The bid by Success by Health affiliates to intervene in the FTC’s regulatory case has been denied.

The denied second motion to intervene follows an earlier attempt, which was also denied.

The second motion to intervene was filed on the basis of Rule 24 of the Federal Rules of Civil Procedure.

Rule 24 recognizes two types of intervention:

(1) intervention of right; and

(2) permissive intervention. Courts must permit intervention of right, but may permit or deny permissive intervention

The filed motion sought intervention through both means.

Citing League of United Latin Am. Citizens v. Wilson, the court boiled down determination of its decision to three factors;

(1) the stage of the proceeding at which an applicant seeks to intervene;

(2) the prejudice to other parties; and

(3) the reason for and length of the delay.

Noting litigation proceeding for thirteen months prior to the Motion to Interevene filing, the court ruled ‘the Proposed Intervenors’ motion thus comes far too late’.

With respect to prejudice, the court found

the Proposed Intervenors appear to seek Rule 23 class certification to pursue a novel avenue of declaratory and injunctive relief in the final stages of a civil FTC enforcement action.

This will necessarily “inject new issues into the litigation that at this late date would prejudice the parties.” Alisal Water Corp., 370 F.3d at 922.

The Court finds that the proposed intervention comes at a sensitive time in the case, as discovery has closed and a summary judgment motion has already been filed.

Moreover, the Proposed Intervenors do not adequately explain how injecting their proposed Rule 23 class certification or reviewing the FTC’s civil enforcement action under 5 U.S.C. § 702 while its outcome is still undetermined would not result in prejudice to the parties’ ability to resolve this case.

Based on this, the court ruled at best the prejudice factor was deemed neutral.

On “the reason for and length of the delay” (if intervention was granted), the court found

there is simply no good explanation for the Proposed Intervenors’ massive delay in requesting intervention.

A core issue here was the delay in filing the motion versus when the affiliate’s rights were allegedly affected.

The record shows that many of the Proposed Intervenors knew or had reason to know about their interests in this litigation as early as January or February 2020, one year before they moved to intervene.

Based on these findings, on April 2nd the affiliate’s Motion to Intervene was denied.

Primarily because it prevents pyramid scheme supporters from further wasting the court’s time…

Over 100 SBH affiliates have submitted over 300 unique declarations in support of the Individual Defendants’ numerous motions and responsive briefing.

The Court has also received countless personal letters from SBH affiliates expressing their support for the Individual Defendants and the SBH enterprise and their discontent with the FTC, the Receivership, and these proceedings.

…I think denying the motion was the right call to make.

Looking forward the next major decision in the case will be the FTC’s motion for summary judgment.

Following a granted request for an extension, the SBH defendants have until April 26th to reply.

After that the FTC has until May 18th to file a reply response.

Pending a decision on the FTC’s motion for summary judgment, stay tuned…