Martinez v. CPG Finance II, LLC et al

Filing 106

ORDER signed by Judge Garland E. Burrell, Jr. on 06/22/11 DENYING #84 Motion for Sanctions. (Michel, G)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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Tony Martinez,
Plaintiff,

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v.

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Columbia Sportswear USA Corp.
dba Columbia Sportswear Company
#446; Eddie Bauer, a Delaware
LLC dba Eddie Bauer Outlet
#R-867; New Balance Athletic
Shoe, Inc. dba New Balance
#0015,

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Defendants.
________________________________

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2:10-cv-01333-GEB-KJN
ORDER DENYING DEFENDANT’S
MOTION FOR SANCTIONS

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Defendant New Balance Athletic Shoe, Inc. dba New Balance

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#0015 (“Defendant”) seeks sanctions against Plaintiff and his counsel

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under Federal Rule of Civil Procedure (“Rule”) 11. (ECF No. 84.)

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Specifically, Defendant argues: “Plaintiff and his counsel should be

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required to reimburse New Balance for all attorneys’ fees and costs that

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it incurred to oppose and/or defend itself from the baseless allegations

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in the Complaint, [in the First Amended Complaint (“FAC”)], and [in

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Plaintiff’s] Application for Continuance[ of Defendant’s motion for

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summary judgment].” (Mot. 3:15-17.)

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Plaintiff

filed

an

opposition

to

the

motion;

however,

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Plaintiff and his counsel, Lynn Hubbard, III (“Hubbard”), failed to

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appear at the hearing on the motion. (ECF Nos. 92, 100.) Plaintiff

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submitted the declaration of Hubbard after the scheduled hearing on

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Defendant’s Rule 11 motion, in which Plaintiff explains why he failed to

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appear at the scheduled hearing. (ECF No. 102.) Specifically, in that

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declaration Hubbard declares he “had notice of this hearing but did not

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appear, because [he] thought that . . . the hearing[] had been vacated

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with the grant of judgment in favor of the defense.” Id. ¶ 2. However,

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nothing in the judgment vacated the scheduled hearing on Defendant’s

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Rule 11 motion. (ECF Nos. 98-99.) Further, “[i]t is well established

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that a federal court may consider collateral issues[, such as Rule 11

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sanctions motion,] after an action is no longer pending.” Cooter & Gell

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v. Hartmarx Corp., 496 U.S. 384, 395-396 (1990).

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Defendant indicates by including the following new argument

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in its reply brief that it desires to exceed the scope of its noticed

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Rule 11 motion: “[t]he Court should award New Balance the attorneys’

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fees and costs incurred to defend plaintiff’s frivolous claims as

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provided for under [42 U.S.C. § 12205].” (Reply 5:4-5.) However, since

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this new argument is made for the first time in the reply brief it need

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not be considered and is stricken because it has not been duly noticed

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for hearing. See Int’l Union of Bricklayers v. Martin Jaska, Inc., 752

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F.2d 1401, 1404 (9th Cir. 1985) (“[W]e will not ordinarily consider

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matters . . . that are not specifically and distinctly raised and argued

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in [the] opening brief”).

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Although Defendant requests that a Rule 11 sanction be imposed

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against both Plaintiff and his counsel, “Rule 11 sanctions are generally

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imposed on attorneys, not litigants”. Kiobel v. Millson, 592 F.3d 78, 87
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(2nd Cir. 2010) (Cabranes, J., concurring) (citing Fed.R.Civ.P. 11

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Advisory Committee’s Notes, 146 F.R.D. 401, 588 (West 1993) (“The person

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signing, filing, submitting, or advocating a document has a nondelegable

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responsibility to the court, and in most situations is the person to be

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sanctioned for a violation.”)). Further, Defendant has not presented

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evidence supporting his motion against Plaintiff. Therefore, the portion

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of Defendant’s Rule 11 motion which is against Plaintiff is DENIED.

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Defendant withdrew its request for costs at the hearing, in

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light of the adverse judgment entered against Plaintiff pursuant to an

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order filed three days before the hearing.

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Further, Defendant’s counsel initially argued at the hearing

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that Defendant is entitled to a sanction against Hubbard based solely on

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the text of Rule 11(c)(4), and that the Advisory Committee Notes

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concerning the relevant portion of Rule 11 should be disregarded.

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However, after Defendant’s counsel was questioned by the Court about his

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basis for this argument, Defendant’s counsel conceded that the Advisory

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Committee Notes could be considered. Defendant’s counsel’s argument

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against using the Advisory Committee Notes reflects a misunderstanding

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of applicable precedent governing the interpretation of a Federal Rule

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of Civil Procedure. The Ninth Circuit has stated: “We look to Advisory

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Committee Notes when interpreting a federal rule for ‘guidance and

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insight.’” U.S. v. Saeteurn, 504 F.3d 1175, 1180 n.11 (9th Cir. 2007)

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(citation omitted). There are nine factors in the applicable portion of

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the Advisory Committee Notes on Rule 11 which a Court may consider when

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determining what sanction is appropriate under Rule 11. Fed.R.Civ.P. 11

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Advisory

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directly address these factors in its motion, and the evidence cited in

Committee

Notes,

146

F.R.D.

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at

587.

Defendant

failed

to

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Defendant’s motion is only relevant to consideration of three of these

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factors.

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However, these factors need not be analyzed since in response

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to the following inquiry at the hearing on the motion Defendant in

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effect withdrew its request to have Hubbard reimburse it for the

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attorneys’ fees expended defending this case: the Court questioned

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whether Defendant had sufficient evidence to justify the attorney fee

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reimbursement sanction it seeks against Hubbard, or whether instead, the

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monetary sanction it seeks against Hubbard should be paid into the

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United States Treasury. Defendant’s counsel responded stating his client

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would be “happy” if the Court ordered Hubbard to pay the monetary

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sanction it seeks into the United States Treasury. This response is

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tantamount

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reimbursement of attorneys’ fees, and essentially comprises an oral

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motion requesting that Hubbard be required to pay an unspecified amount

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of monetary sanctions into the United States Treasury. However, this

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sanctions issue has not been adequately noticed for hearing; nor has it

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been adequately briefed in light of Defendant’s failure to directly

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address the factors enumerated in the Rule 11 Advisory Committee Notes

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applicable to the motion. Therefore, Defendant’s motion for Rule 11

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sanctions is DENIED.

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Dated:

to

Defendant

explicitly

withdrawing

its

June 22, 2011

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GARLAND E. BURRELL, JR.
United States District Judge

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request

for