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Burke v. Federal National Mortgage Association

United States District Court, E.D. Virginia, Richmond Division

September 29, 2016

ASHLEY BURKE, individually and on behalf of a class of similarly situated persons, Plaintiff,


          Henry E. Hudson United States District Judge

         THIS MATTER is before the Court on a Motion to Intervene (ECF No. 59), filed on September 2, 2016, through which the Federal Housing Finance Agency (the "FHFA" or ''movant") seeks to intervene as a defendant in the above-captioned matter. For the reasons stated herein, the Motion will be denied.

         I. BACKGROUND

         Plaintiff Ashley Burke ("Plaintiff) filed a Complaint on behalf of herself and a putative class of similarly situated persons on March 11, 2016, alleging that the Federal National Mortgage Association ("Defendant") violated her rights under the Fair Credit Reporting Act by unlawfully obtaining her credit report under the false pretense of an "account review, " even though no account existed. (Compl. ¶ 3.) In claiming that Defendant violated 15 U.S.C. § 1681b(f), she contends that her privacy was invaded and that she was placed at an increased risk of identity theft and/or a data breach, resulting in anxiety and emotional distress. (Compl. ¶¶ 24-25.) Plaintiff seeks, inter alia, class certification, "actual and/or statutory damages and punitive damages, " and attorney's fees and costs. (Compl. ¶ 35.)

         Defendant filed its Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) on June 27, 2016. (ECF No. 30.) On August 9, 2016, the Court issued a Memorandum Opinion and an accompanying Order (ECF Nos. 57, 58) denying Defendant's Motion. Nearly one month later, on September 2, 2016, the FHFA filed its Motion to Intervene.[1] (ECF No. 59.) Plaintiff filed her Memorandum in Opposition to the FHFA's Motion to Intervene on September 16, 2016. (ECF No. 68). And the movant filed its Reply on September 22, 2016. (ECF No. 72.)

         Congress established the FHFA as the primary regulatory and oversight authority of the Defendant through the Housing and Economic Recovery Act of 2008 ("HERA"), Pub. L. No. 110-289, 122 Stat. 2654. On September 6, 2008, pursuant to HERA, 12 U.S.C. § 4617(a), the FHFA's director placed the Defendant into a conservatorship. In doing so, the FHFA succeeded to "all rights, titles, powers, and privileges" of the Defendant and its respective stockholders, boards of directors, and officers. 12 U.S.C. § 4617(b)(2)(A)(i).

         As Conservator, the FHFA is authorized to participate in litigation involving the Defendant and is empowered to "take such action as may be ... appropriate to ... preserve and conserve the assets and property of [the Defendant]." 12 U.S.C. § 4617(b)(2)(B)(ii). Further, HERA provides that "no court may take any action to restrain or affect the exercise of powers or functions of the [FHFA] as conservator ...." 12 U.S.C. § 4617(f).[2]

         In this capacity, the FHFA now seeks to intervene in this suit, two months before the scheduled trial date of December 5, 2016. (ECF No. 34.)


         Federal Rule of Civil Procedure 24 offers two avenues for intervention into a lawsuit by a non-party movant-intervention as of right and permissive intervention. A movant may intervene as of right "[o]n timely motion" if it has been "given an unconditional right to intervene by a federal statute." Fed.R.Civ.P. 24(a)(1). Additionally, the Court must permit anyone to intervene who, "[o]n a timely motion, " asserts "an interest relating to the property or transaction that is the subject of the action" such that "disposing of the action ... as a practical matter impair[s] or impede[s] the movant's ability to protect its interest, unless existing parties adequately represent that interest." Fed.R.Civ.P. 24(a)(2). Alternatively, at its discretion, the Court may permit intervention "[o]n timely motion" by a movant showing "a claim or defense that shares with the main action a common question of law or fact." Fed.R.Civ.P. 24(b)(1)(B). In determining whether to permit intervention, the Court must also consider delay or prejudice to the adjudication of the original parties' rights. Fed.R.Civ.P. 24(b)(3).

         The FHFA asserts that it should be granted intervention as of right under Rules 24(a)(1)[3] and 24(a)(2), or, alternatively, it seeks permissive intervention under Rule 24(b)(1). (Mem. in Supp. of Mot. to Intervene 2.) In her Memorandum in Opposition, Plaintiff "does not contest the FHFA's assertion that it may intervene as a matter of right;" rather, she contends that the Motion to Intervene is untimely. (Mem. in Opp'n to Mot. for Intervention 4.) As there appears to be no genuine dispute between the parties regarding the FHFA's right to intervene in this case as a matter of law, the Court will focus its analysis on Rule 24's threshold requirement that motions for intervention be "timely" filed.


         When assessing the timeliness of a motion to intervene under Rule 24, the Court "is obliged to assess three factors: first, how far the underlying suit has progressed; second, the prejudice any resulting delay might cause the other parties; and third, why the movant was tardy in filing its motion." Alt v. U.S. E.P.A., 758 F.3d 588, 591 (4th Cir. 2014).

         Beyond merely considering the factors articulated in Alt, the Fourth Circuit has noted the importance of this threshold requirement of timeliness and has emphasized that courts should be reluctant to stall "the momentum of [a] lawsuit" that is in the advanced stages of litigation. Id. And while '"the timeliness requirement of Rule 24 should not be as strictly enforced [where intervention is of right] as in a case where intervention is only permissive, "' Scardelletti v. Debarr,265 F.3d 195, 203 (4th Cir. 2001) (quoting Brink v. Da Lesio,667 F.2d 420, 428 (4th Cir. 1981)), rev'don other grounds by Devlin v. Scardelletti, 536 U.S. 1 (2002), it remains a "cardinal consideration" that is applicable to both ...

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