Cornerstone Staffing Solutions, Inc. v. James et al

Filing 297

ORDER by Judge Richard Seeborg denying 290 Motion to Amend/Correct. (cl, COURT STAFF) (Filed on 4/7/2014)

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1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE NORTHERN DISTRICT OF CALIFORNIA 7 SAN FRANCISCO DIVISION 8 9 11 For the Northern District of California United States District Court 10 12 13 No. C 12-1527 RS CORNERSTONE STAFFING SOLUTIONS, INC., a California corporation, ORDER DENYING MOTION TO CERTIFY PRIOR ORDER Plaintiff, v. LARRY THAXTER JAMES, an individual, et al., 14 15 Defendant. ____________________________________/ 16 17 I. INTRODUCTION 18 Pursuant to 28 U.S.C. § 1292(b), defendant Larry James requests certification for 19 interlocutory review of the March 7, 2014 order on plaintiff CornerStone’s motion for summary 20 judgment. In particular, James seeks to appeal the order’s determination that he is precluded— 21 whether by lack of standing, or judicial estoppel, or both—from vindicating his claimed interest in 22 CornerStone and various related counterclaims. Because James has not demonstrated “exceptional 23 circumstances” warranting immediate, interlocutory appeal, the motion is denied. This matter is 24 appropriate for resolution without oral argument pursuant to Civil Local Rule 7-1(b). 25 26 27 28 II. LEGAL STANDARD As a general rule, a party may seek review of a district court’s rulings only after the entry of final judgment. In re Cement Litig., 673 F.2d 1020, 1027 (9th Cir. 1982). The district court may NO. C 12-01527 RS ORDER 1 under “exceptional” circumstances, however, certify an order for interlocutory review pursuant to 28 2 U.S.C. § 1292(b). Id. at 1026 (citing Coopers & Lybrand v. Livesay, 437 U.S. 463, 475 (1978) 3 (holding that “exceptional circumstances [must] justify a departure from the basic policy of 4 postponing appellate review until after the entry of a final judgment”)). Certification may be 5 appropriate where: (1) the order involves a controlling question of law; (2) as to which there is 6 substantial ground for difference of opinion; and (3) an immediate appeal from the order may 7 materially advance the ultimate termination of the litigation. 28 U.S.C. § 1292(b). 8 III. DISCUSSION For the Northern District of California James falls far short of clearing the high bar required for interlocutory review. His motion, 10 United States District Court 9 which suffers a litany of deficiencies too numerous to warrant addressing here, misses the mark at 11 every step of the requisite § 1292(b) analysis. For purposes of resolving the motion, it is sufficient 12 to note just a few fundamental shortcomings. 13 It is difficult to glean what specific “controlling question of law” James seeks to certify for 14 appeal. While his motion addresses standing and judicial estoppel generally, it also raises several 15 other issues, some of which were simply not addressed (or were arguably decided in James’ favor) 16 in the prior order. Although it is clear that James disputes the order’s conclusion that he cannot 17 pursue several of his counterclaims or his interest in CornerStone, he does little to frame any 18 controlling question of law for consideration. Moreover, as in his February 2013 supplemental 19 brief, James conflates judicial estoppel and standing, making it all the more difficult to discern what 20 specific questions he would seek to certify for appeal. His cleanest presentation of questions 21 appears on Page 7, where James states: 22 23 24 25 26 27 28 The Ninth Circuit does not appear to have ruled definitely on the specific issues presented here: (1) Does a debtor have standing to pursue post-petition interest in earnings that were generated by debtor’s personal services? 11 U.S.C. § 541(a)(6) (2) In a reopened bankruptcy, does the debtor lose standing to pursue claims that accrue post-petition by failing to identify those claims in amended schedules, including: - Equitable claims (such as unjust enrichment) for profits and value generated by post-petition personal services? - Fraud claim; or NO. C 12-1527 RS ORDER 2 - 1 California Labor Code Section 970 claim? (3) What evidence of inadvertence or mistake is sufficient to preclude judicial estoppel where the bankruptcy is reopened and schedules amended? 2 3 (Motion to Amend Order to Certify Appeal, ECF No. 290, 7:9-21). As an initial matter, it not 4 apparent that each of these questions address issues that were actually relevant to the challenged 5 order. In any event, no matter how James poses his questions, there is not a “controlling” one in the 6 bunch. 7 A question of law is controlling if “resolution of the issue on appeal could materially affect “was intended primarily as a means of expediting litigation by permitting appellate consideration 10 For the Northern District of California the outcome of the litigation in the district court.” Cement Litig., 673 F.2d at 1026. Section 1292(b) 9 United States District Court 8 during the early stages of litigation of legal questions which, if decided in favor of the appellant, 11 would end the lawsuit.” United States v. Woodbury, 263 F.2d 784, 787 (9th Cir. 1959). While the 12 challenged issue need not be dispositive of the entire lawsuit to be controlling, see Kuehner v. 13 Dickinson & Co., 84 F.3d 316, 319 (9th Cir. 1996), this first step of § 1292(b) analysis “should, at a 14 minimum, require that reversal have some immediate effect on the course of litigation and result in 15 some savings of resources.” F.T.C. v. Swish Mktg., C 09-03814 RS, 2010 WL 1526483, *2 (N.D. 16 Cal. Apr. 14, 2010) (citation omitted). For example, in Asis Internet Servs. v. Active Response Grp., 17 C 07-6211 TEH, 2008 WL 4279695 (N.D. Cal. Sept. 16, 2008), the defendant sought interlocutory 18 review of the court’s holding that the plaintiffs had standing to pursue a claim under the CAN- 19 SPAM Act. The district court concluded that the CAN-SPAM standing issue was a controlling 20 question of law, reasoning that if the Ninth Circuit reversed, “the litigation would end.” Id. at *3. 21 Similarly, in Yoshimoto v. O’Reilly Auto., Inc., C 10-05438 LB, 2011 WL 2669604 (N.D. Cal. July 22 7, 2011), the defendant sought to appeal a ruling that, if reversed, would terminate the plaintiff’s 23 case. 24 Here, by contrast, James seeks to appeal an order finding that he is precluded from pursuing 25 several of his counterclaims (or portions thereof). If this action were stayed pending appeal and the 26 Ninth Circuit ruled in James’ favor, the litigation would not end; the scope of the upcoming trial 27 would merely expand. Unlike in Yoshimito and Asis, there is no risk that in the absence of 28 interlocutory review the court might proceed with a trial that never should have been held in the first NO. C 12-1527 RS ORDER 3 1 place. Moreover, immediate resolution of James’ questions would not avoid “needless expense and 2 delay.” See Kuehner, 84 F.3d at 319. If anything, interlocutory review would further delay the 3 upcoming trial, which will address numerous issues entirely unrelated to James’ failed 4 counterclaims. In the event the Ninth Circuit was eventually to reverse the challenged order, a 5 second trial can be held at that time. 6 In short, there is no indication that certifying the prior order for appeal would “materially 7 affect the outcome of the litigation in the district court.” Cement Litig., 673 F.2d at 1026. 8 Accordingly, James fails to present a single “controlling question of law” that might warrant 9 immediate review. Moreover, even if his motion were construed as properly framing a controlling For the Northern District of California United States District Court 10 question of law, James falls far short of demonstrating that there is “substantial ground for 11 difference of opinion” that would justify accelerated consideration by the Ninth Circuit. See 28 12 U.S.C. § 1292(b). Finally, for many of the same reasons that interlocutory review would not save 13 this litigation from needless expense and delay, certifying an immediate appeal would not 14 “materially advance the ultimate termination of the litigation.” See id. (emphasis added). 15 Accordingly, James fails to satisfy each of the three requirements for interlocutory review under § 16 1292(b). IV. 17 18 CONCLUSION James’ motion does not demonstrate that certification under § 1292(b) is warranted. 19 Although James has not yet submitted a reply brief, there is no doubt that under these circumstances 20 he cannot successfully invoke this “narrow exception to the final judgment rule.” Couch v. 21 Telescope Inc., 611 F.3d 629, 633 (9th Cir. 2010). Accordingly, the motion is denied. 22 The clerk is directed to terminate ECF No. 290 and vacate the hearing set for May 8, 2014. 23 IT IS SO ORDERED. 24 Dated: 4/7/14 25 RICHARD SEEBORG 26 UNITED STATES DISTRICT JUDGE 27 28 NO. C 12-1527 RS ORDER 4

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