United States District Court, E.D. Virginia, Richmond Division
MEMORANDUM OPINION
Robert
E. Payne Senior United States District Judge.
This
matter is before the Court on the INDIVIDUAL
COUNTER-DEFENDANTS' MOTION FOR LEAVE TO INTERVENE (ECF
No. 591) and JOHN G. PIERCE'S MOTION FOR LEAVE TO
INTERVENE (ECF No. 606). For the reasons set forth below, the
motions will be granted.
BACKGROUND
Steves
and Sons, Inc. ("Steves") initiated this action on
June 29, 2016, asserting several antitrust and contract
claims against JELD-WEN, Inc. ("JELD-WEN") related
to JELD-WEN's 2012 acquisition of CraftMaster
Manufacturing, Inc., as well as JELD-WEN's alleged breach
of a 2012 long-term doorskin supply agreement between Steves
and JELD-WEN ("the Supply Agreement"). After the
matter was set for trial, the Court implemented a detailed
schedule for pretrial proceedings, pursuant to which the
parties engaged in extensive discovery. ECF No. 65.
On
March 27, 2017, JELD-WEN sought leave to amend its Answer and
to add counterclaims against Steves. JELD-WEN asserted that
the counterclaims were based on its recent detection, from
documents produced by Steves during discovery, of
"Steves' theft of JELD-WEN trade secrets and
confidential information." ECF No. 101 at 1-2. In
relevant part, the counterclaims alleged that Steves-through
its principal officers, Edward Steves and Sam Steves II
("the Steves Brothers")-and two former JELD-WEN
employees, John Pierce ("Pierce") and John Ambruz
("Ambruz"), had engaged in a conspiracy and had
stolen trade secrets from JELD-WEN concerning how to build
and operate a doorskin plant that could produce the type of
doorskins that Steves was buying from JELD-WEN under the
Supply Agreement.
Based
on those allegations, JELD-WEN asserted the following
proposed counterclaims: FIRST COUNTERCLAIM FOR RELIEF,
Violation of the Defend Trade Secrets Act, 18 U.S.C. §
1836; SECOND COUNTERCLAIM FOR RELIEF, Conspiracy to Violate
Defend Trade Secrets Act, 18 U.S.C. § 1832(a)(5); THIRD
COUNTERCLAIM FOR RELIEF, Violation of the Texas Uniform Trade
Secret Act, Texas Civil Practice & Remedies Code
Annotated §§ 134A.001 - 134A.008; FOURTH
COUNTERCLAIM FOR RELIEF, Tortious Interference with Contract
Under Texas Common Law, relating to Pierce's employment
contract with JELD-WEN; FIFTH COUNTERCLAIM FOR RELIEF,
Tortious Interference with Contract Under Texas Common Law,
relating to Ambruz's employment contract with JELD-WEN;
SIXTH COUNTERCLAIM FOR RELIEF, Breach of the Implied Covenant
of Good Faith and Fair Dealing Under Delaware Law; and
SEVENTH COUNTERCLAIM FOR RELIEF, Breach of Contract. ECF No.
106 (Under Seal) ¶¶ 41-78.
Steves
opposed the addition of the counterclaims, arguing that they
should have been brought in San Antonio, Texas, where Steves,
the Steves Brothers, Pierce, and Ambruz could be sued in a
single forum.[1] On May 17, 2017, the Court granted
JELD-WEN's request, and JELD-WEN filed the counterclaims.
Counterclaims (ECF No. 252) (Under Seal) ¶¶ 41-78.
However, the Court also ordered that the trade secrets
counterclaims be tried separately from the antitrust and
contract claims. ECF Nos. 239-240. Trial for the
counterclaims was set to begin on February 12, 2018. ECF No.
261.
On June
19, 2017, Steves moved to dismiss the Second, Sixth, and
Seventh Counterclaims for failure to state a claim. The Court
granted the motion on September 13, 2017, dismissing those
counterclaims with prejudice. ECF Nos. 353-354. Shortly
thereafter, counsel for both Steves and JELD-WEN asked the
Court to move the trial of the trade secrets counterclaims to
April 2018 because they said that the same lawyers would be
involved extensively in the trial of the antitrust claims in
January 2018. ECF No. 352. Based on these representations,
the Court moved the trial of JELD-WEN's counterclaims to
April 9, 2018. ECF No. 374.
On
September 26, 2017, JELD-WEN filed an action in Texas state
court, alleging the following trade secrets and related
claims against the Steves Brothers and Pierce: COUNT 1,
Violation of the Texas Uniform Trade Secrets Act, CPRC §
134A, against all defendants; COUNT 2, Conspiracy to Violate
Texas Uniform Trade Secrets Act, CPRC § 134A, against
all defendants; COUNT 3, Breach of Contract, against Pierce;
COUNT 4, Tortious Interference with Contract, against the
Steves Brothers; COUNT 5, Tortious Interference, against
Pierce; COUNT 6, Breach of Fiduciary Duty, against Pierce;
and COUNT 7, Aiding and Abetting Breach of Fiduciary Duty,
against the Steves Brothers. ECF No. 403-1 ¶¶
53-70. Those claims are based on virtually identical factual
allegations to those underlying JELD-WEN's counterclaims
in this action.
Then,
on October 23, 2017, JELD-WEN voluntarily moved to dismiss
its counterclaims in this case. ECF No. 457. In response,
Steves indicated that the Steves Brothers and Pierce would
consent to personal jurisdiction in this forum so that
JELD-WEN could assert all its claims in one court.
Steves' counsel reiterated this position at oral
argument. However, JELD-WEN declined to accept that offer,
instead persisting with its motion. After briefing on that
motion had been completed, JELD-WEN filed an amended
complaint in the Texas case that removed several claims from
the original complaint: namely, Count 1, Count 2, and Count
4. Amended Texas Petition (ECF No. 607-1) ¶¶ 53-58.
As a result, the sole remaining claims in the Texas case are
breach of contract (against Pierce), tortious interference
with contract (against Pierce), breach of fiduciary duty
(against Pierce), and aiding and abetting breach of fiduciary
duty (against the Steves Brothers). See
id.[2]
The
Court denied JELD-WEN's voluntary dismissal motion on
November 27, 2017. ECF No. 579. It found that the trade
secrets case had advanced to a stage where dismissal would
prejudice the parties, and that the only apparent explanation
for JELD-WEN's motion-the Court's earlier dismissal
of three of JELD-WEN's counterclaims-was insufficient to
justify disrupting the parties' extensive trial
preparation efforts. Memorandum Opinion (ECF No. 734)
("Voluntary Dismissal Op.") at 7-10. Moreover, the
Court observed that, given the similarity between the pending
counterclaims here and the remaining claims in the Texas
case, "there is likely substantial overlap between the
evidence relevant to those Texas claims and the documents
already produced during discovery on the counterclaims in
this case. The parties should therefore need little, if any,
additional discovery for the new claims." Id.
at 10-11.
Shortly
thereafter, the Steves Brothers and Pierce (collectively,
"the Intervenors") filed these motions to intervene
as counter-defendants to certain counterclaims. The Steves
Brothers seek to intervene in all remaining counterclaims:
the First, Third, Fourth, and Fifth Counterclaims. Pierce,
however, seeks to intervene in only the First and Third
Counterclaims, which concern trade secrets misappropriation
under the federal Defend Trade Secrets Act and the Texas
Uniform Trade Secrets Act, respectively.
DISCUSSION
Both
Intervenors have moved to intervene under Federal Rule of
Civil Procedure 24(b). Under that provision, a court may,
"[o]n timely motion, " permit intervention by
anyone who "has a claim or defense that shares with the
main action a common question of law or
fact."[3] Fed.R.Civ.P. 24(b)(1)(B). "In
exercising its discretion [under that rule], the court must
consider whether the intervention will unduly delay or
prejudice the adjudication of the original parties'
rights." Id. 24(b)(3).
The
threshold requirement for any permissive intervention motion
is whether that motion is "timely." See
id. 24(b)(1). To determine whether a motion to intervene
is timely, the Court must "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. EPA, 758 F.3d 588, 591
(4th Cir. 2014). Among these factors, "the most
important ... is the prejudice caused to the other parties by
the delay." Hill Phoenix, Inc. v. Systematic
Refrigeration, Inc., 117 F.Supp.2d 508, 514 (E.D. Va.
2000) (citing Spring Const. Co., Inc. v. Harris, 614
F.2d 374, 377 (4th Cir. 1980)). "The determination of
timeliness is committed to the ...