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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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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HUSSEIN OSMAN ALI,

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Plaintiff,

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No. 1:17-cv-00850-DAD-BAM

v.

ORDER GRANTING MOTION FOR COSTS

CHEX SYSTEMS, INC.,

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(Doc. No. 4)

Defendant.

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This action was removed from Fresno County Superior Court on June 23, 2017. (Doc.

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No. 1.) On June 30, 2017, defendant filed a motion to dismiss, as well as a motion for costs and

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to stay the matter pursuant to Rule 41(d) of the Federal Rules of Civil Procedure. (Doc. Nos. 3,

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4.) Plaintiff then filed a notice of voluntary dismissal on July 10, 2017. (Doc. No. 5.) The Clerk

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of the Court was thereafter directed to close the action by minute order, but this court specifically

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retained jurisdiction to address defendant’s motion for costs, to which it now turns. Plaintiff has

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filed no opposition to defendant’s motion for cost. The motion came before the court on August

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15, 2017, with attorney Scott Goldsmith appearing telephonically on behalf of defendant.

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Plaintiff did not appear at the hearing. For the reasons that follow, defendant’s motion for costs

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pursuant to Rule 41(d) will be granted.

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BACKGROUND

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Plaintiff here is a well-known pro se litigant in this district, and has been plaintiff in nine

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lawsuits (not including the instant matter) either filed or removed here within the last two years.1

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The complaint in this matter essentially alleges defendant misreported certain accounts on

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plaintiff’s credit report. (Doc. No. 1-1 at 5–10.) The allegations here mostly restate allegations

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made by plaintiff in a prior case, also removed to this court, Ali v. Chex Sys., Inc., No. 1:17-cv-

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00475-DAD-EPG (E.D. Cal. Apr. 3, 2017) (“Ali I”).

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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

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defamation, tortious interference with prospective economic advantage, and negligence, by

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misreporting information on his credit report. Ali I, Doc. No. 1-1 at 2–9. In Ali I plaintiff alleged

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that he discovered defendant was reporting negative information on his credit report in January

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2017, and thereafter contacted defendant and provided it with an “Affidavit of Identity theft that

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occurred on 2012 [sic].” Ali I, Doc. No. 1-1 at 3. Defendant replied that what it was reporting

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was accurate and refused to change the credit report. Id. Additionally, in Ali I plaintiff included

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factual allegations that defendant had reported plaintiff “had committed bank fraud” and that he

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“had committed ACCOUNT ABUSE.” Id. at 7–9. Ali I was voluntarily dismissed by plaintiff on

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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

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15, 2017 (Doc. No. 1-1 at 5), less than two weeks after plaintiff’s voluntary dismissal of Ali I.

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Just as in Ali I, the complaint in Ali II alleges plaintiff discovered defendant was reporting

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negative information on his credit report in January 2017, and thereafter contacted defendant and

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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).
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provided it with an “Affidavit of Identity theft that occurred on 2016 [sic].” (Id. at 6.) The

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complaint alleges plaintiff’s credit report depicted that plaintiff “owes a Credit Union an amount

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in excess of $2500.00,” which plaintiff claims is a result of identity theft, and again repeated that

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the report indicates he “had committed ACCOUNT ABUSE.” (Id. at 6–7.) The complaint in Ali

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II does omit any reference to the FCRA, and instead asserts only the previously alleged state law

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tort claims, including defamation, tortious interference with economic advantage, and negligence,

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along with a new claim for violation of Business and Professions Code § 17200, et seq. (Id. at 6–

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9.) Ali II was removed to this federal court on June 23, 2017 and voluntarily dismissed by

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plaintiff on July 10, 2017. (Doc. Nos. 1, 5.)

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LEGAL STANDARD

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Rule 41(d) of the Federal Rules of Civil Procedure states, “[i]f a plaintiff who previously

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dismissed an action in any court files an action based on or including the same claim against the

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same defendant,” the court may both (1) “order the plaintiff to pay all or part of the costs of that

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previous action,” and (2) “stay the proceedings until the plaintiff has complied.” The language

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“clearly indicates that it conveys ‘broad discretion’ on federal courts to order stays and payment

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of costs, and that neither is mandatory.” Esquivel v. Arau, 913 F. Supp. 1382, 1386 (C.D. Cal.

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1996) (quoting United Transp. Union v. Maine Cent. R.R. Corp., 107 F.R.D. 391, 392 (D. Me.

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1985)). The goal of Rule 41(d) is both “to serve as a deterrent to forum shopping and vexatious

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litigation,” Simeone v. First Bank Nat’l Ass’n, 971 F.2d 103, 108 (8th Cir. 1992), as well as “to

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protect defendants from the harassment of repeated lawsuits by the same plaintiff on the same

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claims,” Jurin v. Google, Inc., 695 F. Supp. 2d 1117, 1123 (E.D. Cal. Mar. 1, 2010). “Costs may

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be imposed under Rule 41(d) where the plaintiff has brought a second identical, or nearly

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identical, claim and has requested identical, or nearly identical, relief.” Esquivel, 913 F. Supp. at

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1387. The moving party need not show subjective bad faith on behalf of the dismissing party to

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be awarded costs. Id. at 1388.

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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
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statements on plaintiff’s credit history to his detriment. Further, the relief sought is substantially

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the same, although plaintiff has added a request for injunctive relief in the current suit. Moreover,

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plaintiff has presented no explanation as to why he voluntarily dismissed the first action only to

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refile two weeks later in state court. Nor has plaintiff explained how he believes the suits differ

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from one another or, if the claims were distinguishable in some way, why those claims could not

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have been brought as one case and pursued simultaneously, thereby saving both the defendant and

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two different court systems valuable time and resources. Finally, plaintiff has engaged in similar

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behaviors in other cases filed in this court, voluntarily dismissing them shortly after they are

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removed to federal court. See Ali v. Early Warning Servs., LLC, No. 1:17-cv-00785-LJO-SKO

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(removed on June 9, 2017 and voluntarily dismissed on July 10, 2017); Ali v. Early Warning

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Servs., LLC, No. 17-cv-00494-DAD-SAB (removed on April 7, 2017 and voluntarily dismissed

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on May 2, 2017). This pattern is indicative of plaintiff engaging in forum-shopping and suggests

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that his lawsuits are not being pursued for their merits, but rather to harass or vex the defendants.

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Simeone, 971 F.2d at 108; Jurin, 695 F. Supp. 2d at 1123. As such, the court finds in its

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discretion that the award of costs to defendant for the work of its lawyers related to the removal

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of Ali I is appropriate here. See Esquivel, 913 F. Supp. at 1387; see also Fed. R. Civ. Proc. 41(d)

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(the court may “order the plaintiff to pay all or part of the costs of that previous action”)

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While the Ninth Circuit has not expressly decided the issue, courts within the circuit are

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split as to whether the award of costs under Rule 41(d) includes the award of attorneys’ fees.

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Compare Reid v. I.C. Sys. Inc., 304 F.R.D. 253, 255–56 (D. Ariz. 2014) (analogizing to Rule 68,

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and allowing attorneys’ fees only where the underlying statute permits the award of such fees)

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with Aloha Airlines, Inc. v. Mesa Air Grp., Inc., No. 07-00007DAE-KSC, 2007 WL 2320672, at

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*2–3 (D. Haw. Aug. 10, 2007) (finding “an award of attorneys’ fees to Defendants under Rule

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41(d) in this case is consistent with the underlying purposes of the rule”). Moreover, the circuits

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are split in their approaches to this issue. See Andrews v. America’s Living Ctrs., LLC, 827 F.3d

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306, 309–12 (4th Cir. 2016) (noting that the Eighth and Tenth Circuits allow the award of

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attorneys’ fees as costs under Rule 41(d), the Sixth Circuit does not, and adopting the Seventh

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Circuit’s approach of allowing attorneys’ fees when only authorized by the underlying statute or
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when the opposing party acted in bad faith). While there is a lack of clear authority on the issue,

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the trend within this circuit appears to be to allow the inclusion of attorneys’ fees in such cost

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awards. See Esquivel, 913 F. Supp. at 1392 (“[D]efendants are entitled to both expenses and

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attorneys’ fees that are reasonably incurred and that will not contribute toward defendants’

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defense in the present case.”); see also Platinum Logistics, Inc. v. Platinum Cargo Logistics, Inc.,

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No. 3:15-CV-617-CAB-KSC, 2015 WL 11921401, at *5 (S.D. Cal. Sept. 15, 2015); Simmonds v.

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Credit Suisse Secs. (USA) LLC, No. C12-1937 JLR, 2013 WL 501884, at *2 (W.D. Wash. Feb. 7,

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2013); Cheryl Kelmar v. Bank of Am. Corp., No. CV 12-6826 PSG (SHx), 2012 WL 12973473, at

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*1 (C.D. Cal. Oct. 26, 2012); Aloha Airlines, Inc., 2007 WL 2320672 at *4; Nielson v. Union

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Bank of Cal., N.A., No. CV 02-06942 MMM (CWx), 2003 WL 27374136, at *5–6 (C.D. Cal.

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Mar. 31, 2003); EOS GMBH Electro Optical Sys. v. DTM Corp., No. SA CV 00-1230 DOC

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(MLGx), 2002 WL 34536678, at *4–5 (C.D. Cal. Mar. 18, 2002). But see Caldwell v. Wells

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Fargo Bank, N.A., No. 13-CV-01344-LHK, 2014 WL 789083, at *6–7 (N.D. Cal. Feb. 26, 2014)

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(disallowing attorneys’ fees); La Cuna de Aztlan Sites Prot. Circle Advisory Comm. v. U.S. Dep’t

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of Interior, No. CV 11-00400 DMG (DTBx), 2011 WL 13131114, at *2 (C.D. Cal. Nov. 14,

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2011) (same); Banga v. First USA, N.A., No. C 10-00975 SBA (LB), 2010 WL 6184482, at *5–6

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(N.D. Cal. Dec. 8, 2010) (same). While a close question, this court is persuaded by the

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authorities cited above that the court’s broad discretion under Rule 41(d) includes the awarding of

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attorneys’ fees as part of the costs and advances the recognized goal of the Rule of preventing

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forum shopping and vexatious lawsuits. Certainly that is the case under the circumstances

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presented here. Therefore, attorneys’ fees may be recovered as costs under Rule 41(d) in this

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action.

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Under Rule 41(d), courts are not to award costs associated with past work that will still be

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useful to defendants in the present litigation. Aloha Airlines, Inc., 2007 WL 2320672, at *4.

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Defendant here seeks only compensation for the amounts spent on Ali I, and seeks no costs or

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fees associated with the present case. The costs sought by defendant are therefore appropriate

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and awardable. The documentation attached to defendant’s motion show that attorney Goldsmith

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spent 1.4 hours on removing Ali I to federal court, which was billed at the rate of $403.75, while
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attorney Troutman spent 0.2 hours editing the documents related to removal of Ali I, billed at a

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rate of $552.50. (Doc. No. 4-2.) Typically, the reasonable rate of attorneys’ fees to be awarded

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under a fee-shifting provision is based on the forum in which the district court sits. Shirrod v.

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Director, Office of Workers’ Comp. Progs., 809 F.3d 1082, 1087–88 (9th Cir. 2015); Camacho v.

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Bridgeport Fin., Inc., 523 F.3d 973, 979 (9th Cir. 2008). Other judges of this court have

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previously found that the reasonable hourly rate for attorneys in the Fresno community is $250 to

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$380, with the court awarding $250 to $300 per hour for attorneys with less than ten years of

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experience and higher rates for those attorneys with more experience. See BR North 223, LLC v.

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Glieberman, No. 1:10-cv-02153 LJO-BAM, 2012 WL 2920856, at *2–3 (E.D. Cal. July 17,

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2012); see also J&J Sports Prods., Inc. v. Flores, No. 1:10-cv-02087-AWI, 2013 WL 3729577, at

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*3–4 (E.D. Cal. July 12, 2013); C.B. v. Sonora Sch. Dist., No. 1:09-cv-00285-OWW-SMS, 2011

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WL 4590775, at *3–4 (E.D. Cal. Sept. 30, 2011). Here, attorney Troutman has 13 years of

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litigation experience, and the court finds a reasonable hourly rate for his service in the local

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community to be $315 per hour. Attorney Goldsmith has eight years of litigation experience, and

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the court finds a reasonable hourly rate for his services in the local community to be $285 per

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hour. Thus, the total awardable attorneys’ fees are $462. Defendant has also established that it

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spent $424.79 in costs associated with the removal of Ali I, including the filing fee, and delivery

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and service charges, all of which are properly chargeable as costs to plaintiff here. (Doc. No. 4-3

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at 6.) The total costs awardable to defendant, therefore, are $886.79.

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CONCLUSION
For the foregoing reasons, plaintiff is hereby ordered to pay $886.79 in costs related to the

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removal of Ali I to defendant. Payment shall be made within thirty days of the date of service of

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this order.

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IT IS SO ORDERED.

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Dated:

August 15, 2017
UNITED STATES DISTRICT JUDGE

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