The opinion of the court was delivered by: Judge Robert W. Gettleman
MEMORANDUM OPINION AND ORDER
In a span of two months, plaintiff Daniel B. Nicholas, on behalf of himself and all others similarly situated, filed this putative class action against defendant Conseco Life Insurance Company challenging defendant's 2011 cost of insurance ("COI") rate scales in its universal life insurance policies, hired a former federal judge as a mediator, and negotiated a settlement with defendant whereby a nationwide class would be certified and all class members would be permanently barred and enjoined from filing, commencing, continuing, prosecuting or receiving benefits or other relief from any other lawsuit based on or relating to the claims alleged in the instant case.
On April 4, 2012, after a conference call to the court placed by counsel for plaintiff and defendant, plaintiff wrote to the court asking it to certify a nationwide settlement class, appoint plaintiff as a class representative, appoint plaintiff's counsel as lead counsel, directing notice to the class, preliminarily approving a class-wide settlement, and issuing a preliminary injunction enjoining all other actions based on the allegations in the instant complaint and enjoining all persons from filing or prosecuting a class action (including by amending a pending action to include class allegations) on behalf of non-excluded class members based on or relating to the allegations of the complaint. Excepted from the proposed preliminary injunction was the continued limited prosecution of a virtually identical class action already pending in the Central District of California in which that court had already certified two subclasses of California policy holders and had under advisement a motion to certify a nationwide class. Yue v. Conseco Life Insurance Co., CV 11-9506 (AHM) ("Yue II"). The proposed order limited the continued prosecution of Yue II to only the claims brought on behalf of the two subclasses. Plaintiff specifically asked the court to keep the letter confidential until the court ruled on the "request" for Preliminary Approval Order, ostensibly because Conseco "needs to notify certain regulators about the settlement before it becomes public."
Dr. Celedonia Yue ("Dr. Yue"), the named plaintiff in Yue II who has been challenging Conseco's COI rate increases for over four years in the Central District of California, see Yue v. Conseco Life Insurance Co., 2011 WL 210943 (C.D. Cal. 2011) ("Yue I"), has moved to intervene as a plaintiff in the instant action and to transfer the action to the Central District of California so it can be heard by Judge Matz, to whom Yue II is assigned and who has presided over litigation challenging Conseco's COI rates for over eight years, including acting as designated MDL judge in In re Conseco Life Insurance Cost of Insurance Litigation, MDL 1610 (C.D. Cal.) (MDL 1610). Plaintiff and defendant oppose both motions, characterizing them as "a thinly veiled effort to derail a class-wide settlement that . . . is in the best interest of the class." For the reasons that follow both of Dr. Yue's motions are granted.
Dr. Yue has moved to intervene as a matter of right under Fed. R. Civ. P. 24(a)(2), which provides that upon timely motion the court must permit anyone to intervene who:
(2) claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant's ability to protect its interests unless existing parties adequately represent that interest.
To prevail on her motion to intervene as a matter or right, Dr. Yue must establish that:
(1) the motion is timely; (2) she claims an interest relating to the property or transaction at issue;
(3) disposition of the action as a practical matter may impede or impair her ability to protect that interest; and (4) her interest is not represented adequately by the existing parties to the suit. Vollmer v. Publishers Clearinghouse, 248 F.3d 698, 705 (7th Cir. 2001). The burden is on Dr. Yue to establish each element; failure to establish any element requires denial. Id. Dr. Yue has met this burden.
First, her motion is timely. The instant case is only three months old and her motion was filed only two days after plaintiff filed the amended complaint. There had been no activity in the case until then, and Dr. Yue would have no way to determine if her interest were being adequately represented until the parties (only after being ordered by the court) made their proposed settlement public.
Next, Dr. Yue obviously has an interest in the action, and neither plaintiff nor defendant has argued differently. She is a putative class member and named plaintiff in a virtually identical action that was already pending when the instant action was filed. The proposed settlement seeks to bar her from prosecuting her motion in Yue II to certify a nationwide class.
Those interests will, of course, be impaired by a resolution in the instant action. For example, the proposed order seeks a ban on informing class members of their option to opt out and join the Yue II class. Additionally, a decision in the instant case may destroy the effect of Judge Matz' order in Yue II preliminarily enjoining Conseco from implementing a 2011 COI rate increase. And, absent Dr. Yue's intervention, there is no party in the instant case to object to the proposed class certification, and no one to object to the terms of the settlement which she claims is inadequate. Thus, her interests are not being adequately represented by the parties to the instant action.
Plaintiff and defendant argue that there is no need for Dr. Yue to intervene because she has a right as an absent class member to object to the proposed settlement and to appeal the denial of that objection. "A member of a class in a class action suit, even if not a named party, can challenge a settlement that will bind him." Korczak v. Sedeman, 427 F.3d 419, 422 (7th Cir. 2005). She can, ...