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Uesugi Farms, Inc. v. Michael J. Navilio & Son, Inc.

United States District Court, N.D. Illinois, Eastern Division

June 25, 2015

UESUGI FARMS, INC., et al., Plaintiffs,
MICHAEL J. NAVILIO & SON, INC., d/b/a NAVILIO AND SON, INC., et al., Defendants.


JOHN W. DARRAH, District Judge.

Plaintiffs Uesugi Farms, Inc. and San Joaquin Tomato Growers, Inc. have brought this lawsuit for alleged violations of the Perishable Agricultural Commodities Act ("PACA"), 7 U.S.C. § 499e, et seq., against Defendants. Third Party Quality Food Products, Inc. ("Quality") has moved to intervene as an Intervenor-Plaintiff in the action. Defendants have opposed Quality's Motion. For the reasons discussed below, Quality's Motion [53] is granted.


On February 26, 2015, Plaintiffs, sellers and shippers of perishable agricultural commodities, filed their Complaint and a Motion for a Temporary Restraining Order ("TRO") against Defendants. Plaintiffs alleged that they had not been paid for produce that was shipped to Defendants and sought to preserve their beneficiary interests in trust assets created pursuant to PACA, 7 U.S.C. § 499e.[1] On February 27, 2015, the Court granted Plaintiffs' TRO.

On March 19, 2015, by Agreed Order, the Court granted motions to intervene filed by Anthony Marano Co. ("Marano") and Strube Celery & Vegetable Co. ("Strube"). The March 19, 2015 Agreed Order further reflected that the parties were negotiating a settlement. On March 24, 2015, another third party, Bebo Distributing Co., Inc. ("Bebo"), filed a Motion to Intervene. On March 25, 2015, with the parties' agreement, the TRO was dissolved.

On March 27, 2015, Quality filed its Motion to Intervene as a Plaintiff. Quality alleges that it is a perfected PACA trust creditor of Defendants and has claims to the same PACA trust as the other Plaintiffs.

On April 16, 2015, two Agreed Orders were entered: one granted Bebo's Motion to Intervene, reflected that the parties had reached a settlement and dismissed Bebo's Intervening Complaint; the other reflected that the action was dismissed and that Marano and Strube had withdrawn their Motions to Intervene. However, at that time, Quality's Motion to Intervene was still pending, and, for this reason, the action was not closed.


Rule 24(a) of the Federal Rules of Civil Procedure governs intervention as a matter of right. Under this rule, a party must establish: (1) a timely motion; (2) an interest relating to the property or transaction that is the subject of the lawsuit; (3) potential impairment to its interest by the disposition of the lawsuit; and (4) lack of adequate representation of its interest by the existing parties. Sokaogon Chippewa Comm. v. Babbitt, 214 F.3d 941, 945-46 (7th Cir. 2003). "[A]t some fundamental level, the proposed intervenor must have a stake in the litigation." Id. at 946. Failure to meet any of these four factors requires the denial of the motion to intervene. Reich v. ABC/York-Estes Corp., 64 F.3d 316, 321 (7th Cir. 1995).



A district court holds the discretion on the issue of timeliness and considers the following factors: "(1) length of time the intervenor knew or should have known of his interest in the case; (2) prejudice caused to the original parties by the delay; (3) prejudice to the intervenor if the motion is denied; and (4) unusual circumstances." Heartwood, Inc. v. U.S. Forest Serv., Inc., 316 F.3d 694, 701 (7th Cir. 2003). "The test for timeliness is essentially one of reasonableness: potential intervenors need to be reasonably diligent in learning of a suit that might affect their rights, and upon so learning they need to act reasonably promptly." Reich, 64 F.3d at 321 (internal citations and quotations omitted).

Here, Quality filed its Motion within a reasonable time of learning of the lawsuit. The Complaint was filed on February 26, 2015, and Quality filed its Motion roughly one month later. See, e.g., In re Discovery Zone Sec. Litig., 181 F.R.D. 582, 594 (N.D. Ill. 1998) (finding one month to be a reasonable time); Reich, 64 F.3d at 321 (finding motion to intervene filed thirty-three days after party learned of interest in case timely); United States v. City of Chicago, 870 F.2d 1256, 1263 (7th Cir. 1989) (finding six weeks timely). Although Defendants argue that Quality knew of its claims for months after the first missed payment, the analysis focuses on when Quality acted diligently in pursuing its interest in this lawsuit. Clearly, Quality acted diligently in filing its Motion within a short time of learning of the lawsuit.

This short amount of time also weighs against a finding of prejudice to the original parties. Although Defendants argue that they will be prejudiced because they have entered into settlement agreements with the other Plaintiffs, ...

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