Prejudice to existing parties is the most important consideration in deciding whether a motion for intervention is untimely. Courts may find prejudice on the basis of non-monetary factors: For example, if granting a belated motion to intervene would threaten the delicate balance reached by existing parties after protracted negotiations, this factor may weigh against intervention. However, the only prejudice that is relevant under this factor is that which flows from a prospective intervenor's failure to intervene after he knew, or reasonably should have known, that his interests were not being adequately represented—and not from the fact that including another party in the case might make resolution more difficult. For the purpose of determining whether an application for intervention is timely, the relevant issue is not how much prejudice would result from allowing intervention, but rather how much prejudice would result from the would-be intervenor's failure to request intervention as soon as he knew or should have known of his interest in the case.
Appellants April Munoz and several others comprised a sub-class of moderately to severely disabled children who sought to intervene in a class action in federal district court against defendant Los Angeles Unified School District ("LAUSD") brought on behalf of all disabled students in LAUSD/. Appellants sought to intervene to challenge the legality of a new policy, adopted by LAUSD in 2012 as part of a renegotiation of a prior settlement. That settlement required a class of LAUSD's most severely disabled students to go to the same schools as the district's general, non-disabled student body. LAUSD called it "integration." The parents of appellants wanted their children to be schooled separately. The district court denied appellants' motion to intervene as untimely. Appellants appealed.
Did the district court err by denying a motion to intervene as a matter of right under Fed. R. Civ. P. 24(a)(2), which was brought by a sub-class of disabled children seeking to challenge a school district's policy adopted as part of a renegotiation of a class action settlement?
A panel of the appellate court judges held that the district court abused its discretion in denying as untimely appellants' motion to intervene as of right under Fed. R. Civ. P. 24(a). The motion was timely filed. The renegotiated outcome constituted a change in circumstances, as it resulted in closure of special education centers. In addition, prejudice to existing parties was nominal at best, and the delay in filing was justified. The panel also held that appellants had a protectable interest under the IDEA that would be impaired as a practical matter if they could not intervene and were limited to individual placement challenges. Appellants' interests were inadequately represented by the existing parties, who had opposing interests. Thus, the district court further erred when it found intervention unnecessary to protect appellants' interest in ensuring the receipt of public education consistent with their disabilities and federal law. As such, the panel reversed the district court's denial of the motion to intervene and remanded for further proceedings consistent with its opinion.