Thompson v. United States

Citations: 268 F.R.D. 319; 2010 U.S. Dist. LEXIS 63242; 2010 WL 2573884Docket: No. 08 C 1294

Court: District Court, N.D. Illinois; June 25, 2010; Federal District Court

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Midwest Partners' motion to intervene in the case is denied. The background involves Marvel Thompson, arrested in May 2004 for drug conspiracy, from whom the government seized approximately $320,000. After pleading guilty and receiving a 540-month prison sentence in 2007, Thompson sought the return of the seized funds in March 2008. Midwest, claiming to hold an unsatisfied judgment against Thompson from January 2004 for $28,774.01, moved to intervene in December 2008. The government opposed Thompson's motion, citing his minimal payment of the $100,000 fine and an ongoing tax dispute with the IRS regarding roughly $200,000 in unpaid taxes.

The court granted Thompson's motion in part, directing some funds to be used for his fine while allowing him to consider the remainder for the tax dispute, which will remain with the government pending resolution. 

Regarding Midwest's request to intervene, the court evaluated it under Federal Rule of Civil Procedure 24, which allows for intervention as of right or permissive intervention. For intervention as of right, the movant must prove four criteria: timeliness, a related interest in the action, a threat to that interest from the action's resolution, and inadequate representation of that interest by existing parties. Midwest's motion was deemed inadequately developed, with only a copy of the default judgment provided and no substantial legal arguments made. Additionally, the court questioned the timeliness of Midwest's motion, given the judgment's age and the lack of information on prior enforcement attempts. Thus, the motion to intervene was denied.

Midwest has not provided a reasonable explanation for its delay in intervention, missing the opportunity to do so in its motions. It also fails to demonstrate a sufficient interest to justify intervention in the litigation. The Seventh Circuit has noted that the 'interest' required by Rule 24(a)(2) is not precisely defined but must be direct, significant, and legally protectable, rather than merely economic. Courts have ruled that an economic interest alone, such as anticipating a benefit from a judgment in favor of a party, does not suffice for intervention. A pertinent example involves Wisconsin gasoline dealers whose interests were aligned with legislation intended to protect them, which justified their intervention. In contrast, Midwest's interest in the ongoing litigation is purely practical and economic—focused on debt collection—thus not meeting the criteria for intervention under Rule 24(a). Additionally, Midwest has not established that its ability to collect its debt would be impaired by not intervening, as impairment is assessed by whether the legal decisions in the case would practically foreclose the intervenors' rights in future proceedings. There is no indication in Midwest’s motion that enforcing its judgment in a separate action would be impossible.

In Shea v. Angulo, the court determined that a party's interests were not impaired since they could initiate their own suit to recover partnership earnings. When the outcome of a suit does not prevent a potential intervenor from asserting rights in a separate action, the 'impairment' criterion under Rule 24(a) is generally not satisfied. Midwest's request for permissive intervention was also unsuccessful. Under Rule 24(b), district courts have significant discretion in allowing third-party interventions to safeguard their interests. Permissive intervention is appropriate when the movant demonstrates (1) a shared legal or factual question with an existing party, (2) a timely application, and (3) the court's independent jurisdiction over the claims. Midwest's motion failed to address any of these factors, providing only a vague assertion that it should be allowed to intervene due to its claim to the disputed funds. Complications arise as Thompson's property is already claimed by the IRS and potentially other creditors, with the IRS not being a party in the current proceedings. Midwest has not substantiated that its claim to Thompson's funds is superior to the IRS's claims. Addressing these complexities within Thompson's Rule 41 motion would unnecessarily delay the proceedings. Consequently, Midwest's motion for both intervention as of right and permissive intervention was denied. Additionally, Midwest claims that Thompson owes it $44,938.05, including a principal sum and interest, but Thompson challenges the validity of this judgment, particularly questioning whether proper legal procedures were followed in Illinois. However, these challenges are set aside for the current motion.