Burnett and Sons Inc et al v. Hall Cattle Feeders, LLC et al

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
AMARILLO DIVISION
BURNETT & SONS, INC., et al.,
Plaintiffs,
v. 2:23-CV-148-Z-BR
HALL CATTLE FEEDERS, LLC, et ai.,
Defendants.
MEMORANDUM OPINION AND ORDER
Before the Court is nonparty Capital Farm Credit’s (‘CFC’) Motion to Deny as Moot
Pending Motion for Summary Judgment and Motion to Intervene Regarding Discrete Claim
Contained in Motion for Summary Judgment (“Motion”), filed January 20, 2026. ECF No. 153.
Plaintiffs responded on February 10, 2026. ECF No. 154. CFC replied on February 20, 2026. ECF
No. 156. The Motion is now ripe. Having considered the Motion, briefing, and relevant law, the
Court GRANTS the Motion. Both pending motions for partial summary judgment are DENIED
as moot. ECF Nos. 116, 117. The Clerk of the Court is DIRECTED to administratively close this
case while the parties pursue mediation.
BACKGROUND
Plaintiffs brought this suit on September 12, 2023. Generally, Plaintiffs claim that
Defendants mismanaged their cattle while they were in Defendants’ care, resulting in the loss of
more than 1,000 head of cattle. See, e.g., ECF No. 21 at 15-19. More relevant here is CFC’s role
in this litigation.
CFC is a nonparty “farm credit institution regulated under the auspices of the Farm Credit
Administration.” ECF No. 153 at 2. CFC was the “primary lender” to Defendant Hall Cattle
Feeders (“HCF”) before HCF declared bankruptcy in early 2023. Jd. “As part of CFC’s lending
relationship with HCF, HCF pledged a security interest in its assets to CFC, including, but not
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limited to, cattle and proceeds.” Id. During HCF’s bankruptcy proceedings, “CFC became aware
that approximately 500 head of cattle were languishing on HCF’s Canadian, Texas facility.” Id.
“In an effort to save the value of those animals, which constituted a meaningful portion of the
bankruptcy estate and CFC’s collateral at the time,” CFC asked the bankruptcy court to “lift the
automatic bankruptcy stay to allow CFC” to sell its cattle collateral. Id. The bankruptcy court
lifted the stay over the Defendants’ objections. See id. at 3. CFC then “sold those cattle for
approximately $250,000.00 (‘Cattle Proceeds’).” Id.
CFC contends it was “apparent at the time of the motion to lift stay that there would be
disagreement between CFC and other creditors of HFC, principally Plaintiffs in this case, on the
question of who was entitled to the Cattle Proceeds.” ECF No. 153 at 3. “CFC has held the proceeds
in stasis” pursuant to “a stipulation in the bankruptcy proceeding between CFC and Plaintiffs”
until that question is resolved. Id. “The dispute between CFC and Plaintiffs concerning
entitlement to the funds centers on the dueling positions of th[e] parties: CFC as secured creditor,
Plaintiffs as putative dealer trust beneficiary” under the Packers and Stockyards Act, 7 U.S.C.
§§ 181-229. Plaintiffs’ status under the Act—and therefore its claim to the Cattle Proceeds—is a
subject of its pending Motion for Partial Summary Judgment. See ECF No. 119 at 16-20. CFC
believes that “a finding in Plaintiffs’ favor” on the dealer trust question “could potentially have
universally preclusive effect on CFC,” preventing it from litigating its entitlement to the Cattle
Proceeds. ECF No. 153 at 7.
CFC believes no party adequately represents its interest in the Cattle Proceeds.
Accordingly, CFC asks the Court to: (1) allow it to “intervene and respond in opposition to
Plaintiffs’ Motion for Summary Judgment on the limited issue of the dealer trust’; (2) “deny the
pending motions for summary judgment without prejudice to refiling”; and (3) “order the parties
to mediation” on the dealer trust issue. ECF No. 153 at 6-7.
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LEGAL STANDARD
CFC seeks to intervene under both Rule 24(a) and 24(b). See ECF No. 156 at 7-8
(mentioning Rule 24(b) for the first time in CFC’s Reply). Rule 24(a), which governs intervention
as of right, provides that
(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;
(8) the applicant must be so situated that the disposition of the action may, as a
practical matter, impair his ability to protect that interest; (4) the applicant’s
interest must be inadequately represented by the existing parties to the suit.
Ford v, City of Huntsville, 242 F.3d 235, 239 (5th Cir. 2001) (quoting Taylor Commc’ns Grp., Inc.
v. Sw. Bell Tel. Co., 172 F.3d 385, 387 (5th Cir. 1999)). The first factor has its own four-part test
to “determine whether the application for intervention is timely.” Jd. (citation modified). The
timeliness factors are:
(1) The length of time during which the would-be intervenor actually knew or
reasonably should have known of its interest in the case before it petitioned for
leave to intervene; (2) the extent of the prejudice that the existing parties to the
litigation may suffer as a result of the would-be intervenor’s failure to apply for
intervention as soon as it knew or reasonably should have known of its interest in
the case; (3) the extent of the prejudice that the would-be intervenor may suffer if
intervention is denied; and (4) the existence of unusual circumstances militating
either for or against a determination that the application is timely.
Id. (quoting Sierra Club v. Espy, 18 F.3d 1202, 1205 (5th Cir. 1994)). Under Rule 24(b), any party
that “has a claim or defense that shares with the main action a common question of law or fact”
may intervene “[o]n timely motion.” FED. R. CIv. P. 24(b)(1)(B). A “district court’s determination
regarding the timeliness of intervention is typically reviewed for abuse of discretion.” City of
Huntsville, 242 F.3d at 239 (citing Sierra Club, 18 F.3d at 1205 n.2).
“Although the movant bears the burden of establishing its right to intervene, Rule 24 is to
be liberally construed.” Texas v. United States, 805 F.3d 653, 656 (5th Cir. 2015) (quoting
Brumfield v. Dodd, 749 F.3d 339, 341 (5th Cir. 2014)); see also Sierra Club, 18 F.3d at 1205
(‘Federal courts should allow intervention where no one would be hurt and the greater justice
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|
could be attained.”). And a district court may grant permissive intervention under Rule 24(b) even
where, as here, the would-be intervenor relied only on Rule 24(a) in its initial motion. See FED. R. |
CIv. P. 24(b) (authorizing permissive intervention “on timely motion” without requiring the
movant to specifically invoke subsection (b)); United States v. LULAC, 793 F.2d 636, 644 (5th Cir.
1986) (“Although the court erred in granting intervention as of right, it might have granted
permissive intervention under Rule 24(b) . . . .”); id. at 644 n.12 (citing McKay v. Heyison, 614 F.2d
899, 906 (3d Cir. 1980) (“In order for the district court to exercise its discretion, Rule 24(b) requires
only that the intervenor share a ‘question of law or fact in common’ with the original plaintiffs.”
(quoting FED. R. Civ. P. 24(b)))).
ANALYSIS
CFC asks the Court to “deny [Plaintiffs] pending motion for summary judgment as moot, |
allow CFC to intervene, and order the parties to mediation.” ECF No. 153 at 2. The mootness of |
the parties’ cross-motions for summary judgment and whether the parties should be ordered to |
mediation are downstream of OFC’s intervention in this suit, so the Court addresses intervention
first.
I, CFC’s Motion to Intervene |
A. Timeliness |
The parties primarily dispute whether CFC’s Motion is timely. Courts generally consider |
timeliness before addressing Rule 24(a)’s other requirements. Timeliness is also a requirement
for permissive intervention under Rule 24(b). See FED. R. CIv. P. 24(b) (“On timely motion, the
court may permit anyone to intervene who: ... has a claim or defense that shares with the main
action a common question of law or fact.”). “Timeliness under mandatory intervention is evaluated
more leniently than under permissive intervention.” Rotstain v. Mendez, 986 F.3d 931, 942 (5th
Cir. 2021) (citing Stallworth v. Monsanto Co., 558 F.2d 257, 266 (5th Cir. 1977)). However, in
exercising their discretion under Rule 24(b), courts “must consider whether the intervention will
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unduly delay or prejudice the adjudication of the original parties’ rights.” FED. R. CIv. P. 24(b)(8).
This requirement is specific to permissive intervention and so is not a consideration under Rule
24(a).
CFC believes “Plaintiffs are stalling for time in the hope that the Court will enter an order
finding in their favor on the dealer trust issue” because Plaintiffs have “delay[ed] engagement”
with CFC, “knowing CFC is not a party to this action.” ECF No. 153 at 4. CFC contends that
finding in Plaintiffs’ favor on this issue would “negat[e] the need for any negotiation or separate
litigation on entitlement to the Cattle Proceeds” because such a finding “could potentially have
universally preclusive effect on CFC.” Id. at 3-4, 7. CFC avers that it did not know the dealer
trust issue was part of Plaintiffs’ motion for partial summary judgment and only recently
discovered that it was, after “counsel for Plaintiffs for the first time brought to the attention of
CFC... the pending motion for summary judgment seeking a determination of Plaintiffs’ dealer
trust status.” Id. at 3. CFC describes this delay as a “potential subterfuge.” Jd. Plaintiffs respond
that “CFC did nothing to protect its alleged interests in the subject matter of this lawsuit until
January 2026—nearly two and half years after the litigation was filed.” ECF No. 154 at 8.
The Court finds that CFC’s Motion is timely under Rule 24(a). The first timeliness factor
asks courts to evaluate the “length of time during which the would-be intervenor actually knew
or reasonably should have known of its interest in the case before it petitioned for leave to
intervene.” City of Huntsville, 242 F.3d at 239. Plaintiffs argue that “resolution of the Dealer Trust
Claims was critical to the division of the [Cattle Proceeds]” during the bankruptcy proceedings,
and so CFC should have known the Proceeds would be implicated in this case. ECF No. 154 at 8.
But as Plaintiffs concede, 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.” ECF No. 154 at 8 (quoting Sierra Club, 18 F.3d at 1205). “A better
gauge of promptness is the speed with which the would-be intervenor acted when it became aware
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that its interests would no longer be protected by the original parties.” Sierra Club, 18 F.3d at
1205.
CFC contends that, as a nonparty, it “had no reason to review or analyze Plaintiffs’ motion
for summary judgment when it was filed.” ECF No. 153 at 5. “Only upon Plaintiffs’ counsel’s
mention of the dealer trust issue being part of the motion for summary judgment, did CFC review
and analyze the motion for summary judgment.” Id. This means CFC did not have actual
knowledge of the potential impact of Plaintiffs’ motion for partial summary judgment on its right
to the Cattle Proceeds until January 5, 2026. See ECF No. 154-4 at 1-2 (“[A]s you might already
be aware, we affirmatively moved for summary judgment on the dealer trust claim. It is fully
briefed, and I expect a ruling on it any day. That ruling might move the needle a bit with respect
to the division of these funds.”). As to whether CFC should have known the dealer trust issue
might form part of Plaintiffs’ motion for partial summary judgment, CFC is currently a nonparty
who claims the Cattle Proceeds only as a “secured creditor.” Id. at 2. While a more diligent party
might have read Plaintiffs’ motion before last month, this case is about much more than just the
Cattle Proceeds. It was not incumbent on CFC to scour the docket in search of claims that might
implicate the Proceeds. And CFC had even less reason to monitor this case because, as CFC notes,
it “had no reason to believe its interests were at immediate risk” until recently. ECF No. 156 at 5.
Until late last year, the parties were in regular contact about the Proceeds and “proceeded on the
shared assumption that the competing claims to the Cattle Proceeds would be resolved
cooperatively” without court intervention. Jd. Plaintiffs then stopped communicating with CFC
beginning in March 2025, filed their motion for partial summary judgment in June 2025, and only
notified CFC that the motion implicates the Cattle Proceeds when CFC reached out in December
2025.
The remaining timeliness factors also favor allowing intervention. Because CFC learned
ofits interest in joining this case as a party just last month, Plaintiffs will suffer minimal prejudice
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if CFC is allowed to intervene. By contrast, CFC may suffer much greater prejudice if it is not
allowed to intervene, since the Court would have to adjudicate the pending motions for partial
summary judgment without the benefit of briefing from CFC. And as to the fourth factor, the
Court is aware of no “unusual circumstances militating either for or against a determination that
the application is timely,” aside from Plaintiffs’ “extended silence” around the time they moved for
partial summary judgment. City of Huntsville, 242 F.3d at 239; ECF No. 156 at 6. If anything,
Plaintiffs’ failure to notify CFC that it was no longer interested in negotiating favors giving CFC
an opportunity to be heard. Thus, CFC acted promptly upon discovering that Plaintiffs’ motion
could affect its entitlement to the Proceeds.
B. Interest Relating to the Property or Transaction
Plaintiffs also argue that CFC does not have the kind of “direct, substantial, legally
protectable interest in the proceedings” that Rule 24 requires. ECF No. 154 at 9 (quoting Edwards
v. City of Hou., 78 F.3d 983, 1004 (5th Cir. 1996)). In Plaintiffs’ view, it follows that the Court
“must” deny CFC’s Motion. Jd. at 10. CFC counters that unlike in the cases Plaintiffs cite, it does
not have a merely indirect economic interest in the Cattle Proceeds. Rather, CFC “is the specific
entity holding the specific funds—the Cattle Proceeds—whose distribution may be affected by
how this Court resolves the dealer trust question.” ECF No. 156 at 6.
The Court agrees with CFC. While Plaintiffs are correct that general economic interests
do not usually justify intervention, economic interests are enough “when they are directly related
to the litigation.” Wal-Mart Stores, Inc. v. Tex. Alcoholic Beverage Comm'n, 834 F.3d 562, 568 (5th
Cir. 2016). It is difficult to imagine how a nonparty’s economic interests could be more related to
the underlying litigation than they are here, where CFC currently holds the Cattle Proceeds but
stands to lose them if the Court grants Plaintiffs’ motion for partial summary judgment. The
Court therefore finds that CFC’s economic interest in this litigation is sufficiently direct to justify
intervention.
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Plaintiffs do not contest the third and fourth Rule 24(a) factors, so the Court need not
address them. CFC’s Motion is GRANTED.
II. Mootness and Mediation
CFC asks the Court to “deny the pending motions for summary judgment without
prejudice to refiling, particularly as to the dealer trust issue.” ECF No. 153 at 6. “Second, and
perhaps more importantly, CFC requests the Court order it and Plaintiffs to mediation on the
question of the Cattle Proceeds.” Id. CFC says this “would allow for a more efficient use of judicial
resources and allow the parties” to resolve their dispute over the Cattle Proceeds “without the
need for additional Court intervention.” Jd. Plaintiffs do not specifically resist CFC’s request to
send the parties to mediation, seemingly conceding that mediation is an appropriate next step if
the Court allows CFC to intervene. Accordingly, the Court ORDERS CFC and Plaintiffs to
mediate their competing claims to the Cattle Proceeds. The parties are further ORDERED to file
monthly status reports about their progress in mediation, beginning on March 31, 2026.
As to the mootness of the pending motions for partial summary judgment, CFC moved to
intervene because its interests are not currently represented by the existing parties. It follows
that the Court cannot rule on Plaintiffs’ motion without giving CFC an opportunity to defend its
position. And it would make little sense to deny Plaintiffs’ motion as moot but proceed to
adjudicate Defendants’ motion, given that the motions address overlapping issues and Defendants
will suffer no prejudice from taking additional time to sharpen the questions before the Court.
Defendants should also have an opportunity to address the effect, if any, of CFC’s intervention on
its own motion. Lastly, as CFC notes, the Court has denied motions for summary judgment as
moot in other litigation to allow the parties to resolve their claims through mediation. See, e.g.,
Order, Herring Bank v. First Baptist Church of Sterling, No. 2:24-CV-246-Z-BR, Dkt. 70 (N.D.
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Tex. Dec. 16, 2025). The Court therefore DENIES both pending motions as moot. ECF Nos.
116, 117.
CONCLUSION
CFC’s Motion is GRANTED. CFC and Plaintiffs are ORDERED to pursue mediation as
to Plaintiffs’ dealer trust claims. The parties’ pending cross-motions for partial summary
judgment are DENIED as moot with leave to refile. The Clerk of the Court is DIRECTED to
administratively close this case while the parties pursue mediation.
SO ORDERED.
February Z/ 2026
MATTHEW J. KACSMARYK
UNITED STATES DISTRICT JUDGE
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