In a closely watched decision that ultimately rested on narrow grounds, the Supreme Court held in Town of Chester v. Laroe Estates that an "intervenor-of-right" under Federal Rule of Civil Procedure 24(a)(2) must establish its own standing under Article III of the Constitution in order to pursue relief that a plaintiff has not sought in the underlying litigation.

Town of Chester involved a claim for a regulatory taking (among others) brought by a land developer against a New York municipality whose "red tape" prevented him from completing a planned subdivision. Before bringing suit, the developer's financing issues led him to obtain funding from Laroe Estates, secured by a mortgage on the underlying property. When the project went south and the developer sued the municipality for damages, Laroe intervened under Fed. R. Civ. P. 24(a)(2). Laroe predicated its intervention on having an "equitable interest" in the property for which it sought compensation directly in the form of money damages.

The Supreme Court observed that Laroe's briefing in the appellate courts had wavered on whether it sought the same damages as those sought in the developer's underlying suit, or separate compensation based on its own interest in the property. But the Court did not hold, as some expected, that a Rule 24 intervenor must always have independent Article III standing. The Court instead adopted a more cautious, narrow view that an intervenor must independently have and establish constitutional standing if it seeks relief that is distinct from the relief the plaintiff seeks. The Court remanded for findings on whether Laroe had, in fact, sought different relief, and as a result needed to establish its own independent standing to maintain its claims.

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