A Kentucky merchant filed suit challenging a Federal Reserve regulation (the “regulation”) that caps the interchange fees banks may charge on debit card transactions. The case was initially dismissed on the ground that the merchant’s filing had been untimely, but following a Supreme Court decision clarifying when claims accrue for purposes of the statute of limitations, the court of appeals vacated the dismissal and remanded the case for further proceedings. After remand, several trade associations representing banks moved to intervene to defend the regulation, citing their members’ financial interest in the current interchange fee structure. The prospective intervenors argued that their inclusion was necessary to protect those interests, which could be threatened if the rule were invalidated, and sought intervention both as of right and by permission under Fed. R. Civ. P. 24(a) and 24(b), respectively.
In Linney’s Pizza, LLC v. Bd. of Governors of the Fed. Reserve Sys., No. 3:22-cv-00071-GFVT, 2025 WL 1260807, 2025 U.S. Dist. LEXIS 82764 (E.D. Ky. May 1, 2025), (unpublished opinion), the court denied the motion for intervention but ordered the clerk of court to file the proposed intervenors memorandum of law that had been filed with the court as an amicus brief in support of Federal Reserve’s cross-motion for summary judgment in the on-going matter. The court first addressed the proposed intervenors’ request for intervention as of right under Rule 24(a). Rule 24(a) provides that a “non-party is entitled to intervention of right” when the proposed intervenors demonstrate “(1) the motion to intervene is timely; (2) the proposed intervenors have a significant legal interest in the subject matter of the pending litigation; (3) the disposition of the action may impair or impede the proposed intervenors’ ability to protect their legal interest; and (4) the parties to the litigation cannot adequately protect the proposed intervenors’ interest.” The court applied a test to determine the timeliness of the motion to intervene, as directed by the Sixth Circuit, which consisted of the five following factors: “1) the point to which the suit has progressed; 2) the purpose for which intervention is sought; 3) the length of time preceding the application during which the proposed intervenors knew or should have known of their interest in the case; 4) the prejudice to the original parties due to the proposed intervenors' failure to promptly intervene after they knew or reasonably should have known of their interest in the case; and 5) the existence of unusual circumstances militating against or in favor of intervention.” Applying the five-part test, the court concluded that the motion had been timely. Additionally, the court found that the proposed intervenors had a financial interest that could be impaired if the regulation were invalidated. However, the court found that the intervenors failed to show that the Federal Reserve would inadequately represent their interests to the required extent. The court found that both parties sought an identical outcome, defending the validity of the rule, and that minute differences in litigation strategy or focus were insufficient to establish inadequate representation. Second, on the request for permissive intervention under Rule 24(b), the court again denied relief and held that intervention would duplicate arguments already advanced by the Federal Reserve and would undermine judicial economy. Finally, the court permitted the proposed intervenors to participate as amici curiae, concluding that this mechanism allowed them to present their views and interests without complicating the litigation unnecessarily. Thus, the court denied redundant intervention but ordered the clerk of court to file the proposed intervenors’ memorandum of law filed with the court as an amicus brief in support of the Federal Reserve Board.
By Landon Womack [email protected]
Edited By Jace Brown [email protected]
Edited By Kristin Meurer [email protected]
Edited By Hayden Mariott [email protected]