Ali v. Chex Systems, Inc.

Filing 9

ORDER GRANTING 4 Motion for Costs ; ORDERED Plaintiff to pay $886.79 in costs related to the removal of Ali I to Defendant; payment shall be made within thirty days of the date of service of this order, signed by District Judge Dale A. Drozd on 8/15/17. (30-Day Deadline) (Martin-Gill, S)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 HUSSEIN OSMAN ALI, 12 Plaintiff, 13 14 No. 1:17-cv-00850-DAD-BAM v. ORDER GRANTING MOTION FOR COSTS CHEX SYSTEMS, INC., 15 (Doc. No. 4) Defendant. 16 This action was removed from Fresno County Superior Court on June 23, 2017. (Doc. 17 18 No. 1.) On June 30, 2017, defendant filed a motion to dismiss, as well as a motion for costs and 19 to stay the matter pursuant to Rule 41(d) of the Federal Rules of Civil Procedure. (Doc. Nos. 3, 20 4.) Plaintiff then filed a notice of voluntary dismissal on July 10, 2017. (Doc. No. 5.) The Clerk 21 of the Court was thereafter directed to close the action by minute order, but this court specifically 22 retained jurisdiction to address defendant’s motion for costs, to which it now turns. Plaintiff has 23 filed no opposition to defendant’s motion for cost. The motion came before the court on August 24 15, 2017, with attorney Scott Goldsmith appearing telephonically on behalf of defendant. 25 Plaintiff did not appear at the hearing. For the reasons that follow, defendant’s motion for costs 26 pursuant to Rule 41(d) will be granted. 27 ///// 28 ///// 1 1 BACKGROUND 2 Plaintiff here is a well-known pro se litigant in this district, and has been plaintiff in nine 3 lawsuits (not including the instant matter) either filed or removed here within the last two years.1 4 The complaint in this matter essentially alleges defendant misreported certain accounts on 5 plaintiff’s credit report. (Doc. No. 1-1 at 5–10.) The allegations here mostly restate allegations 6 made by plaintiff in a prior case, also removed to this court, Ali v. Chex Sys., Inc., No. 1:17-cv- 7 00475-DAD-EPG (E.D. Cal. Apr. 3, 2017) (“Ali I”). 8 9 In Ali I, plaintiff alleged that Chex Systems—the defendant in both suits—had violated the Fair Credit Reporting Act (“FCRA”) and committed various state law torts, including 10 defamation, tortious interference with prospective economic advantage, and negligence, by 11 misreporting information on his credit report. Ali I, Doc. No. 1-1 at 2–9. In Ali I plaintiff alleged 12 that he discovered defendant was reporting negative information on his credit report in January 13 2017, and thereafter contacted defendant and provided it with an “Affidavit of Identity theft that 14 occurred on 2012 [sic].” Ali I, Doc. No. 1-1 at 3. Defendant replied that what it was reporting 15 was accurate and refused to change the credit report. Id. Additionally, in Ali I plaintiff included 16 factual allegations that defendant had reported plaintiff “had committed bank fraud” and that he 17 “had committed ACCOUNT ABUSE.” Id. at 7–9. Ali I was voluntarily dismissed by plaintiff on 18 May 2, 2017, approximately a month after its April 3, 2017 removal to this court by defendant. The instant case (“Ali II”) was filed by plaintiff in Fresno County Superior Court on May 19 20 15, 2017 (Doc. No. 1-1 at 5), less than two weeks after plaintiff’s voluntary dismissal of Ali I. 21 Just as in Ali I, the complaint in Ali II alleges plaintiff discovered defendant was reporting 22 negative information on his credit report in January 2017, and thereafter contacted defendant and 23 24 25 26 27 28 1 See Ali v. Early Warning Servs., LLC, No. 17-cv-00785-LJO-SKO (E.D. Cal. June 9, 2017); Ali v. OneMain Fin. Servs., Inc., No. 17-cv-00666-AWI-SKO (E.D. Cal. May 12, 2017); Ali v. Early Warning Servs., LLC, No. 17-cv-00494-DAD-SAB (E.D. Cal. April 7, 2017); Ali v. Synchrony Bank, No. 17-cv-00488-DAD-SKO (E.D. Cal. April 5, 2017); Ali v. Chex Systems, Inc., No. 1:17cv-00475-DAD-EPG (E.D. Cal. April 3, 2017); Ali v. Hudson Insurance Co., et al., No. 1:16-cv01743-DAD-EPG (E.D. Cal. Nov. 17, 2016); Ali v. Jawad, et al., No. 1:16-cv-00879 (E.D. Cal. June 22, 2016); Ali v. Hudson Insurance Co., et al., No. 1:16-cv-00409-DAD-EPG (E.D. Cal. March 25, 2016); Ali v. Starbucks Corp., No. 1:15-cv-01450-DAD-SKO (E.D. Cal. Sept. 24, 2015). 2 1 provided it with an “Affidavit of Identity theft that occurred on 2016 [sic].” (Id. at 6.) The 2 complaint alleges plaintiff’s credit report depicted that plaintiff “owes a Credit Union an amount 3 in excess of $2500.00,” which plaintiff claims is a result of identity theft, and again repeated that 4 the report indicates he “had committed ACCOUNT ABUSE.” (Id. at 6–7.) The complaint in Ali 5 II does omit any reference to the FCRA, and instead asserts only the previously alleged state law 6 tort claims, including defamation, tortious interference with economic advantage, and negligence, 7 along with a new claim for violation of Business and Professions Code § 17200, et seq. (Id. at 6– 8 9.) Ali II was removed to this federal court on June 23, 2017 and voluntarily dismissed by 9 plaintiff on July 10, 2017. (Doc. Nos. 1, 5.) 10 LEGAL STANDARD 11 Rule 41(d) of the Federal Rules of Civil Procedure states, “[i]f a plaintiff who previously 12 dismissed an action in any court files an action based on or including the same claim against the 13 same defendant,” the court may both (1) “order the plaintiff to pay all or part of the costs of that 14 previous action,” and (2) “stay the proceedings until the plaintiff has complied.” The language 15 “clearly indicates that it conveys ‘broad discretion’ on federal courts to order stays and payment 16 of costs, and that neither is mandatory.” Esquivel v. Arau, 913 F. Supp. 1382, 1386 (C.D. Cal. 17 1996) (quoting United Transp. Union v. Maine Cent. R.R. Corp., 107 F.R.D. 391, 392 (D. Me. 18 1985)). The goal of Rule 41(d) is both “to serve as a deterrent to forum shopping and vexatious 19 litigation,” Simeone v. First Bank Nat’l Ass’n, 971 F.2d 103, 108 (8th Cir. 1992), as well as “to 20 protect defendants from the harassment of repeated lawsuits by the same plaintiff on the same 21 claims,” Jurin v. Google, Inc., 695 F. Supp. 2d 1117, 1123 (E.D. Cal. Mar. 1, 2010). “Costs may 22 be imposed under Rule 41(d) where the plaintiff has brought a second identical, or nearly 23 identical, claim and has requested identical, or nearly identical, relief.” Esquivel, 913 F. Supp. at 24 1387. The moving party need not show subjective bad faith on behalf of the dismissing party to 25 be awarded costs. Id. at 1388. 26 27 28 ANALYSIS While there are some differences between the allegations in Ali I and the current suit, both appear to allege essentially the same legal wrongs: that defendant has misreported certain 3 1 statements on plaintiff’s credit history to his detriment. Further, the relief sought is substantially 2 the same, although plaintiff has added a request for injunctive relief in the current suit. Moreover, 3 plaintiff has presented no explanation as to why he voluntarily dismissed the first action only to 4 refile two weeks later in state court. Nor has plaintiff explained how he believes the suits differ 5 from one another or, if the claims were distinguishable in some way, why those claims could not 6 have been brought as one case and pursued simultaneously, thereby saving both the defendant and 7 two different court systems valuable time and resources. Finally, plaintiff has engaged in similar 8 behaviors in other cases filed in this court, voluntarily dismissing them shortly after they are 9 removed to federal court. See Ali v. Early Warning Servs., LLC, No. 1:17-cv-00785-LJO-SKO 10 (removed on June 9, 2017 and voluntarily dismissed on July 10, 2017); Ali v. Early Warning 11 Servs., LLC, No. 17-cv-00494-DAD-SAB (removed on April 7, 2017 and voluntarily dismissed 12 on May 2, 2017). This pattern is indicative of plaintiff engaging in forum-shopping and suggests 13 that his lawsuits are not being pursued for their merits, but rather to harass or vex the defendants. 14 Simeone, 971 F.2d at 108; Jurin, 695 F. Supp. 2d at 1123. As such, the court finds in its 15 discretion that the award of costs to defendant for the work of its lawyers related to the removal 16 of Ali I is appropriate here. See Esquivel, 913 F. Supp. at 1387; see also Fed. R. Civ. Proc. 41(d) 17 (the court may “order the plaintiff to pay all or part of the costs of that previous action”) 18 While the Ninth Circuit has not expressly decided the issue, courts within the circuit are 19 split as to whether the award of costs under Rule 41(d) includes the award of attorneys’ fees. 20 Compare Reid v. I.C. Sys. Inc., 304 F.R.D. 253, 255–56 (D. Ariz. 2014) (analogizing to Rule 68, 21 and allowing attorneys’ fees only where the underlying statute permits the award of such fees) 22 with Aloha Airlines, Inc. v. Mesa Air Grp., Inc., No. 07-00007DAE-KSC, 2007 WL 2320672, at 23 *2–3 (D. Haw. Aug. 10, 2007) (finding “an award of attorneys’ fees to Defendants under Rule 24 41(d) in this case is consistent with the underlying purposes of the rule”). Moreover, the circuits 25 are split in their approaches to this issue. See Andrews v. America’s Living Ctrs., LLC, 827 F.3d 26 306, 309–12 (4th Cir. 2016) (noting that the Eighth and Tenth Circuits allow the award of 27 attorneys’ fees as costs under Rule 41(d), the Sixth Circuit does not, and adopting the Seventh 28 Circuit’s approach of allowing attorneys’ fees when only authorized by the underlying statute or 4 1 when the opposing party acted in bad faith). While there is a lack of clear authority on the issue, 2 the trend within this circuit appears to be to allow the inclusion of attorneys’ fees in such cost 3 awards. See Esquivel, 913 F. Supp. at 1392 (“[D]efendants are entitled to both expenses and 4 attorneys’ fees that are reasonably incurred and that will not contribute toward defendants’ 5 defense in the present case.”); see also Platinum Logistics, Inc. v. Platinum Cargo Logistics, Inc., 6 No. 3:15-CV-617-CAB-KSC, 2015 WL 11921401, at *5 (S.D. Cal. Sept. 15, 2015); Simmonds v. 7 Credit Suisse Secs. (USA) LLC, No. C12-1937 JLR, 2013 WL 501884, at *2 (W.D. Wash. Feb. 7, 8 2013); Cheryl Kelmar v. Bank of Am. Corp., No. CV 12-6826 PSG (SHx), 2012 WL 12973473, at 9 *1 (C.D. Cal. Oct. 26, 2012); Aloha Airlines, Inc., 2007 WL 2320672 at *4; Nielson v. Union 10 Bank of Cal., N.A., No. CV 02-06942 MMM (CWx), 2003 WL 27374136, at *5–6 (C.D. Cal. 11 Mar. 31, 2003); EOS GMBH Electro Optical Sys. v. DTM Corp., No. SA CV 00-1230 DOC 12 (MLGx), 2002 WL 34536678, at *4–5 (C.D. Cal. Mar. 18, 2002). But see Caldwell v. Wells 13 Fargo Bank, N.A., No. 13-CV-01344-LHK, 2014 WL 789083, at *6–7 (N.D. Cal. Feb. 26, 2014) 14 (disallowing attorneys’ fees); La Cuna de Aztlan Sites Prot. Circle Advisory Comm. v. U.S. Dep’t 15 of Interior, No. CV 11-00400 DMG (DTBx), 2011 WL 13131114, at *2 (C.D. Cal. Nov. 14, 16 2011) (same); Banga v. First USA, N.A., No. C 10-00975 SBA (LB), 2010 WL 6184482, at *5–6 17 (N.D. Cal. Dec. 8, 2010) (same). While a close question, this court is persuaded by the 18 authorities cited above that the court’s broad discretion under Rule 41(d) includes the awarding of 19 attorneys’ fees as part of the costs and advances the recognized goal of the Rule of preventing 20 forum shopping and vexatious lawsuits. Certainly that is the case under the circumstances 21 presented here. Therefore, attorneys’ fees may be recovered as costs under Rule 41(d) in this 22 action. 23 Under Rule 41(d), courts are not to award costs associated with past work that will still be 24 useful to defendants in the present litigation. Aloha Airlines, Inc., 2007 WL 2320672, at *4. 25 Defendant here seeks only compensation for the amounts spent on Ali I, and seeks no costs or 26 fees associated with the present case. The costs sought by defendant are therefore appropriate 27 and awardable. The documentation attached to defendant’s motion show that attorney Goldsmith 28 spent 1.4 hours on removing Ali I to federal court, which was billed at the rate of $403.75, while 5 1 attorney Troutman spent 0.2 hours editing the documents related to removal of Ali I, billed at a 2 rate of $552.50. (Doc. No. 4-2.) Typically, the reasonable rate of attorneys’ fees to be awarded 3 under a fee-shifting provision is based on the forum in which the district court sits. Shirrod v. 4 Director, Office of Workers’ Comp. Progs., 809 F.3d 1082, 1087–88 (9th Cir. 2015); Camacho v. 5 Bridgeport Fin., Inc., 523 F.3d 973, 979 (9th Cir. 2008). Other judges of this court have 6 previously found that the reasonable hourly rate for attorneys in the Fresno community is $250 to 7 $380, with the court awarding $250 to $300 per hour for attorneys with less than ten years of 8 experience and higher rates for those attorneys with more experience. See BR North 223, LLC v. 9 Glieberman, No. 1:10-cv-02153 LJO-BAM, 2012 WL 2920856, at *2–3 (E.D. Cal. July 17, 10 2012); see also J&J Sports Prods., Inc. v. Flores, No. 1:10-cv-02087-AWI, 2013 WL 3729577, at 11 *3–4 (E.D. Cal. July 12, 2013); C.B. v. Sonora Sch. Dist., No. 1:09-cv-00285-OWW-SMS, 2011 12 WL 4590775, at *3–4 (E.D. Cal. Sept. 30, 2011). Here, attorney Troutman has 13 years of 13 litigation experience, and the court finds a reasonable hourly rate for his service in the local 14 community to be $315 per hour. Attorney Goldsmith has eight years of litigation experience, and 15 the court finds a reasonable hourly rate for his services in the local community to be $285 per 16 hour. Thus, the total awardable attorneys’ fees are $462. Defendant has also established that it 17 spent $424.79 in costs associated with the removal of Ali I, including the filing fee, and delivery 18 and service charges, all of which are properly chargeable as costs to plaintiff here. (Doc. No. 4-3 19 at 6.) The total costs awardable to defendant, therefore, are $886.79. 20 21 CONCLUSION For the foregoing reasons, plaintiff is hereby ordered to pay $886.79 in costs related to the 22 removal of Ali I to defendant. Payment shall be made within thirty days of the date of service of 23 this order. 24 IT IS SO ORDERED. 25 Dated: August 15, 2017 UNITED STATES DISTRICT JUDGE 26 27 28 6

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