Liu et al v. Win Woo Trading, LLC et al

Filing 168

ORDER by Judge Kandis A. Westmore denying Plaintiffs' 163 Motion for Sanctions against the Win Woo Defendants. (kawlc1, COURT STAFF) (Filed on 4/12/2016)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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KUANG XUAN LIU, et al.,

Case No. 14-cv-02639-KAW

Plaintiffs,
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v.
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WIN WOO TRADING, LLC, et al.,
Defendants.

ORDER DENYING PLAINTIFFS'
MOTION FOR SANCTIONS AGAINST
WIN WOO DEFENDANTS AND
COUNSEL
Re: Dkt. No. 163

United States District Court
Northern District of California

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On March 17, 2016, Plaintiffs filed a motion for sanctions against the Win Woo

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Defendants and their attorney of record, Margaret J. Grover, for allegedly perpetuating a fraud on

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the court in connection with Defendant Jia Tun Zheng’s declaration in support of Defendants’

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motions for summary judgment. (Pls.’ Mot., Dkt. No. 163 at 2.)

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Plaintiffs filed the motion pursuant to Federal Rule of Civil Procedure 56(h). Id. Rule

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56(h) permits the court to impose sanctions on a party who submitted an affidavit or declaration in

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support of a motion for summary judgment found to be in bad faith. Fed. R. Civ. P. 56(h). Here,

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Defendants withdrew their argument that Safety Trucking and Win Woo were separate businesses

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on March 10, 2016—seven days before the motion for sanctions was filed. (See Defs.’ Opp’n,

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Dkt. No. 165 at 3.) Further, Defendants contend that they were unaware that documents existed

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that created a triable issue of fact regarding the separation of the businesses when the motions for

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summary judgment were filed. Id. at 2. Since Defendants withdrew their argument shortly after

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becoming aware that time records existed that appeared to list Win Woo as the payor, there is no

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finding of bad faith under Rule 56.

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Alternatively, Plaintiffs may seek sanctions for the purported wrongdoing under Rule 11.
Rule 11 requires that a motion for sanctions “be served under Rule 5, but it must not be filed or be

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presented to the court if the challenged paper, claim, defense, contention, or denial is withdrawn or

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appropriately corrected within 21 days after service or within another time the court sets.” Fed. R.

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Civ. P. 11(c)(2). Here, Defendants contend that Plaintiffs did not serve the motion on opposing

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counsel before it was filed. (Decl. of Margaret J. Grover, Dkt. No. 165-1 ¶ 17.) Plaintiffs do not

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dispute this assertion, but instead contend that a meet and confer was not required because the

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motion was filed under Rule 56(h). (Pls.’ Reply, Dkt. No. 167 at 1.) The Court disagrees.
At the March 8, 2016 case management conference, the Court ordered Plaintiffs to meet

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and confer with the Win Woo Defendants prior to filing a motion for sanctions. Pursuant to the

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Northern District Guidelines for Professional Conduct, “[m]otions should be filed or opposed only

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in good faith and when the issue cannot be otherwise resolved.” (See Northern District Guidelines

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United States District Court
Northern District of California

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for Professional Conduct ¶ 10.) This requires that a party meet and confer prior to filing a motion

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for sanctions. See id. at ¶ 10(a). The Court admonishes Plaintiffs’ counsel for failing to comply

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with this court order and the district’s Guidelines, but declines to impose sanctions at this time.

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Plaintiffs are not to file any other motions prior to engaging in a good faith meet and confer effort.

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For the reasons set forth above, Plaintiffs’ motion for sanctions is DENIED.

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IT IS SO ORDERED.

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Dated: April 12, 2016
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KANDIS A. WESTMORE
United States Magistrate Judge

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