Bona Fide Conglomerate, Inc. v. SourceAmerica et al

Filing 234

ORDER Granting 212 Request for Entry of Rule 54(b) Judgment and Denying 218 Joint Motion to Stay. The Court Dismisses Without Leave to Amend claims one through nine of Plaintiff's FAC, Grants Plaintiff's request for entry of judgment pursuant to Rule 54(b), and Denies Defendants' joint motion to stay. Signed by Judge Gonzalo P. Curiel on 6/3/15. (dlg)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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BONA FIDE CONGLOMERATE,
INC.,

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Plaintiff,

v.

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SOURCEAMERICA, et al.,

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CASE NO. 14cv0751-GPC-DHB
ORDER:
(1) GRANTING REQUEST FOR
ENTRY OF RULE 54(b)
JUDGMENT [ECF No. 212] and
(2) DENYING JOINT MOTION TO
STAY [ECF No. 218]

Defendants.

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Before the Court are Plaintiff’s request for entry of judgment as to its dismissed

19 federal antitrust claims pursuant to Rule 54(b) of the Federal Rules of Civil Procedure
20 (ECF No. 212) and Defendants’ joint motion to stay the case, if the Court grants
21 Plaintiff’s motion (ECF No. 218). Defendant SourceAmerica, as well as all of the
22 dismissed Defendants, also filed a statement of non-opposition to Plaintiff’s request.
23 (ECF No. 218.) Having reviewed the briefing, and for the reasons set forth below, the
24 Court GRANTS Plaintiff’s request for entry of judgment (ECF No. 212) and DENIES
25 Defendants’ joint motion to stay the case (ECF No. 218).
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BACKGROUND
In its First Amended Complaint (“FAC”), Plaintiff alleged nine antitrust claims

3 in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1, and Section 8 of the
4 Clayton Act, 15 U.S.C. § 19 against Defendant SourceAmerica and various non-profit
5 and for-profit entities, and breach of contract against SourceAmerica. Plaintiff
6 contends Defendants rigged the process through which service providers may compete
7 for government contracts through the federal “AbilityOne Program.” (ECF No. 128,
8 FAC ¶¶ 1-2, 6.) Plaintiff’s breach of contract claim stems from a settlement agreement
9 Plaintiff and SourceAmerica entered into following two bid protests Plaintiff lodged
10 with the U.S. Court of Federal Claims. (Id. at 86-93.) The settlement agreement
11 required (among other things) that SourceAmerica “reasonably monitor” Plaintiff’s
12 participation in the AbilityOne Program for three years and use “best efforts” to treat
13 Plaintiff fairly and afford them equal access to services. (Id.)
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Defendants filed ten separate motions to dismiss the FAC. (ECF Nos. 138, 140,

15 141, 143, 144, 148, 149, 150, 155, 159.) Defendant SourceAmerica did not move to
16 dismiss Plaintiff’s claim for breach of contract. (See ECF No. 141-1.) By order dated
17 January 6, 2015, the Court dismissed Plaintiff’s causes of action against Defendants for
18 violations of Section 1 of the Sherman Act and for violation of Section 8 of the Clayton
19 Act in their entirety for failure to state a claim, but granted Plaintiff thirty days to file
20 a second amended complaint. (ECF No. 189.)
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On February 3, 2015, Plaintiff moved for certification of the order for 28 U.S.C.

22 § 1292(b) interlocutory appeal and for a stay of the proceedings so that it might seek
23 review of the Court’s January 6, 2015 order. (ECF No 195.) The Court denied
24 Plaintiff’s motion on March 4, 2015. (ECF No. 206.) Having been granted an
25 extension of time, Plaintiff had until fifteen days after the Court’s entry of the March
26 4, 2015 order to file a second amended complaint. (ECF No. 200.) In lieu of a second
27 amended complaint, Plaintiff timely filed a document entitled Notice of Intent Not to
28 File Second Amended Complaint and Request for Entry of Fed. R. Civ. P. 54(b)
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1 Judgment on Dismissed Claims. (ECF No. 212.)
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DISCUSSION

3 A.

Entry of Judgment Pursuant to Rule 54(b)

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Plaintiff seeks a Rule 54(b) entry of judgment as to the first nine claims of is

5 FAC, which all allege antitrust violations. (ECF No. 212 at 2.)
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Federal Rule of Civil Procedure 54(b) states:

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When an action presents more than one claim for relief--whether as a
claim, counterclaim, crossclaim, or third-party claim--or when multiple
parties are involved, the court may direct entry of a final judgment as to
one or more, but fewer than all, claims or parties only if the court
expressly determines that there is no just reason for delay.

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10 Fed. R. Civ. P. 54(b). In evaluating whether dismissal of one or more claims under
11 Rule 54(b) is appropriate, the “district court must first determine that it is dealing with
12 a ‘final judgment.’” Curtiss-Wright Corp. v. Gen. Elec. Co., 446 U.S. 1, 7 (1980). For
13 a judgment to be “final,” it must be “an ultimate disposition of an individual claim
14 entered in the course of a multiple claims action.” Id. (quoting Sears, Roebuck & Co.
15 v. Mackey, 351 U.S. 427, 436 (1956)).
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Once this element is satisfied, the district court must evaluate “whether there is

17 any just reason for delay.” Id. at 8. The Supreme Court has made clear that “[n]ot all
18 final judgments on individual claims should be immediately appealable.” Id. For this
19 reason, “[i]t is left to the sound judicial discretion of the district court to determine the
20 ‘appropriate time’ when each final decision in a multiple claims action is ready for
21 appeal.” Id. Evaluation of whether there are just reasons to delay “must take into
22 account judicial administrative interests as well as the equities involved.”

Id.

23 “Consideration of the former is necessary to assure that application of the Rule
24 effectively ‘preserves the historic federal policy against piecemeal appeals.’” Id.
25 (quoting Sears, Roebuck, 351 U.S. at 438). In this vein, the district court may properly
26 consider “whether the claims under review were separable from the others remaining
27 to be adjudicated and whether the nature of the claims already determined was such
28 that no appellate court would have to decide the same issues more than once even if
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1 there were subsequent appeals.” Id.
2

Unlike in most cases where a Rule 54(b) judgment is sought, the question of

3 whether the district court is dealing with a final judgment is not a perfunctory one in
4 this case. “A decision is final ... if it ‘ends the litigation on the merits and leaves
5 nothing for the court to do but execute the judgment.’” Az. State Carpenters Pension
6 Trust Fund v. Miller, 938 F.2d 1038, 1039 (9th Cir.1991) (quoting Gulfstream
7 Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 275 (1988) (internal quotation
8 omitted)). This Court dismissed Plaintiff’s antitrust claims with express leave to
9 amend within thirty days. An order granting leave to amend a dismissed complaint
10 does not constitute a final judgment. Jung v. K. & D. Min. Co., 356 U.S. 335, 336-37
11 (1958) (per curium); WMX Tech., Inc. v. Miller, 104 F.3d 1133, 1136-37 (9th Cir.
12 1997) (holding that “when a district court expressly grants leave to amend, it is plain
13 that order is not final”). Rather, “another order of absolute dismissal after expiration
14 of the time allowed for amendment is required to make a final disposition of the cause.”
15 Jung, 356 U.S. at 337 (internal quotation omitted); WMX Tech, 104 F.3d at 1137
16 (explaining that a further step must be taken to make clear the unequivocal terminal
17 date for purposes of appealability). Thus, this Court’s order dismissing Plaintiff’s FAC
18 was not a final judgment.
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That is not the end of the inquiry, though. Where the plaintiff expresses in a

20 filed brief that he does not intend to amend his complaint, “the district court [has] an
21 opportunity to reconsider, if appropriate, but more importantly, to enter an order
22 dismissing the action, one that is clearly appealable.” Lopez v. City of Needles, Cal.,
23 95 F.3d 20, 22-23 (9th Cir. 1996). Here, Plaintiff’s notice states that “Plaintiff Bona
24 Fide Conglomerate, Inc. [] does not intend to file a Second Amended Complaint in this
25 action, but will stand upon the existing pleading.” (ECF No. 212 at 1 (citing Edwards
26 v. Marin Park, Inc., 356 F.3d 1058, 1064-65 (9th Cir. 2004) and WMX Tech., Inc., 104
27 F.3d at 1135-36.) In light of this statement and the accompanying citations, the Court
28 finds it appropriate to enter an order dismissing claims one through nine of Plaintiff’s
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1 FAC without leave to amend. Following such a dismissal, Plaintiff will have satisfied
2 Rule 54(b)’s final judgment requirement. See Roberts v. C.R. England, Inc., No. C 113 2586-CW, 2012 WL 711903, at *3 (N.D. Cal. Mar. 5, 2012) (finding the requirement
4 of a final judgment “satisfied because the Court has dismissed Plaintiffs’ CFIL claim
5 without leave to amend”); Khan v. Park Capital Sec., LLC, No. C 03-00574-RS, 2004
6 WL 1753385, at *7 (N.D. Cal. Aug. 5, 2004) (concluding that “[s]ince all claims
7 against [defendant] have been dismissed without granting [plaintiff] leave to amend his
8 complaint, the first part of the Sears test is satisfied”).
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The next question then is “whether there is any just reason for delay.” Curtiss-

10 Wright, 446 U.S. at 8. Certainly the fact that none of the defendants object to
11 Plaintiff’s request and the absence of counterclaims both weigh in favor of granting a
12 Rule 54(b) judgment. Further, requiring the numerous dismissed defendants to await
13 the conclusion of this case before having to respond to the appeal would be prejudicial
14 to them, given that this case is at the pre-answer stage and no trial date has been set.
15 Similarly, Plaintiff may suffer prejudice if the delay results in the loss of witnesses or
16 evidence.
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However, the Court also must consider judicial administrative interests in

18 determining whether to grant a Rule 54(b) dismissal. Id. Though the Ninth Circuit
19 previously held that “[a] similarity of legal or factual issues will weigh heavily against
20 entry of judgment under [Rule 54(b)],” Morrison-Knudsen Co. v. Archer, 655 F.2d 962,
21 965 (9th Cir. 1981), the court now has “embraced ‘a more pragmatic approach focusing
22 on severability and efficient judicial administration.’” Wood v. GCC Bend, LLC, 422
23 F.3d 873, 880 (9th Cir. 2005) (quoting Continental Airlines, Inc. v. Goodyear Tire &
24 Rubber Co., 819 F.2d 1519, 1525 (9th Cir.1987)). For instance, the court recently
25 reconfirmed that “[b]oth the Supreme Court and our court have upheld certification on
26 one or more claims despite the presence of facts that overlap remaining claims when,
27 for example, ... the case is complex and there is an important or controlling legal issue
28 that cuts across (and cuts out or at least curtails) a number of claims.” U.S. Fid. &
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1 Guar. Co. v. Lee Inv. LLC, 641 F.3d 1126, 1140 (9th Cir. 2011) (quoting Wood, 422
2 F.3d at 881); SkinMedica, Inc. v. Histogen Inc., 869 F. Supp. 2d 1176, 1200-01 (S.D.
3 Cal. 2012) (“[t]he mere fact that claims share common facts does not preclude the entry
4 of partial final judgment as to one or more of those claims”).
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In this case, Plaintiff acknowledges that there is some factual overlap between

6 its federal antitrust claims and its state-law breach of contract claim, but argues that the
7 Court should allow it to appeal because the case is complex and Plaintiff seeks review
8 of the Court’s application of pleading standards. (ECF No. 212.) In Wood, the court
9 concluded that the case was not complex because the case involved “a single plaintiff,
10 single defendant case involving a discrete employment relationship that played out in
11 a relatively short time among relatively few actors.” Wood, 422 F.3d at 881. Here, by
12 contrast, the FAC alleges nine complex antitrust allegations against eleven defendants
13 in addition to the breach of contract claim against SourceAmerica.

Appellate

14 resolution of the issue of whether or not Plaintiff sufficiently plead the existence of a
15 contract, combination, or conspiracy would address the vast majority of Plaintiff’s
16 claims. If Plaintiff were to lose on appeal, the case would be finally resolved as to the
17 antitrust claims and almost all of the defendants. If the court of appeal reverses this
18 Court as to some of the defendants, this Court’s granting of the Rule 54(b) motion still
19 will have significantly narrowed the issues for trial. See Texaco, Inc. v. Ponsoldt, 939
20 F.2d 794, 797-98 (9th Cir. 1991) (upholding certification under Rule 54(b) even though
21 counterclaims relating to the same factual determinations remained pending because
22 “the legal issues now appealed will streamline the ensuing litigation”). And, while it
23 is possible that a subsequent appeal could be taken, it would occur after summary
24 judgment or trial and, thus, not present the same pleading issues.
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In sum, because the Court finds that the equities and considerations of judicial

26 administration both favor severing the claims for purposes of obtaining immediate
27 review, the Court GRANTS Plaintiff’s request for entry of judgment pursuant to Rule
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1 B.

Stay of the Case

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Defendants jointly request that the Court stay the case until Plaintiff’s appeal is

3 resolved. (ECF No. 218 at 2.) Plaintiff did not file a response to Defendants’ request
4 for a stay.
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In the exercise of its inherent authority to control its own docket, the Court may

6 stay a case. See Leyva v. Certified Grocers of Cal., Ltd., 593 F.2d 857, 863 (9th Cir.
7 1979) (“A trial court may, with propriety, find it is efficient for its own docket and the
8 fairest course for the parties to enter a stay of an action before it, pending resolution of
9 independent proceedings which bear upon the case”). When considering a motion to
10 stay pending appeal, courts consider:
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(1) whether the stay applicant has made a strong showing that he is likely
to succeed on the merits; (2) whether the applicant will be irreparably
injured absent a stay; (3) whether issuance of the stay will substantially
injure the other parties interested in the proceedings; and (4) where the
public interest lies.

14 Golden Gate Rest. Ass'n v. City & Cnty. of San Francisco, 512 F.3d 1112, 1115 (9th
15 Cir. 2008) (quoting Hilton v. Braunskill, 481 U.S. 770, 776 (1987)). The first two
16 factors should be viewed as falling on a sliding scale, such that “the required degree
17 of irreparable harm increases as the probability of success decreases.” Id. at 116. In
18 other words, satisfying steps (1) and (2) requires proof of either “a strong likelihood
19 of success on the merits, [and] . . . the possibility of irreparable injury to [the
20 applicant]” or a showing “that serious legal questions are raised and that the balance
21 of hardships tips sharply in [the moving party’s] favor.” Id. at 1115-16 (internal
22 quotations and citations omitted).
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Here, Defendants have made no showing in regard to the merits and have not

24 alleged irreparable injury to themselves or Plaintiff. Instead, Defendants argue that
25 they will be prejudiced if they are forced to litigate both arms of the litigation
26 independently, “which could ultimately entail significant, burdensome, and duplicative
27 discovery, both as to the parties and the dismissed Defendants.” (ECF No. 218 at 3.)
28 However, only SourceAmerica will be required to proceed with discovery and pretrial
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1 motions on the remaining breach of contract claim. To the extent Defendants’ joint
2 motion raises concerns regarding the possibility of conducting two separate trials, the
3 Court notes that it may always revisit its decision to stay the case at a later date.
4 Therefore, the Court finds that Defendants have failed to demonstrate a strong
5 likelihood of success on the merits or that the balance of hardships tips sharply in
6 Defendants’ favor.
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In light of the above findings, and because the Court find that the public interest

8 lies more in expeditiously resolving this case on the merits than in staying the case
9 pending an appeal, the Court declines to stay the case.
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CONCLUSION
For the reasons set forth above, the Court (1) DISMISSES WITHOUT LEAVE

12 TO AMEND claims one through nine of Plaintiff’s FAC, (2) GRANTS Plaintiff’s
13 request for entry of judgment pursuant to Rule 54(b) (ECF No. 212), and (3) DENIES
14 Defendants’ joint motion to stay (ECF No. 218).
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IT IS SO ORDERED.

16 DATED: June 3, 2015
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HON. GONZALO P. CURIEL
United States District Judge

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