Diversified Lenders, LLC v. Amazon Logistics, Inc. et al

Filing 125

ORDER TO SHOW CAUSE, as to Diversified, within seven days of the date of this Order, why sanctions, up to and including dismissal of its claims, should not be imposed; re defendant Amazon Logistics, Inc's 103 Motion for Summary Judgment, by Judge Robert S. Lasnik. (SWT)

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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DIVERSIFIED LENDERS, LLC,

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Plaintiff,

Cause No. C16-1232RSL

v.
AMAZON LOGISTICS, INC., and
VERTICAL HOLDINGS UNLIMITED,
LLC,

ORDER TO SHOW CAUSE

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Defendants.
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AMAZON LOGISTICS, INC.,

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Cross-Claim Plaintiff,
v.
VERTICAL HOLDINGS UNLIMITED,
LLC,
Cross-Claim Defendant.

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This matter comes before the Court on defendant Amazon Logistics, Inc.’s “Motion for

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Summary Judgment.” Dkt. # 103. Amazon seeks dismissal of plaintiff’s claims for damages

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based in part on defenses and setoffs that it would have had against the assignor, Vertical

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Holdings Unlimited, LLC, under the parties’ contract. In opposing Amazon’s motion for

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summary judgment, Diversified argues that UCC § 9-404 governs Amazon’s right to claim a

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ORDER TO SHOW CAUSE

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setoff and that the statute “states in relevant part: ‘Unless an account debtor has made an

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enforceable agreement not to assert defenses or claims . . . the rights of an assignee are subject to

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. . . Any other defense or claim of the account debtor against the assignor which accrues before
the account debtor receives a notification of the assignment authenticated by the assignor
or the assignee.’” Dkt. # 111 at 14 (emphasis in original).1 This is not the relevant part of the

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statute, and Diversified could not reasonably have thought that it was. Diversified intentionally
used ellipses to excise subsection (a)(1), which applies in this case and which clearly establishes
Amazon’s right to claim a setoff regardless of whether the setoff accrued before or after Amazon
received notice of the assignment.
Diversified misrepresented the governing law in an attempt to obtain a favorable ruling

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from the Court. The Court relies on attorneys, as officers of the court, to be truthful and to

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comply with the Rules of Professional Conduct. The adversarial system is designed to present all

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sides of a dispute, including all reasonable interpretations of the relevant law and facts, but the

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underlying assumptions are that facts are presented accurately and that arguments are made in

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good faith. The judicial system is ill-equipped to identify and defend against outright

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fabrications and misstatements, especially when made by those who are guardians of the law and
play a vital role in the search for justice.

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Plaintiff went on to argue that, “Amazon is barred from asserting a setoff of employee wage
claim payments against Diversified because all of the employment wage claims accrued well after
Amazon received Diversified’s First Notice of Assignment dated April 28, 2015.” Dkt. # 111 at 15.
ORDER TO SHOW CAUSE

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The Court has the inherent power to protect the integrity of the judicial system and
sanction bad faith conduct. Diversified shall, within seven days of the date of this Order, show
cause why sanctions, up to and including dismissal of its claims, should not be imposed for the
intentional misstatement of governing law set forth above.

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Dated this 17th day of January, 2018.
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A

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Robert S. Lasnik
United States District Judge

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ORDER TO SHOW CAUSE

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