Field v. Anadarko Petroleum Corporation

UNITED STATES DISTRICT COURT January 24, 2022

SOUTHERN DISTRICT OF TEXAS Nathan Ochsner, Clerk

HOUSTON DIVISION

JOE FIELD, Individually and For §

Others Similarly Situated. §

§

Plaintiff. §

§ CIVIL ACTION NO. 4:20-cv-00575

VS. §

§

ANADARKO PETROLEUM §

CORPORATION, et al. §

§

Defendants. §

ORDER AND OPINION

Before me is a Motion to Intervene filed by RUSCO Operating, LLC and

Planning Thru Completion, LLC (collectively “RigUp”). See Dkt. 84. After carefully

reviewing the parties’ arguments, the record, and the applicable law, and for the

reasons discussed below, RigUp’s Motion to Intervene is DENIED.1

BACKGROUND AND PROCEDURAL HISTORY

On February 19, 2020, Joel Field (“Field”) filed this collective action against

Anadarko Petroleum Corporation (“Anadarko”), alleging that Anadarko

misclassified him and others similarly situated as independent contractors and

1 “The Fifth Circuit hasn’t considered whether a motion to intervene is properly

characterized as dispositive or non-dispositive. But every federal district court in Texas to

do so has concluded that such motions are non[-]dispositive.” Doucet v. Boardwalk

Pipelines LP, No. 4:20-CV-01793, 2021 WL 3674974, at *1 (S.D. Tex. Feb. 23, 2021). See

also Lindsey v. ONEOK, Inc., No. MO19CV00284DCRCG, 2021 WL 2934503, at *1 (W.D.

Tex. Mar. 12, 2021) (“The motion to intervene is a non-dispositive, pretrial matter.”);

DOH Oil Co. v. QEP Res., Inc., No. MO:18-CV-152-DC, 2020 WL 7631502, at *3 n.2 (W.D.

Tex. Mar. 19, 2020) (same); S.E.C. v. Kornman, No. 3:04-cv-1803L, 2006 WL 148733, at

*2–5 (N.D. Tex. Jan. 18, 2006) (treating motion to intervene as non-dispositive and

applying clear-error standard of review); Tex. Tech. Inst., Inc. v. Silicon Valley, Inc., No.

CV H-04-3349, 2005 WL 8169210, at *1 n.1 (S.D. Tex. Aug. 19, 2005) (same). “This

conclusion is undoubtedly correct. A motion to intervene is a pretrial matter, and its

resolution decides no issue of substance on the merits. It is thus within the statutory

authority of matters that a magistrate judge may ‘hear and determine.’” Doucet, 2021 WL

3674974, at *1 (quoting 28 U.S.C. § 636(b)(1)(A)).

paid them a day rate without overtime compensation in violation of the Fair Labor

Standards Act (“FLSA”). On October 15, 2020, I issued an order allowing notice to

be sent to putative class members. Since then, dozens of opt-in plaintiffs have

consented to join the collective action.

RigUp is in the business of facilitating relationships in the oil-and-gas

industry. More specifically, RigUp operates an online platform through which

skilled professionals can market their services to oil-and-gas operators. In that

same vein, RigUp’s online platform enables oil-and-gas operators to search for and

connect with skilled professionals who meet a particular project’s needs. At a big-

picture level, RigUp’s platform functions as a sophisticated job posting board.

Typically, operators contract with skilled professionals who meet their needs on a

project-by-project basis. Central to RigUp’s Motion to Intervene, workers must

sign an “independent professional” agreement, which includes an arbitration

clause,2 before they can access RigUp’s online platform.

Anadarko is one of RigUp’s clients. RigUp seeks to intervene in this action,

insisting that 11 of the opt-in plaintiffs3 (collectively “Opt-in Plaintiffs”) have

agreed to arbitrate the claims at issue in this lawsuit.

RigUp argues it is entitled to intervene as of right under Federal Rule of Civil

Procedure 24(a) because it has a substantial legal interest in this case, namely its

“interest in the arbitration of disputes about workers’ payment and independent-

contractor status.” Dkt. 84 at 9. Alternatively, RigUp contends that permissive

intervention is warranted under Rule 24(b).

2 RigUp has periodically updated its “independent professional” agreement. RigUp claims

“[e]ach revised Agreement supersedes any predecessor Agreement.” Dkt. 84-2 at 4. Field

disputes this claim and argues that the agreements (or, at least, some of the agreements)

are unconscionable or do not require arbitration for various other reasons. See Dkt. 86 at

14.

3 The Opt-in Plaintiffs are Jon Bartow, Joseph Boone, Jeffrey Baker, John Clipp, Joshua

DuBois, Jason Freeman, Tyler Humphrey, Jammy Ledbetter, Jonathan Martin, Adam

Perez, and Toby Pitts. See Dkt. 84 at 3. RigUp claims there are twelve Opt-in Plaintiffs;

however, its motion lists “Jon Bartow” twice. See id.

Field vehemently opposes RigUp’s attempt to intervene. Field leads off by

arguing that RigUp’s motion to intervene is untimely. Regardless, Field continues,

RigUp does not have a sufficient interest in the underlying action. Because this

case concerns Anadarko’s alleged misclassification of the plaintiffs as independent

contractors, Field argues that Anadarko’s—not RigUp’s—employment practices

are at issue. If Anadarko’s classification of the plaintiffs did not comply with the

FLSA, Field maintains that only Anadarko is liable. Because RigUp faces no

exposure to an adverse judgment against Anadarko, Field argues that RigUp has

no legally protectable interest that would warrant intervention. What’s more, says

Field, RigUp’s generalized lamentations that this lawsuit could affect the legality

of classifying workers as independent contractors in the oil-and-gas industry is the

exact type of remote and speculative economic interest that courts have routinely

rejected as a basis for intervention.

DISCUSSION

Rule 24 governs intervention and provides for two types—intervention “as

of right” and permissive intervention. See FED. R. CIV. P. 24(a)–(b).

A. INTERVENTION AS OF RIGHT

Intervention as of right is governed by Rule 24(a). See FED. R. CIV. P. 24(a).

In the Fifth Circuit, to intervene as of right, a movant must establish four elements:

(1) the application for intervention must be timely; (2) the applicant

must have an interest relating to the property or transaction which is

the subject of the action; (3) the applicant must be so situated that the

disposition of the action may, as a practical matter, impair or impede

his ability to protect that interest; (4) the applicant’s interest must be

inadequately represented by the existing parties to the suit.

Haspel & Davis Milling & Planting Co. v. Bd. of Levee Comm’rs of the Orleans

Levee Dist., 493 F.3d 570, 578 (5th Cir. 2007) (quotation omitted). “Failure to

satisfy any one requirement precludes intervention of right.” Id. “Although the

movant bears the burden of establishing its right to intervene, Rule 24 is to be

liberally construed.” Brumfield v. Dodd, 749 F.3d 339, 341 (5th Cir. 2014). See also

Poynor v. Chesapeake Energy Ltd. P’ship (In re Lease Oil Antitrust Litig.), 570

F.3d 244, 248 (5th Cir. 2009) (“Rule 24 is to be construed liberally, [with] doubts

resolved in favor of the proposed intervenor.” (cleaned up)).

1. Timeliness

RigUp’s motion to intervene is timely; Field’s argument to the contrary is

entirely without merit. “The timeliness inquiry is contextual” and “not limited to

chronological considerations but is to be determined from all the circumstances.”

Wal-Mart Stores, Inc. v. Tex. Alcoholic Bev. Comm’n, 834 F.3d 562, 565 (5th Cir.

2016) (quotations omitted). The Fifth Circuit has “rejected the notion that the date

on which the would-be intervenor became aware of the pendency of the action

should be used to determine whether it acted promptly.” Sierra Club v. Espy, 18

F.3d 1202, 1206 (5th Cir. 1994). Instead, the timeliness clock generally starts

running when a would-be intervenor learns that its interests will no longer be

protected by the parties to the suit. See Swoboda v. Manders, 665 F. App’x 312,

314 (5th Cir. 2016). All said, “timeliness is not a tool of retribution to punish the

tardy would-be intervenor, but rather a guard against prejudicing the original

parties by the failure to apply sooner.” Sierra Club, 18 F.3d at 1205.

Field claims that “RigUp did nothing after the 12 [sic] opt-in Plaintiffs joined

this case in December 2020.” Dkt. 86 at 13. But the evidence conclusively

establishes that the first Opt-in Plaintiff to join this lawsuit did so on September

17, 2021, not in December 2020. See Dkt. 74. Simply stated, RigUp did not have

any skin in the game prior September 17, 2021. In fact, had RigUp attempted to

intervene before the first Opt-in Plaintiff filed a consent to join the lawsuit, it ran

the risk of being “laughed out of court.” Reich v. ABC/York-Estes Corp., 64 F.3d

316, 322 (7th Cir. 1995). See also Sierra Club, 18 F.3d at 1206 (“Courts should

discourage premature intervention that wastes judicial resources.”).

The only serious question I need to address is whether RigUp dragged its

heels after September 17, 2021. I find that it did not. Although RigUp filed its

motion to intervene three months later, on December 17, 2021, it has submitted

declaration testimony that it did not learn any Opt-in Plaintiff had joined the

collective action until December 2, 2021. See Dkt. 84-2 at 5. Viewed through this

lens, when RigUp became aware that the parties would no longer protect its

purported interests, it acted promptly to intervene. See Swoboda, 665 F. App’x at

314 (motion to intervene was reasonable and timely when made forty-five days

after intervenor “became aware that its privilege would not be protected” by

another party); Ass’n of Pro. Flight Attendants v. Gibbs, 804 F.2d 318, 320–21 (5th

Cir. 1986) (holding that intervention was timely where five months passed between

intervenor’s learning of its interest and moving to intervene).

2. Interest in the Property or Transaction

Rule 24(a)(2) requires the movant to show a direct, substantial, and legally

protectable interest in the property or transaction that is the subject of the

litigation.4 See Ross v. Marshall, 456 F.3d 442, 443 (5th Cir. 2006). “The

touchstone of the inquiry is whether the interest is legally protectable.” Wal-Mart

Stores, 834 F.3d at 566 (quotation omitted). However, “it need not be legally

enforceable.” Texas v. United States, 805 F.3d 653, 659 (5th Cir. 2015). “As a

practical matter, this means that the proposed intervener would suffer harm from

an adverse decision on the merits.” DSMC, Inc. v. Convera Corp., 273 F. Supp. 2d

14, 25 (D.D.C. 2002) (quotation omitted). Thus, a “contingent interest or mere

expectancy” is not enough. United States v. 936.71 Acres of Land, 418 F.2d 551,

556 (5th Cir. 1969) (quotation omitted).

RigUp asserts that it has a “legitimate interest in the enforcement” of its

arbitration agreements, Dkt. 84 at 13, as well as a more generalized “interest in the

arbitration of disputes about workers’ payment and independent-contractor

status.” Id. at 9. See also id. at 13 (“When a worker like the Opt-In Plaintiffs have

a broad arbitration agreement with a staffing company like [RigUp], but the

4 “On timely motion, the court must permit anyone to intervene who: . . . (2) claims an

interest relating to the property or transaction that is the subject of the action, and is so

situated that disposing of the action may as a practical matter impair or impede the

movant’s ability to protect its interest, unless existing parties adequately represent that

interest.” FED. R. CIV. P. 24(a)(2).

worker sues only an operator like Anadarko, the staffing company has an interest

in compelling arbitration that warrants its intervention as of right.”); Dkt. 84-2 at

4 (referencing a “desire[] to continue its working relationship with those

contractors who may initiate dispute-resolution procedures related to the terms of

their Agreements”).

Field counters that RigUp lacks standing because it has not suffered, and

will not suffer, an injury as a result of the underlying litigation. As such, Field

contends that RigUp cannot force Opt-in Plaintiffs to arbitrate claims brought

against non-signatory Anadarko. Even assuming, arguendo, Anadarko could

compel arbitration as a non-signatory, Field argues that Anadarko has waived its

right to do so by substantially invoking the litigation process.5

The United States District Court for the Western District of Texas has twice

addressed near-identical arguments, holding both times that “any attempt by

[RigUp] to enforce an arbitration agreement on behalf of a non-signatory

[Anadarko] against a signatory [Opt-in Plaintiffs] does not constitute direct,

substantial, and legally protectable interest sufficient to give [RigUp] an interest to

intervene as of right.” Kennedy v. Pioneer Nat. Res. Co., No.

MO20CV00086DCRCG, 2021 WL 2843837, at *3 (W.D. Tex. Mar. 15, 2021);

Lindsey v. ONEOK, Inc., MO19CV00284DCRCG, 2021 WL 2934503, at *3 (W.D.

Tex. Mar. 12, 2021).

In an effort to blunt the force of this reasoning, RigUp directs me to a

handful of decisions from outside this circuit, in which district courts have found

that an intervenor in RigUp’s shoes does have a legitimate interest in pursuing

what it views as the benefit of its bargain under an arbitration agreement. See

Becker v. Delek US Energy, Inc., 3:20-CV-00285, 2020 WL 4604544, at *8 (M.D.

5 Field also argues five Opt-in Plaintiffs’ service agreements with RigUp were illicitly

obtained and that RigUp’s 2016 and 2018 service agreements exclude disputes between

the worker and third-party companies like Anadarko. See Dkt. 86 at 14. Because I find

that RigUp has not established a direct, substantial, and legally protectable interest in the

underlying litigation, I do not reach these arguments.

Tenn. Aug. 11, 2020) (finding intervenor’s interest in resolving the question of

whether the arbitration clause extended to the plaintiff’s claims against a non-

signatory may be impaired if the court denied intervention); Bock v. Salt Creek

Midstream LLC, No. CV 19-1163 WJ/GJF, 2020 WL 3989646, at *4 (D.N.M. July

15, 2020) (finding intervenor’s “seeking to vindicate its [arbitration agreement]

with Plaintiffs [was] a legitimate interest”); Altenhofen v. S. Star Cent. Gas

Pipeline, Inc., No. 4:20-CV-00030-JHM, 2020 WL 3547947, at *4 (W.D. Ky. June

30, 2020) (finding intervenor’s interest in enforcing the arbitration agreement,

when coupled with its status as a potential joint employer, constituted a legally

sufficient interest for intervention).

RigUp is readily distinguishable from the intervenors in Becker, Bock, and

Altenhofen, as those intervenors claimed they: (1) were the plaintiffs’ employer; (2)

set the plaintiffs’ salaries and duties; (3) determined whether the plaintiffs’ duties

and pay qualified them for the administrative overtime exemption; and (4) were

subject to potential liability under either a joint-employer theory or an indemnity

agreement with the defendant. In contrast, RigUp claims that it merely “handled .

. . Plaintiffs’ payments for the work they performed for Anadarko,” for which

Anadarko would later reimburse RigUp. Dkt. 84-1 at 5. See Dkt. 84-2 at 3

(testifying that RigUp “pays the contractor in accordance with an invoice

submitted by the contractor, less a percentage known as the ‘split’ that

compensates RigUp for its services. Operators like Anadarko then pay RigUp the

balance invoiced.”). Moreover, RigUp does not argue that it faces potential liability

under either a joint-employer theory or an agreement to indemnify Anadarko. See

Hinkle v. Phillips 66 Co., No. PE:20-CV-00022-DC-DF, 2020 WL 10352346, at *4

(W.D. Tex. Nov. 13, 2020) (granting intervention as of right under similar

circumstances because, inter alia, “the specter of joint and several liability hanging

over” the intervenor’s relationship with the defendant warranted a “place at the

table because any liability assessed to Defendant may have a direct impact on” the

intervenor).

This case lacks the hallmarks underlying the district court’s decisions in

Becker, Bock, and Altenhofen. Accordingly, I find that RigUp has failed to

demonstrate it possesses a sufficient interest in the subject of this lawsuit to justify

intervention as of right under Rule 24(a)(2). Without making this threshold

demonstration, “the remaining considerations of practical harm and adequacy of

representation become irrelevant.” Howse v. S/V “Canada Goose I”, 641 F.2d 317,

322 (5th Cir. 1981).

B. PERMISSIVE INTERVENTION

In the alternative, RigUp urges me to allow it to permissively intervene.

Separate and apart from intervention as of right, Rule 24(b) provides:

On timely motion, the court may permit anyone to intervene who:

(A) is given a conditional right to intervene by federal statute; or

(B) has a claim or defense that shares with the main action a

common question of law or fact.

FED. R. CIV. P. 24(b).

Whether to allow permissive intervention is “wholly” within the district

court’s discretion. See Kneeland v. Nat’l Collegiate Athletic Ass’n, 806 F.2d 1285,

1289 (5th Cir. 1987). “Thus, even where there is common question of law or fact,

or the requirements of 24(b) are otherwise satisfied, a district court may deny

permissive intervention if such would unduly delay or prejudice the adjudication

of the rights of the original parties.” Graham v. Evangeline Par. Sch. Bd., 132 F.

App’x 507, 514 (5th Cir. 2005) (cleaned up).

Permissive intervention involves a two-step process. See Jones v. Caddo

Par. Sch. Bd., 204 F.R.D. 97, 101 (W.D. La. 2001). First, the court must decide

whether the movant’s claim or defense and the main action share a common

question of law or fact. See id. If this threshold requirement is met, the court must

then exercise its discretion in deciding whether intervention should be allowed.

See id. As with intervention as of right, a motion to permissively intervene must be

timely. See Stallworth v. Monsanto Co., 558 F.2d 257, 267 (5th Cir. 1977).

RigUp provides little reasoning to support its permissive-intervention

argument. It merely mentions that the Kennedy court granted permissive

intervention under Rule 24(b), before summarily arguing “[t]he same result should

obtain here if the Court does not agree that [RigUp is] entitled to intervention as

of right.” Dkt. 84 at 14. Recall, RigUp bears the burden of establishing that

intervention is appropriate.

In Kennedy, the intervening party, Applied Consultants, Inc. (“Applied

Consultants”), argued that it: (1) was the plaintiff’s employer; (2) set the plaintiff’s

salary; (3) determined whether the plaintiff’s duties and pay met the

administrative-exemption requirement for overtime pay; and (4) was subject to

potential liability under either a joint-employer theory or indemnity agreement

with the defendant. See Kennedy, 2021 WL 2843837, at *2–5. Although Applied

Consultants also claimed an interest in enforcing its arbitration agreement, the

Kennedy court did not consider the purported interest when addressing

permissive intervention. Instead, the court found that “among other common

questions of law and fact, Applied Consultants clearly share[d] a defense with [the

defendant] that is central to the main case—that [the plaintiff] was properly

classified as overtime exempt.” Id. at *5. While the court did not elaborate on the

basis for this conclusion, presumably, its finding was premised on Applied

Consultant’s potential liability either as a joint employer or under its indemnity

agreement. Neither concern is present in this case.

RigUp’s failure to show a common question of law or fact is fatal. But even

if it had done so, it is still within my discretion to deny permissive intervention. I

have no interest in allowing RigUp to permissively intervene and attempt to

compel arbitration when it has failed to show that it faces even the specter of

liability should Opt-in Plaintiffs obtain a judgment against Anadarko. If Anadarko

wishes to enforce a purported right to arbitrate claims brought against it by Opt-in

Plaintiffs, it may do so.

On a final note, the parties have invited RigUp to participate in their

upcoming mediation; I expect they will honor the invitation, despite my decision

today.

CONCLUSION

For the reasons explained above, RigUp’s Motion to Intervene (Dkt. 84) is

DENIED.

SIGNED this 24th day of January 2022.

______________________________

ANDREW M. EDISON

UNITED STATES MAGISTRATE JUDGE