United States District Court, D. Minnesota
Katherine Menendez United States Magistrate Judge.
matter is before the Court on Eric Berg's Motion to
Intervene and for Contempt. Berg Mot., ECF No. 311. The Court
held a hearing on the motion on October 3, 2019. For the
reasons that follow, the motion is granted in part. Mr. Berg
is permitted to intervene for limited purposes in this case
and although a finding of contempt is unnecessary, the Court
concludes that defendants Wendy Brown and A.W. Companies
(“AW”), and their attorney, Alex Loftus,
should be subject to sanctions under
Federal Rule of Civil Procedure 37(b)(2) for violating the
Berg was originally a defendant in the lawsuit, but in
August, 2018, MRI dismissed its claims against him. Order
(Aug. 9, 2018), ECF No. 163. He is now performing work in
some capacity for MRI. On December 7, 2018 Mr. Berg filed a
separate lawsuit against Mr. Brown, Ms. Brown, and AW in
Minnesota state district court. The state court litigation
remains pending and, at the time of the October 3, 2019
hearing in this matter, Mr. Berg's deadline for
responding to the defendants' motion for summary judgment
in that case was fast approaching.
2019, Mr. Berg received a subpoena from the parties seeking
his deposition in this case. Through his counsel, Scott
Moriarty, Mr. Berg made clear that his subpoenaed deposition
testimony could not be used in the state court litigation.
Moriarty Decl, Ex. 1, ECF No. 315-1. At the hearing, Mr.
Moriarty explained the context for his email in more detail.
Specifically, Mr. Moriarty represented, without disagreement
from defense counsel, that the defendants in the state court
litigation had failed to serve any written discovery requests
by the applicable state court deadline, which had passed.
Though their requests were untimely, the defendants took the
position in the state case that they would not take Mr.
Berg's deposition in connection with that matter until he
responded to their written discovery requests. Mr.
Moriarty's communications in response to the federal
subpoena attempted to avoid responding to discovery requests
in the state court case that the defendants had allegedly
failed to diligently pursue. To put it simply, Mr. Berg did
not want the defendants to use the federal-case deposition to
end-run the already expired state court deadlines.
Mr. Berg's deposition in this case, Mr. Moriarty
designated certain testimony regarding Berg's income and
his consulting work “Confidential-Attorney's Eyes
Only” (“AEO”) under the Protective Order.
Moriarty Decl., Ex. 3, ECF No. 318-1; see also
Protective Order (“PO”), ECF No. 88. Mr. Moore
was representing the defendants at the deposition and did not
object to the AEO designation. After he received a transcript
of the deposition, Mr. Moriarty informed the parties'
counsel that he was preliminarily designating the entire
transcript AEO, but would follow up with the parties
regarding a “more detailed description of the matters
to be designated Confidential or AEO.” Moriarty Decl.,
Ex. 4, ECF No. 315-4. Neither Mr. Moore, nor his co-counsel,
Mr. Loftus, objected to the designation.
weeks after Mr. Berg's deposition, on September 4, 2019
Mr. Moriarty took Ms. Brown's deposition in the state
court litigation. Ms. Brown testified regarding her knowledge
of Mr. Berg's approximate income from his consulting
business and indicated she learned those details after
reading his deposition transcript from this case. Moriarty
Decl., Ex. 5, ECF No. 318-2. Because Mr. Moriarty had
notified counsel that the deposition transcript should be
treated as AEO material, and the Protective Order in this
case prevents AEO designated information from being used in
another proceeding or from being shared with a party, Mr.
Berg believed Ms. Brown's testimony showed the Protective
Order had been violated. Mr. Moriarty raised this issue with
Mr. Moore during Ms. Brown's deposition, but Mr. Moore
asked that the matter be addressed later. On September 6,
2019, Mr. Moriarty sent Mr. Moore and Mr. Loftus a letter
asking to discuss this issue sometime before September 11th.
Moriarty Decl., Ex. 6, ECF No. 315-6. Neither Mr. Moore nor
Mr. Loftus raised any disagreement with the propriety of the
designation in response to the September 6th letter or at any
other time, and Mr. Moriarty received no other response.
September 18, 2019, Mr. Moriarty drafted a letter narrowing
the specific portions of Mr. Berg's transcript that were
being designated Confidential and AEO. Moriarty Decl., Ex. 7,
ECF No. 315-7. On September 19, 2019, despite having received
Mr. Moriarty's September 6th and 18th letters, the
defendants in the state court litigation publicly filed the
transcript of Mr. Berg's August 13, 2019 deposition.
Moriarty Decl., Ex. 8, ECF No. 315-8. Mr. Berg's motion
to intervene and for contempt followed. After the October 3rd
hearing on the present motion, Mr. Loftus notified Mr.
Moriarty that the defendants in the state court litigation
would withdraw the entire motion for summary judgment they
filed. E-mail from A. Loftus to S. Moriarty (October 3, 2019,
11:15 CST) (on file with the Court).
Berg contends that he should be allowed to intervene for the
limited purpose of addressing the defendants' and their
attorneys' alleged violations of the Protective Order and
to remedy the harm caused by those violations. See
Intervention Pleading, ECF No. 311-1. MRI has not taken any
position on Mr. Berg's request. Min. Entry (Sept. 23,
2019), ECF No. 320. The defendants oppose Mr. Berg's
motion, arguing that he has not shown a valid basis to
intervene. Defs.' Resp., ECF No. 321.
Berg claims a right to intervene under Rule 24(a), or
alternatively, that his intervention is permissible under
Rule 24(b). “A party seeking mandatory intervention
under Rule 24(a) must establish that ‘(1) it has a
recognized interest in the subject matter of the litigation;
(2) the interest might be impaired by the disposition of the
case; and (3) the interest will not be adequately protected
by the existing parties.'” WaterLegacy v. U.S.
E.P.A., 300 F.R.D. 332, 338 (D. Minn. 2014) (quoting
S.D. ex rel. Barnett v. U.S. Dep't of Interior,
317 F.3d 783, 785 (8th Cir. 2003)).
intervention as a matter of right cannot be demonstrated, a
court has discretion to allow intervention under Rule 24(b)
and must construe the Rule liberally, resolving any doubts in
favor of the person seeking to intervene.
WaterLegacy, 300 F.R.D. at 338-39. A court may
permit intervention by anyone who “(A) is given a
conditional right to intervene by a federal statute; or (B)
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).
Courts must consider (1) whether the motion is timely; (2)
whether a shared question of law or fact exists between the
movant's claim and the main action; and (3) whether
intervention will result in undue delay or prejudice to the
original parties. Franconia Minerals (US) LLC v. United
States, 319 F.R.D. 261, 265 (D. Minn. 2017). When a
person “seek[s] to intervene only to modify a
protective order or unseal documents, and not to litigate a
claim on the merits, an independent basis for jurisdiction is
not required.” Flynt v. Lombardi, 782 F.3d
963, 967 (8th Cir. 2015) (reversing district court's
order denying journalist's motion to intervene for the
purpose of seeking to unseal judicial records).
“[P]ermissive intervention under Rule 24(b) is an
appropriate procedural vehicle for non-parties” who
seek to litigate their interests with respect to
confidentiality orders. See Id. (discussing
permissive intervention for the purpose of seeking access to
judicial records that are unavailable due to confidentiality
defendants generally allege that Mr. Berg should not be
allowed to intervene because the interests he seeks to
protect are collateral to the substance of the dispute
between the parties. See Defs.' Resp. at 6-13.
However, they do not point to any controlling Eighth Circuit
precedent addressing the issue here: whether a nonparty that
has marked information provided in discovery confidential
pursuant to a protective order may intervene to obtain
enforcement of that protective order.
defendants next argue that Mr. Berg's request to
intervene should be denied because he cannot show any injury
and therefore lacks standing. They assert that the
information designated as confidential (the amount Mr. Berg
was paid by MRI for consulting work), is already available
from other sources, so the disclosure of his transcript in
the state court litigation in support of the defendants'
summary-judgment motion caused no harm. See
Defs.' Resp. at 6- 9. For two reasons, this argument is
the Court concludes that a traditional showing of injury is
not required in this context. When an intervenor seeks to be
involved in litigation for a limited purpose related to the
application of a confidentiality order, some courts conclude
that the usual requirement of standing is unnecessary.
See In re Baycol Prods. Litig., 214 F.R.D. 542, 544
(D. Minn. 2003) (“To date the Eighth Circuit has not
yet ruled on whether standing is a prerequisite for
permissive intervention. … Other courts, however, have
created an exception to the standing requirement when third
parties seek intervention solely to challenge a
confidentiality order.”). The Court agrees that a
traditional showing of standing is unnecessary under the
circumstances presented here.
have permitted third parties to intervene under Rule 24 for
“collateral discovery issues” under similar
circumstances. J.D. Fields & Co. v. Nucor-Yamato
Steel Co., No. 4:12-cv-00754-KGB, 2015 WL 12696208, at
*2-4 (E.D. Ark. June 15, 2015) (granting nonparty's
motion to intervene for the limited purpose of opposing the
plaintiff's motion to remove confidentiality designations
from the nonparty's information produced in discovery);
see also California Parents for Equalization of
Educ. Materials v. Torlakson, No. 17-cv-00635-CRB(JSC),
2018 WL 3930141, at *4-6 (N.D. Cal. Aug. 16, 2018) (granting
nonparty's motion to intervene for the limited purpose of
joining a motion to maintain confidentiality designations on
documents produced pursuant to Rule 45 subpoena). Consistent
with these cases, the Court finds that where a nonparty has
been subpoenaed for a deposition, has marked aspects of his
deposition testimony confidential pursuant to a protective
order, and claims that a party to the case has used his
information in violation of the protective order, permissive
intervention under Rule 24(b) is appropriate.
Court is convinced that Mr. Berg should be permitted to
intervene under Rule 24(b). There is no principled
distinction between allowing a nonparty to a lawsuit to
intervene to modify a protective order or unseal records and
allowing intervention in a case like this one. Mr. Berg is a
third party whose interests are affected by the Court's
application of the Protective Order in this case. He is not
seeking to have a claim adjudicated on the merits here, but
merely to intervene to ensure that his confidential
information is protected. Allowing him to intervene will not
delay this litigation or prejudice any of the parties'
rights. S. Dakota ex rel Barnett v. U.S. Dep't of
Interior, 317 F.3d 783, 787 (8th Cir. 2003) (“The
principal consideration in ruling on a Rule 24(b) motion is
whether the proposed intervention would unduly delay or
prejudice the adjudication of the parties'
the record demonstrates that, even if some sort of injury is
required in this context, Mr. Berg has shown such harm.
Specifically, the defendants' violation of the Protective
Order likely required Mr. Berg to begin preparing a response
to a summary judgment motion that he would not have otherwise
had to defend. Indeed, his response to the state court
summary judgment motion would have been due the day after the
October 3rd hearing before this Court if Mr. Loftus had not
subsequently agreed during the hearing to withdraw that
motion. Although counsel for the defendants claimed that the
information in question was available from “other
sources, ” the only information that was submitted in
support of the defendants' summary judgment motion in the
state case was Mr. Berg's deposition transcript. ...