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Daniel Askin, On Behalf of Himself and All Others Similarly Situated v. the Quaker Oats Company

October 20, 2011


The opinion of the court was delivered by: Magistrate Judge Young B. Kim


In this purported class action brought under this court's diversity jurisdiction, Daniel Askin alleges that The Quaker Oats Company ("Quaker") deceptively labels several of its granola and oatmeal products as being "heart-healthy" despite the fact that their ingredients include artificial trans-fats. Askin claims that these labeling practices violate the Illinois Consumer Fraud and Deceptive Practices Act ("ICFA"), 815 ILCS § 505/1, et seq., and common law breach of warranty principles. Askin's suit comes on the heels of three similar suits previously filed in the Northern District of California, bringing nearly identical claims under California's consumer protection laws. Quaker has moved to dismiss Askin's suit under the first-to-file rule. Currently before the court is the motion to intervene filed by Victor Guttmann, Kelley Bruno, Sonya Yrene, and Rebecca Yumul (together, "the Guttmann plaintiffs"), all plaintiffs in the consolidated putative class action pending in California. They seek to intervene in this case for the limited purpose of filing their own motion to dismiss under the first-to-file rule. For the following reasons, the motion is granted:


In February, November, and December 2010 three distinct sets of plaintiffs filed their respective putative class actions against Quaker in the Northern District of California. Guttmann and Robert Chacanaca filed the first suit, alleging that Quaker's Chewy Granola Bars contain artificial trans fats and are deceptively labeled. Next came Yrene's suit, making similar claims with respect to Quaker's Instant Oatmeal. Third in line were Bruno and Yumul, who took aim at Quaker's Oatmeal to Go Bars. Two days after that third filing, the plaintiffs in the first suit moved to consolidate the actions and appoint their counsel, the Weston Firm and Law Offices of Ronald A. Marron, as interim class counsel. But Chacanaca hired a new law firm, Reese Richman in New York, to replace his original attorney. Reese Richman filed the current Illinois action on behalf of Askin on January 7, 2011, and then six days later filed a motion in California on Askin's behalf under 28 U.S.C. § 1407, seeking to move the California actions to Illinois. As a result, the district court in California stayed the first case and deferred ruling on the pending consolidation motion. See Chacanaca v. Quaker Oats Co., C 10-0502 RS, 2011 WL 441324, at *2 (N.D. Cal. Feb. 3, 2011).

After holding a hearing on Askin's motion to transfer, an MDL panel denied the motion in April 2011, explaining that Askin had not given a sufficient reason to centralize the various proceedings. (R. 48-2, Ex. B at 2.) The panel pointed out that a fourth action, Pelobello v. The Quaker Oats Co., No. 3:11-00093, had been filed in the Northern District of California, and concluded that the various parties "have every ability to cooperate and minimize the possibilities of duplicative discovery and inconsistent pretrial rulings between the four Northern District of California actions and the sole outlying Northern District of Illinois action." (Id.) The MDL panel concluded that the filing of the Illinois case "is insufficient reason at this point to centralize these proceedings." (Id.)

Three days after the MDL panel's decision the Guttmann plaintiffs renewed their motion to consolidate the actions pending in the Northern District of California. Chacanaca opposed the motion and sought to have Reese Richman (Askin's counsel here) appointed as interim class counsel. On June 14, 2011, the district court in California granted the Guttmann plaintiffs' motion, consolidated the four California cases, and appointed the Weston and Marron firms as interim counsel in the consolidated actions. (R. 48-4, Ex. D at 3.) Ten days later, the Guttmann plaintiffs filed their amended consolidated complaint-which had been lodged in the Guttmann case since December 2010-alleging violations of California's unfair competition, false advertising, and consumer protection laws. (R. 48-5, Ex. E ¶¶ 110-144.)

Three days after the consolidation of the California actions, Askin filed his amended complaint in this case, including in his complaint allegations that are partly copied from the California consolidated complaint. (Compare R. 22 with R. 48-5, Ex. E.) On June 30, 2011, the parties in this case consented to the jurisdiction of this court. See 28 U.S.C. § 636(c); (R. 25). One week later Quaker filed two motions to dismiss: one under the first-to-file rule, (R. 32), and one under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), arguing that Askin lacks standing in this case, (R. 38). The Guttmann plaintiffs filed the current motion to intervene four days later, on July 11, 2011.*fn1 They seek leave to intervene in this matter for the purpose of filing their own motion to dismiss. (R. 46.)


The Guttmann plaintiffs argue that they are entitled to intervene in this action as of right under Rule 24(a), and alternatively, that they qualify for permissive intervention under Rule 24(b). Intervention is a procedural device meant to promote efficiency in the resolution of legal disputes by consolidating related legal questions in a single lawsuit on the one hand, while on the other hand not allowing a single suit to become "'unnecessarily complex, unwieldy or prolonged.'" Shea v. Angulo, 19 F.3d 343, 349 (7th Cir. 1994) (quoting United States v. Pitney Bowes, Inc., 25 F.3d 66, 69 (2d Cir. 1994)). This court concludes that although the Guttmann plaintiffs have not shown that they meet the requirements for intervention as of right, the competing polices above are best served by granting their motion for permissive intervention and allowing them to file their motion to dismiss under the first-to-file rule.

I. Intervention as of Right

"A party may seek intervention as of right if the party has 'an interest' and is 'so situated that the disposition of the action may as a practical matter impair or impede the applicant's ability to protect that interest, unless the applicant's interest is adequately represented by the existing parties.'" Ligas ex rel. Foster v. Maram, 478 F.3d 771, 773 (7th Cir. 2007) (quoting Fed. R. Civ. P. 24(a)(2)). In order to prevail on a motion to intervene under Rule 24(a), the moving party must meet the following criteria: (1) the motion to intervene must be timely; (2) the proposed intervenors must have a legally protected interest related to the subject matter of the action; (3) the disposition of the suit must threaten to impair that interest; and (4) the proposed intervenor's interest must not be adequately represented by the existing parties. Id. "The proposed intervenor has the burden of proving each element, and lack of even one element requires denial of the motion." American Nat'l Bank & Trust Co. of Chicago v. City of Chicago, 865 F.2d 144, 146 (7th Cir. 1989).

The Guttmann plaintiffs have established that their motion to intervene is timely within the meaning of Rule 24. The test for timeliness is primarily one of reasonableness, Reich v. ABC/York-Estes Corp., 64 F.3d 316, 321 (7th Cir. 1995), under the guise of which four factors are weighed: "(1) the length of time the intervenor knew or should have known of his interest in the case, (2) the prejudice to the original party caused by the delay, (3) the resulting prejudice to the intervenor if the motion is denied, and (4) any unusual circumstances," People Who Care v. Rockford Bd. of Educ., 68 F.3d 172, 175 (7th Cir. 1995). There is no precise time limit under this test, which is designed primarily to ensure that potential intervenors are diligent "in learning of a suit that might affect their rights," and that they act "reasonably promptly" in moving to protect those rights. Nissei Sangyo Am., Ltd. v. United States, 31 F.3d 435, 438-39 (7th Cir. 1994); see also Aurora Loan Servs., Inc. v. Craddieth, 442 F.3d 1018, 1027 (7th Cir. 2006) ("The reason for requiring promptness is to prevent a tardy intervenor from derailing a lawsuit within sight of the terminal." (Internal quotation omitted.)).

Although the Guttmann plaintiffs did not file the current motion until seven months after Askin filed his original complaint, they filed it only three weeks after the district court in California ruled on the motion to consolidate the actions pending there. That decision appointed as interim class counsel the law firms representing the Guttmann plaintiffs, thereby establishing the core legal interest that the Guttmann plaintiffs now point to in support of this motion. Because they acted with dispatch from the time that interest arose, the first factor weighs in their favor. As for the second factor, the existing parties will not suffer any prejudice from allowing intervention at this stage because the proposed intervention is for the purpose of filing a motion to dismiss. Quaker's motion to dismiss under the first-to-file rule is currently pending and not yet fully briefed, so allowing the Guttmann Plaintiffs to intervene to submit their own motion will not delay the current proceedings in any meaningful way. On the other hand, the Guttmann plaintiffs would be prejudiced by the denial of the opportunity to bring before this court its arguments pertaining to the import of the consolidated California actions. Additionally, the "unusual circumstances" factor falls in the Guttmann plaintiffs' favor, given Askin's counsel's role in prolonging the relevant class-action litigation against Quaker. Askin's counsel, on behalf of Chacanaca, was competing in the California litigation with the Guttmann plaintiffs with respect to the motion to consolidate, and Askin managed to delay that decision by filing this suit and the unsuccessful MDL motion six days later. Accordingly, all of these factors point toward a finding that the motion to intervene is timely.

The Guttmann plaintiffs do not fare as well, however, in their attempt to show that their interest in this case-and the potential threat to that interest-is the kind that is contemplated by Rule 24(a)(2). Precisely what the requisite interest is has never been defined with any particularity, but the Seventh Circuit has made clear that it must be a "'direct, significant, legally protectable' one." Security Ins. Co. of Hartford v. Schipporeit, Inc., 69 F.3d 1377, 1380 (7th Cir. 1995) (quoting American Nat'l Bank, 865 F.2d at 146). In other words, "the applicant's interest must be one on which an independent federal suit could be based." Aurora Loan, 442 F.3d at 1022. In evaluating the proposed intervenor's interest, this court focuses "on the issues to be resolved by the litigation and whether the potential ...

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