Steves and Sons, Inc. v. Jeld-Wen, Inc.

          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 ...