current action. No decision has yet been rendered in the case pending in the Southern District of New York.
Both the plaintiff and the defendant oppose the motion of the petitioners for leave to intervene herein and the matter has been argued fully by counsel for the petitioners, as well as counsel for the plaintiff and the defendants.
There is a general practice in this and other Federal Courts to take a liberal view towards motions to intervene, upon the apparent assumption that no substantial harm results from the granting of such motions. It is apparently felt that if the intervenor does not have a substantial right or interest in the proceedings, the ultimate disposition of the case will eliminate him without injury to the principal parties. This Court feels, however, that petitions or motions to intervene should be carefully scrutinized and granted only in cases in which there is either a legal right to intervene or in cases in which the motion definitely establishes that the petitioner has some interest or right which will not be adequately protected or enforced unless intervention is granted.
In the present proceeding the Court has carefully studied the nature and status of the substantive case, not only as between the present plaintiff and defendant, but also in so far as it relates to the interests of the petitioners as stockholders in the plaintiff corporation. The memoranda of points and authorities, as well as counsels' arguments, devote considerable attention to the question of whether the parties seek to intervene in a representative or in a derivative capacity. Counsel have argued as to the applicability or nonapplicability, depending upon their viewpoints, of Rules 23 and 24 of the Federal Rules of Civil Procedure, 28 U.S.C.A.
From all of the data and authorities cited to the Court, it is the Court's conclusion that the facts appear to establish that the petitioners' action is definitely upon a representative basis. Assuming that this conclusion is correct, the Court rules that the petitioners have failed to establish their status in a representative capacity to intervene in this action. Appraising the pleadings and arguments from a different viewpoint and assuming for the purpose of analysis that the petitioners seek to intervene upon a derivative basis, the Court finds that they are without legal status in this regard and not entitled to intervene.
The Court concludes that whether the petitioners predicate their motion to intervene either upon a representative or a derivative foundation, they are without proper status in either category to support their petition and, accordingly, the Motion to Intervene is denied.
Counsel will present appropriate Order.
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