Patriot Rail Corp. v. Sierra Railroad Company

Filing 166

ORDER signed by Judge Morrison C. England, Jr. on 8/1/2011 ORDERING 159 Sierra's Request for Review and Motion for Relief is DENIED. (Reader, L)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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PATRIOT RAIL CORP.,

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No. 2:09-cv-00009-MCE-EFB

Plaintiff,

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v.

MEMORANDUM AND ORDER

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SIERRA RAILROAD COMPANY,

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Defendants.
________________________

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And Related Counterclaim.
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Defendant Sierra Railroad Company (“Sierra”) has filed a

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Request for Review by the District Court of the Magistrate

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Judge’s Ruling (ECF No. 157) granting Plaintiff Patriot Rail

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Corp.’s (“Patriot’s”) Motion for a Protective Order (ECF No.

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146).

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enforce an order and subpoena seeking financial records from a

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third party, UBS Investment Bank (“UBS”).

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The protective order prevents further efforts by Sierra to

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Sierra requests review on grounds that the Magistrate Judge’s

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order was “clearly erroneous or is contrary to law” pursuant to

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Federal Rule of Civil Procedure 72(a).1

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joints with its Request a Motion for Relief pursuant to

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Rule 60(b) or a modification of the Pretrial Scheduling Order

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(“PTSO”) pursuant to Rule 16(b)(4). (Def.’s Req. for Review, 1:5-

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9, May 19, 2011, ECF No. 159).

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Alternatively, Sierra

For the reasons set forth below, Sierra’s Request is denied.

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BACKGROUND

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This case stems from unsuccessful negotiations between the

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parties for Patriot’s acquisition of Sierra. Patriot seeks

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monetary damages for breach of contract, breach of implied

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covenant of good faith and fair dealing, fraud, and unfair

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competition.

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the same theories, as well as intentional and negligent

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interference with prospective economic advantage,

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misappropriation of trade secrets, and coercion. (Joint Status

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Report, 2-3, Mar. 6, 2009, ECF No. 15).

Sierra, in turn, is countersuing for damages under

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The current Request (ECF No. 159) relates to a subpoena

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originally issued by Sierra to UBS on June 8, 2010, 10 days prior

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to the June 18, 2010 non-expert discovery cutoff.

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which had already been extended twice, was extended again to

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June 25, 2010, then once more to what the Magistrate Judge and

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Patriot presumed was a new cut-off date of September 10, 2010.

The cutoff,

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All further references to “Rule” or “Rules” are to the Federal
Rules of Civil Procedure unless otherwise noted.
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(See Orders Amending Pretrial Scheduling Order, ECF Nos. 100 &

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104).

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second order indicates that September 10 was only the “[l]ast day

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for third parties to respond” to requests, not the deadline for

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them to enforce discovery requests. (Def.’s Req. 1:16-19, ECF

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No. 159).

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Sierra, however, contends that the plain language of the

On March 17, 2011, Sierra filed a Motion to Compel against

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UBS in the Southern District of New York (where UBS is

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headquartered).

The motion was withdrawn when an agreement was

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apparently reached with UBS to produce the documents. (Id. at 6).

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On May 5, 2011, the Magistrate Judge granted Patriot’s Motion for

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a Protective Order preventing further efforts by Sierra to obtain

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the documents from UBS on grounds that those efforts were

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untimely. Sierra’s current Request asks this Court to reverse the

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Magistrate Judge’s order pursuant to Rule 72(a) or alternatively

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to modify the PTSO pursuant to Rules 60(b) or 16(b)(4).

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ANALYSIS

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A.

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Rule 72(a) Review

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In reviewing a magistrate judge’s determination, the

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assigned judge shall apply the “clearly erroneous or contrary to

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law” standard of review set forth in Local Rule 72-303(f), as

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specifically authorized by Rule 72(a) and 28 U.S.C.

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§ 636(b)(1)(A). Under this standard, the Court must accept a

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magistrate judge’s decision unless it has a “definite and firm

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conviction that a mistake has been committed.”

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Concrete Pipe & Products of Cal., Inc. v. Constr. Laborers

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Pension Trust for So. Cal., 508 U.S. 602, 622 (1993).

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Court believes the conclusions reached by the magistrate judge

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were at least plausible, after considering the record in its

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entirety, the Court will not reverse even if convinced that it

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would have weighed the evidence differently.

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Supply Inc. v. Universal Elec. Co., Inc., 104 F.3d 1137, 1141

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(9th Cir. 1997).

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say that the Magistrate Judge’s order was “clearly erroneous or

If the

Phoenix Eng. &

After reviewing the evidence, this Court cannot

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contrary to law” as the standard has been defined.

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language of the order extending the deadline to September 10,

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2010 was arguably vague, the Magistrate Judge indicated that he

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based his holding both on the fact that applicable local rules do

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not allow indefinite extensions of time and a lack of due

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diligence exercised by Sierra. (Tr. Of Proceedings, 10-11, May 2,

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2011, ECF No. 160).

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While the

Local Rule 144 states that “[n]o open extensions of time by

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stipulation of the parties will be recognized.”

L.R. 144(a).

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Consequently, the interpretation of September 10, 2010 as the

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non-expert discovery cut-off appears to be the most reasonable

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interpretation.

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interpreting it as such would have given them no time to enforce

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the subpoena following UBS’s failure to produce by the deadline.

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(Def.’s Req. 9:26-28, ECF No. 159).

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Sierra contends otherwise, claiming that

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However, even if this Court were to adopt Sierra’s

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interpretation of the September 10 date, the Magistrate Judge was

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well within the law in declaring that the six months it took

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Sierra to file a Motion to Compel - from September 10, 2010 to

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March 17, 2011 - demonstrated a lack of due diligence and thus

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made it untimely.

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622 (D. Nev. 1999) (“If the moving party has unduly delayed, the

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court may conclude that the motion [to compel] is untimely”);

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Bredemus v. Int’l Paper Co., 252 F.R.D. 529, 534 (D. Minn. 2008)

Gault v. Nabisco Biscuit Co., 184 F.R.D. 620,

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(the trial court generally has considerable discretion in

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granting or denying discovery requests and it is not an abuse of

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discretion to deny a discovery request that is untimely); In re

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Health Mgmt., Inc., 1999 WL 33594132, at *5-6 (E.D.N.Y.

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Sept. 25, 1999) (finding no error in denial of motion to

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compel as untimely based on undue delay); see also

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Ayala-Gerena v. Bristol Myers-Squibb Co., 95 F.3d 86 (1st Cir.

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1996) (finding no abuse of discretion by the district court in

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denying appellant’s motion to compel where appellant waited more

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than one month after the second extended discovery deadline).

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Sierra’s explanation for the delay is that Patriot’s Summary

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Judgment Motion, filed on August 26, 2010, was not denied until

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February 1, 2011.

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subpoena at this time...would have squandered judicial

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resources,” because the documents would have become irrelevant if

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the motion was granted. (Def.’s Req. 6:3-8, ECF No. 159).

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Sierra claims that “moving to enforce the

This explanation, however, does not address the six-week gap

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between the February 1, 2011 ruling and Sierra’s March 17, 2011

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Motion to Compel.
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If Sierra was under the assumption that September 10, 2010 was

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only the deadline for UBS to respond, it was still under a duty

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to begin enforcement as soon as feasible.

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Sierra’s argument that pursuing enforcement of the subpoena while

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the summary judgment was pending was a waste of resources, to

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demonstrate due diligence Sierra should have filed its motion

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shortly after the decision was rendered. Sierra offers no

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explanation for why it waited 44 more days to file the motion,

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despite the fact that all other significant discovery deadlines,

Even accepting

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as well as the last day to file dispositive motions had long

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expired. (Stipulation and Order, 3, July 27, 2010, ECF No. 104).

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For the reasons detailed above, this court has no “definite

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and firm conviction” that the Magistrate Judge’s order was

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“clearly erroneous or contrary to law.”

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the order is not justified under Rule 72(a).

Therefore, relief from

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B.

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Review under Rules 60(b) and 16(b)(4)

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Sierra also seeks alternative relief under Rule 60(b) or a

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modification of the PTSO under this Court’s discretion pursuant

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to Rule 16(b)(4).

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Rule 60(b) enumerates the grounds upon which a motion for

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relief from an order or judgment may be made. It specifies that:

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On motion and upon such terms as are just, the court
may relieve a party or a party’s legal representative
from a final judgment, order, or proceeding for the
following reasons: (1) mistake, inadvertence, surprise
or excusable neglect; (2) newly discovered evidence
which by due diligence could not have been discovered
before the court’s decision; (3) fraud by the adverse
party; (4) the judgment is void; (5) the judgment has
been satisfied; or (6) any other reason justifying
relief. Fed. R. Civ. P. 60(b).

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Mere dissatisfaction with the court’s order or belief that the

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court is wrong in its decision are not adequate grounds for

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relief.

Richardson v. Ayers, 2009 WL 1528183, *1 (N.D. Cal.

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May 29, 2009). Relief under Rule 60(b)(6) is available only under

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extraordinary circumstances.

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Dunnahoo, 637 F.2d 1338, 1341 (9th Cir. 1981).

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Twentieth Century-Fox Film Corp. v.

To justify relief under Rule 60(b), Sierra urges an analysis

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of factors applied by the Ninth Circuit in Pincay v. Andrews,

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389 F.3d 853 (9th Cir. 2004).

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sitting en banc, affirmed the district court’s excusal of a

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calendaring mistake that caused an attorney to miss the thirty-

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day deadline for filing an appeal.

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issues including both the lack of any prejudice and the absence

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of any bad faith in the calendaring error at issue, the Pincay

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court determined that the district court did not abuse its

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discretion in allowing the attorney to file for an extension.

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Id.

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In Pincay, the Ninth Circuit,

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Id. at 856.

After looking at

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Applying the Pincay factors to the present case, however, is

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unnecessary.

As explained above, even accepting Sierra’s

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interpretation of September 10, 2010 as only the deadline for UBS

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to respond, Sierra was still required to use due diligence in

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pursuing enforcement and has provided no explanation for the 44-

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day gap between the summary judgment ruling and its Motion to

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Compel.

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not solely on the reasonable interpretation of September 10, 2010

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as the non-expert discovery cutoff, but also on its assessment

This Court bases its decision to deny Sierra’s Request

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that Sierra did not exercise due diligence in pursuing

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enforcement.

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the September 10 deadline under Rule 60(b) would not excuse

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Sierra’s untimely motion and, thus, does not justify the

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requested relief.

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Therefore, excusing the mistaken interpretation of

Similar reasoning applies to Sierra’s request to modify the

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PTSO.

The scheduling order “may be modified only for good cause

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and with the judge’s consent.”

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Rule’s “good cause” standard primarily considers the diligence of

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the party seeking the amendment.

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975 F.2d 604, 609 (9th Cir. 1992).

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the pretrial schedule “if it cannot reasonably be met despite the

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diligence of the party seeking the extension.”

Fed. R. Civ. P.

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16 advisory committee’s notes (1983 amendment).

Because Sierra

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has not demonstrated such diligence, this Court also declines to

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modify the PTSO at this time.

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Fed. R. Civ. P. 16(b)(4).

The

Johnson v. Mammoth Recreations,

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The district court may modify

CONCLUSION

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For the foregoing reasons, Sierra’s Request for Review and
Motion for Relief (ECF No. 159) is DENIED.
IT IS SO ORDERED.
Dated: August 1, 2011

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_____________________________
MORRISON C. ENGLAND, JR.
UNITED STATES DISTRICT JUDGE

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