Nelson-Ricks Cheese Company, Inc. v. Lakeview Cheese Company LLC

Filing 138

MEMORANDUM DECISION AND ORDER. Lakeview's Motion for Attorney Fees (Dkt. 135 ) is GRANTED. The Court hereby awards Lakeview attorney fees in the amount of $21,692.00. NRCC has 30 days from the date of this order to tender the fees awarded. Lakeview's Motion for Order to Show Cause (Dkt. 136 ) is GRANTED in PART to the extent the Court will issue an order to show cause and hold a hearing on the same. Signed by Judge David C. Nye. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (alw)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
NELSON-RICKS CHEESE COMPANY,
INC., an Idaho corporation,

Case No. 4:16-cv-00427-DCN
MEMORANDUM DECISION AND
ORDER

Plaintiff,
v.
LAKEVIEW CHEESE COMPANY,
LLC, a Nevada limited liability company,
Defendant.

I. INTRODUCTION
Pending before the Court is Defendant Lakeview Cheese Company LLC’s
(“Lakeview”)1 Motion for Attorney Fees (Dkt. 135) and Motion for Order to Show Cause
(Dkt. 136).
Having reviewed the record and briefs, the Court finds the facts and legal arguments
are adequately presented. Accordingly, in the interest of avoiding further delay, and
because the Court finds the decisional process would not be significantly aided by oral
argument, the Court will decide the motions without oral argument. Dist. Idaho Loc. Civ.

1

Lakeview has informed the Court that on or about July 31, 2018, it amended its Articles of Organization
and that as part of that process it changed its name to “Chill Out Cold Storage LV, LLC.” For continuity,
and to avoid any confusion, the Court will continue to refer to the Defendant in this case as Lakeview.
Nevertheless, it goes without saying that Chill Out Cold Storage LV LLC has the same rights, interests,
authority, and responsibilities as Lakeview in regard to any decisions rendered by this Court.

MEMORANDUM DECISION AND ORDER - 1

R. 7.1(d)(1)(B).
Upon review, and for the reasons set forth below, the Court GRANTS both motions.
II. BACKGROUND
On July 12, 2018, the Court granted summary judgment in Lakeview’s favor. Dkt.
94. Contemporaneously—and in accordance with Federal Rule of Civil Procedure 58—the
Court entered Judgment. Dkt. 95. Lakeview subsequently moved for attorney’s fees and
costs (Dkt. 96) and on November 27, 2018, the Court granted the same (Dkt. 109).
NRCC appealed the Court’s summary judgment decision and award of attorney
fees. Dkts. 98, 110.
On August 21, 2019, the Ninth Circuit Court of Appeals issued its memorandum
affirming the Court’s granting of summary judgment and upholding the Court’s award of
attorney fees. Dkt. 118. NRCC filed a motion for rehearing, which the Ninth Circuit denied.
Dkt. 125.
During the same timeframe, Lakeview began to take certain anticipatory actions
against NRCC. Specifically, Lakeview moved for a Writ of Execution (Dkt. 112)2 and
began post-judgment discovery in an effort to collect on the previously entered judgment.
Lakeview claims it took these actions when it became aware that NRCC might be
transferring or disposing of assets. NRCC denies these allegations and contends that
Lakeview’s post-judgment discovery requests were irrelevant and burdensome and,

2

The Court subsequently granted this motion. Dkt. 120.

MEMORANDUM DECISION AND ORDER - 2

further, that its third-party subpoenas were inappropriate.
Pursuant to the Court’s standard procedure, Lakeview brought its concerns
regarding NRCC’s actions to the Court informally. A discovery dispute conference was
held on August 30, 2019. A resolution was not reached during the call. Accordingly, NRCC
filed a Motion to Quash (Dkt. 119) and Lakeview filed a Motion to Compel (Dkt. 123).
Following the completion of briefing on the two pending motions, NRCC’s
counsel—the law firm of Beard St. Clair Gaffney PA—filed a Motion to Withdraw as
Counsel of Record in this case. Dkt. 129. Good cause appearing, the Court granted the
same. Dkt. 130. Pursuant to District of Idaho Local Rule 83.4, the Court advised NRCC
that, as a corporation, it could not appear without representation. Dkt. 130, at 1. The Court
gave NRCC 21 days from the date of service of the Court’s order to appoint other counsel.
Id.
Beard St. Clair Gaffney dutifully filed a certificate of compliance on December 19,
2019. Dkt. 131. NRCC never filed any notice of appearance on its behalf.
The Court subsequently issued its decision granting Lakeview’s Motion to Compel
and denying NRCC’s Motion to Quash. Dkt. 134.
As part of that decision, the Court determined that Lakeview was entitled to the
attorney fees it incurred in bringing its Motion to Compel and defending against NRCC’s
Motion to Quash. Id. at 9. The Court noted that once Lakeview filed its application for
costs, NRCC would have an opportunity to challenge the amount of the fees requested but
not the validity of the award itself. Id. at n. 6. On April 15, 2020, Lakeview appropriately
filed its Motion for Attorney Fees. Dkt. 135. NRCC never responded.
MEMORANDUM DECISION AND ORDER - 3

Also as part of its prior decision, the Court noted that in the likely event that NRCC
continued to thwart Lakeview’s efforts—and the Court’s orders—it would entertain a
motion for contempt or a motion for an order to show cause. Id. at 9–10.
On May 7, 2020, Lakeview filed the pending Motion for Order to Show Cause. Dkt.
136. NRCC never responded to this motion either.
III. ANALYSIS
A. Attorney Fees
As noted, the Court has already determined that an award of attorney fees is
appropriate in this case as it relates to the prior discovery motions. Dkt. 134, at 9.
Additionally, insofar as NRCC failed to respond to Lakeview’s motion challenging either
the rate billed or the hours expended, the Court can address this motion in short order.
Critically, the Court has already awarded attorney fees in this case on numerous
occasions. See Dkts. 87, 109. It has previously approved rates similar (or identical) to the
rates requested here and for many of the same attorneys at issue. The Court’s prior analysis
related to the requested rates stands.
The Court has likewise reviewed Lakeview’s records (Dkt. 135-2, at 2-29) and finds
that the hours billed were appropriate for the work done and that the work done was
necessarily incurred in support of the prior motions. Accordingly, the Court GRANTS
Lakeview’s request and awards it attorney fees in the amount of $21,692.00.
B. Order to Show Cause
NRCC continues to thwart Lakeview’s legal and lawful efforts to collect on its valid
judgment and continues to defy this Court’s orders. The Court and Counsel have tried to
MEMORANDUM DECISION AND ORDER - 4

resolve the issues informally, through motion practices and written orders, but to no avail.
NRCC leaves the Court will little choice.
Pursuant to Federal Rule of Civil Procedure 37, this Court has the authority to
sanction NRCC for its failure to comply with the Court’s prior order (Dkt. 134). Rule
37(b)(2) provides that “if a party . . . fails to obey an order to provide or permit discovery
. . . , the court where the action is pending may issue further just orders.” Such an order
may include any of the following remedies:
i.
ii.
iii.
iv.
v.
vi.
vii.

directing that the matters embraced in the order or other designated
facts be taken as established for purposes of the action, as the
prevailing party claims;
prohibiting the disobedient party from supporting or opposing
designated claims or defenses, or from introducing designated matters
in evidence;
striking pleadings in whole or in part;
staying further proceedings until the order is obeyed;
dismissing the action or proceeding in whole or in part;
rendering a default judgment against the disobedient party; or
treating as contempt of court the failure to obey any order except an
order to submit to a physical or mental examination.

Fed. R. Civ. P. 37(b)(2).
The Court has broad discretion in determining the appropriate sanction for a
violation of its orders. See Reygo Pac. Corp. v. Johnston Pump Co., 680 F.2d 647, 649 (9th
Cir. 1982) (“The district court is afforded great latitude in imposing sanctions under Rule
37 . . . .”); See also, Campidoglio LLC v. Wells Fargo & Co., 870 F.3d 963, 975 (9th Cir.
2017) (“We have recognized that this rule provides a wide range of sanctions for a party’s
failure to comply with court discovery orders.”).
“Rule 37(b)(2) contains two standards—one general and one specific—that limit a

MEMORANDUM DECISION AND ORDER - 5

district court’s discretion. First, any sanction must be ‘just’; second, the sanction must be
specifically related to the particular ‘claim’ which was at issue in the order to provide
discovery.” Ins. Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 707
(1982).
As a sanction in this case, Lakeview asks that the Court:
(1) hold NRCC in contempt; (2) direct NRCC to pay the reasonable expenses,
including attorney’s fees, caused by NRCC’s failure to comply; (3) direct
that the matters embraced in the outstanding discovery requests and other
designated facts regarding the abuse of NRCC’s corporate form be taken as
established for the purposes of this action; (4) prohibit NRCC and the
Greenberg Parties from opposing Chill Out’s collection efforts against its
alter egos or introducing evidence regarding same; (5) issue a writ of
execution against the assets of the Greenberg Parties; (6) appoint a receiver
over NRCC; and (7) award any other relief that this Court deems equitable
and just.
Dkt. 136, at 2–3. The Court has reviewed Lakeview’s requests and finds that—based
on NRCC’s behavior during this litigation over the past four years—some, if not all,
of the requests are appropriate in this case. However, it will not make such a
determination at this time without giving NRCC a final opportunity to appear and
oppose the request.
In this case, there is a judgment creditor (Lakeview) who seeks to recover
fees owed. The judgment debtor (NRCC) has failed repeatedly to comply with lessintrusive requests, failed to abide by the Court’s orders, and failed to respond to any
of the pending motions. Accordingly, the Court will issue an order to show cause
requiring that NRCC appear and explain why the Court should not adopt each of

MEMORANDUM DECISION AND ORDER - 6

Lakeview’s requests for relief.3
IV. ORDER
IT IS HEREBY ORDERED:
1. Lakeview’s Motion for Attorney Fees (Dkt. 135) is GRANTED.
2. The Court hereby awards Lakeview attorney fees in the amount of $21,692.00.
3. NRCC has 30 days from the date of this order to tender the fees awarded.
4. Lakeview’s Motion for Order to Show Cause (Dkt. 136) is GRANTED in PART
to the extent the Court will issue an order to show cause and hold a hearing on
the same. The Court will issue a separate order concurrently herewith.
5. The Court will hold a hearing on Lakeview’s Motion (Dkt. 136) on August 5,
2020, at 3:00 p.m. in Pocatello, Idaho. NRCC will be ordered to appear in person.
Failure to do so will result in sanctions.
6. Lakeview shall serve this order and the order to show cause on NRCC as soon
as reasonable possible and file a certificate of service once complete.

DATED: June 11, 2020
_________________________
David C. Nye
Chief U.S. District Court Judge

3

To be clear, Lakeview’s motion is granted to the extent that the Court is issuing an order to show cause,
however, the Court is not affirmatively ruling on the underlying requests at this time.

MEMORANDUM DECISION AND ORDER - 7