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Audi of America, Inc. v. Bronsberg & Hughes Pontiac, Inc.

United States District Court, M.D. Pennsylvania

July 11, 2016

AUDI OF AMERICA, INC., Plaintiff
v.
BRONSBERG & HUGHES PONTIAC, INC. d/b/a WYOMING VALLEY AUDI, Defendant

          Jones Judge

          MEMORANDUM ORDER

          Martin C. Carlson United States Magistrate Judge

         I. Factual Background

         On December 13, 2016, Audi of America, Inc., (“Audi”) brought a breach of contract action, alleging that defendant Bronsberg & Hughes Pontiac, Inc., d/b/a Wyoming Valley Audi (“Wyoming Valley”) breached certain terms of an Audi Dealer Agreement into which the parties entered on January 1, 1997, when it entered into an Asset and Real Estate Purchase Agreement (the “Purchase Agreement”) with the Napleton Group. Audi alleged that this Purchase Agreement between Wyoming Valley and the Napleton Group, which was Dated: July 11, 2016, included the sale of Wyoming Valley's Audi assets in violation of Audi's own right of first refusal and its right to refuse to consent to the transaction on reasonable grounds. (Doc. 1.) In January of 2017, Audi sought, and obtained, a preliminary injunction from the district court temporarily enjoining Wyoming Valley and Napleton from consummating the Purchase Agreement while this litigation was pending. (Doc. 30.) That order currently remains in effect, but is now the subject of an array of competing motions filed by the parties.

         These motions include: a motion to dismiss this action, and preliminary injunction, filed by the defendants, (Doc. 42.); a motion to intervene, filed Napleton, the other participant in this asset purchase agreement, (Doc. 52.); a motion filed by Audi for rule to show cause why various parties and non-parties should not be held in contempt for allegedly violating the terms of the district court's preliminary injunction, (Doc. 65.); and a motion by Audi to extend its preliminary injunction, (Doc. 119.). The proliferation of these motions, in turn, has inspired even further motions practice, as Audi issued subpoenas to a number of non-party witnesses, seeking to compel their appearance and attendance at the contempt proceedings which Audi has initiated before this court. Some of these subpoenaed witnesses have moved to quash the outstanding subpoenas served upon them. (Docs. 101, 108, and 136.)

         This on-going flurry of motions practice has compelled a division of labor within the court in order to address these various pleadings. Thus, the district court is addressing the defendants' motion to dismiss, and Audi's motion to extend the preliminary injunction. (Docs. 42 and 119.) Indeed, a hearing is scheduled by the district court on June 28, 2017, to determine whether, and to what extent, the preliminary injunction should remain in effect.

         Napleton's motion to intervene, Audi's motion to show cause why various parties and non-parties should be held in contempt, and attendant motions to quash subpoenas relating to this show-cause hearing, have been referred to the undersigned. (Docs. 52, 65, 108, 136.) In an effort to create a more orderly process out of this proliferation of motions, we are addressing six of these pending motions, as described below.

         I. Discussion

         A. Napleton's Motion to Intervene is Granted

         At the outset, Napleton has moved to intervene in this litigation both as a matter of right under Rule 24(a)(2) and permissively under Rule 24(b) of the Federal Rules of Civil Procedure. Under Rule 24 it is well settled that even:

If a party fails to meet the requirements of Rule 24(a) to intervene as a matter of a right, that party nonetheless may be granted permission to intervene under Rule 24(b). Rule 24(b) provides, in pertinent part: “On timely motion, the court may permit anyone to intervene who: ... has a claim or defense that shares with the main action a common question of law or fact....” Fed.R.Civ.P. 24(b)(1) (emphasis added). Rule 24(b) further provides that, when a court exercises its discretion, “the court must consider whether the intervention will unduly delay or prejudice the adjudication of the original parties' rights.” Fed.R.Civ.P.24(b)(3). In exercising its discretion, the court should consider various factors, including whether the proposed intervenors will add anything to the litigation and whether the proposed intervenors' interests are already adequately represented in the litigation. Hoots, 672 F.2d at 1136.

Benjamin v. Dep't of Pub. Welfare of Cmwlth., 267 F.R.D. 456, 464-65 (M.D. Pa. 2010), aff'd sub nom. Benjamin v. Dep't of Pub. Welfare of Pennsylvania, 432 F.App'x 94 (3d Cir. 2011).

         As the text of Rule 24(b) implies, decisions regarding requests for permissive joinder rest in the sound discretion of the court and will not be disturbed absent an abuse of that discretion. Hoots v. Com. of Pa., 672 F.2d 1133, 1135 (3d Cir. 1982). By its terms Rule 24(b) provides that: “On timely motion, the court may permit anyone to intervene who: . . . has a claim or defense that shares with the main action a common question of law or fact.” Fed. R. Civ. P., Rule 24(b)(1)(B). Thus, Rule 24(b), “lists three requirements for permissive intervention: (1) ‘timely application'; (2) ‘a question of law or fact in common' between the ‘applicant's claim or defense and the main action'; (3) a determination that the intervention will not ‘unduly delay or prejudice the adjudication of the rights of the original parties.' ” United States v. Columbia Pictures Indus., Inc., 88 F.R.D. 186, 189 (S.D.N.Y. 1980).

         Judged by these benchmarks, we conclude that Napleton's request for permissive intervention should be granted. This request was made early in the litigation and is thus timely. Moreover, Napleton undeniably has a direct interest in this lawsuit, in the form of claims and defense that share with the main action a common question of law or fact. Indeed, Napleton is a party to the Purchase Agreement which lies at the heart of this lawsuit, a transaction that Audi seeks to defeat, and enjoin. In such instances, where an injunction entered between parties may adversely affect the prospective contractual rights of a non-party, courts have in the exercise of their discretion permitted intervention. United States v. Columbia Pictures Indus., Inc., 88 F.R.D. 186, 188 (S.D.N.Y. 1980); Usery v. Brandel, 87 F.R.D. 670, 681 (W.D. Mich. 1980). Finally, we conclude that allowing Napleton to intervene will not delay these proceedings. Quite the ...


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