Haeger v. Goodyear Tire & Rubber Company ( 2021 )

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Leroy Haeger, et al., No. CV-05-02046-PHX-GMS 10 Plaintiffs, ORDER 11 v. 12 Goodyear Tire & Rubber Company, et al., 13 Defendants. 14 15 Pending before the Court is Plaintiffs Leroy and Donna Haeger, Barry and Suzanne 16 Haeger, and Farmers Insurance Company of Arizona’s (collectively, “Haegers”) Motion 17 to Establish the Remaining Amount of the Contingent Sanction. (Doc. 1229.) Also before 18 the Court is Defendant Goodyear Tire & Rubber Company’s (“Goodyear”) Motion for 19 Leave to File Sur-Reply Instanter or Alternatively for Oral Argument. (Doc. 1232.) For 20 the following reasons, the Haegers’ Motion is granted in part and denied in part and 21 Goodyear’s Motion is denied as moot.1 22 BACKGROUND 23 The Haegers filed a product liability suit against Goodyear in 2005. Goodyear was 24 represented by Graeme Hancock of Fennemore Craig, P.C. and Basil Musnuff of Roetzel 25 & Andress. On November 8, 2012, the Court awarded sanctions against Mr. Hancock, Mr. 26 1 As the Court did not require Goodyear’s Sur-Reply to make its determination, 27 Goodyear’s Motion is denied as moot. Additionally, Goodyear’s request for oral argument is denied because the parties have had an adequate opportunity to discuss the law and 28 evidence and oral argument will not aid the Court’s decision. See Lake at Las Vegas Invs. Grp., Inc. v. Pac. Malibu Dev., 933 F.2d 724, 729 (9th Cir. 1991). 1 Musnuff, and Goodyear for discovery-related misconduct in the suit. (Doc. 1073.) The 2 Court found that Mr. Hancock, Mr. Musnuff, and Goodyear all engaged in sanctionable 3 behavior. Id. at 56. The Court concluded that Mr. Hancock was responsible for twenty 4 percent of Plaintiffs’ fees and costs and that Mr. Musnuff and Goodyear would be “held 5 jointly responsible for eighty percent of the fees.” Id. at 64. The Court explained that it 6 made this allocation “based on its belief that Mr. Hancock is less culpable but Mr. Musnuff 7 and Goodyear are equally culpable.” Id. 8 On August 26, 2013, the Court entered a sanctions judgment against Mr. Hancock 9 in the amount of $548,240.23 and against Mr. Musnuff and Goodyear in the amount of 10 $2,192,960.93, totaling $2,741,201.16 in attorneys’ fees and costs. (Doc. 1125.) In the 11 same order, the Court also entered a contingent award of $2,018,794.64 in case “a direct 12 linkage between the misconduct and harm is required.” Id. at 7, 11. Goodyear appealed 13 the sanctions award to the Ninth Circuit, (Doc. 1127), which was affirmed, Haeger v. 14 Goodyear Tire & Rubber Co., 813 F.3d 1233 (9th Cir. 2016). Goodyear then sought further 15 review from the United States Supreme Court. 16 During this time, the Haegers also pursued a lawsuit against Goodyear, Mr. 17 Musnuff, Roetzel & Andress, Mr. Hancock, and Fennemore Craig in Maricopa County 18 Superior Court for damages caused by the misconduct in the federal proceedings. In 2016, 19 prior to the United States Supreme Court’s ruling, Mr. Musnuff and Roetzel & Andress 20 settled the state lawsuit with the Haegers. As part of the settlement, Mr. Musnuff and 21 Roetzel & Andress agreed to pay $1.1 million “in full satisfaction of their share” of the 22 sanctions awarded by the Court in the federal proceeding. (Doc. 1229, Ex. 1.) 23 In 2017, the Supreme Court reversed and remanded the Court’s sanctions award, 24 finding that “[a] sanctioning court must determine which fees were incurred because of, 25 and solely because of, the misconduct at issue.” Goodyear Tire & Rubber Co. v. Haeger, 26 137 S. Ct. 1178, 1189 (2017). The Supreme Court, however, deferred on whether to accept 27 the contingent award and instructed the Court to consider whether Goodyear waived its 28 ability to challenge it on remand. Id. at 1190. On March 7, 2018, the Court found that 1 Goodyear waived its objections to the contingent award. (Doc. 1186 at 10.) The Court 2 also determined that Goodyear is vicariously liable for the conduct of its attorneys. Id. at 3 7. 4 As of this Order, Goodyear has yet to pay any portion of the contingent award. 5 (Doc. 1229 at 2.) The Haegers now move for the Court to determine how much of the 6 contingent award Goodyear must pay. 7 DISCUSSION 8 The Court found that both Mr. Musnuff and Goodyear engaged in sanctionable 9 conduct and that they are “jointly responsible.” Mr. Musnuff and Goodyear are thus jointly 10 liable for 80% of the $2,018,794.64 contingent award. Joint liability is defined as 11 “[l]iability shared by two or more parties.” Joint Liability, Black’s Law Dictionary (11th 12 ed. 2019). “[A] payment made by a joint tortfeasor diminishes the claim against the 13 remaining tortfeasors.” Seymour v. Summa Vista Cinema, Inc., 809 F.2d 1385, 1389 (9th 14 Cir. 1987). Because Goodyear is a joint tortfeasor, its liability is offset by Mr. Musnuff’s 15 settlement for $1.1 million. Factoring in the offset from the settlement, the amount 16 remaining for Goodyear to pay is $515,035.71 plus post-judgment interest.2 Although 17 Goodyear reaches the same conclusion pursuant to Arizona law, federal law applies. 18 Regarding post-judgment interest, 28 U.S.C. § 1961 applies. The statute provides 19 that interest on a sanctions judgment is “calculated from the date of the entry of the 20 judgment, at a rate equal to the weekly average 1-year constant maturity Treasury yield.” 21 28 U.S.C. § 1961(a). Interest is computed daily to the date of payment and is compounded 22 annually. § 1961(b). Judgment was entered on August 26, 2013, (Doc. 1126), and the 23 parties agree that the interest is calculated at .14% per year. Therefore, the Haegers are 24 entitled to $5,484.90 in post-judgment interest. 25 Accordingly, 26 IT IS THEREFORE ORDERED that Plaintiffs’ Motion to Establish the 27 2 Contrary to the Haegers’ assertion, that Goodyear is vicariously liable for the actions of 28 its attorneys does not change that Goodyear is jointly liable for its own sanctionable conduct. Remaining Amount of the Contingent Sanction Award Against Goodyear, per Docket 1186 2|| (Doc. 1229) is GRANTED in part and DENIED in part. The Haegers are entitled to $515,035.71 plus $5,484.90 in post-judgment interest pursuant to 28 U.S.C. § 1961. 4 IT IS FURTHER ORDERED that Goodyear Tire & Rubber Company’s Motion 5 || for Leave to File Sur-Reply Instanter or Alternatively for Oral Argument (Doc. 1232) is 6 || DENIED as moot. 7 Dated this 26th day of March, 2021. Wars ) 9 A Whacrsay Sooo) 10 Chief United States District Judge 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -4-