interest in subject-matter

In May 1959, Caribbean Mills, Inc., a Haitian corporation, entered into a contract with an individual named Kelly and the Panama and Venezuela Finance Company, a Panamanian corporation. The agreement provided that Caribbean would purchase from Panama 125 shares of corporate stock, in return for payment of $85,000 down and an additional $165,000 in 12 annual installments. No installment payments ever were made, despite requests for payment by Panama. In 1964, Panama assigned its entire interest in the 1959 contract to petitioner Kramer, an attorney in Wichita Falls, Texas. The stated consideration was $1. By a separate agreement dated the same day, Kramer promised to pay back to Panama 95% of any net recovery on the assigned cause of action, solely as a Bonus. Kramer soon thereafter brought suit against Caribbean for $165,000 in the United States District Court for the Northern District of Texas, alleging diversity of citizenship between himself and Caribbean. The District Court denied Caribbean’s motion to dismiss for want of jurisdiction. The case proceeded to trial, and a jury returned a $165,000 verdict in favor of Kramer. On appeal, the Court of Appeals for the Fifth Circuit reversed. The Supreme Court granted certiorari to review the jurisdictional question.

Before us are two cases in which proposed defendant-intervenors were denied intervention under Federal Rule of Civil Procedure 24(a) and (b). The actions were brought against the University of Michigan to contest the use of an applicant's race as a factor in determining admission. The appeals come from separate district courts but present similar issues. We have therefore consolidated the two cases for purposes of this opinion. In Gratz v. Bollinger, the named plaintiffs are two white applicants who were denied admission to the College of Literature, Arts and Science. They allege that the College's admissions policy violates the Equal Protection Clause of the Fourteenth Amendment, 42 U.S.C. § 1981 and § 1983, and 42 U.S.C. §§ 2000d et seq. The plaintiffs seek compensatory and punitive damages, injunctive relief forbidding continuation of the alleged discriminatory admissions process, and admission to the College. The proposed intervenors are 17 African-American and Latino/a individuals who have applied or intend to apply to the University, and the Citizens for Affirmative Action's Preservation (CAAP), a nonprofit organization whose stated mission is to preserve opportunities in higher education for African-American and Latino/a students in Michigan. The district court denied their motion for intervention as of right, holding that the plaintiffs did not have a substantial interest in the litigation and that the University could adequately represent the proposed intervenors' interests. The district court also denied the proposed intervenors' alternative motion for permissive intervention. In Grutter v. Bollinger, the named plaintiff is a white woman challenging the admissions policy of the University of Michigan Law School. She alleges that the race-conscious admissions policy utilized by the law school violates the Equal Protection Clause of the Fourteenth Amendment, 42 U.S.C. § 1981 and § 1983, and 42 U.S.C. §§ 2000d et seq. Grutter seeks compensatory and punitive damages, injunctive relief forbidding continuation of the alleged discriminatory admissions process, and admission to the law school. The proposed intervenors are 41 students and three pro-affirmative action coalitions. The individual proposed intervenors include 21 undergraduate students of different races who currently attend different undergraduate institutions, all of whom plan to apply to the law school for admission. Five black students who currently attend local high schools also plan to apply to the law school for admission. Twelve students of different races currently attend the law school. A paralegal and a Latino graduate student at the University of Texas at Austin intend to apply to the law school for admission. A black graduate student at the University of Michigan is a member of the Defend Affirmative Action Party. The district court denied the motion to intervene as of right on the basis that the intervenors failed to show that their interests would not be adequately represented by the University. The district court also denied the proposed intervenors' alternative motion for permissive intervention. The plaintiff opposed the motion to intervene, but the defendants, officials of the Law School and the University, did not oppose the motion. The appeals were argued on June 8, 1999, and decided on August 10, 1999.

In 1961 Steve and Robert Szukhent, father and son farmers residing in Michigan, obtained two incubators from National Equipment Rental, Ltd. under a lease. National Equipment Rental is a Delaware corporation whose principal place of business is in New York. The lease was a standard printed form less than a page and a half long that contained eighteen numbered paragraphs. The final numbered paragraph, printed in the same type as the rest of the document and appearing immediately above the Szukhents' signatures, stated that the lessees designated Florence Weinberg, 47-21 Forty-first Street, Long Island City, New York, as agent for the purpose of accepting service of any process within the State of New York. The Szukhents had never met, seen, or heard of Florence Weinberg before the lawsuit. In 1962 National Equipment Rental filed a complaint in the United States District Court for the Eastern District of New York alleging that the Szukhents had failed to make any of the periodic payments required by the lease. The marshal delivered two copies of the summons and complaint to Florence Weinberg. On the same day she mailed the summons and complaint to the Szukhents by certified mail together with a letter stating that the documents had been served upon her as their agent pursuant to the lease. National Equipment Rental also notified the Szukhents of the service by certified mail. The Szukhents moved to quash service. The District Court granted the motion. The Court of Appeals for the Second Circuit affirmed. The Supreme Court granted certiorari.