Unite Here Health et al v. Tinoco's Kitchen et al

Filing 41

ORDER Denying 15 Motion for Sanctions. Signed by Judge Miranda M. Du on 1/4/13. (Copies have been distributed pursuant to the NEF - MMM)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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UNITED HERE HEALTH, et. al.,

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Plaintiffs,
ORDER

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Case No. 2:11-cv-02025-MMD-GWF

v.
TINOCO’S KITCHEN, LLC, et. al.,

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(Defs.’ Motion for Sanctions – dkt. no. 15)

Defendants.

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I.

SUMMARY

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Before the Court are Cross-Claimants Las Vegas Club Hotel & Casino, LLC and

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PlayLV Gaming Operations, LLC’s Motion for Sanctions Pursuant to 28 U.S.C. § 1927

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(dkt. no. 15). After reviewing the briefings, the Court denies the Motion consistent with

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the reasoning below.

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II.

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BACKGROUND
The relevant factual background is set forth in detail in the Court’s November 13,
(Dkt. no. 34.)

Defendants Tinoco’s Kitchen, LLC and Enrique Tinoco

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2012 Order.

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(collectively “Defendants”) filed a Motion to Dismiss on March 19, 2012, arguing that the

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lack of a written contract between them and Plaintiffs warrants dismissal in the case.

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(Dkt. no. 8.) Not long after, Cross-Claimants Las Vegas Club Hotel & Casino, LLC

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(“LVC”) and PlayLV Gaming Operations, LLC (“PlayLV”) filed this Motion seeking

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sanctions to cover their expenses for appearing in this suit, arguing that Defendants’

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Motion to Dismiss was frivolous and intended to delay proceedings.

(Dkt. no. 15.)

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Defendants oppose the Motion, and lay out in their Opposition why their Motion to

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Dismiss is meritorious. (Dkt. no. 20.) LVC and PlayLV replied by introducing new facts

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in the form of three declarations of PlayLV executives that describe how Defendants’

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counsel, Enrique Acuña, represented to them during a meeting that the Motion to

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dismiss was meant “to buy time.” (Dkt. no. 22 at 4.)
The Court subsequently denied Defendants’ Motion to Dismiss, and granted

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Plaintiffs’ Motion for Preliminary Injunction. (Dkt. no. 34.)

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III.

LEGAL STANDARD

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Sanctions under 28 U.S.C. § 1927 are an extraordinary remedy “to be exercised

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with extreme caution.” In re Keegan Mgmt. Co., Sec. Litig., 78 F.3d 431, 437 (9th Cir.

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1996) (describing both Fed. R. Civ. P. 11 and § 1927). “[I]n responding to perceived

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misconduct, courts must use care to exercise the sanctioning power only when they are

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legally authorized to do so.” Id. at 437.

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When a party’s counsel “multiplies the proceedings in any case unreasonably and

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vexatiously,” the court may require counsel “to satisfy personally the excess costs,

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expenses, and attorneys’ fees reasonably incurred because of such conduct.”

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U.S.C. § 1927; see also In re Girardi, 611 F.3d 1027, 1060-61 (9th Cir. 2010). A court

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awards § 1927 sanctions only upon a finding of bad faith, which is present when an

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attorney acts with recklessness or intentionally misleads the court in arguing a claim

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solely for the purpose of harassing the opposition. B.K.B. v. Maui Police Dep’t, 276 F.3d

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1091, 1107 (9th Cir. 2002). The court can award this penalty only for vexatious conduct;

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“carelessly, negligently, or unreasonably multiplying the proceedings is not enough.” In

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re Girardi, 611 F.3d at 1061.

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IV.

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DISCUSSION

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After reviewing the record, the Court cannot conclude that Acuña acted recklessly

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or intentionally to justify the imposition of sanctions. LVC and PlayLV make two principle

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arguments: the Motion to Dismiss was frivolous as Defendants entered into express

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agreements to be bound by the Collective Bargaining Agreement (“CBA”); and Acuña
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personally represented to PlayLV executives that his Motion to Dismiss was intended to

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“buy time.” As the second argument, along with its appended declarations, was

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presented first in Reply, the Court declines to consider it in reviewing this Motion. Gadda

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v. State Bar of Cal., 511 F.3d 933, 937 n.2 (9th Cir. 2007) (“It is well established that

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issues cannot be raised for the first time in a reply brief.”); Clark v. Cnty. of Tulare, 755

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F. Supp. 2d 1075, 1090 (E.D. Cal. 2010) (“It is improper for the moving party to ‘shift

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gears’ and introduce new facts or different legal arguments in the reply brief than

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presented in the moving papers.”).

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In their Motion to Dismiss, Defendants argued that the absence of an express

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contract between them and Plaintiffs foreclosed Plaintiffs’ action, notwithstanding

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express agreements made between Defendants and LVC. On its face, this is not a

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frivolous argument, particularly in light of Defendants’ position that the parties intended

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for Defendants to renegotiate the application of various CBA terms to Tinoco’s Kitchen.

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“A frivolous filing is one that is both baseless and made without a reasonable and

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competent inquiry.” In re Girardi, 611 F.3d at 1062 (internal quotations and citations

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omitted). While Tinoco’s arguments may have been weak, the Court hesitates to call

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them frivolous.

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Even if Defendants’ Motion can be understood as demonstrating an intent to

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multiply and delay proceedings, the Court cannot infer a motive to harass from their

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arguments. So long as Defendants’ filing was not frivolous, that a dismissal motion is

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brought as a matter of course does not automatically render it vexatious or harassing.

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See In re Keegan Mgmt. Co., 78 F.3d at 436 (“[W]hile it is true that reckless filings may

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be sanctioned, and nonfrivolous filings may also be sanctioned, reckless nonfrivolous

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filings, without more, may not be sanctioned.”).

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V.

CONCLUSION

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Accordingly, IT IS ORDERED that Defendants Las Vegas Club Hotel & Casino,

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LLC and PlayLV Gaming Operations, LLC’s Motion for Sanctions Pursuant to 28

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U.S.C. § 1927 (dkt. no. 15) is DENIED.

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DATED THIS 4th day of January 2013.

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MIRANDA M. DU
UNITED STATES DISTRICT JUDGE

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