Dornoch Holdings International, LLC et al v. Conagra Foods Lamb Weston, Inc. et al

Filing 358

AMENDED ORDER re 357 Order on Motion for Attorney Fees, Order on Motion to Strike, Order on Motion to Expedite. Signed by Judge Terry J Hatter, Jr. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (Hatter, Terry)

United States District Court
District of Idaho
DORNOCH HOLDINGS INTERNATIONAL, LLC, et al.,
Plaintiffs,

1:10-CV-00135-TJH

Amended Order

v.
CONAGRA FOODS LAMB
WESTON, INC., et al.,
Defendants.

The Court has considered Defendant Conagra Foods Lamb Weston, Inc.’s
motion for attorney fees and non-taxable costs [338], Plaintiffs’ motion to strike
Defendant’s motion for attorney fees and non-taxable costs [342], and Plaintiffs’
motion to expedite their motion to strike [343], together with the moving and
opposing papers.
It is Ordered that the motion to expedite [343] be, and hereby is, Denied.
Order – Page 1 of 5

It is further Ordered that the motion to strike [342] be, and hereby is,
Denied as an inappropriate opposition to the motion for attorney fees and nontaxable costs. As Plaintiffs have acknowledged, motions to strike are, indeed,
limited to “pleadings” as defined in Fed. R. Civ. P. 7. Nevertheless, the Court
considered the arguments made in support and in opposition to the motion to strike
when it considered Defendant’s motion for attorney fees and non-taxable costs.
Defendant’s motion for attorney fees and non-taxable costs, to the extent that
it seeks further sanctions pursuant to the Court’s inherent authority, 28 U.S.C. §
1927, and Fed. R. Civ. P. 11, is an attempt by Defendant to seek reconsideration
of the Court’s order imposing only terminating sanctions. In its motion for sanctions
[289], filed on April 1, 2013, Defendant asked the Court to impose both terminating
and monetary sanctions. The Court reasonably exercised its discretion by explicitly
imposing terminating sanctions and implicitly denying monetary sanctions. The
Court imposed terminating sanctions after concluding, based on the facts of this case
and the Ninth Circuit’s guidelines for the imposition of sanctions, that monetary
sanctions alone were not a sufficiently severe sanction, and that the imposition of
both terminating sanctions and monetary sanctions would be too severe.

As

Defendant has not presented the Court with newly discovered facts, has not
identified an intervening change in the law, and has not argued that the Court
committed clear error by not imposing monetary sanctions in addition to terminating
sanctions, reconsideration is not warranted. See School District No. IJ, Multnomah
County, Oregon v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993).
To the extent that Defendant’s current motion for attorney fees and nontaxable costs raises new and independent grounds for monetary sanctions under the
Court’s inherent authority, 28 U.S.C. § 1927, and Fed. R. Civ. P. 11, the Court
exercises its discretion to not impose monetary sanctions. The Court finds that
Order – Page 2 of 5

terminating sanctions were an appropriate and sufficient sanction in this case for the
cumulative acts of Plaintiffs, Plaintiffs’ counsel, and/or their representatives, and
that any additional sanctions, regardless of the basis for the sanctions, would be
excessively punitive.
Defendant, also, seeks attorney fees, as a matter of right, pursuant to Idaho
Code § 12-120(3), which entitles the prevailing party to recover reasonable attorney
fees in civil actions filed to recover on a contract involving a commercial
transaction. In an action involving state law claims, as in the instant case, the Court
must generally apply the law of the forum state to determine whether a party is
entitled to attorney fees. MRO Communications, Inc. v. American Tel. & Tel. Co.,
197 F.3d 1276, 1282 (9th Cir.1999). However, because the attorney fee rules of
Idaho conflict with the attorney fee rules of Washington, the state which provides
the substantive law for this case pursuant to the contracts entered into by the parties,
the Court must apply the choice of law rules of the forum state, in this instance
Idaho, to determine whether the Court should apply Idaho or Washington law
regarding the award of attorney fees. See Alaska Rent-A-Car, Inc. v. Avis Budget
Grp., Inc., 709 F.3d 872, 887 (9th Cir. 2013).
Defendant argues, pursuant to a District of Idaho case, Boise Tower Assocs.,
LLC v. Wash. Capital Joint Master Trust Mortg. Income Fund, No. 03-141-SMHW, 2007 WL 4355815, at *4 (D. Idaho Dec. 10, 2007), that the Court must
apply the attorney fee law of Idaho, based on a most significant relationship choiceof-law analysis, as Idaho has a more significant relationship than does Washington
to the contracts and transactions that gave rise to this action.

However, the

controlling law was set forth more recently by the Idaho Supreme Court in Houston
v. Whittier, 147 Idaho 900, 911, 216 P.3d 1272, 1283 (2009) and Carroll v. MBNA
America Bank, 148 Idaho 261, 270, 220 P.3d 1080, 1089 (2009).
Order – Page 3 of 5

In Carroll, the Idaho Supreme Court relied on Houston to explain that
“[w]hen a choice-of-law clause is in play, [the] Court must determine whether the
award of attorney fees is procedural or substantive in order to determine which
state’s law applies.” Carrol, 148 Idaho at 270, citing Houston, 147 Idaho at 911912. If the statute regarding the award of fees is procedural, then the law of the
forum must be applied; however, if the statute regarding the award of fees is
substantive, then the law of the jurisdiction providing the substantive law for the case
must be applied. Houston, 147 Idaho at 911. The Supreme Court went on to
explain that if the statutory award of attorney fees to the prevailing party is a matter
of discretion for the the trial court, then it is a procedural rule. Carrol, 148 Idaho
at 270, citing Houston, 147 Idaho at 911. However, if the statutory award of
attorney fees to the prevailing party is mandatory under the governing statute, then
the attorney fee law is deemed to be a matter of substantive law. Houston, 147
Idaho at 911.
Here, Idaho Code § 12-120(3) states that “. . . the prevailing party shall be
allowed a reasonable attorney's fee to be set by the court . . . .” Accordingly, § 12120(3) is substantive in nature as it is mandatory. Houston, 147 Idaho at 911.
Therefore, the issue of attorney fees must be resolved pursuant to Washington, not
Idaho, law.
Washington follows the American Rule and does not permit the award of
attorney fees to a prevailing party absent a specific contractual provision, express
statutory authority or a recognized equitable ground. Guillen v. Contreras, 147
Wash. App. 326, 330 195 P.3d 90 (2008).

As Defendant has not identified a

specific contractual provision, an express Washington statute, or a recognized
equitable ground, Defendant is not entitled to an award of attorney fees as the
prevailing party.
Order – Page 4 of 5

Accordingly,
It is further Ordered that Defendant’s motion for attorney fees and
nontaxable costs [338] be, and hereby is, Denied.

Date: July 31, 2013
___________________________________
Terry J. Hatter, Jr.
Senior United States District Judge

Order – Page 5 of 5