Erhart v. Bofi Holding Inc.

Filing 38

ORDER denying Bofl Federal Bank's #26 Motion to Clarify or Reconsideration of Order Denying Bofl's Amended Motion for Preliminary Injunction. Court orders the parties to appear on 1/30/2017 10:30 AM in Courtroom 4B before Judge Cynthia Bashant for oral argument. The parties should be prepared to discuss Bofl's motion for summary adjudication of Erhart's 12th through 24th affirmative defenses. Signed by Judge Cynthia Bashant on 12/8/2016. (Motion for Summary Adjudication filed as ECF. 45 in 15cv2353) (jah)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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CHARLES MATTHEW ERHART,
Plaintiff,

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Case No. 15-cv-02287-BAS(NLS)
consolidated with
15-cv-02353-BAS(NLS)
ORDER:

v.

(1) DENYING MOTION FOR
CLARIFICATION OR
RECONSIDERATION OF
ORDER DENYING BOFI’S
AMENDED MOTION FOR
PRELIMINARY INJUNCTION
(ECF No. 26);

BOFI HOLDING, INC.,

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Defendant.

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AND

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BOFI FEDERAL BANK,
Plaintiff,

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(2) SETTING ORAL
ARGUMENT ON MOTION FOR
SUMMARY ADJUDICATION
(ECF No. 45 (in 15-cv-02353))

v.
CHARLES MATTHEW ERHART,
Defendant.

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On September 7, 2016, the Court issued an order denying BofI Federal Bank

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(“BofI”)’s amended motion for a preliminary injunction (“Order”). (ECF No. 70 in

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Case No. 15-cv-02353.) In short, the Court concluded BofI failed to demonstrate that

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irreparable harm was likely to occur if its request for preliminary relief was denied.

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(Id. at 20:11–12.) Thus, BofI did not meet its burden of demonstrating it was entitled

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to an extraordinary remedy. (Id. at 21:2–3.)

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On October 5, 2016, BofI filed a motion for clarification or, alternatively,

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reconsideration of the Order. (ECF No. 26.) BofI argues the Order is erroneous

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because it was based on the incorrect assumption that Erhart has returned all of BofI’s

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information and documents in his possession. (ECF No. 26-1 at 1:2–9.) Because BofI

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believes Erhart still has access to BofI’s information and documents, it argues this

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Court should reconsider its ruling and also order Erhart “to permanently delete the

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BofI documents and information on his desktop computer, the Lexar USB drive, and

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in his Gmail account and . . . Erhart’s counsel, Carol Gillam . . . [to] delete any copies

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of the Confidential Information that Erhart provided to her.” (Id. at 1:24–2:3.) Erhart

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opposes. (ECF No. 34.)

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District courts have the authority to entertain motions for reconsideration of

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interlocutory orders at any time before the entry of final judgment. See Fed. R. Civ.

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P. 59(e); Amarel v. Connell, 102 F.3d 1494, 1515 (9th Cir. 1996); Balla v. Idaho

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State Bd. of Corr., 869 F.2d 461, 465 (9th Cir. 1989). To determine the merits of a

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request to reconsider an interlocutory order, courts apply the standard required under

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a Rule 59(e) reconsideration motion. See Hydranautics v. FilmTec Corp., 306 F.

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Supp. 2d 958, 968 (S.D. Cal. 2003). Reconsideration is appropriate under Federal

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Rule of Civil Procedure 59(e) if: (1) the district court “is presented with newly

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discovered evidence,” (2) the district court “committed clear error or the initial

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decision was manifestly unjust,” or (3) “there is an intervening change in controlling

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law.” Sch. Dist. No. 1J, Multnomah Cty. v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir.

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1993); see also Allstate Ins. Co. v. Herron, 634 F.3d 1101, 1111 (9th Cir. 2011).
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Here, BofI fails to demonstrate reconsideration is warranted. The Court has

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not been presented with newly discovered evidence, and there has not been an

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intervening change in controlling law. Thus, the remaining basis for reconsideration

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is if this Court “committed clear error or the [Order] was manifestly unjust.” See

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ACandS, Inc., 5 F.3d at 1263. BofI argues the “clear error” ground for reconsideration

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applies. (ECF No. 26-1.)

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The Court did not commit clear error. Even if the Court were to assume, for

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the sake of argument, that Erhart still has access to some of BofI’s confidential

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information, the Court would still conclude BofI has not demonstrated a likelihood

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of irreparable harm in the absence of preliminary relief. As discussed in the Order,

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BofI must show it is likely that Erhart will disclose confidential information—

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causing irreparable injury—absent preliminary relief. See, e.g., Winter v. Nat. Res.

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Def. Council, Inc., 555 U.S. 7, 20, 22–23 (2008). The Order was not predicated on

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only whether Erhart has returned BofI’s information. Rather, the Court reasoned the

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record as a whole indicated BofI has not demonstrated Erhart is likely to disclose

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confidential information. (Order 18–21.) This record included the fact that Erhart

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submitted to a deposition and provided the requested declaration to BofI regarding

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his use of BofI’s information. (Id. 18:19–21.) It also included a lack of evidence that

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Erhart had “progressively disclosed more and more of BofI’s confidential

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information.” (Id. 19:18.) The Court further reasoned:

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At best, BofI has demonstrated Erhart repeatedly disclosed largely the
same allegations of perceived wrongdoing to the OCC, members of his
family, his girlfriend, and colleagues. These same allegations then
appeared in his whistleblower retaliation complaint. The Court finds this
course of conduct does not demonstrate a likelihood that, moving
forward, Erhart will suddenly disclose other information to the public,
such as a trove of personal-identifying information of BofI’s customers,
if the Court does not issue an injunction.

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(Id. 20:1–7.) This conclusion would not be changed by only the fact that Erhart may

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still have access to some of BofI’s information. BofI must still demonstrate a
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likelihood that Erhart would disclose the information he purportedly has access to

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absent preliminary relief. BofI did not satisfy this burden in moving for a preliminary

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injunction, and BofI has not satisfied it now.

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As for the modified relief BofI seeks in its present motion, this relief appears

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simple: an order requiring Erhart and his counsel to delete any copies of BofI’s

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information and documents. BofI is even willing to offer the services of its forensic

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consultant to assist Erhart and his counsel. But this order would still be an

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injunction—a mandatory one. See Marlyn Nutraceuticals, Inc. v. Mucos Pharma

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GmbH & Co., 571 F.3d 873, 879 (9th Cir. 2009) (“A mandatory injunction ‘orders a

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responsible party to ‘take action.’’ (quoting Meghrig v. KFC W., Inc., 516 U.S. 479,

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484 (1996))). Consequently, BofI must satisfy the requirements for obtaining this

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preliminary, extraordinary relief. For the same reasons discussed above and in this

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Court’s prior ruling, this modified, mandatory injunction is not warranted.

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In light of the foregoing, the Court DENIES BofI’s motion to clarify or

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reconsider the Court’s order denying BofI’s amended motion for a preliminary

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injunction (ECF No. 26).

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In addition, the Court ORDERS the parties to appear on January 30, 2017, at

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10:30 a.m. in Courtroom 4B for oral argument. See Civ. L.R. 7.1(d)(1). The parties

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should be prepared to discuss BofI’s motion for summary adjudication of Erhart’s

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twelfth through twenty-fourth affirmative defenses (ECF No. 45 in Case No. 15-cv-

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02353).

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IT IS SO ORDERED.

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DATED: December 8, 2016

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