Patriot Rail Corp. v. Sierra Railroad Company

Filing 778

ORDER signed by Magistrate Judge Allison Claire on 03/31/16 ORDERING that non-parties' 771 Motion for Reconsideration is DENIED. (Benson, A)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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PATRIOT RAIL CORP.,

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No. 2:09-cv-0009 TLN AC

Plaintiff,
v.

ORDER

SIERRA RAILROAD COMPANY,
Defendant.

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AND RELATED COUNTERCLAIMS
Non-parties Gary O. Marino, Pacific Rail Holdings, LLC, and Patriot Equity, seek

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reconsideration by the undersigned, of two aspects of ECF No. 759, the undersigned’s February

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23, 2016 discovery order. ECF No. 771.

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I. LEGAL STANDARD

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The court has discretion to reconsider and vacate a prior order. Barber v. Hawaii, 42 F.3d

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1185, 1198 (9th Cir. 1994). However, a motion for reconsideration “should not be used to ask the

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court to rethink what the court had already thought through – rightly or wrongly.” United States

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v. Rezzonico, 32 F. Supp. 2d 1112, 1116 (D. Ariz. 1998) (internal quotation marks omitted). “A

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party seeking reconsideration must show more than a disagreement with the Court's decision, and

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recapitulation of the cases and arguments considered by the court before rendering its original

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decision fails to carry the moving party's burden.” United States v. Westlands Water Dist., 134 F.
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Supp. 2d 1111, 1131 (E.D. Cal. 2001) (Wanger, J.) (internal quotation marks omitted). When

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filing a motion for reconsideration, E.D. Cal. R. 230(j) requires a party to show the “new or

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different facts or circumstances claimed to exist which did not exist or were not shown upon such

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prior motion, or what other grounds exist for the motion.” The moving party must also show

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“why the [new] facts or circumstances were not shown at the time of the prior motion.”1 Id.

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II. ANALYSIS

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First, non-parties argue that the discovery order falsely stated that Patriot Rail LLC

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rendered itself “judgment-proof” during the course of the litigation. Non-parties argue that in

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fact, Patriot Rail LLC “has the $1.2 million needed to satisfy the punitive award against it.” ECF

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No. 771 at 4. Non-parties misleadingly omit any mention of the $22.282 million judgment

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rendered against Patriot Rail LLC, jointly and severally with Patriot Rail Corp. (see ECF No. 532

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at 2 ¶ 2), and do not claim that Patriot Rail Corp. has the funds needed to pay that portion of the

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judgment. This argument does not warrant reconsideration of the discovery order.

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Second, non-parties argue that whether Patriot Rail LLC is judgment-proof is an issue

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currently pending before the district court, beyond the authority of the undersigned to consider,

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and that use of the term risks creating a “settled, finding of fact or the law of this Court.” ECF

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No. 771 at 4-5. The undersigned’s use of the term “judgment-proof” was a short-hand way of

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observing that during the litigation, Patriot Rail LLC went from being able to pay the entire

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judgment (not limited to the punitive portion of the judgment), to being unable to pay the entire

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judgment. The observation was offered to give context to the matter before the court. The

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district court of course is not bound in any way by this observation, and it is not a finding of fact

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or conclusion of law.

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Third, non-parties object to the fact that the undersigned addressed an argument they

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raised in their brief. Specifically, non-parties argued that under Cal. Civ. Proc. Code § 187, a

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judgment could not be amended unless “uncollectability of the judgment is the result of an

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inequity.” ECF No. 739 at 4 (emphasis in text). Thus, they argued, they needed discovery to

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Non-parties also seem to base their motion on Smith v. Mass., 543 U.S. 462, 475 (2005), a
Double Jeopardy case. Non-parties do not explain the relevance of that case to this motion.
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prove that “there are no inequitable results from not amending the judgments.” ECF No. 739 at 4.

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Now that the undersigned has ruled against them on this point, non-parties argue instead that the

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undersigned should never have considered the argument they themselves raised. ECF No. 771

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at 5. The undersigned rejects non-parties’ argument that “heads we win, tails you should never

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have considered our argument.” As posed by non-parties in their brief, resolution of this question

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was a proper consideration of the question before the undersigned.

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Non-parties then proceed to re-argue the merits of their Section 187 argument. ECF

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No. 771 at 5-7. However, motions for reconsideration are not an opportunity for “recapitulation

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of the cases and arguments considered by the court before rendering its original decision.”

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Westlands, 134 F. Supp. 2d at 1131. Here, plaintiffs re-argue the cases they cited in their original

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brief, but this time they attempt to explain the relevance of those cases – the thing they failed to

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do the first time around. The undersigned has already expended scarce judicial resources

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examining – without non-parties’ assistance – the unexplained cases non-parties string-cited in

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their original brief.2 Non-parties’ current efforts to back-fill the research they should have done

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in their original brief is not a basis for reconsidering the discovery order.

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Moreover, non-parties’ addition of two district court decisions to its argument is also

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unavailing, as neither case undermines the court’s discovery order. See ECF No. 771 at 6-7.

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Those cases address the need to show “inequity” as a requirement for invoking the alter ego

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doctrine, not as a requirement for amending a judgment.3 In any event, reconsideration in light of

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cases not previously cited in the original brief could be warranted if those cases were binding on

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this court, and showed that the prior ruling was in error. The cited cases are not binding on this

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court, and do not reveal any error.

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See ECF No. 759 (noting that non-parties “string-cite eight cases, none with jump-cites or
explanatory parentheticals”).
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See Wady v. Provident Life & Accident Ins. Co. of Am., 216 F. Supp. 2d 1060, 1066 (C.D.
Cal. 2002) (“[b]efore the [alter ego] doctrine may be invoked,” it must be established that “if the
acts are treated as those of the corporation alone, an inequitable result will follow”) (internal
quotation marks omitted); Stewart v. Screen Gems-EMI Music, Inc., 81 F. Supp. 3d 938, 960
(N.D. Cal. 2015) (“[t]o invoke the alter ego doctrine, a plaintiff must allege facts sufficient to
support a plausible claim that . . . if the acts are treated as those of only one of the corporations,
an inequitable result will follow”).
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III. CONCLUSION
For the reasons stated above, IT IS HEREBY ORDERED that non-parties’ motion for

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reconsideration (ECF No. 771), is DENIED.

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DATED: March 31, 2016

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