Eurosemillas S.A. v. PLC Diagnostics, Inc. et al

Filing 92

ORDER by Judge Maria-Elena James denying 83 Motion to Dismiss; denying 84 Motion for Sanctions. (mejlc3, COURT STAFF) (Filed on 3/28/2018)

1
2
3
4

UNITED STATES DISTRICT COURT

5

NORTHERN DISTRICT OF CALIFORNIA

6
7

EUROSEMILLAS, S.A.,
Plaintiff,

8
9
10

United States District Court
Northern District of California

11

v.
PLC DIAGNOSTICS INC., et al.,
Defendants.

Case No. 17-cv-03159-MEJ
ORDER RE: MOTION TO DISMISS
COUNTERCLAIM FOR
DECLARATORY RELIEF; MOTION
FOR SANCTIONS
Re: Dkt. Nos. 83, 84

12
13

This matter is currently scheduled for a hearing on April 5, 2018 regarding Plaintiff’s

14

Motion to Dismiss the Counterclaim and Motion for Sanctions. See MTD, Dkt. No. 83; Mot. for

15

Sanctions, Dkt. No. 84. Defendants filed oppositions to both motions. MTD Opp’n, Dkt. No. 86;

16

Mot. for Sanctions Opp’n, Dkt. No. 87. Plaintiff filed replies. MTD Reply, Dkt. No. 89; Mot. for

17

Sanctions Reply, Dkt. No. 91. Pursuant to Federal Rule of Civil Procedure 78(b) and Civil Local

18

Rule 7-1(b), the Court finds these matters suitable for disposition without oral argument and

19

VACATES the April 5, 2018 hearing.

20

Plaintiff has not demonstrated at this juncture that the counterclaim for declaratory relief is

21

redundant such that it can be stricken pursuant to Federal Rule of Civil Procedure 12(f), or that it

22

fails to state a claim such that it can be dismissed pursuant to Rule 12(b)(6). Based on the record

23

in this matter, the Court declines to strike or dismiss the counterclaim. The Motion to Dismiss the

24

Counterclaim is DENIED.

25

The Motion for Sanctions is based on Plaintiff’s contention that the counterclaims

26

Defendants initially filed in this action were presented for an improper purpose, were not

27

warranted by existing law, or did not constitute a non-frivolous argument. See Mot. for Sanctions.

28

The Motion does not acknowledge that, after the Court heard oral argument and ordered the

1

parties to submit further briefing on a number of issues (Dkt. No. 72), Plaintiff stipulated to

2

Defendants’ filing of a single amended counterclaim for declaratory relief (Dkt. No. 79), which

3

omitted the remainder of their original counterclaims (Dkt. No. 82). In any event, the Court denies

4

the Motion for Sanctions based on the same reasoning it applied in denying Plaintiff’s Motion for

5

Sanctions against Third Party Plaintiffs (Order, Dkt. No. 88), and because it denies Plaintiff’s

6

Motion to Dismiss the remaining counterclaim for declaratory relief.
The Court also reminds Plaintiff that it voluntarily amended its original complaint after

7
8

Defendants filed their first Motion to Dismiss (First Mot., Dkt. No. 12; Am. Compl., Dkt. No. 17),

9

and that the Court granted Defendants’ second Motion to Dismiss (Second Mot., Dkt. No. 20;
Aug. 2017 Order, Dkt. No. 26 (Plaintiff fails to state a breach of contract claim against NMS; fails

11
United States District Court
Northern District of California

10

to state a breach of implied covenant of good faith and fair dealing claim against either NMS or

12

PLC; fails to state a fraudulent inducement claim against any defendant; and fails to state a UCL

13

claim against any defendant)). Defendants bore the costs of twice moving to dismiss Plaintiff’s

14

claims before it was able to state a claim in the Second Amended Complaint (Dkt. No. 27).1
The Court echoes Plaintiff’s counsel’s observation that the parties have engaged in “heavy

15
16

and contentious motion practice[.]” MTD Reply at 4. Indeed, to date, the parties have asked the

17

Court to rule on five motions to dismiss and two motions for sanctions. See Dkt. Nos. 12, 20, 46,

18

54, 78, 83, 84. The Court shares counsel’s concern that this “presages the path that lies ahead”

19

(MTD Reply at 4), but this alone does not establish prejudice.2

20

The Court observes that the parties generally have not met their responsibility “to secure

21

the just, speedy, and inexpensive determination” of this action (Fed. R. Civ. P. 1), and that they

22

have repeatedly failed to follow the Court’s Local Rules. Now that the pleadings are settled, the

23

Court encourages the parties to focus on the merits of the claims and to litigate this case in a

24
1

26

Plaintiff’s current counsel did not appear in this action until October 2017, after the filing of the
Second Amended Complaint and of the Third Party Complaint. See Dkt. No. 41. Counsel
subsequently filed three motions to dismiss and two motions for sanctions.

27

2

25

28

Plaintiff’s counsel’s observation has not stopped him from appealing this Court’s denial of his
motion for sanctions filed on behalf of the now-dismissed Third Party Defendants. See Not. of
Appeal, Dkt. No. 90.
2

1

cooperative, efficient manner for the benefit of their clients. In the undersigned’s experience,

2

scorched-earth litigation tactics do not benefit anyone, unnecessarily burden the parties, and drain

3

the resources of the Court.

4

IT IS SO ORDERED.

5
6
7
8

Dated: March 28, 2018
______________________________________
MARIA-ELENA JAMES
United States Magistrate Judge

9
10

United States District Court
Northern District of California

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3