In its Supreme Court amicus brief in Town of Chester v. Laroe Estates the State and Local Legal Center (SLLC) argues that interveners to lawsuits must have standing even if there is a genuine case or controversy between the existing parties.

Steven Sherman sued the Town of Chester alleging an unconstitutional taking as the town refused to approve a subdivision on plots of land Sherman intended to sell to Laroe Estates. Laroe Estates advanced Sherman money for the land in exchange for a mortgage on the property. Sherman defaulted on a loan to a senior mortgage holder who foreclosed on the property.

Laroe Estates, claiming to be the owner of the property, sought to “intervene” in the takings lawsuit. The Federal Rule of Civil Procedure grant non-parties the right to intervene who “claim 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.”  

The district court concluded that Laroe Estates lacked Article III “standing” under the U.S. Constitution to assert a takings claim against the Town. Laroe Estates argued that it was a “contract vendee” of the Sherman property. According to the district court, under longstanding circuit court precedent “contract vendees lack standing to assert a takings claim.”

The question the Supreme Court will decide in Town of Chester v. Laroe Estates is whether Laroe Estates may intervene in this case even though it lacks standing.

The Second Circuit held, based on prior circuit court precedent, Laroe Estates does not have to have standing to intervene in this lawsuit where there is a genuine case or controversy between the existing parties (here Sherman and the Town of Chester). Of the ten federal circuit courts of appeals to have ruled on this issue three have held interveners must have Article III standing.

The SLLC amicus brief argues that allowing parties without standing to intervene prolongs and complicates litigation ultimately making it more expensive. “The consequences are even more serious in cases involving state and local governments, as the cost of intervention also comes at the expense of taxpayers, complicating litigation (as well as settlement), and forcing government entities to continue to litigate in order to avoid allowing third-parties to control the results of the litigation, which can have significant public policy consequences.”

Sarah Shalf of the Emory Law School Supreme Court Advocacy Program wrote the SLLC amicus brief which was joined by the National Association of Counties, National League of Cities,  United States Conference of Mayors, and the International Municipal Lawyers Association.