Crandall v. Seagate Technology et al

Filing 100

MEMORANDUM DECISION AND ORDER denying 94 Motion for Reconsideration ; denying 92 Motion for Attorney Fees. Signed by Judge Mikel H. Williams. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by jm)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

DANIEL W. CRANDALL,
Case No. 1:10-CV-128-MHW
Plaintiff,
MEMORANDUM DECISION AND
ORDER

v.
SEAGATE TECHNOLOGY, BEST
BUY CO., INC., SEAGATE
TECHNOLOGY (THAILAND), LTD,
Defendants.

Currently pending before the Court are Plaintiff’s Motion to Reconsider the
February 9, 2011 Judgment for Best Buy (Dkt. 94), filed March 7, 2011 and Defendant
Best Buy’s Motion for Attorney Fees (Dkt. 92), filed February 22, 2011.
BACKGROUND
Plaintiff Daniel D. Crandall (“Plaintiff”) filed this lawsuit on March 9, 2010
alleging claims of negligence, strict products liability, and breach of warranty for the
failure of the 7200.11 hard drives manufactured by Defendant Seagate Technology and
Seagate Technology Thailand Ltd. (“Seagate Thailand”) and purchased at Defendant Best
Buy’s store.
On January 25, 2011, this Court entered an order finding in favor Defendant Best
Buy on all of Plaintiff’s claims. Judgment was entered in favor of Best Buy on February

Memorandum Decision and Order - 1

9, 2011. The Court found that Plaintiff’s claim under the Idaho Products Liability
Reform Act failed because Best Buy was exempt under the “seller’s exemption” found at
I.C. § 6-1407(1). The Court also found that none of the exceptions found at I.C. § 61407(4) apply the seller’s exemption. The Court also found that the negligence claim
failed because all of the damages claimed by Plaintiff were economic loss which is not
recoverable in negligence. Lastly, the Court found that no warranties had been breached.
As for the implied warranty of merchantability, the Court found that the hard drives were
not defective at the time they were delivered and therefore there could be no claim for
breach of the implied warranty of merchantability. Next, with respect to the implied
warranty of fitness for a particular purpose, the Court found that this implied warranty
was never created because the Plaintiff never relied on any representation made by any
employee of Best Buy.
DISCUSSION
1.

Plaintiff’s Motion for Reconsideration
While Plaintiff does not state what rule he moves for reconsideration under,

because he moves for reconsideration prior to a trial taking place, the appropriate avenues
for reconsideration are Rules 59(e) or 60(b). See School Dist. No. 1J, Multnomah County,
OR v. ACandS, Inc., 5 F.3d 1255, 1262 (9th Cir. 1993). Under Rule 59(e),
“[r]econsideration is appropriate if the district court (1) is presented with newly
discovered evidence, (2) committed clear error or the initial decision was manifestly

Memorandum Decision and Order - 2

unjust; or (3) if there is an intervening change in controlling law.” Id. at 1263. “Rule
60(b) provides for reconsideration only upon a showing of (1) mistake, surprise, or
excusable neglect; (2) newly discovered evidence; (3) fraud; (4) a void judgment; (5) a
satisfied or discharged judgment; (6) extraordinary circumstances which would justify
relief.” Id. at 1264 (internal quotations omitted). These rules offer an “extraordinary
remedy, to be used sparingly in the interests of finality and conservation of judicial
resources.” Kona Enterprises, Inc. v. Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 2000)
(internal quotation omitted).
Plaintiff’s motion for reconsideration most likely falls within the realm of Rule
59(e) as Plaintiff makes arguments regarding new evidence and an expanded factual
record and also argues that reconsideration is necessary to correct clear error and prevent
manifest injustice. The Court will summarize and address his arguments.
A.

New Evidence/Expanded Factual Record

Plaintiff makes several arguments regarding new evidence and an expanded
factual record that he believes would justify reconsideration of the Court’s January 25,
2011 Memorandum Decision and Order (“Order”). The most critical piece of information
that he argues should reverse the Court’s ruling is that in response to a discovery request,
co-Defendant Seagate Technology1 denied that it “did not promptly notify Best Buy Co,
Inc. at any time in writing to disclose a firmware defect or safety issue as respect Seagate
1

On March 14, 2011, Crandall and Seagate filed a stipulation of dismissal. (Dkt.

95)
Memorandum Decision and Order - 3

hard disk drives sold by them” (Crandall Aff, Ex. 1, Dkt. 94-5, p. 16.). Plaintiff argues,
“[i]n other words, Seagate admits giving Best Buy warning of a defect or safety issue
involving the hard disk drives sold by Best Buy.” (Pl’s Mem. Dkt. 94-1, at 2).
Plaintiff also cites to reports from LWG Consulting as evidence that the hard disk
drives failed due to defective hardware. Plaintiff also references the expert report of Dr.
Andrew D. Hospodor, dated December 15, 2010. Lastly, the other “new” evidence
provided by Plaintiff is a print out of reviews of the Seagate 1tb internal hard disk drive
from Best Buy’s website. (Crandall Aff., Ex. 1, Dkt. 94-3.) Plaintiff contends that in his
earlier filings, he “inadvertently printed only 4 of 83 reviews” for his exhibit and
therefore, the record is now expanded and complete. (Crandall Aff., Dkt. 94-2.)
A Rule 59(e) motion “may not be used to raise arguments or present evidence for
the first time when they could have reasonably been raised earlier in the litigation.” Kona
Enterprises, Inc. v. Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 2000) The failure to file
documents in an original motion or opposition does not turn the late filed documents into
“newly discovered evidence.” School Dist. No. 1J, Multnomah County, Oregon v.
AcandS, Inc., 5 F.3d 1255, 1262 (9th Cir. 1993). To prevail on a Rule 59(e) motion
because of newly discovered evidence, the movant must show the evidence (1) existed at
the time of the trial or proceeding at which the ruling now protested was entered; (2)
could not have been discovered through due diligence; and (3) was of such magnitude
that production of it earlier would have been likely to change the disposition of the case.

Memorandum Decision and Order - 4

Coastal Transfer Co. v. Toyota Motor Sales, 833 F.2d 208, 211 (9th Cir. 1987).
First off, the Court notes that much of the “newly discovered evidence” cited by
Plaintiff does not fall within the scope of Rule 59(e)’s purpose. As stated above, newly
discovered evidence does not include evidence that could have been filed earlier.
The reviews from Best Buy’s website could have been provided earlier in this case
and indeed, some of them were. Plaintiff’s “inadvertent” printing of only four of the
reviews does not rise to the level that warrants an extraordinary remedy under Rule 59(e).
Further, as the Court noted in its earlier decision, even if Best Buy was aware “of the
various complaints and articles on the internet, they do not establish the existence of a
defect and Best Buy could not be said to have reason to know of such.” (Mem. Dec. &
Order, Dkt. 87, p. 7.)
Similarly, regarding the expert report, Plaintiff has not given a reason why this was
not provided earlier. The report is dated December 15, 2010. While that date was after
briefing had completed on the motions pending at that time, it was prior to the hearing
that took place on January 19, 2011. Plaintiff could have moved for the admission of this
report or filed an addendum to his briefing. The late filing of documents is not “newly
discovered evidence.” See School Dist. No. 1J, 5 F.3d at 1262. Further, Plaintiff does not
set forth how this evidence is relevant other than it “confirms the existence of the
manufacturer’s firmware defect.” (Pl’s Mem., Dkt. 94-1, at 3). Again, this does not show
that Best Buy had “knowledge or reason to know of the defect in the product.” See I.C.

Memorandum Decision and Order - 5

§ 6-1407(1). Accordingly, it would not have a bearing on the Court’s decision and is not
of the magnitude that would warrant an extraordinary remedy.
Lastly is the matter of Seagate Technology’s response to Plaintiff’s Request for
Admission No. 156 which states: “Please admit that Seagate Technology did not promptly
notify Best Buy Co., Inc. at any time in writing to disclose a firmware defect or safety
issue as respects Seagate hard disk drives sold by them.” Seagate denied this request for
admission. By denying the request for an admission, Plaintiff seeks to twist this “denial”
into an “admission” that Seagate gave Best Buy warnings of a defect in the hard disk
drives and this creates a genuine issue of material fact and impeaches a statement by Best
Buy’s counsel that Best Buy did not know of any alleged defect in Seagate’s products.
Seagate’s denial that it “did not promptly notify Best Buy .. . [of] a firmware defect or
safety issue [with respect to the Seagate hard drives]” is not an admission that it did
promptly notify Best Buy of a defect or safety issue. A denial of an ambiguous request
for admission by a co-defendant is not the type of “new” evidence that warrants the use of
the “extraordinary remedy” made available under Rule 59(e). See Kona Enterprises, Inc.
v. Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 2000).
B.

Other Arguments
Plaintiff attempts to reargue the issues previously addressed by the Court in its

earlier Order (Dkt. 87), including rearguing the economic loss rule in a negligence action,
the implied warranty of merchantability, the implied warranty of fitness for a particular

Memorandum Decision and Order - 6

purpose, the legislative intent behind I.C. 6-1407(1), and exceptions for seller’s
exemption to liability. Plaintiff also requests that the Court adopt Restatement (3d) of the
Law Torts Products Liability and to adopt the tenets and reasoning of the Foreign
Manufacturers Legal Accountability Act of 2010. Plaintiff’s arguments essentially restate
his prior written submission as well as arguments made at the hearing on the motions, that
were already ruled on by this Court in its Order. Rule 59(e) may not be used to “relitigate
old matters, or to raise arguments or present evidence that could have been raised prior to
the entry of judgment.” Exxon Shipping Co. v. Baker, 554 U.S. 471, 486 n. 5 (2008)
(citing 11 C. Wright & A. Miller, Federal Practice and Procedure § 2810.1, pp. 127-128
(2d ed.1995)). This is precisely what Plaintiff seeks to do here. He is raising the same
issues on “reconsideration” that he raised initially. Additionally, to extent any “new”
arguments are raised, a Rule 59(e) “motion may not be used to raise arguments . . . for the
first time when they could reasonably have been raised earlier in the litigation.” Kona
Enterprises, Inc. v. Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 2000). Plaintiff
reiterates the same arguments previously made when it comes to the seller’s exemption,
the economic loss rule and the implied warranties.2 This is not what Rule 59(e) was

2

With respect to the seller’s exemption, Plaintiff again argues that Defendant Seagate
Technology (Thailand) is “not subject to service of process under the laws of the claimant’s domicile” as
set forth in I.C. § 6-1407(1). Plaintiff also again argues that he suffered property damage as a result of
the hard disk drive malfunction and his negligence claim is not barred by the economic loss recovery
rule. Additionally, he argues for the second time that the hard disk drives were defective at the time of
manufacture and therefore the implied warranty of merchantability has been breached and that the
implied warranty of fitness for a particular purpose was created and there was reliance upon the
statements of the Best Buy employee. These are all arguments that Plaintiff previously made in his
response to Best Buy’s motion for summary judgment. (See Dkt. 52).
Memorandum Decision and Order - 7

designed for. Clearly, Plaintiff disagrees with the Court’s earlier ruling. However, the
Court does not find merit in Plaintiff’s contentions. Rule 59(e) does not require the Court
to address these arguments a second time unless clear error or manifest injustice has been
shown. Plaintiff has not shown either.
As the Court does not find that the alleged new” evidence cited by Plaintiff would
change the outcome of its earlier decision and Plaintiff has not shown clear error or
manifest injustice but rather reargued his position, the Court will deny Plaintiff’s motion
for reconsideration.
2.

Defendant’s Motion for Attorney Fees
Defendant Best Buy moves for attorney fees pursuant to I.C. §§ 12-120, 12-121,

12-123, Fed. R. Civ. P. 54 and Dist. Idaho Loc. Civ. R. 54.1 and 54.2 in the amount of
$36,538.50.
A.

Idaho Code § 12-120(3)

Best Buy moves for attorney fees under I.C. § 12-120(3). I.C. § 12-120(3) states:
In any civil action to recover on an open account, account
stated, note bill, negotiable instrument, guaranty, or contract
relating to the purchase or sale of goods, wares, merchandise,
or services and in any commercial transaction unless
otherwise provided by law, the prevailing party shall be
allowed a reasonable attorney’s fee to be set by the court, to
be taxed and collected as costs.
The term commercial transaction is defined to mean all
transactions exception transaction for personal or household
purposes . . .
Best Buy argues that this case involves a commercial transaction and as such, they
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are entitled to attorney fees under this statute. An award of attorney fees is not warranted
every time a commercial transaction is remotely connected with the case, rather the test is
whether the commercial transaction “comprises the gravamen of the lawsuit.” Brooks v.
Gigray Ranches, Inc., 910 P.2d 744, 750 (Idaho 1996). This requires that there be a
commercial transaction that is integral to the claim and the commercial transaction is the
basis upon which recovery is sought. Great Plains Equip., Inc. v. Northwest Pipeline
Corp., 36 P.3d 218, 223 (Idaho 2001).
When an action sounds in tort, I.C. § 12-120(3) is not applicable. Rockefeller v.
Grabow, 39 P.3d 577, 584 (Idaho 2001). In that case, the Idaho Supreme Court held that
a claim for breach of a fiduciary duty, even though the it arose out of a commercial
transaction, sounded in tort and therefore an award of attorney fees under I.C. § 12-120(3)
would not be proper. Id. The court similarly held in another case that the fact that a
“conversion claim arose out of a commercial transaction is not sufficient to apply I.C.
§ 12-120(3). . .the basis of [the] claim was the tort of conversion.” Brooks v. Gigray
Ranches, Inc., 910 P.2d 744, 751 (Idaho 1996).
The Idaho Supreme Court denied attorney fees under this statute when plaintiffs
had brought a products liability claim against the manufacturer of electrical components
in their homes holding that although the plaintiffs had based their claims on two
contractual theories (breach of express and implied warranties), “the main thrust of their
suit clearly sounded in tort and the two other claims brought against [the defendant]

Memorandum Decision and Order - 9

(negligence and strict liability) reflect this focus.” Sammis v. Magnetek, Inc., 941 P.2d
314, 326 (Idaho 1997).
The Court will deny attorney fees under I.C. § 12-120(3). The Court finds this
case to be analogous to Sammis, even though there was a purchase of a product, i.e., the
hard drives, the thrust of Plaintiff's lawsuit sounds in tort, as evidenced by his claims for
strict products liability and negligence. See id. Although Plaintiff has brought claims for
breach of warranty, I.C. § 12-120(3) is not implicated every time a commercial
transaction is “remotely connected with the case.” See Brooks v. Gigray Ranches, Inc.,
910 P.2d 744, 750 (Idaho 1996). As the Court finds this case sounds in tort, attorney fees
will be denied under I.C. § 12-120(3).
B.

Idaho Code § 12-121

Idaho Code § 12-121 provides, in part:
In any civil action, the judge may award reasonable attorney's
fees to the prevailing party or parties, provided that this
section shall not alter, repeal or amend any statute which
otherwise provides for the award of attorney's fees.
Attorney fees are awarded to the prevailing party under I.C. § 12-121 only if “the Court
determines that the action was brought or pursued frivolously, unreasonably or without
foundation.” Baker v. Sullivan, 979 P.2d 619, 624 (1999). Although the Court granted
summary judgment in favor of Defendant Best Buy, the Court does not find that the
action was brought frivolously, unreasonably or without foundation. Plaintiff believed he

Memorandum Decision and Order - 10

had a strong case and while the Court found that his claims failed as a matter of law,
attorney fees are not warranted under this statute.3
ORDER
IT IS HEREBY ORDERED:
1)

Plaintiff’s Motion for Reconsideration (Dkt. 94), filed March 7, 2011 be

DENIED; and
2)

Defendant Best Buy’s Motion for Attorney Fees (Dkt. 92), filed February

22, 2011, be DENIED.
DATED: June 30, 2011

Honorable Mikel H. Williams
United States Magistrate Judge

3

Plaintiff also cites to I.C. § 12-123 which allows for sanctions for frivolous conduct. The
statute defines “frivolous conduct” as conduct that “. . . serves merely to harass or maliciously injure
another party to the civil action” or “. . . is not supported in fact or warranted under existing law and
cannot be supported by a good faith argument for an extension, modification, or reversal of the existing
law.” As stated previously, the Court does not find that Plaintiff engaged in frivolous conduct.
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