Lake v. Ohana Military Communities, LLC

Filing 159

ORDER Denying Plaintiffs' Motion For Reconsideration of Order Dismissing Plaintiffs' Unfair Competition Claim re 141 . Signed by JUDGE LESLIE E. KOBAYASHI on 6/13/2019. (cib)

UNITED STATES DISTRICT COURT
DISTRICT OF HAWAII

KENNETH LAKE, CRYSTAL LAKE,
HAROLD BEAN, MELINDA BEAN, KYLE
PAHONA, ESTEL PAHONA, TIMOTHY
MOSELEY, ASHLEY MOSELEY, RYAN
WILSON, and HEATHER WILSON,

CIV. NO. 16-00555 LEK

Plaintiffs,
vs.
OHANA MILITARY COMMUNITIES, LLC,
FOREST CITY RESIDENTIAL
MANAGEMENT, INC., DOE
DEFENDANTS 1-10,
Defendants.

ORDER DENYING PLAINTIFFS’ MOTION FOR RECONSIDERATION OF
ORDER DISMISSING PLAINTIFFS’ UNFAIR COMPETITION CLAIM
On August 1, 2017, this Court issued its Order
Granting in Part and Denying in Part Defendants’ Motion to
Dismiss (“8/1/17 Order”).

[Dkt. no. 63.1]

On April 29, 2019,

Plaintiffs Kenneth Lake, Crystal Lake, Harold Bean,
Melinda Bean, Kyle Pahona, Timothy Moseley, and Ashley Moseley
(“Plaintiffs”) filed their Motion for Reconsideration of Order

1

The 8/1/17 Order is also available at 2017 WL 4563079. On
August 15, 2017, Plaintiffs filed a motion for reconsideration
of the 8/1/17 Order, on other grounds, and that motion was
denied in an order issued on October 12, 2017 (“10/12/17
Order”). [Dkt. nos. 64, 78.] The 10/12/17 Order is also
available at 2017 WL 4560123.

Dismissing Plaintiffs’ Unfair Competition Claim (“Motion for
Reconsideration”).

[Dkt. no. 141.]

Defendants Ohana Military

Communities, LLC and Forest City Residential Management, LLC
(“Defendants”) filed their memorandum in opposition on May 14,
2019, and Plaintiffs filed their reply on May 28, 2019.
nos. 144, 154.]

[Dkt.

The Court has considered the Motion for

Reconsideration as a non-hearing matter pursuant to Rule
LR7.2(e) of the Local Rules of Practice for the United States
District Court for the District of Hawaii (“Local Rules”).
Plaintiffs’ Motion for Reconsideration is hereby denied for the
reasons set forth below.
BACKGROUND
Plaintiffs are current or former residents of rental
housing at Kaneohe Marine Corp Base Hawaii (“MCBH”).

The crux

of Plaintiffs’ claims is that the soil in some of the
residential neighborhoods at MCBH is contaminated, and
Defendants failed to perform adequate remediation measures and
failed to disclose the contamination to MCBH residents.
Plaintiffs allege they were each exposed to the contaminated
soil: 1) because the soil in their respective neighborhoods was
contaminated and/or they routinely visited and traveled through
neighborhoods with contaminated soil; and 2) as a result of dust
and dirt created from demolition and construction on MCBH.

2

The operative pleading is the First Amended Complaint,
which was filed on September 20, 2017.

[Dkt. no. 75.]

At issue

in the instant Motion for Reconsideration is Plaintiffs’ unfair
methods of competition (“UMOC”) claim, pursuant to Haw. Rev.
Stat. § 480-2(a),2 against both Defendants.

The 8/1/17 Order

addressed the UMOC claim in Plaintiffs’ original Complaint,
which was filed in state court on September 14, 2016.3

[Notice

of Removal, filed 10/13/16 (dkt. no. 1), Decl. of Christine A.
Terada, Exh. 1.]

Plaintiffs’ UMOC claim was dismissed, with

prejudice, because it was “based upon the payment of increased
rent and other expenses, which is insufficient to plead an
injury to property for a UMOC claim.”4

8/1/17 Order, 2017 WL

2

Section 480-2(a) states: “Unfair methods of competition
and unfair or deceptive acts or practices in the conduct of any
trade or commerce are unlawful.” Pursuant to Haw. Rev. Stat.
§ 480-13(a), “any person who is injured in the person’s business
or property” may bring a UMOC claim.
3

Plaintiffs Kenneth Lake, Crystal Lake, Harold Bean,
Melinda Bean, Kyle Pahona, Estel Pahona, Timothy Moseley, and
Ashley Moseley filed the original Complaint. Ryan Wilson and
Heather Wilson were added as plaintiffs in the First Amended
Complaint. Estel Pahona’s claims were dismissed, with
prejudice, by stipulation on April 24, 2019. [Dkt. no. 139.]
4

The 8/1/17 Order focused on Plaintiffs’ alleged injury to
property because “[t]he Complaint [wa]s devoid of any assertions
of injury to any business.” 8/1/17 Order, 2017 WL 4563079, at
*8; see also Trans. of 5/22/17 hrg. on motion to dismiss, filed
8/30/17 (dkt. no. 72), at 30-31 (Plaintiffs’ counsel confirmed
that there was no alleged injury to business and that the loss
of money associated with Plaintiffs’ leases was the alleged
injury to property.).
3

4563079, at *10.

Plaintiffs now argue this Court made a

manifest error of law in dismissing Plaintiffs’ UMOC claim
because “the payment of money wrongfully induced constitutes
harm to ‘business or property.’”

[Motion for Reconsideration at

2.]
STANDARD
Plaintiffs bring their Motion for Reconsideration
pursuant to Fed. R. Civ. P. 60(b)(1) and Local Rule 60.1(c).
[Motion for Reconsideration at 2.]

Rule 60(b) states: “On

motion and just terms, the court may relieve a party or its
legal representative from a final judgment, order, or proceeding
for the following reasons: (1) mistake, inadvertence, surprise,
or excusable neglect.”

(Emphasis added.)

instant motion under the wrong rule.

Plaintiffs bring the

Rule 60(b)(1) is

inapplicable because the 8/1/17 Order is not a final order.5

5

Even if Rule 60(b)(1) was applicable to interlocutory
orders, the Motion for Reconsideration is untimely because
Plaintiffs failed to file the motion within a year after the
8/1/17 Order was issued. See Rule 60(c)(1) (“A motion under
Rule 60(b) must be made within a reasonable time – and for
reasons (1), (2), and (3) no more than a year after the entry of
the judgment or order or the date of the proceeding.”).
Further, the Motion for Reconsideration does not challenge any
“inadvertence, surprise, or excusable neglect” in the 8/1/17
Order. To the extent the Motion for Reconsideration alleges
there was a mistake in the 8/1/17 Order, the alleged mistake is
reviewable under Local Rule 60.1(c).
4

Local Rule 60.1 states: “Motions for reconsideration
of interlocutory orders may be brought only upon the following
grounds . . . (c) Manifest error of law or fact.”
added.)

(Emphasis

This Court has previously stated a motion for

reconsideration
“must accomplish two goals. First, a motion for
reconsideration must demonstrate reasons why the
court should reconsider its prior decision.
Second, a motion for reconsideration must set
forth facts or law of a strongly convincing
nature to induce the court to reverse its prior
decision.” See Davis v. Abercrombie, Civil
No. 11-00144 LEK-BMK, 2014 WL 2468348, at *2 (D.
Hawaii June 2, 2014) (citation and internal
quotation marks omitted). . . . “Mere
disagreement with a previous order is an
insufficient basis for reconsideration.” Davis,
2014 WL 2468348, at *3 n.4 (citations and
internal quotation marks omitted).
Heu v. Waldorf=Astoria Mgmt. LLC, CIVIL 17-00365 LEK-RLP, 2018
WL 2011905, at *1 (D. Hawai`i Apr. 30, 2018) (alteration in Heu)
(some citations omitted).
DISCUSSION
I.

Timeliness
Plaintiffs’ Motion for Reconsideration is not based on
See Local Rule LR60.1(b).6

any intervening legal authority.

6

Local Rule 60.1(a), regarding motions for reconsideration
based on “[d]iscovery of new material facts not previously
available,” is inapplicable here because the 8/1/17 Order ruled
on a motion to dismiss, and the factual allegations of
Plaintiffs’ original Complaint were assumed to be true. See,
e.g., 2017 WL 4563079, at *6. Further, Plaintiffs have not
(. . . continued)
5

Local Rule 60.1 states a motion for reconsideration alleging
manifest errors of law or fact “must be filed and served not
more than fourteen (14) days after the court’s written order is
filed.”

Plaintiffs filed the Motion for Reconsideration almost

twenty-one months after the 8/1/17 Order was issued.

In fact,

although the 8/1/17 Order dismissed Plaintiffs’ UMOC claim with
prejudice, Plaintiffs still insisted on including a UMOC claim
in the First Amended Complaint, and the claim was stricken.
[Order Granting in Part and Denying in Part Defs.’ Motion to
Dismiss and/or Strike Pltfs.’ First Amended Complaint [Dkt 75],
filed 5/31/18 (dkt. no. 98) (“5/31/18 Order”), at 6.7]
Plaintiffs filed their Motion for Reconsideration almost eleven
months after the filing of the 5/31/18 Order.
The fourteen-day filing deadline for Local Rule
60.1(c) motions comes as no surprise to Plaintiffs, as evidenced
by their August 15, 2017 motion seeking reconsideration of the
8/1/17 Order on other grounds.

As well as being a waste of

time, the instant Motion for Reconsideration is clearly untimely
and can be denied on that basis alone.

However, for the sake of

alleged that, in light of newly available evidence, their
factual allegations in support of their UMOC claim would have
been different.
7

The 5/31/18 Order is also available at 2018 WL 2449188.
6

completeness, the merits of the Motion for Reconsideration will
be addressed.
II.

Merits
In the 8/1/17 Order, this Court rejected Plaintiffs’

argument that they suffered an injury to their property because
they were required to pay more for their rental homes than they
would have paid if Defendants had disclosed the soil
contamination at MCBH.

This Court ruled that “the payment of

money does not constitute an injury to property in a UMOC claim”
because “money” and “property” are distinguishable under Haw.
Rev. Stat. Chapter 480.

8/1/17 Order, 2017 WL 4563079, at *10.

In the Motion for Reconsideration, Plaintiffs argue
Hawai`i case law and federal case law interpreting similar
statutes support their position that the loss of money
constitutes an injury to property.

They are wrong.

First,

Plaintiffs’ Hawai`i law argument relies on Davis v. Four Seasons
Hotel Ltd., 122 Hawai`i 423, 228 P.3d 303 (2010), and the 8/1/17
Order addressed Davis and its progeny.

Plaintiffs’

interpretation of Hawai`i case law has already been directly
considered and rejected, and Plaintiffs’ mere disagreement with
or failure to comprehend this Court’s analysis is not a ground
for reconsideration of the 8/1/17 Order.
Abercrombie, 2014 WL 2468348, at *3 n.4.

7

See Davis v.

Section 480-2(b) states: “In construing this section,
the courts . . . shall give due consideration to the rules,
regulations, and decisions of the Federal Trade Commission and
the federal courts interpreting section 5(a)(1) of the Federal
Trade Commission Act (15 U.S.C. 45(a)(1)), as from time to time
amended.”

In addition, Chapter 480 must “be construed in

accordance with judicial interpretations of similar federal
antitrust statutes, except that lawsuits by indirect purchasers
may be brought as provided in this chapter.”
§ 480-3.

Haw. Rev. Stat.

This Court has stated:
15 U.S.C. § 15 is the damages provision for
violations of both the Sherman Act and the
Clayton Act.[8] Section 15(a) states, in
pertinent part:
any person who shall be injured in his
business or property by reason of anything
forbidden in the antitrust laws may sue
therefor in any district court of the United
States in the district in which the
defendant resides or is found or has an
agent, without respect to the amount in
controversy, and shall recover threefold the
damages by him sustained, and the cost of
suit, including a reasonable attorney’s fee.

Green v. Kanazawa, CIVIL 16-00055 LEK-KSC, 2017 WL 10647711, at
*15 (D. Hawai`i Nov. 30, 2017) (emphasis in Green), clarified on
denial of reconsideration, 2018 WL 1278185 (Mar. 12, 2018).

8

15

Plaintiffs’ Motion for Reconsideration relies upon Reiter
v. Sonotone Corp., 442 U.S. 330 (1979), which discusses the
Sherman Act and the Clayton Act.
8

U.S.C. Chapter 1, of which § 15 is a part, does not have a
provision distinguishing between money and property.

Further,

neither 15 U.S.C. § 45 nor 15 U.S.C. Chapter 2, of which § 45 is
a part, distinguishes between money and property.

Thus, case

law interpreting 15 U.S.C. Chapter 1 and case law interpreting
15 U.S.C. Chapter 2 are not instructive as to the issue of
whether “money” is considered “property” for purposes of Haw.
Rev. Stat. Chapter 480.

The 8/1/17 Order does not contain a

discussion of federal statutes and case law because both do not
apply to the analysis of whether Plaintiffs’ UMOC claim was
cognizable under Hawai`i law.
Apart from the fact that Plaintiffs’ Motion for
Reconsideration is untimely, the motion fails because Plaintiffs
have engaged in a time-wasting and frivolous exercise, and have
utterly failed to identify any manifest legal error in the
portion of the 8/1/17 Order dismissing Plaintiffs’ UMOC claim
with prejudice.

Plaintiffs therefore are not entitled to

reconsideration of the 8/1/17 Order.
CONCLUSION
On the basis of the foregoing, Plaintiffs’ Motion for
Reconsideration of Order Dismissing Plaintiffs’ Unfair
Competition Claim, filed April 29, 2019, is HEREBY DENIED.
IT IS SO ORDERED.

9

DATED AT HONOLULU, HAWAI`I, June 13, 2019.

KENNETH LAKE, ET AL. VS. OHANA MILITARY COMMUNITIES, LLC, ET AL;
CV 16-00555 LEK-KJM; ORDER DENYING PLAINTIFFS' MOTION FOR
RECONSIDERATION OF ORDER DISMISSING PLAINTIFFS' UNFAIR
COMPETITION CLAIM

10