NIRP Pasadena PLLC et al v. Medstreaming LLC et al

Filing 79

MINUTE ORDER granting parties' 78 Stipulated Motion to Amend Deadline: Dispositive motions due by 4/17/2019; denying defendants' 69 Motion for Sanctions. Authorized by Judge Thomas S. Zilly. (SWT)

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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NIRP PASADENA, PLLC, and
NIRP SUGAR LAND, PLLC,
Plaintiffs,

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v.

MINUTE ORDER

MEDSTREAMING, LLC, et al.
Defendants.

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C17-1607 TSZ

The following Minute Order is made by direction of the Court, the Honorable
Thomas S. Zilly, United States District Judge:

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(1)
The parties’ stipulated motion, docket no. 78, is GRANTED, and the
deadline for filing dispositive motions is EXTENDED from April 11, 2019, to April 17,
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2019. Pursuant to the parties’ stipulation, any timely filed dispositive motion shall be
noted for the third Friday after filing, i.e., May 3, 2019. Responses shall be due on
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April 29, 2019, and replies shall be filed on the noting date. All other dates and deadlines
set forth in the Minute Order entered February 7, 2019, shall remain in full force and
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effect.
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(2)
Defendants’ motion for sanctions, docket no. 69, is DENIED. Defendants
brought their motion for sanctions under (a) Federal Rule of Civil Procedure 37(b)(2),
19 (b) 28 U.S.C. § 1927, and (c) the Court’s “inherent power.”
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(a)
Defendants’ request for sanctions pursuant to Rule 37(b)(2) lacks
merit because defendants make no showing that plaintiffs failed “to obey an order
to provide or permit discovery.” Fed. R. Civ. P. 37(b)(2). The order that
defendants allege was violated required plaintiffs’ counsel to certify that all
reasonable investigation had been conducted and that all documents responsive to

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MINUTE ORDER - 1

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defendants’ discovery requests had been produced. See Minutes (docket no. 52).
Lori Hood of Baker Donelson Bearman Caldwell & Berkowitz, PC, who is no
longer counsel of record for plaintiffs, see Notice of Withdrawal and Substitution
(docket no. 66), submitted the requisite declaration, see Certification (docket
no. 57). The order at issue did not compel plaintiffs to “provide or permit”
discovery, and to the extent that Ms. Hood’s representations to the Court were not
accurate, the appropriate relief does not consist of sanctions against her former
clients under Rule 37(b)(2).

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(b)
Similarly, defendants’ reliance on 28 U.S.C. § 1927 to seek
sanctions against plaintiffs is misplaced. The statute authorizes an award of
attorney’s fees, costs, and expenses reasonably incurred as a result of a lawyer’s
conduct that “multiplies the proceedings in any case unreasonably and
vexatiously,” 28 U.S.C. § 1927, but it does not permit sanctions against the
parties represented by a misbehaving attorney, see Alexander v. FBI, 541 F. Supp.
2d 274, 299 (D.D.C. 2008), or against counsel who has substituted for an allegedly
offending lawyer. Defendants have not served their motion for sanctions on
Ms. Hood or the Baker Donelson firm, or on prior local counsel, Lawrence Cock
and Jack Lovejoy of Corr Cronin, LLP, see Decl. of Serv. (docket no. 69 at 15),
and the Court will not entertain an ex parte motion for sanctions against former
counsel of record under 28 U.S.C. § 1927.
(c)
With regard to sanctions under the Court’s “inherent power,”
defendants have not established that plaintiffs or their current attorneys have
engaged in “conduct that is ‘tantamount to bad faith.’” See B.K.B. v. Maui Police
Dep’t, 276 F.3d 1091, 1108 (9th Cir. 2002); see also Chambers v. NASCO, Inc.,
501 U.S. 32, 45-46 (1991) (indicating that a court may assess attorney’s fees
“when a party has ‘acted in bad faith, vexatiously, wantonly, or for oppressive
reasons’”). The Court is not persuaded that plaintiffs’ failure to earlier disclose
responsive documents concerning their business relationship with Braintree LLC
resulted from “bad faith,” as opposed to an innocent misunderstanding or perhaps
some recklessness about their discovery obligations. Although recklessness
standing alone suffices for purposes of awarding attorney’s fees and costs under
28 U.S.C. § 1927, to justify sanctions under the Court’s “inherent power,”
recklessness must have been combined with an additional factor, for example,
frivolousness, harassment, or improper purpose. See B.K.B., 276 F.3d at 1107-08.
Shortly after current counsel, Liyue Huang-Sigle, became involved in this matter,
plaintiffs followed her advice and provided the Braintree materials to defendants.
The Court is satisfied that plaintiffs’ concerns about producing confidential
documents to one of Braintree’s competitors were not frivolousness and that
plaintiffs’ delay in disclosure did not have a harassing or other improper purpose.

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(3)
record.

The Clerk is directed to send a copy of this Minute Order to all counsel of

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Dated this 10th day of April, 2019.
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William M. McCool
Clerk

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s/Karen Dews
Deputy Clerk

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