United States of America et al v. North East Medical Services

Filing 292

ORDER DENYING MOTIONS TO ALTER, VACATE OR SET ASIDE JUDGMENT. Signed by Judge Claudia Wilken on 2/17/16. (jebS, COURT STAFF) (Filed on 2/17/2016)

1

IN THE UNITED STATES DISTRICT COURT

2

FOR THE NORTHERN DISTRICT OF CALIFORNIA

3
4
5

UNITED STATES OF AMERICA and
STATE OF CALIFORNIA ex rel. LOI
TRINH and ED TA-CHIANG HSU,

6

Plaintiffs,

7

No. C 10-1904 CW

v.

8

NORTHEAST MEDICAL SERVICES, INC.,

9

Defendant.
________________________________/

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United States District Court
For the Northern District of California

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NORTHEAST MEDICAL SERVICES, INC.,

No. C 12-2895 CW

12

Plaintiff,
13

v.
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15
16

CALIFORNIA DEPARTMENT OF HEALTH
CARE SERVICES, et al.,
Defendants.
________________________________/

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ORDER DENYING
MOTIONS TO ALTER,
VACATE OR SET
ASIDE JUDGMENT
(Docket Nos. 265 &
284 in 10-1904)
(Docket Nos. 144 &
154 in 12-2895)

18
19
20

Northeast Medical Services, Inc. (NEMS), Defendant in case

21

number 10-19041 and Plaintiff in case number 12-2895, moves to

22

alter, vacate or set aside both the Court's judgment and

23

accompanying settlement term documents, Docket Nos. 256, 257 and

24

258, and Magistrate Judge Laurel Beeler's order enforcing the

25

parties' oral settlement agreement on which judgment rests, Docket

26
27
28

1

All docket numbers referenced refer to this case unless
otherwise stated.

1

Nos. 223, 225 and 229.

NEMS asserts that such relief is proper

2

under Rule 59(e) and Rule 60(b) and (d) of the Federal Rules of

3

Civil Procedure.

4

denied.

For the reasons discussed below, the motions are

BACKGROUND

5
6

United States et al. v. NEMS, No. 10-1904, is a qui tam

7

action that arose out of a dispute concerning NEMS's financial

8

reporting obligations under the Medicaid Act.

9

No. 12-2895, related to the same dispute, against the United

NEMS filed action

States, the State of California, California's Department of

11
United States District Court
For the Northern District of California

10

Healthcare Services (DHCS) and its director (collectively, the

12

Governments), seeking declaratory and injunctive relief.

13

District Court referred the cases to Magistrate Judge Beeler for a

14

settlement conference and, on September 4, 2014, NEMS reached an

15

oral settlement agreement with the Governments and Relators,

16

placed on the record in open court, Docket No. 189-1, Ex. 1,

17

Transcript September 4, 2014, that would result in dismissal of

18

both cases with prejudice, id. at 10.

19

The relevant terms are as follows.

The

In exchange for dismissal

20

of the case against it, NEMS agreed to pay eight million dollars

21

"plus 2.37 percent interest . . . from September 26, 2014."

22

at 8; Judgment ¶ 1.

23

resolution of its federal administrative remedies" with the United

24

States Department of Health and Human Services (USDHHS), id. at 8,

25

meaning, "essentially, whether or not the [USDHHS] would require a

26

corporate-integrity agreement," Docket No. 225, Amended Order

27

Enforcing Settlement at 3.

28

an auditing process to establish governing standards for reporting

Id.

The settlement was contingent upon "NEMS'

NEMS and the DHCS agreed to implement

2

1

purposes.

2

parties also agreed that Magistrate Judge Beeler would retain

3

jurisdiction over the settlement agreement and that the settlement

4

agreement would be reduced to writing.

5

2014 at 8, 11.

6

agreement in the qui tam case "is the standard federal and state

7

False Claims Act[] Settlement agreement."

8

States and the State both accepted the settlement agreement

9

subject to the contingency of final supervisory approval.

10

United States District Court
For the Northern District of California

11

Id. at 3; Transcript September 4, 2014 at 8-9.

The

Transcript September 4,

Finally, the parties agreed that the settlement

Id. at 9.

The United

Id. at

16-17.
The parties were unable to reduce that settlement agreement

12

to writing because NEMS refused to sign the Governments' draft

13

settlement agreement.

14

Amended Order Enforcing Settlement at 7.

On December 1, 2014, the Governments and the qui tam Relators

15

together filed a motion to enforce the settlement agreement.

16

Docket No. 189.

17

Attorney Melanie Proctor, attached to the motion, stated, "The

18

Governments have obtained the necessary approvals to enter into

19

the settlement agreement that was recorded on September 4, 2014."

20

Docket No. 247 (citing Docket No. 189-1, Proctor Dec.).

21

opposition was based on the USDHHS administrative remedies

22

contingency.

23

the settlement on the record, the federal government had informed

24

NEMS that "so long as it participated in the state audit process

25

set forth in the settlement agreement, it could satisfy the

26

requirements for a corporate integrity agreement" with the USDHHS.

27

Amended Order Enforcing Settlement at 6.

28

not sign the settlement agreement because the Governments provided

The declaration of Assistant United States

NEMS's

Sometime after Magistrate Judge Beeler had placed

3

NEMS argued that it did

1

only a general outline of the audit proposal that would satisfy

2

the federal administrative remedies contingency.

3

However, NEMS "believed that a completed audit, or at least an

4

agreed-upon audit process . . . was a 'prerequisite' to NEMS's

5

signing the final settlement agreement."

6

No. 195, NEMS's Opposition to Motion to Enforce).2

7

Id. at 7-8.

Id. at 8 (quoting Docket

The parties consented to having Magistrate Judge Beeler hear

8

and decide the motion to enforce settlement herself, as opposed to

9

making a Report and Recommendation to the Court.

At the hearing,

Magistrate Judge Beeler stated that the USDHHS administrative

11
United States District Court
For the Northern District of California

10

remedies contingency "was the only contingency beyond the . . .

12

ordinary contingency of . . . the signoff by the upper echelons on

13

the government side, both state and federal."

14

Transcript January 8, 2015 at 10-11.

15

contingency were satisfied, she continued, the agreement would be

16

binding and enforceable.

17

stated repeatedly that the contingency was satisfied, id. at 14-

18

15, 23, and Assistant United States Attorney Proctor agreed, id.

19

at 14-15.

20

permitted NEMS a few days to convene its Board so it could sign

21

the agreement on its own without her enforcement.

22

NEMS did not sign it.

23
24
25
26
27

Id. at 11.

Docket No. 221,

As long as the USDHHS

Magistrate Judge Beeler

At the end of the hearing, Magistrate Judge Beeler

Id. at 32-36.

Amended Order Enforcing Settlement at 7.

Magistrate Judge Beeler issued an order enforcing the oral
settlement agreement on January 13, 2015.
2

With respect to the

Interestingly in light of the current dispute, NEMS
distinguished the USDHHS contingency from the "'normal
contingency' of the government approval, which occurs only after a
final agreement has been signed." NEMS's Opposition to Motion to
Enforce at 5 n.2.

28

4

1

USDHHS contingency, she held that "NEMS got what it bargained for:

2

dismissal of the case without a [corporate integrity agreement],

3

with a settlement number in a restitution landscape, and with the

4

litigation insulation of a False Claims Act release."

5

As she explained, the issue involved in the USDHHS contingency

6

"was only whether [USDHHS} would require, or waive, a corporate-

7

integrity agreement.

8

NEMS had wanted to include more precise, or different, conditions

9

into the settlement, it should have expressed that desire openly,

Id. at 17.

NEMS wanted waiver, and it got it . . . If

objectively."

11
United States District Court
For the Northern District of California

10

and their counsel had been "present with settlement authority" on

12

September 4, 2014, the date of the oral agreement.

13

noted above, the State and the United States had expressly

14

conditioned their acceptance on the "ordinary final supervisory

15

authority that is required" in a settlement agreement with a

16

government entity.

17

disputes that the contingency of approval was satisfied" because,

18

at the January 8, 2015 hearing, the federal and state governments

19

represented that they had the authority to sign the transcripts.

20

Id. at 6.

21

Id. at 14.

The order also stated that the parties

Id. at 5.

Id. at 3.

As

The order explained that "no one

On January 15, 2015, Magistrate Judge Beeler issued a Report

22

and Recommendation recommending that this Court enter judgment.

23

On the same day, NEMS filed a Notice of Appeal.

24

the Ninth Circuit dismissed the appeal for lack of jurisdiction

25

because there was not yet a final order.

26

On June 10, 2015,

On June 17, 2015, Brian V. Frankel, an attorney for the

27

State, e-filed a letter to Magistrate Judge Beeler with the

28

following text:
5

1

This is to inform you that while NEMS' appeal was
pending, and consistent with the parties' settlement
agreement, as reflected on the September 4, 2014 hearing
transcript, the State of California's Department of
Health Care Services obtained "control agency approval"
to proceed with implementing the terms of the September
4, 2014 settlement.

2
3
4

Docket No. 244, June 17, 2015 Frankel Letter.

6

Magistrate Judge Beeler directed the State to file a written

7

explanation regarding what effect, if any, this letter had on the

8

case.

9

stating that the January 13 order "included an incorrect reference

10

to the timing of when the State obtained control agency approval."

11
United States District Court
For the Northern District of California

5

Docket No. 246, July 2, 2015 Frankel Letter.

12

explained that his June 17 letter "was a courtesy to advise the

13

Court and parties of the completion of that anticipated event."

14

Id.

15

agency approval had no effect on the enforceability of the

16

agreement.

17

The following day,

Mr. Frankel filed an explanatory letter on July 2, 2015,

Mr. Frankel

Mr. Frankel stated that the timing of the State's control

Id.

The Governments explain the sequence of events resulting in

18

the June 17, 2015 letter as follows.

In December 2014, when the

19

Governments and Relators moved to enforce the settlement

20

agreement, the United States had authority to settle and

21

understood that the State also had that authority.

22

268-1, Proctor Dec. ¶ 2.

23

Assistant United States Attorney Proctor to affix their electronic

24

signatures to the motion to enforce settlement.

25

The State reviewed Assistant United States Attorney Proctor's

26

declaration in support of the motion to enforce indicating that

27

the supervisory approvals had been obtained and, through an

28

oversight, agreed to its filing.

Docket No.

The State attorneys had authorized

6

Proctor Dec. ¶ 4.

1

NEMS's counsel filed several letters in response to Mr.

2

Frankel's letters.

In particular, NEMS's counsel requested that

3

Magistrate Judge Beeler "direct the governments to produce the

4

bases for their representations" in the motion to enforce the

5

settlement agreement and supporting declarations and to produce

6

"documents and communications that show when, as to what, and from

7

whom the approval was sought."

8

Feldesman Letter; see also Docket No. 249, July 25, 2015 Feldesman

9

Letter.

Docket No. 247, July 7, 2015

Magistrate Judge Beeler issued no such directive and, on

August 6, 2015, NEMS's counsel filed another letter requesting

11
United States District Court
For the Northern District of California

10

that she issue a directive or state why she did not issue a

12

directive.

13

Docket No. 253, August 6, 2015 Feldesman Letter.

On July 22, 2015, Magistrate Judge Beeler scheduled a

14

conference call for July 29, 2015, to discuss the letters the

15

parties had filed.

16

on August 10, 2015, vacated the scheduled conference call.

17

Court reviewed the record de novo, including the above-described

18

letters, concluded that the cases were ripe for entry of judgment

19

and entered judgment.

20

She later rescheduled the conference call, and
This

On September 9, 2015, NEMS filed a motion to alter the

21

judgment or in the alternative to set aside the judgment or in the

22

alternative to vacate the order granting the motion to enforce the

23

settlement and the judgment.

24

DHCS's director and Relators filed timely responses.

25

its reply brief on September 30, 2015.

26

pending, NEMS filed another Rule 60(b) and (d) motion on December

27

23, 2015.

Docket No. 284.

Docket No. 265.

The Governments,
NEMS filed

While this motion was

The parties have filed timely

28

7

1

responses and replies.

2

The Court rules on both motions in this

order.
LEGAL STANDARDS

3
4

Rule 59(e) of the Federal Rules of Civil Procedure permits a

5

party to move to alter or amend a judgment no later than twenty-

6

eight days after the entry of judgment.

7

entry is "an extraordinary remedy which should be used sparingly."

8

Allstate Ins. Co. v. Herron, 634 F.3d 1101, 1111 (9th Cir. 2011).

9

Rule 59(e) amendments are appropriate if the district court is

Amending a judgment after

presented with newly discovered evidence or committed clear error

11
United States District Court
For the Northern District of California

10

or the initial decision was manifestly unjust.

12

Litig., 516 F.3d 1095, 1100 (9th Cir. 2008).

13

In re Syncor ERISA

Rule 60(b) allows a party to seek relief from a “final

14

judgment, order, or proceeding” when one of the following is

15

shown: “(1) mistake, inadvertence, surprise, or excusable neglect;

16

(2) newly discovered evidence that, with reasonable diligence,

17

could not have been discovered in time to move for a new trial

18

under Rule 59(b); (3) fraud (whether previously called intrinsic

19

or extrinsic), misrepresentation, or misconduct by an opposing

20

party; (4) the judgment is void; (5) the judgment has been

21

satisfied, released or discharged . . .; or (6) any other reason

22

that justifies relief.”

23

motions are not a substitute for appeal or a means of attacking

24

some perceived error of the court.

25

Corp. v. Dunnahoo, 637 F.2d 1338, 1341-42 (9th Cir. 1981).

26

Fed. R. Civ. P. 60(b).

Rule 60(b)

See Twentieth Century-Fox Film

Rule 60(d) states that the "rule does not limit a court's

27

power to: . . . (3) set aside judgment for fraud on the court."

28

Fed. R. Civ. P. 60(d)(3).

A court's inherent power to vacate or
8

1

amend a judgment obtained by fraud on the court is narrowly

2

construed, "applying only to fraud that defiles the court or is

3

perpetrated by officers of the court."

4

642 F.3d 1236, 1240 (9th Cir. 2011).
DISCUSSION

5
6

I.

The Judgment
A. Rule 59(e)

7
8
9

United States v. Chapman,

NEMS argues that the judgment should be altered or amended
under Rule 59(e)(1) based on newly discovered evidence.

However,

the letters indicating that the State had belatedly obtained

11
United States District Court
For the Northern District of California

10

control agency approval to implement the settlement were filed

12

with the Court in June and July of 2015, well before judgment was

13

entered in August.

14

be altered or amended under Rule 59(e)(1) is unavailing.

Thus, NEMS's argument that the judgment should

15

NEMS is also not entitled to relief under Rule 59(e)(2)3

16

because the judgment was neither clearly erroneous nor manifestly

17

unjust.

18

"governmental supervisory approval was a fully disclosed and

19

bargained-for term . . . which was ultimately satisfied."

20

No. 267, State Response Br. at 3.

21

the settlement terms relating to obtaining supervisory approval

22

were not fully explained is unavailing.

23

Br. at 4-5.

24

approval needed or how long it would take, it should have inquired

The Court agrees with the State that the contingency of

Docket

Further, NEMS's argument that

See Docket No. 272, Reply

If NEMS wanted more details regarding the supervisory

25
26
27

3

The Court addresses Rule 59(e)(2) even though it is not
clear from NEMS's briefing whether NEMS believes it is entitled to
relief under this subsection.

28

9

1

before orally agreeing to the settlement as it stood on September

2

4, 2014.

3
4

B. Rule 60(b)
NEMS requests relief under Rule 60(b)(2), which relates to
reconsideration based on newly discovered evidence.

6

judgment on the basis of newly discovered evidence is warranted if

7

(1) the moving party can show the evidence relied on in fact

8

constitutes 'newly discovered evidence' within the meaning of Rule

9

60(b); (2) the moving party exercised due diligence to discover

10

this evidence; and (3) the newly discovered evidence must be of

11
United States District Court
For the Northern District of California

5

'such magnitude that production of it earlier would have been

12

likely to change the disposition of the case.'"

13

Inc. v. City of Spokane, 331 F.3d 1082, 1093 (9th Cir. 2003)

14

(quoting Coastal Transfer Co. v. Toyota Motor Sales, U.S.A., Inc.,

15

833 F.2d 208, 211 (9th Cir. 1987)).

16

"Relief from

Feature Realty,

As with Rule 59(e), evidence is not newly discovered if the

17

moving party was in possession of the evidence before judgment was

18

rendered.

19

agency approval in June 2015 was before the parties and the Court

20

before judgment was entered.

21

under Rule 60(b)(2).

22

See id.

Evidence that the State obtained control

Thus, NEMS is not entitled to relief

NEMS also argues for relief based on purported fraud.

Under

23

Rule 60(b)(3), the movant must (1) prove by clear and convincing

24

evidence that the verdict was obtained through fraud,

25

misrepresentation, or other misconduct; and (2) establish that the

26

conduct complained of prevented the losing party from fully and

27

fairly presenting its case or defense.

28

362 F.3d 1254, 1260 (9th Cir. 2004); Jones v. Aero/Chem Corp., 921
10

Casey v. Albertson's Inc.,

1

F.2d 875, 878-79 (9th Cir. 1990).

Rule 60(b)(3) "require[s] that

2

fraud . . . not be discoverable by due diligence before or during

3

the proceedings."

4

in original).

5

unfairly obtained, not at those which are factually incorrect."

6

In re M/V Peacock, 809 F.2d 1403, 1405 (9th Cir. 1987).

Casey, 362 F.3d at 1260 (brackets and ellipsis

Rule 60(b)(3) "is aimed at judgments which were

7

NEMS is not entitled to relief under Rule 60(b)(3) because it

8

has not established that the premature representation, on December

9

1, 2014, that the State already had supervisory approval prevented
NEMS from fully and fairly presenting its case or defense.

11
United States District Court
For the Northern District of California

10

Casey, 362 F.3d at 1260.

12

demonstrate what the premature representation of supervisory

13

approval prevented it from presenting.

14

present any evidence of fraud.

15

representation that final approval had been obtained was an

16

unintentional error, as was the delay in obtaining the approval.

17
18

See

NEMS has not satisfied its burden to

Further, NEMS does not

It appears that the premature

C. Rule 60(d)
For similar reasons, NEMS is not entitled to relief under

19

Rule 60(d).

Fraud on the court occurs when "the fraud rises to

20

the level of an unconscionable plan or scheme which is designed to

21

improperly influence the court in its decision."

Chapman, 642

22

F.3d at 1240 (internal quotation marks omitted).

The proponent

23

must demonstrate "by clear and convincing evidence" that such

24

fraud occurred.

25

415, 445 (9th Cir. 2011).

26

instead, it has fastened on the apparently inadvertent and

27

immaterial delay in obtaining the State's supervisory approval to

28

implement the settlement.

United States v. Estate of Stonehill, 660 F.3d
NEMS did not meet its burden here;

11

D. Objections to the Judgment's Terms

1

In addition to its motions to set aside the judgment

2
3

altogether, NEMS raises two objections to the judgment's terms.
First, NEMS argues that the judgment's description of the

4
5

contemplated state auditing process differs from the descriptions

6

in both the September 4, 2014 transcript and Magistrate Judge

7

Beeler's January 13, 2015 order enforcing the settlement.

8

judgment states that "NEMS shall participate in an auditing

9

process established and executed by and with the California

10

Department of Health Care Services."

11
United States District Court
For the Northern District of California

Docket No. 256 ¶ 2.

The

The

September 4, 2014 transcript states that NEMS and DHCS have

12

"agreed to the condition that they will have . . . an auditing

13

process to include auditors for both sides to establish the

14

governing standards on how NEMS reports revenue for wraparound

15

purposes for open and future years."

16

at 8.

17

the settlement agreement states that "NEMS and the California

18

Department of Health Care Services . . . agreed to implement an

19

auditing process, including auditors for both sides, to establish

20

governing standards on how NEMS reports revenue for wraparound

21

purposes for open and future years."

22

Settlement at 3 (citing the September 4, 2014 transcript).

Transcript September 4, 2014

Magistrate Judge Beeler's January 13, 2015 order enforcing

Amended Order Enforcing

23

Second, NEMS objects to the Court's statement of the Standard

24

False Claims Act Settlement Terms, Docket No. 257, which the Court

25

incorporated into the judgment.

26

agreed orally on the record on September 4, 2014, that their

27

settlement would "be a standard False Claims Act settlement

28

agreement."

As noted above, the parties had

Amended Order Enforcing Settlement at 4; see also
12

1

Transcript September 4, 2014 at 9.

NEMS now argues that there are

2

no standard False Claims Act settlement terms, and that the

3

Standard False Claims Act Settlement Terms incorporated into the

4

judgment differ both from the version of the terms the Governments

5

filed with their motion to enforce and from a settlement agreement

6

NEMS had executed in an earlier case.
The Court gave NEMS an opportunity to submit supplemental

7
8

briefing regarding these objections, to explain the "exact changes

9

it requests that the Court make to these documents to address 'the
discrepancies'" and "the basis for its requests."

11
United States District Court
For the Northern District of California

10

Order for

Additional Briefing.

12

Docket No. 279, NEMS's Additional Briefing; Docket No. 282, NEMS's

13

Additional Reply.

14

appropriate recourse is to set aside or vacate the judgment and

15

Magistrate Judge Beeler's order.

16

unpersuasive.

17

transcript, Magistrate Judge Beeler's order and the judgment with

18

regard to the auditing process do not constitute clear error.

19

Further, the Court agrees with Magistrate Judge Beeler that "the

20

10-1904 settlement requires only implementing and engaging in the

21

audit process, not resolving it."

22

Settlement at 18.

23

NEMS did not identify any Standard False Claims Act Settlement

24

Terms it considers inconsistent with its understanding of the

25

standard terms, any differences that may exist do not constitute

26

clear error.

27

//

28

//

In response, NEMS provides neither.

See

Instead, NEMS states repeatedly that the only

The Court finds NEMS's arguments

Whatever differences may exist among the

Amended Order Enforcing

Likewise, because, when given the opportunity,

13

1
2

II.

Order Enforcing the Settlement Agreement

Analysis under Rule 60(b)(2) is different with respect to the

3

January 13, 2015 order enforcing the settlement agreement.

4

that the State did not obtain control agency authority to

5

implement the settlement agreement until June 2015 was "newly

6

discovered evidence" with respect to the order.

7

not fail to exercise diligence to discover the filed letter

8

announcing authority sooner, as the letter was only available once

9

filed.

Second, NEMS did

The Governments had represented that both had supervisory

10

approval as of the January 8, 2015 hearing on the motion to

11
United States District Court
For the Northern District of California

First,

enforce the settlement.

12

However, NEMS falls short on the third prong; this newly

13

discovered evidence was not of "such magnitude that production of

14

it earlier would have been likely to change the disposition of the

15

case."

16

Judge Beeler would not have granted the motion on January 13, 2015

17

if the State had not yet obtained final supervisory approval, the

18

State ultimately did obtain such approval.

19

Beeler been aware that the State had not yet obtained final

20

approval, she might, at most, have waited to grant the order to

21

enforce the settlement agreement until it did, which would not

22

have altered the disposition.

23

Governments' motion to enforce the settlement agreement based on

24

the State's delay in obtaining final implementing approval,

25

particularly because it was the State, as well as the United

26

States, that wished to enforce the settlement, over NEMS's

27

objections, which had nothing to do with the State's authority.

Feature Realty, 331 F.3d at 1093.

Even if Magistrate

Had Magistrate Judge

She would not have denied the

28

14

1

NEMS also argues that it would not have agreed on September

2

4, 2014 to a September 26, 2014 payment date "had it had any idea

3

that the State's supervisory approval was the responsibility of a

4

still unknown 'control agency' whose processes, by all

5

appearances, . . . would take five months to complete."

6

No. 265, Opening Br. at 10.

7

information when it agreed to the settlement in September, nor did

8

it pay by that date.

9

when the Court approved a supersedeas bond pending NEMS's appeal.

Docket

NEMS, however, did not seek that

Indeed, it had not paid as of May 13, 2015,

September 26 was not the payment date, but the date from which

11
United States District Court
For the Northern District of California

10

interest would begin to accrue.

12

8; Amended Order Enforcing Settlement at 3.

13

Transcript September 4, 2014 at

NEMS argues that, without the State's final supervisory

14

approval, the State was not entitled to file the motion to enforce

15

the settlement agreement at all.

16

Relators also filed the motion.

17

State had not yet obtained control agency approval, the State

18

would have filed the motion once the State did obtain the final

19

approval, with the same result.

20

However, the United States and
Had the parties known that the

NEMS argues in its second Rule 60 motion that, because it did

21

not know that the State had not yet obtained control agency

22

approval, its consent to Magistrate Judge Beeler's jurisdiction

23

over the motion to enforce the settlement was neither knowing nor

24

voluntary.

25

authority suggesting that any misunderstanding regarding final

26

supervisory approval relates to the knowing-and-voluntary

Docket Nos. 284 and 289.

27
28

15

NEMS cites no legal

1

requirement.4

2

argument, even though it consented to Magistrate Judge Beeler's

3

jurisdiction over a year ago and received Mr. Frankel's letter

4

over six months ago.

5

State had not yet obtained control agency approval to implement

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the settlement does not constitute the "extraordinary

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circumstances" required to vacate consent to a magistrate judge.

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See 28 U.S.C. § 636(c)(4).

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unpersuasive.5

Further, this is the first time NEMS has made this

Finally, that NEMS was unaware that the

The Court finds NEMS's argument

In addition, the Court has reviewed de novo Magistrate Judge

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United States District Court
For the Northern District of California

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Beeler's order enforcing the settlement agreement and concludes

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that her determination that the settlement must be enforced is

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correct.
It appears that NEMS has thought the better of its agreement

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to settle and is grasping at straws seeking to undo it.

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//

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//

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//

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Indeed, the Ninth Circuit and the Supreme Court have
discussed this requirement in the context of constitutional,
rather than factual, concerns. See Roell v. Withrow, 538 U.S.
580, 595 (2003) (explaining that the express consent requirement
for magistrate judge jurisdiction "ensures that the parties
knowingly and voluntarily waive their right to an Article III
judge"); Anderson v. Woodcreek Venture Ltd., 351 F.3d 911, 914-15
(9th Cir. 2003) (explaining that the knowing-and-voluntary-consent
requirement "was designed to assuage constitutional concerns, as
Congress did not want to erode a litigant's right to insist on a
trial before an Article III judge").
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Because this argument fails on its merits, the Court need
not discuss procedural arguments for denying the motion. See
Docket No. 287 at 2.

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CONCLUSION

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For all the foregoing reasons, NEMS's motions for relief

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under Rules 59 or 60 (Case No. 10-1904, Docket Nos. 265 and 284;

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Case No. 12-2895, Docket Nos. 144 and 154) are DENIED.

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IT IS SO ORDERED.
Dated: February 17, 2016

CLAUDIA WILKEN
United States District Judge

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United States District Court
For the Northern District of California

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