th Cir. 2014) (citations and internal marks omitted). Under any reasonable construction, Nissan West Mobile has a direct, substantial and legally protectable interest in the transaction at issue in this litigation. Recall that Nissan of Mobile seeks, inter alia, a permanent injunction barring NNA from entering into a Dealer Agreement with Nissan West Mobile to open a Nissan dealership in west Mobile. NNA and Nissan West Mobile have entered into a contract for Nissan West Mobile to operate the very dealership whose existence Nissan of Mobile seeks to stamp out; thus, plaintiff is pursuing an injunction that, if granted, would wipe out Nissan West Mobile's contractual interest in that west Mobile dealership. This is not a speculative, indirect or ancillary connection; rather, Nissan West Mobile's rights and interests are directly implicated by Nissan of Mobile's Amended Complaint. These facts and circumstances plainly satisfy the protectable interest requirement of Rule 24(a)(2), and support a conclusion that in the interests of efficiency, fairness and due process, Nissan West Mobile should have an opportunity to appear and defend against Nissan of Mobile's claims asserted herein.[3]

         Finally, the parties disagree as to whether Nissan West Mobile satisfies the requirement that its interest is represented inadequately by the existing parties. In particular, plaintiff seizes on Nissan West Mobile's admission that “NNA and Proposed Intervenor have the same goal, to open the Proposed Dealership.” (Doc. 31, at 8.) Under Circuit precedent, this acknowledgement gives rise to a weak presumption that NNA's representation is adequate to protect Nissan West Mobile's interests. See, e.g., Technology Training, 874 F.3d at 697 (“The intervenors and the existing plaintiffs are pursuing the same general objective … so we presume that the plaintiffs' representation is adequate. … But the presumption is weak; in effect, it merely imposes upon the proposed interven[o]rs the burden of coming forward with some evidence to the contrary.”) (citations and internal quotation marks omitted). The proposed intervenor's burden on this factor has been described as “minimal, ” and Nissan West Mobile need only show that NNA's representation “may be” inadequate.[4] The Court finds that the proposed intervenor has made the requisite “minimal” showing of potential inadequacy. Because NNA is a manufacturer with hundreds of franchised dealerships nationwide, its knowledge of and ability to advocate concerning the proposed west Mobile dealership may be inferior to that of Nissan West Mobile, such that Nissan West Mobile cannot count on NNA to make arguments that Nissan West Mobile deems most important, particularly as to the statutory consideration “[w]hether it is beneficial or injurious to the public welfare for an additional franchise to be established.” Ala. Code. § 8-20-4(3)(l). Moreover, it is not difficult to envision a scenario in which NNA's and Nissan West Mobile's interests diverge in the defense strategy of this litigation; after all, NNA's responsibility is to its myriad dealerships nationwide, whereas Nissan West Mobile appears solely concerned with its contractual rights and ability to operate a single Nissan dealership in west Mobile. Under the circumstances, the Court is satisfied that Nissan West Mobile has satisfied its “minimal” burden of showing that NNA “may be” inadequate to represent its interests herein.[5]

         For all of the foregoing reasons, the Court concludes that the Motion to Intervene is due to be granted and that Nissan West Mobile is entitled to intervene in these proceedings as a ...

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