Atlantis Development Corp. v. United States
379 F.2d 818 (1967)
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Rule of Law:
Under Federal Rule of Civil Procedure 24(a)(2), as amended in 1966, a party has a right to intervene in an action if the disposition of that action may, as a practical matter, impair their ability to protect a related interest, including impairment caused by the precedential effect of stare decisis.
Facts:
- A group of coral reefs, including Triumph and Long Reefs, exist approximately four and a half miles off the coast of Florida and have been shown on government charts for many years.
- In 1962, William T. Anderson formed a plan to occupy and develop these reefs, making a public claim to them through newspaper advertisements.
- Atlantis Development Corporation, Ltd. (Atlantis) acquired Anderson's purported rights to the reefs.
- Atlantis sought permission from Florida and the U.S. government to develop the reefs, but both disclaimed jurisdiction, with the U.S. Departments of State and Interior stating the reefs were part of the high seas.
- Subsequently, the U.S. Corps of Engineers reversed this position and asserted that a permit was required to build any structures on the reefs.
- Another group of private parties (Acme General Contractors, Inc., J. H. Coppedge Company, and Louis M. Ray) began construction activities, including placing caissons and dredging, on Triumph and Long Reefs.
- Atlantis notified the U.S. government of its own ownership claim and urged the government to sue the other parties for trespassing on the reefs.
Procedural Posture:
- The United States filed a lawsuit against Acme General Contractors, Inc., J. H. Coppedge Company, and Louis M. Ray in a federal district court.
- The complaint sought an injunction to stop the defendants' construction activities on coral reefs, alleging trespass on U.S. property on the Outer Continental Shelf.
- Atlantis Development Corporation, Ltd. filed a motion to intervene as a matter of right under FRCP 24(a), or alternatively, for permissive intervention.
- The U.S. District Court denied the motion to intervene, but granted Atlantis leave to participate as amicus curiae.
- Atlantis, as the appellant, appealed the denial of its motion to intervene to the U.S. Court of Appeals for the Fifth Circuit, with the United States as the appellee.
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Issue:
Under the newly amended Federal Rule of Civil Procedure 24(a)(2), does a non-party have a right to intervene in an action when a decision in that action would, as a practical matter due to stare decisis, impair or impede their ability to protect their own claim to the property that is the subject of the action?
Opinions:
Majority - Judge John R. Brown
Yes, a party has a right to intervene when a decision in the action would practically impair its ability to protect a related interest through the effect of stare decisis. The court determined that the 1966 amendment to Federal Rule of Civil Procedure 24(a)(2) should be applied retroactively to this case. This amendment replaced the rigid former requirement that an applicant be 'bound' by a judgment in the res judicata sense with a more pragmatic test. The new test focuses on whether the disposition of the action 'may as a practical matter impair or impede' the applicant's ability to protect their interest. Here, Atlantis claims ownership of the very reefs at the center of the dispute between the U.S. government and the defendants. The existing parties do not adequately represent Atlantis's interest; the government is adverse to its claim, and the defendants are rival claimants. If the court were to rule in favor of the U.S. on key legal questions—such as whether the reefs are part of the Outer Continental Shelf under U.S. jurisdiction—the principle of stare decisis would, for all practical purposes, foreclose any future success for Atlantis's own claim. Given the formidable difficulty of overturning a prior panel's decision, this potential precedential effect constitutes a practical impairment under the new rule, thus compelling intervention as a matter of right.
Analysis:
This decision is a landmark interpretation of the 1966 amendment to FRCP 24(a)(2), significantly broadening the scope of intervention as a matter of right. By holding that the practical impairment of an interest can be established by the doctrine of stare decisis, the court moved away from the strict, formalistic 'res judicata' test of the prior rule. This pragmatic approach promotes judicial efficiency by allowing for the resolution of related claims in a single lawsuit, preventing duplicative litigation and the risk of inconsistent results. The case establishes a key precedent that the potential adverse effect of a legal ruling on a non-party's future litigation can be sufficient grounds to permit them to join the initial case.
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