Intervention Motions and Mootness Following Stipulated Dismissal: Insights from Local Roots Cannabis Company v. City of Perry

Introduction

The case of Jonathan Moses; Liberty Wellness, LLC v. City of Perry, Michigan, with 120 West LLC dba Local Roots Cannabis Company as a Proposed Intervenor-Appellant (90 F.4th 501) presents a pivotal examination of the interplay between intervention motions and stipulated dismissals within federal civil litigation. Decided by the United States Court of Appeals for the Sixth Circuit on January 4, 2024, this case delves into the procedural intricacies that determine whether a proposed intervenor can challenge a dismissal stemming from a settlement between the original parties.

The central issue revolves around Local Roots Cannabis Company's attempt to intervene in a lawsuit between Liberty Wellness, LLC and the City of Perry, Michigan. The plaintiffs sought enforcement of a voter-approved marijuana licensing scheme, which the city contested, leading to litigation and eventual settlement before the court could rule on the intervention. This commentary dissects the court's reasoning, the legal precedents upheld, and the implications for future cases involving intervention motions.

Summary of the Judgment

The United States Court of Appeals for the Sixth Circuit affirmed the district court's decision to deem Local Roots Cannabis Company's motion to intervene as moot. The original plaintiffs, Liberty Wellness, LLC and Jonathan Moses, had initiated litigation to compel the City of Perry to honor a voter-approved amendment regarding marijuana facility licensing. Shortly after Local Roots Cannabis Company filed a motion to intervene, the original parties settled and dismissed the case with prejudice, stipulating that the district court would retain jurisdiction solely to enforce the settlement agreement.

The appellate court concluded that the stipulation of dismissal effectively rendered the intervention motion moot. Local Roots Cannabis Company, having not been granted intervenor status before the dismissal, lacked standing to challenge the validity of the stipulation or to argue that the motion should remain open. The court emphasized that under Federal Rules of Civil Procedure, a proposed intervenor does not attain party status until their motion is explicitly granted, thereby solidifying the mootness of their intervention when the underlying case is dismissed.

Analysis

Precedents Cited

The judgment extensively references pivotal cases and rules that shape the framework for intervention and mootness:

• Ams. United for Separation of Church & State v. City of Grand Rapids (6th Cir. 1990): The court highlighted that any district court order denying a motion to intervene as moot is appealable, treating it akin to an outright denial.
• FIDEL v. FARLEY (6th Cir. 2008): Reinforced that nonparties generally lack the right to appeal unless they have properly intervened in the case.
• Kokkonen v. Guardian Life Insurance Co. of America (U.S. Supreme Court, 1994): Clarified that retaining jurisdiction to enforce settlement agreements is a separate matter from the merits of the case itself.
• Mut. Produce, Inc. v. Penn Cent. Transp. Co. (D. Mass. 1988): Supported the notion that proposed intervenors do not become parties until their motion is granted.

These precedents collectively informed the court's perspective on the boundaries of intervention motions, especially in scenarios where original parties negotiate settlements that subsequently dismiss the case.

Legal Reasoning

The court's legal reasoning was methodical and anchored in the Federal Rules of Civil Procedure. Central to this reasoning was the interpretation of party status under Rule 24, which governs intervention. The court opined that:

• A proposed intervenor does not attain party status merely by filing a motion to intervene; explicit court approval is requisite.
• The stipulation of dismissal by the original parties, even if signed by the defendant, does not require the intervenor's consent to be effective.
• Once the case is dismissed with prejudice, and the stipulation precludes reopening the case except for enforcing the settlement, any pending motions to intervene lose their relevance, thereby becoming moot.

Additionally, the court addressed and dismissed the appellant's arguments regarding local rules and other procedural nuances, reinforcing that federal rules take precedence over local variations.

Impact

This judgment serves as a critical reference point for litigants and legal practitioners concerning the timing and viability of intervention motions. Key implications include:

• Clarity on Mootness: Establishes that intervention motions are susceptible to being rendered moot by settlements between original parties, even if a district court retains ancillary jurisdiction for enforcement.
• Procedural Timing: Highlights the importance for proposed intervenors to act promptly and seek intervention before opportunistic dismissals occur.
• Limitations on Nonparties: Reinforces the principle that nonparties retain limited recourse in appealing beyond their granted interventions, emphasizing the necessity of formal inclusion into the litigation.

Future cases involving intervention will likely consult this decision to navigate the complexities of procedural dismissals and the boundaries of intervenor participation.

Complex Concepts Simplified

Conclusion

The Sixth Circuit's affirmation in Local Roots Cannabis Company v. City of Perry underscores the stringent conditions under which intervention motions are considered active and actionable within federal litigation. By clarifying that stipulated dismissals by original parties inherently moot pending intervention motions, the court delineates a clear boundary for proposed intervenors. This decision not only reinforces procedural protocols but also emphasizes the strategic timing required for effective intervention. Legal practitioners and parties involved in similar disputes must heed these guidelines to navigate the complexities of civil litigation effectively, ensuring that actions to intervene are both timely and procedurally sound to maintain their viability within ongoing cases.

Overall, this judgment contributes significantly to the body of law governing intervention and mootness, offering a nuanced interpretation that balances the interests of original parties and potential intervenors within the judicial process.