Williams & Cochrane, LLP v. Quechan Tribe of the Fort Yuma Indian Reservation et al

Filing 247

ORDER Denying 219 Plaintiff's Motion for Reconsideration and Denying Plaintiff's Motion for Entry of Final Judgment. Signed by Judge Gonzalo P. Curiel on 12/11/19. (dlg)

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

SOUTHERN DISTRICT OF CALIFORNIA

10
11

WILLIAMS & COCHRANE, LLP,

Case No.: 17-CV-01436-GPC-MSB

Plaintiff,

12
13

v.

14

ORDER DENYING PLAINTIFF’S
MOTION FOR
RECONSIDERATION AND
DENYING PLAINTIFF’S MOTION
FOR ENTRY OF FINAL
JUDGMENT

ROBERT ROSETTE; ROSETTE &
ASSOCIATES, PC; ROSETTE, LLP;
QUECHAN TRIBE OF THE FORT
YUMA INDIAN RESERVATION, a
federally-recognized Indian tribe; and
DOES 1 THROUGH 100,

15
16
17
18

[ECF No. 219]

Defendants.

19
20

Before the Court is Plaintiff/Counter-Defendant Williams & Cochrane’s (“W&C”)

21

motion for reconsideration of the Court’s Order on Defendant/Counter-Plaintiff Quechan

22

Tribe of Fort Yuma Indian Reservation’s (“Quechan” or “the Tribe”) motion to dismiss

23

Plaintiff’s counterclaim in reply, and W&C’s motion for entry of final judgment. ECF

24

No. 219. Quechan filed an opposition on October 25, 2019. ECF No. 236. Plaintiff filed

25

a reply on November 1, 2019. ECF No. 237. Based on the reasoning below, the Court

26

DENIES Plaintiff’s motion for reconsideration and for entry of final judgment.

27
28

1
17-CV-01436-GPC-MSB

1

PROCEDURAL BACKGROUND
On December 10, 2018, W&C filed a “reply claim” 1 (ECF No. 179) in response to

2
3

several counterclaims raised by Quechan in Quechan’s Answer to the First Amended

4

Complaint (ECF No. 94). On December 31, 2018, Quechan filed a motion to strike and

5

dismiss. ECF No. 184. On September 10, 2019, this Court granted, with prejudice,

6

Quechan’s motion to dismiss on the following bases: (1) the individual Tribe members

7

(Keeny Escalanti and Willie White) are not parties to the agreement at issue; (2) W&C’s

8

counterclaim in reply for tortious breach of contract relies on communications that are

9

protected by litigation privilege. ECF No. 216.

10

FACTUAL BACKGROUND

11
12

The parties are familiar with the factual background, which is described at length
in the Court’s prior order (ECF No. 216) and does not bear repeating here.2

13

In brief and in most relevant part, W&C represented Quechan in negotiations with

14

the State of California with respect to payments owed by Quechan to the State. ECF No.

15

94 ¶ 22. In September 2016, Quechan hired W&C for representation in these

16

negotiations and signed an Attorney-Client Fee Agreement on September 29, 2016. Id. ¶

17

23. On June 26, 2017, the Quechan President Keeny Escalanti sent a letter to W&C

18

terminating the firm (“June 26th letter”). Id. ¶ 44. The June 26th letter stated that W&C

19

had been “grossly overcompensated” given its failure to “produce better-than-boilerplate

20

terms in your negotiations so far with the State,” and therefore Quechan’s payment of

21

fees to date was “more than fair.” ECF No. 179 at 3-4. The letter also stated, “We

22

strongly advise you against pressing your luck further out of concern for the reputation of

23
24
In the Court’s prior order, the Court interpreted W&C’s “reply claim” as a counterclaim in reply. ECF
No. 216 at 10.
2
The Court draws on the factual allegations asserted in the “reply counterclaim” (properly,
“counterclaim in reply”) (ECF No. 179) but notes that the operative complaint is now the fourth
amended complaint, which was filed on September 25, 2019. ECF No. 220.
1

25
26
27
28

2
17-CV-01436-GPC-MSB

1

your firm in Indian Country and in the State of California.” Id. In this letter, Escalanti

2

also asked W&C to transmit the Tribe’s entire case file and most recent draft compact to

3

its new counsel, Rosette LLP. ECF No. 94 ¶ 44.

4

On June 30, 2017, the Quechan Executive Secretary sent W&C a letter that was

5

also signed by Escalanti (“June 30th letter”). The June 30th letter included the following

6

statement: “Should you continue your obstruction of the Tribe’s interests, the Tribe will

7

be left with no other choice than to pursue the legal remedies available to it. We trust

8

that the Firm will see the wisdom in promptly complying with these demands.” ECF No.

9

179 at 5.

10

DISCUSSION

11

W&C argues that it should be permitted to pursue its tortious breach of contract

12

counterclaim in reply, and that the Court should reconsider its opinion, citing two

13

California Court of Appeals cases. W&C further requests that in the event that the Court

14

declines to reconsider its prior order, then the Court should enter final judgment on the

15

counterclaim in reply under Federal Rules of Civil Procedure (“Rule”) 54(b) since the

16

issue of litigation privilege is severable from the remainder of issues in this litigation.

17

The Court will address each issue in turn.3

18

I.

19

MOTION FOR RECONSIDERATION
A motion for reconsideration, under Federal Rule of Civil Procedure 59(e), is

20

“appropriate if the district court (1) is presented with newly discovered evidence; (2)

21

clear error or the initial decision was manifestly unjust, or (3) if there is an intervening

22

change in controlling law.” Sch. Dist. No. 1J, Multnomah County, Or. V. ACandS, Inc., 5

23

F.3d 1255, 1263 (9th Cir. 1993); see also Ybarra v. McDaniel, 656 F.3d 984, 998 (9th

24
25
26
27
28

Quechan argues that Plaintiff has not moved for reconsideration of the Court’s order dismissing the
individual defendants Mark White and Keeny Escalanti, and therefore Plaintiff’s motion for
reconsideration is a motion for partial reconsideration of the Court’s prior order. The Court agrees.
3

3
17-CV-01436-GPC-MSB

1

Cir. 2011). The Court has discretion in granting or denying a motion for reconsideration.

2

See Fuller v. M.G. Jewelry, 950 F.2d 1437, 1441 (9th Cir. 1991). A motion for

3

reconsideration “may not be used to raise arguments or present evidence for the first time

4

when they could reasonably have been raised earlier in the litigation.” Kona Enters., Inc.

5

v. Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 2000) (emphasis in original). It is an

6

“extraordinary remedy, to be used sparingly in the interests of finality and conservation

7

of judicial resources.” Id.

8
9

W&C argues that the Court should reconsider its order since the June 26th and
June 30th letters are not communicative and should not be protected by litigation

10

privilege, citing two California Court of Appeals cases: Mancini & Assocs. v. Schwetz, 39

11

Cal. App. 5th 656, 661 (Ct. App. 2019), as modified on denial of reh’g (Sept. 30, 2019);

12

People v. Toledano, 249 Cal. Rptr. 3d 100 (Ct. App. 2019), review denied and ordered

13

not to be officially published (Oct. 23, 2019). ECF 219-1 at 3-9.

14

In Mancini, the plaintiff law firm had successfully litigated sexual harassment and

15

other claims on behalf of its client and sought to collect money owed to it by the

16

judgment debtor, the client’s former employer. The judgment debtor rekindled his social

17

relationship with the law firm client, and they eventually executed a settlement releasing

18

the judgment debtor from his payment obligations to the law firm. The law firm brought

19

a claim against the judgment debtor alleging, inter alia, intentional interference with

20

contract, citing his settlement communications with the client. The judgment debtor

21

argued that his communications with the client were protected by litigation privilege, but

22

the California Court of Appeal disagreed, noting that the “threshold issue” in determining

23

the application of the litigation privilege is whether the defendant's conduct was

24

communicative or noncommunicative.” Id. at 661. Although the judgment debtor’s

25

execution of the settlement agreement was communicative, the Court found that the

26

debtor undertook several noncommunicative acts that were not protected by litigation

27
28

4
17-CV-01436-GPC-MSB

1

privilege – e.g., contacting the client to ascertain whether she had hired a judgment

2

collections attorney. Here, the June 26 and June 30 letters – including the disputed

3

excerpts – are plainly communicative. Therefore, Mancini does not support

4

reconsideration of the Court’s prior order.

5

Toledano is similarly inapposite. In Toledano, an attorney threatened to disclose a

6

witness’ extra-marital affair with his client unless the witness paid $350,000 in a case

7

where the witness was seeking to obtain a restraining order against the client. The

8

attorney argued that his threat should be protected by litigation privilege. The Toledano

9

court held that these communications were insufficiently related to the underlying

10

litigation and therefore not privileged, but ultimately reaffirmed the principle that

11

litigation privilege applies regardless of whether the communication was made with

12

malice or intent to harm, and whether the alleged conduct was fraudulent, perjurious,

13

unethical, or even illegal. Toledano, 249 Cal. Rptr. 3d at 110 (citing Blanchard v.

14

DIRECTV, Inc. 123 Cal.App.4th 903, 919-920 (2004)). Based on this well-established

15

legal principle, the Toledano court noted that the lawyer’s other statements – i.e., that he

16

had information that would “blow” the witness’ case against his client “out of the water,”

17

and his threat to reveal personal information about the witness unless the witness

18

withdrew her request for a restraining order – would be protected by litigation privilege.

19

Id. at 111.

20

As mentioned above, this line-drawing exercise is based on well-established legal

21

principles regarding privileged communications and does not constitute an intervening

22

change in controlling law as required by Rule 59(e) and therefore does not form the

23

proper basis for a motion for reconsideration. Nevertheless, even considering this case

24

and its implications, the Court finds that the June 26th and June 30th letters are

25

sufficiently related to the underlying litigation. Plaintiff argues that Quechan’s statement

26

in the June 30th letter (“We strongly advise you against pressing your luck further out of

27
28

5
17-CV-01436-GPC-MSB

1

concern for the reputation of your firm in Indian Country and the State of California”)

2

bears no connection to the ongoing litigation and therefore falls outside the scope of

3

privileged communication. Specifically, W&C argues that Quechan’s statement arises

4

earlier in the letter than Quechan’s repudiation of the Attorney-Client Fee Agreement, is

5

designed to “silence Williams & Cochrane,” and is an “open-ended and unrestricted

6

threat.” ECF 219-1 at 10. The Court disagrees. The June 30 letter was plainly a follow-

7

up request for the transfer of the Tribe’s materials to Rosette LLP, intending to

8

communicate that if W&C failed to do so, the Tribe would pursue litigation. The letter

9

describes W&C’s performance as the Tribe’s attorney, the Tribe’s termination of W&C,

10

and the Tribe’s request for the transfer of their case materials. The letter indicates that

11

the Tribe will pursue legal remedies for any continued obstruction of the Tribe’s interests

12

– including, the failure to transfer case materials to Rosette LLP. Unlike the attorney’s

13

threat in Toledano, which was separate and apart from the attorney’s other statements

14

related to the litigation, this statement in the June 30th letter is directly related to specific,

15

contemplated litigation as described by the rest of the letter.

16

In their reply W&C argues that the consequences of Quechan’s communications –

17

rather than the substance – are determinative and reiterates their prior argument that there

18

is no connection between Quechan’s statement and the litigative process. ECF No. 237.

19

In support W&C cites three cases where courts have held that a defendant has failed to

20

meet their burden under California’s anti-SLAPP statute (Cal. Code Civ. Proc., §

21

425.16): Miller Marital Deduction Tr. v. Zurich Am. Ins. Co., 41 Cal. App. 5th 247 (Ct.

22

App. 2019); Sifuentes v. Subrogation Div., Inc., 2019 WL 4670150 (Cal. Ct. App. Sept.

23

25, 2019); and Appel v. Wolf, No. 3:18-CV-814-L-BGS, 2019 WL 4534540 (S.D. Cal.

24

Sept. 19, 2019). To the extent that these cases touched on the question of whether the

25

conduct at issue was protected by the litigation privilege, they rely on the established

26

standard under California law, as discussed above. See Appel, 2019 WL 4534540, at *5

27
28

6
17-CV-01436-GPC-MSB

1

(litigation privilege did not apply to libelous statements from defendant to plaintiffs’

2

counsel and additional counsel third-party counsel since these statements were not

3

functionally related to the ongoing action and inaccurately described plaintiff’s prior

4

conduct); Sifuentes, 2019 WL 4670150 at *9 (litigation privilege did not apply to

5

defendants’ extortion since defendants were not seriously contemplating litigation against

6

the plaintiffs in good faith).4 The June 26th and June 30th letters are distinguishable from

7

the communications considered in both the aforementioned cases, given the letters’ direct

8

connection to the Tribe’s request for their case file.
The Court therefore DENIES W&C’s motion for reconsideration.

9
10

II.

11

MOTION FOR ENTRY OF FINAL JUDGMENT
W&C seeks partial judgment on its counterclaim in reply on the issue of litigation

12

privilege, arguing that the litigation privilege issue is separable from the remainder of the

13

litigation.

14

In evaluating whether dismissal of one or more claims under Rule 54(b) is

15

appropriate, the “district court must first determine that it is dealing with a ‘final

16

judgment.’” Curtiss–Wright Corp. v. Gen. Elec. Co., 446 U.S. 1, 7 (1980). For a

17

judgment to be “final,” it must be “an ultimate disposition of an individual claim entered

18

in the course of a multiple claims action.” Id. (quoting Sears, Roebuck & Co. v.

19

Mackey, 351 U.S. 427, 436, 76 S.Ct. 895, 100 L.Ed. 1297 (1956)). Once this element is

20

satisfied, the district court must evaluate “whether there is any just reason for

21

delay.” Id. at 8. The Supreme Court has made clear that “[n]ot all final judgments on

22

individual claims should be immediately appealable.” Id. For this reason, “[i]t is left to

23

the sound judicial discretion of the district court to determine the ‘appropriate time’ when

24
25
26
27
28

The Miller court’s analysis and the excerpts quoted by W&C in its reply address the requisite burden
under the anti-SLAPP statute. The Miller court did not ultimately issue a holding as to litigation
privilege.
4

7
17-CV-01436-GPC-MSB

1

each final decision in a multiple claims action is ready for appeal.” Id. Evaluation of

2

whether there are just reasons to delay “must take into account judicial administrative

3

interests as well as the equities involved.” Id. “Consideration of the former is necessary

4

to assure that application of the Rule effectively ‘preserves the historic federal policy

5

against piecemeal appeals.’ “ Id. (quoting Sears, Roebuck, 351 U.S. at 438). In this vein,

6

the district court may properly consider “whether the claims under review were separable

7

from the others remaining to be adjudicated and whether the nature of the claims already

8

determined was such that no appellate court would have to decide the same issues more

9

than once even if there were subsequent appeals.” Id.

10

Plaintiff requests that the final judgment be entered in the issue of litigation

11

privilege since it separable from the remainder of the litigation. Defendants counter that

12

partial judgment would be inappropriate since the claim relies on the same set of facts

13

that form the basis for W&C’s remaining claim against the Tribe and the Tribe’s pending

14

counterclaims against W&C. The Court agrees. Any inquiry into the remaining claims

15

would be interconnected with the question of litigation privilege and would not

16

“streamline the ensuing litigation.” Noel v. Hall, 568 F.3d 743, 747 (9th Cir. 2009)

17

(citation omitted).

18
19

Accordingly, W&C’s motion for partial entry of final judgment on the question of
litigation privilege is DENIED.

20
21
22

IT IS SO ORDERED.
Dated: December 11, 2019

23
24
25
26
27
28

8
17-CV-01436-GPC-MSB