Barranco v. 3D Systems Corporation et al
Filing
435
ORDER Granting In Part and Denying In Part Plaintiff's Rule 52(b)/59(e) Motion To Amend Bench Findings and Judgment re 398 . Signed by JUDGE LESLIE E. KOBAYASHI on 8/13/2018. (cib, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
)
)
Plaintiff,
)
)
vs.
)
)
)
3D SYSTEMS CORPORATION, a
Delaware corporation, 3D
)
)
SYSTEMS, INC., a California
corporation, ABRAHAM
)
)
REICHENTAL, DAMON GREGOIRE,
)
)
Defendants.
_____________________________ )
RONALD BARRANCO,
CIVIL NO. 13-00412 LEK-RLP
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF’S
RULE 52(b)/59(e) MOTION TO AMEND BENCH FINDINGS AND JUDGMENT
On April 19, 2018, Plaintiff Ronald Barranco
(“Plaintiff”) filed his Rule 52(b)/59(e) Motion to Amend Bench
Findings and Judgment (“Motion”).
[Dkt. no. 398.]
On May 4,
2018, Defendants 3D Systems Corporation and 3D Systems, Inc.
(“Defendants”) filed their memorandum in opposition, and
Plaintiff filed his reply on May 18, 2018.
[Dkt. nos. 408, 411.]
The Court has considered the Motion as a non-hearing matter
pursuant to Rule LR7.2(e) of the Local Rules of Practice of the
United States District Court for the District of Hawai`i (“Local
Rules”).
Plaintiff’s Motion is granted in part and denied in
part for the reasons set forth below.
BACKGROUND
The background of this matter is well known to the
parties, and the Court will only discuss the background relevant
to the Motion.
On May 27, 2016, following a trial, the jury
returned verdict in favor of Defendant on all of Plaintiff’s
claims and in favor of Defendants on their counterclaim for
breach of the Non-Compete Provision (“Non-Compete”) contained
within the parties’ Purchase and Sale Agreement (“PSA”).
no. 282.]
[Dkt.
On May 9, 2017, in its Order Denying Plaintiff’s Oral
Motion for Judgment as a Matter of Law (“5/9/17 Order”), this
Court concluded, based on the jury’s verdict, that Defendants
were entitled to an equitable accounting.
[Dkt. no. 300.1]
On
November 20, 2017, this Court conducted a one-day bench trial to
perform the equitable accounting.
[Minutes, (dkt. no 382).]
On
March 30, 2018, this Court issued its Findings of Fact and
Conclusions of Law and Order (“FOFCOL”).
[Dkt. no. 391.2]
The
FOFCOL found as facts, and ultimately ordered that, inter alia:
17. On August 10, 2016, Barranco exercised the
Buyout. 3D Systems issued Barranco a check in the
amount of $120,818.00 (“Buyout Payment”). . . .
18. Barranco did not cash the check tendering the
Buyout Payment. However, the amount of the Buyout
Payment is still owed pursuant to the PSA].
. . . .
1
The 5/9/17 Order is also available at 2017 WL 1900970.
2
The FOFCOL is also available at 307 F. Supp. 3d 1075.
2
4.
Fashioning complete relief in this case
requires that Barranco disgorge, and 3D Systems
recover:
$229,117.94
$233,333.33
$
0.00
$ 60,409.00
$522,860.24
-
Salary
Up Front Payment
Royalty Payments
Buyout Payment
Total
307 F. Supp. 3d at 1082, 1103.
STANDARD
Federal Rule of Civil Procedure 52(b) provides:
“On a
party’s motion filed no later than 28 days after the entry of
judgment, the court may amend its findings – or make additional
findings – and may amend the judgment accordingly.
The motion
may accompany a motion for a new trial under Rule 59.”
Federal Rule of Civil Procedure 59(e) provides:
“A
motion to alter or amend a judgment must be filed no later than
28 days after the entry of the judgment.”
DISCUSSION
I.
Buyout Payment
The parties dispute the intent and effect of the
ordered partial disgorgement of the Buyout Payment.
To provide
clarity, pursuant to Rule 59(e), the Court amends paragraph 4 of
the judgment as follows:
4.
Fashioning complete relief in this case requires
both:
3
a) that Barranco disgorge, and 3D Systems recover:
$229,117.94
$233,333.33
$
0.00
$462,451.24
-
Salary
Up Front Payment
Royalty Payments
Total; and
b) that Barranco disgorge half of his rights to
the Buyout Payment under the PSA; for example, if $120,818.00 is
due and owing to Barranco under the PSA, then $60,409.00 is
disgorged and is no longer due and owing, and $60,409.00 remains
due and owing.
II.
This Court’s Authority to Order Equitable Relief
A.
Findings of Fact Related to Plaintiff’s Legal Argument
Plaintiff argues the Court’s disgorgement order
provides legal, not equitable, relief, and runs afoul of his
right to a jury trial under the Seventh Amendment.
Plaintiff
asks the Court to note that Defendants failed to show that the
particular funds to be disgorged remained in Plaintiff’s
possession and were not dissipated.
Plaintiff states the
disgorgement order, therefore, “[o]bviously . . . will not
withstand appellate review.”
[Reply at 9.]
with Plaintiff’s legal conclusions.
This Court disagrees
However, to aid a reviewing
court in considering this issue, the Motion is granted insofar as
the Court amends its findings of fact, pursuant to Rule 52(b),
and additionally finds as follows:
144. This Court makes no finding as to whether Barranco’s
Salary payments or his Up Front Payment pursuant to the PSA are
4
still within his possession. No evidence probative of this issue
was introduced in the record.
145. This Court makes no finding as to whether Barranco’s
Salary payments or his Up Front Payment pursuant to the PSA are
now, or ever were, mingled with other funds within Barranco’s
possession. No evidence probative of this issue was introduced
in the record.
B.
Reconsideration under Rule 59(e) Is Not Warranted
Plaintiff urges this Court to reconsider its
conclusions of law, amend the judgment pursuant to Rule 59(e),
and impose $0 in liability.
This Court has stated:
Rule 59(e) offers “an extraordinary remedy, to be
used sparingly in the interests of finality and
conservation of judicial resources.” Carroll v.
Nakatani, 342 F.3d 934, 945 (9th Cir. 2003)
(internal quotation marks and citation omitted).
In the Ninth Circuit, a successful motion for
reconsideration must accomplish two goals. First,
“a motion for reconsideration must demonstrate
some reason why the court should reconsider its
prior decision.” Na Mamo O `Aha `Ino v. Galiher,
60 F. Supp. 2d 1058, 1059 (D. Haw. 1999). Second,
it “must set forth facts or law of a strongly
convincing nature to induce the court to reverse
its prior decision.” Id.
Courts have established three grounds
justifying reconsideration: (1) an intervening
change in controlling law; (2) the availability of
new evidence; and (3) the need to correct clear
error or prevent manifest injustice. Allstate
Ins. Co. v. Herron, 634 F.3d 1101, 1111 (9th Cir.
2011); Mustafa v. Clark County Sch. Dist., 157
F.3d 1169, 1178-79 (9th Cir. 1998). The District
of Hawaii has implemented these standards in Local
Rule 60.1.
Mere disagreement with a previous order is an
insufficient basis for reconsideration. See Leong
v. Hilton Hotels Corp., 689 F. Supp. 1572, 1573
(D. Haw. 1988) (Kay, J.). In addition, a Rule
59(e) motion for reconsideration may not present
5
evidence or raise legal arguments that could have
been presented at the time of the challenged
decision. See Kona Enters., Inc. v. Estate of
Bishop, 229 F.3d 877, 890 (9th Cir. 2000).
“Whether or not to grant reconsideration is
committed to the sound discretion of the court.”
Navajo Nation v. Confederated Tribes and Bands of
the Yakama Indian Nation, 331 F.3d 1041, 1046 (9th
Cir. 2003).
Terr. of Am. Samoa v. Nat’l Marine Fisheries Serv., CIVIL
16-00095 LEK-KJM, 2017 WL 8316931, at *3 (D. Hawai`i Aug. 10,
2017) (citation omitted).
A Rule 59(e) motion “is not intended
to be used to reiterate arguments, facts and law already
presented to the court.”
Grandinetti v. Sells, CIV. NO. 16-00517
DKW/RLP, 2016 WL 6634868, at *1 (D. Hawai`i Nov. 8, 2016)
(citation omitted).
The portion of the Motion seeking reconsideration on
the grounds that the FOFCOL ordered legal relief beyond the scope
of this Court’s equity jurisdiction merely reiterates argument
already considered and rejected by this Court.
Plaintiff has
repeatedly presented to the Court his argument that, under Dairy
Queen, Inc. v. Wood, 369 U.S. 469 (1962) and its progeny, this
Court, sitting in equity, lacks jurisdiction to provide
Defendants a remedy for Plaintiff’s breach of the Non-Compete
Agreement.
See Plaintiff’s Supplemental Brief in Support of His
Motion for Judgment As a Matter of Law, Re: “Accounting”, filed
5/24/16 (dkt. no 267), at 4 (citing Dairy Queen); Plaintiff’s
letter brief, filed 5/30/17 (dkt. no. 301), at 3 (citing Dairy
6
Queen); Plaintiff’s letter brief, filed 8/28/17 (dkt. no. 316),
at 3 (citing Dairy Queen); Plaintiff’s Proposed Findings of Fact
and Conclusions of Law, filed 11/6/17 (dkt. no. 356), at 5
(citing Dairy Queen); Plaintiff’s Proposed Findings of Fact and
Conclusions of Law, filed 2/2/18 (dkt. no. 388-1), at 38-48
(citing Dairy Queen).
This Court has long acknowledged, and disagreed with,
Plaintiff’s position.
See 5/9/17 Order, 2017 WL 1900970, at *4
(citing Dairy Queen); FOFCOL, 307 F. Supp. 3d at 1101 (concluding
Defendants were entitled seek, as an alternative to contract
damages, disgorgement of consideration they provided to
Plaintiff).
Moreover, this Court’s conclusions of law contained
detailed discussion of the scope of equitable jurisdiction,
equitable versus legal restitution, and the purpose of unjust
enrichment under Hawai`i law.
See id. at 1098-1101.
Plaintiff
does not claim there has been an intervening change in
controlling law, present new evidence, or present any other
grounds warranting reconsideration.
Although this Court could stop its analysis there, for
completeness, it will briefly explain why it continues not to
accept Plaintiff’s legal argument.
First, Plaintiff’s authority
is inapposite because the FOFCOL’s disgorgement order could not
be characterized as compensation at law for damages.
Plaintiff
relies heavily on Bayer v. Neiman Marcus Group, Inc., and argues
7
that unless the equitable remedy “‘restore[s] to the plaintiff
particular funds . . . in the defendant’s possession,’” the
remedy “is appropriately characterized as legal” because it
“simply seek[s] to impose general personal liability on a
defendant for money allegedly owed to the plaintiff.”
861 F.3d
853, 866 (9th Cir. 2017) (citation omitted) (quoting Great-West
Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 214, 122 S. Ct.
708, 151 L. Ed. 2d 635 (2002)).
Plaintiff ignores that, in
Bayer, the ordered relief was legal, and could not be deemed
equitable, because there is no “equitable power to make [the
plaintiff] whole by awarding him money to reimburse medical
expenses and legal costs he incurred due to unlawful conduct[:]
such monetary relief is properly characterized as compensatory
damages, the classic form of legal relief.”
861 F.3d 853, 866
(9th Cir. 2017) (citing F.A.A. v. Cooper, 566 U.S. 284, 307, 132
S. Ct. 1441, 182 L. Ed. 2d 497 (2012) (acknowledging that
“compensatory damages . . . compensate the injured party for the
injury sustained . . . such as will . . . replace the loss caused
by the wrong or injury”)).
In this case, Plaintiff’s breach of
the Non-Compete Provision did not cause damages to Defendants.
307 F. Supp. 3d at 1091.
not award damages at law.
In the absence of damages, a jury could
This case is not like Bayer because
the FOFCOL did not order “the classic [or any] form of legal
relief.”
See Bayer, 861 F.3d at 866.
8
Second, Plaintiff’s position inappropriately causes
federal courts sitting in diversity to enforce a uniform rule in
an area where different states have chosen different substantive
law.
As discussed in the FOFCOL, some states limit damages for
breach of a non-compete agreement to the non-breaching party’s
damages at law, while other states, including Hawai`i, allow the
non-breaching party to recover in disgorgement benefits it
provided to the breaching party.
1101 (citing cases).
See FOFCOL, 307 F. Supp. 3d at
To the extent Plaintiff argues Defendants’
failure to prove they were injured by Plaintiff’s breaching
conduct necessarily means Defendants cannot recover for
Plaintiff’s breaching conduct, that is not an accurate statement
of Hawai`i law.
Under Hawai`i law,
disgorgement is available
Id. at 1094 (citing Eckard Brandes, Inc.
for breach of contract.
v. Riley, 338 F.3d 1082, 1088 (9th Cir. 2003).
This Court
properly exercised its discretion to award “‘equitable relief in
the form of disgorgement.’”
See id. at 1098 (quoting Hawaiian
Ass`n of Seventh–Day Adventists v. Wong, 130 Hawai`i 36, 49, 305
P.3d 452, 465 (2013)).
Moreover, the FOFCOL vindicated one of
the purposes of ordering disgorgement under Hawai`i law, which
“‘is to deter wrongdoers.’”
See id. at 1100 (quoting Exec. Risk
Indem., Inc. v. Pac. Educ. Servs., Inc., 451 F. Supp. 2d 1147,
1156 (D. Hawai`i 2006)).
9
Third, this Court questions whether Plaintiff’s late
assertion of arguments based on the Seventh Amendment has
resulted in waiver.
As an initial matter, Plaintiff does not
claim the PSA was on a “take it or leave it” basis or that its
Non-Compete Provision was inconspicuous, or involved unfair
surprise.
Plaintiff does not dispute that, when he negotiated
the PSA, he was an experienced businessman, and was represented
by counsel.
Plaintiff has never claimed that, to the extent he
agreed that remedies for breach would be determined by a judge
sitting in equity rather than a jury finding damages at law, that
his agreement was not “voluntary, knowing, and intelligent.”
See
Siopes v. Kaiser Found. Health Plan, Inc., 130 Hawai`i 437, 462,
312 P.3d 869, 894 (2013).
In addition, on May 23, 2016, the
parties filed their Joint Proposed Revisions to the Court’s
Proposed Special Verdict Form.
[Dkt. no. 265.]
The parties’
proposed verdict form, like the verdict form the jury actually
returned, [dkt. no. 282,] asked whether Barranco breached his
promise under the Non-Compete Provision, but did not ask for a
jury determination regarding the relief to be awarded.
Under
Hawai`i law, a trial court has the discretion to consider a
jury’s verdict in an advisory capacity when imposing equitable
relief.
Porter v. Hu, 116 Hawai`i 42, 57, 169 P.3d 994, 1009
(Ct. App. 2007).
Regardless of whether Plaintiff could have
requested the jury make a conclusive finding regarding the amount
10
of unjust enrichment, Plaintiff did not request that the jury
make such a finding, even if advisory.
CONCLUSION
On the basis of the foregoing, Plaintiff
Ronald Barranco’s Rule 52(b)/59(e) Motion to Amend Bench Findings
and Judgment, filed April 19, 2018, is HEREBY GRANTED IN PART AND
DENIED IN PART.
The Motion is granted insofar as this Court’s
Findings of Fact and Conclusions of Law and Order, filed
March 30, 2018, is amended as stated in Parts I and II-A of this
Order.
The Motion is otherwise denied.
IT IS SO ORDERED.
DATED AT HONOLULU, HAWAII, August 13, 2018.
/s/ Leslie E. Kobayashi
Leslie E. Kobayashi
United States District Judge
RONALD BARRANCO VS. 3D SYSTEMS CORP., ET AL; CIVIL 13-00412 LEKRLP; ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF’S RULE
52(b)/59(e) MOTION TO AMEND BENCH FINDINGS AND JUDGMENT
11
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?