Mkhitaryan et al v. US Bancorp et al

Filing 141

ORDER Denying 126 Plaintiffs' Motion for Reconsideration of 119 Order. Signed by Magistrate Judge Carl W. Hoffman on 1/18/2013. (Copies have been distributed pursuant to the NEF - SLD)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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SERGEY MKHITARYAN, et al.,

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Plaintiffs,
vs.
U.S. BANK, N.A., et al.,
Defendants.

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2:11-cv-01055-JCM-CWH
ORDER

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This matter is before the Court on Plaintiffs’ Motion for Reconsideration of Order #119
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(#126), filed on December 21, 2013. The Court also considered Defendants’ Response (#134),
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filed on January 7, 2013 and Plaintiffs’ Reply #139, filed on January 17, 2013.
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BACKGROUND
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This action stems from the repossession of Plaintiff Sergey Mkhitaryan’s vehicle by
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Defendant Speedy Recovery, Inc. The repossession agent, Defendant Dennis Lyon McGee,
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allegedly trespassed and terrorized Plaintiff with his baseball bat to complete the repossession. On
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August 9, 2012, the Court held a hearing regarding three motions filed by Plaintiffs including:
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Motion to Compel/Motion for Sanctions Against Defendant Speedy Recovery, Inc. (#52), filed on
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May 22, 2012, Motion to Compel/Motion for Sanctions Against Defendant Dennis Lyon McGee
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(#53), filed on May 30, 2012, and Second Motion to Compel/Motion for Sanctions Against
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Defendant Speedy Recovery, Inc. and Defendant Dennis Lyon McGee (#81), filed on August 1,
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2012. The Court granted in part and denied in part all three motions. On August 22, 2012,
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Plaintiffs filed an application for attorneys’ fees requesting $25,300 for 92 hours of work. In
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response, Defendants filed a counter-motion for attorneys’ fees requesting $11,979.50 for 42.1
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hours of work. On November 13, 2012, the Court exercised its discretion to deny both applications
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and ordered each side to bear their own expenses. See Order #119. In the instant motion, Plaintiffs

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request that the Court reconsider its Order #119 because they contend that the Court granted the fee

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application at the August 9, 2012 hearing and fees are warranted given Defendants’ pattern of

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continuing discovery violations. See Pls. Mot. #126, 2. In response, Defendants contend that

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Plaintiffs failed to meet the standard necessary for reconsideration and request the Court impose

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sanctions in the form of the expenses necessary to oppose the Motion. See Defs. Resp. #134, 2.

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DISCUSSION

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A.

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While the Federal Rules of Civil Procedure do not explicitly recognize a petition for

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Standard for Reconsideration

rehearing or motion to reconsider, the Ninth Circuit has recognized that the court has the inherent

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power to revise, correct, and alter interlocutory orders at any time prior to entry of a final judgment.

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See Sch. Dist. No. 5 v. Lundgren, 259 F.2d 101, 105 (9th Cir. 1958). This authority is governed by

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the doctrine that a court will generally not reexamine an issue previously decided by the same or

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higher court in the same case. Lucas Auto. Eng'g, Inc. v. Bridgestone/Firestone, Inc., 275 F.3d

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762, 766 (9th Cir. 2001); United States v. Cuddy, 147 F.3d 1111, 1114 (9th Cir. 1998).

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The Ninth Circuit has identified three circumstances in which a court should grant a motion

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for reconsideration: (1) the court is presented with newly discovered evidence, (2) the court has

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committed clear error or the initial decision was manifestly unjust, or (3) there has been an

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intervening change in controlling law.” Nunes v. Ashcroft, 375 F.3d 805, 807–08 (9th Cir. 2004)

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(quoting Sch. Dist. No. 1J v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993)). On the other hand,

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a motion for reconsideration is properly denied when the movant fails to establish any reason

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justifying relief. Backlund v. Barnhart, 778 F.2d 1386, 1388 (9th Cir. 1985). A motion for

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reconsideration should not merely present arguments previously raised; that is, a motion for

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reconsideration is not a vehicle permitting the unsuccessful party to reiterate arguments previously

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presented. See Merozoite v. Thorp, 52 F.3d 252, 255 (9th Cir. 1995); Khan v. Fasano, 194

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F.Supp.2d 1134, 1136 (S.D. Cal. 2001) (“A party cannot have relief under this rule merely because

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he or she is unhappy with the judgment.”).

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Plaintiffs contend that reconsideration of Order #119 is warranted based on the second
circumstance - the court has committed clear error or the initial decision was manifestly unjust.
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They submit three main arguments in support of this basis for reconsideration. First, Plaintiffs

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allege that the Court indicated at the August 9, 2012 hearing that it was going to grant sanctions in

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the form of attorneys fees and costs associated the Plaintiffs’ discovery motions. See Pls. Mot.

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#126, 5. As such, Plaintiffs allege that the Court was inconsistent in inviting Plaintiffs’ application,

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but later denying an award of fees. Second, Plaintiffs contend that they properly submitted an

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application for fees not expecting Defendants to submit a counter-request for fees in their

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opposition. They indicate that Defendants’ application was inappropriate and it confused the

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Court. See Pls. Mot. #126, 5. Third, Plaintiffs argue that there is significant justification for

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sanctioning Defendants. Indeed, Plaintiffs characterize the Court’s Order #119 as finding that

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“there is no legal authority” for Plaintiffs’ application despite the continuing discovery abuses that

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warrant sanctions under Federal Rule of Civil Procedure 37. See Pls. Mot. #126, 5-6.

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In contrast, Defendants contend that there is no basis for reconsideration of Order #119.

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Defendants argue that Plaintiffs’ Motion “merely rehashes the original arguments of the motions”

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that were fully evaluated by the Court. Defs. Resp. #134, 4. Further, Defendants contend that the

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Court properly exercised its authority under Rule 37(a)(5)(C) to apportion expenses given that the

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discovery motions were granted in part and denied in part.

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After carefully considering all the arguments, the Court finds that Plaintiffs failed to

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demonstrate that the Court committed clear error or that is prior order was manifestly unjust. It will

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address all three of Plaintiffs’ arguments below.

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B.

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Plaintiffs incorrectly characterize the Court’s statements during the August 9, 2012 hearing

Invitation for Fee Application

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regarding sanctions. The Court invited Plaintiffs to submit an Application for fees and costs in

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accordance with Rule 37(a)(5)(A), which states, “[T]he court must, after giving an opportunity to

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be heard, require the party . . . whose conduct necessitated the motion, the party or attorney

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advising that conduct, or both to pay the movant’s reasonable expenses incurred in making the

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motion, including attorney’s fees.” (Emphasis added). Accordingly, the Court was required to

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allow Plaintiffs to submit an application for fees and expenses. However, this invitation was not a

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guarantee that the Court would grant the application. Indeed, Rule 37(a)(5)(A) lists three situations
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in which an award is not warranted: (1) the movant filed the motion before attempting in good faith

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to obtain the disclosure or discovery without court action, (2) the opposing party’s non-disclosure,

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response, or objection was substantially justified, or (3) other circumstances make an award of

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expenses unjust. The Court carefully considered Plaintiffs’ application in accordance with these

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three exceptions. It found that an award would be unjust given that Defendants prevailed on

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numerous objections and Plaintiffs failed to propose a reasonable apportionment scheme. This is

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clearly a proper exercise of the Court’s authority under Rule 37 because an additional evaluation is

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required upon submission of the application. As a result, Plaintiffs’ contention that the Court was

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not consistent with its August 9, 2012 statements is not supported and does not warrant

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reconsideration of Order #119.

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C.

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Rule 37(a)(5)(C) specifically addresses the situation that occurred with respect to Plaintiffs’

Defendants’ Counter-Motion for Fees

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three motions to compel. It states that if a motion is “granted in part and denied in part, the court

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may, after giving an opportunity to be heard, apportion the reasonable expenses for the motion.”

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Id. (emphasis added). Plaintiffs’ Motion for Reconsideration fails to recognize that they were not

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automatically entitled to a mandatory award of expenses under Rule 37(a)(5)(A), but rather,

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apportionment of reasonable expenses was appropriate under Rule 37(a)(5)(C) because each

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motion was granted in part and denied in part. As a result, Defendants’ opposition to Plaintiffs’ fee

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application, which included a counter-motion for fees, was proper. Plaintiffs’ contention that the

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Court was confused by Defendants’ response requesting fees is not valid. It was not a clear error to

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consider Defendants’ response nor was apportionment unjust under Rule 37(a)(5)(C). Accordingly,

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reconsideration is not warranted because Defendants filed a counter-motion for fees in response to

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Plaintiffs’ application.

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D.

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Plaintiffs’ misstate a conclusion in the Court’s Order regarding the authority for awarding

Legal Authority Justifying an Award of Fees

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fees and expenses. They state that the Court concluded “that there is no legal authority for

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Plaintiff’s Application.” Pls. Mot. 126, 5-6. The Court actually highlighted a deficiency in

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Plaintiffs’ application by noting that they failed to cite any authority under which they applied for
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fees and expenses. The Court clearly recognized that Rule 37 governs an award of expenses in this

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situation. What Plaintiffs failed to understand was that Rule 37(a)(5)(C) applied rather than Rule

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37(a)(5)(A) because the underlying discovery motions were granted in part and denied in part. As a

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result, the Court’s observation regarding Plaintiffs’ lack of citation to the appropriate section of

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Rule 37 was included in its order to identify the legal authority that supports its decision to

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apportion expenses.

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Moreover, Plaintiffs’ argument that the cumulative effect of Defendants’ abuse of the

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discovery process warrants reconsideration is not persuasive. This is not an unusual situation in

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which ordering Plaintiffs to bear their own expenses is unjust. Plaintiffs did not succeed in

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obtaining a court order granting the three motions to compel in their entirety. Although Plaintiff

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highlights Defendants withholding of discovery material, the Court carefully considered this

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behavior in its prior order. Therefore, Plaintiffs failed to demonstrate that the Court committed

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clear error or Order #119 was manifestly unjust. The Court properly exercised its authority in

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accordance with Rule 37 in apportioning expenses. Additionally, the Court will not grant

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Defendants request for sanctions in the form of the expense incurred for responding to Plaintiffs’

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Motion.

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Based on the foregoing and good cause appearing therefore,

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IT IS HEREBY ORDERED that Plaintiffs’ Motion for Reconsideration of Order #119

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(#126) is denied.
DATED this 18th day of January, 2013.

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______________________________________
C.W. Hoffman, Jr.
United States Magistrate Judge

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