Cara Barber v. Ohana Military Communities ( 2018 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JUN 25 2018
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
CARA BARBER; et al., No. 18-15149
Plaintiffs-Appellees, D.C. No.
1:14-cv-00217-HG-KSC
v.
OHANA MILITARY COMMUNITIES, MEMORANDUM*
LLC and FOREST CITY RESIDENTIAL
MANAGEMENT, INC.,
Defendants-Appellants.
Appeal from the United States District Court
for the District of Hawaii
Helen W. Gillmor, District Judge, Presiding
Submitted June 22, 2018**
San Francisco, California
Before: FISHER, PAEZ, and NGUYEN, Circuit Judges.
Ohana Military Communities, LLC and Forest City Residential
Management, Inc. (“Defendants”) appeal the denial of their motion for preliminary
injunction and motion to disqualify counsel. We have jurisdiction pursuant to 28
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
U.S.C. §§ 1291 & 1292(a)(1) and reverse.
1. Defendants seek to enjoin Barber’s online activities that they contend
violate the non-disparagement and non-participation provisions of the parties’
settlement agreement. In denying Defendants’ preliminary injunction motion, the
district court relied solely on our July 27, 2017 memorandum disposition. We
must therefore clarify the scope of our previous ruling.
The prior appeal concerned the only issue the district court addressed in its
August 26, 2016 order: whether a preliminary injunction was warranted for
Barber’s violation of the confidentiality provision. In fact, the district court
explicitly limited its ruling to the confidentiality provision, reserving ruling on the
non-disparagement provision for another day.1 We concluded that Barber’s
violations of the confidentiality provision “were relatively mild” and unlikely to
cause irreparable harm. No. 16-16688, Dkt. 51 at 3. Moreover, “[m]ost of her
online postings . . . did not appear to violate the confidentiality provision.” Id. We
therefore vacated the preliminary injunction, but expressly declined to “consider
whether Barber violated the non-disparagement provision of the settlement
agreement, as the district court [had] not reach[ed] that issue.” Id. at n.1. Nor
could we have considered that issue without the benefit of factual findings and a
1
The district court did not mention the non-participation provision at all.
2
ruling on it from the district court.2 Thus, the district court erred when it
interpreted our prior disposition as holding that the entire record failed to
demonstrate a likelihood of irreparable harm for all relevant settlement provisions
instead of limiting our ruling to the confidentiality provision.
2. Defendants also appeal the district court’s order summarily denying
their motion to disqualify counsel because it concluded it lacked subject matter
jurisdiction. Defendants seek to disqualify Barber’s counsel for alleged conflicts
of interest stemming from the solicitation letter counsel sent to prospective class
members and Barber’s involvement in that process. This disqualification motion
apparently arises from some of the same conduct for which Defendants sought a
preliminary injunction—namely, Barber’s involvement in soliciting additional
clients for the firm, which Defendants allege violates the non-participation
provision. Barber’s conduct was properly before the district court pursuant to its
retention of jurisdiction over issues related to the settlement agreement and brought
to its attention prior to August 25, 2016. See No. 16-16688, Dkt. 51 at 2;
Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 381 (1994). Because the
district court has jurisdiction over Barber’s conduct, it might be able to exercise
inherent and/or ancillary jurisdiction over the issue of counsel’s alleged related
misconduct involving improper solicitation. See Erickson v. Newmar Corp., 87
2
The same is true of the non-participation provision.
3
F.3d 298, 303 (9th Cir. 1996); Jackson v. United States, 881 F.2d 707, 709–10 (9th
Cir. 1989).
We express no opinion on the merits of Defendants’ arguments regarding the
district court’s jurisdiction over the motion to disqualify; we do, however, hold that
the district court erred in concluding that our prior disposition barred it from
entertaining them. We ruled that the district court “retained jurisdiction to
adjudicate any purported violations of the settlement agreement brought to its
attention prior to” August 25, 2016. No. 16-16688, Dkt. 51 at 2. We noted that
matters “pertaining to the settlement agreement” which were not raised during the
six-month window of jurisdiction the court created were off the table, since a
district court does not have the inherent power to enforce settlement agreements.
See id.; Kokkonen, 511 U.S. at 380–81. Because our prior disposition was limited
to matters pertaining to the settlement agreement and did not speak to any issues
that may have arisen outside of, or ancillary to, those matters, the district court
should have considered Defendants’ motion to disqualify. See United States v.
Kellington, 217 F.3d 1084, 1092–94 (9th Cir. 2000).3
3
We note that it appears the district court recognized counsel’s possible
conflicts prior to August 26, 2016, when it stated that “[r]eview of the issues in the
preliminary injunction have raised questions about a possible conflict between
Plaintiff Cara Barber and her attorneys.” In that case, it is possible the conflicts
may be subsumed by the retention of jurisdiction upheld in our prior disposition as
pertaining to the settlement agreement and arising by August 25, without the need
for inherent or ancillary jurisdiction.
4
***
With this clarification of the scope of our prior disposition, we leave it to the
district court on remand to consider Defendants’ preliminary injunction and
disqualification motions in the first instance.
REVERSED.
5