Williams & Cochrane, LLP v. Quechan Tribe of the Fort Yuma Indian Reservation ( 2019 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 WILLIAMS & COCHRANE, LLP, Case No.: 17-CV-01436-GPC-MSB 12 Plaintiff, ORDER DENYING PLAINTIFF’S 13 v. MOTION FOR RECONSIDERATION AND 14 ROBERT ROSETTE; ROSETTE & DENYING PLAINTIFF’S MOTION ASSOCIATES, PC; ROSETTE, LLP; 15 FOR ENTRY OF FINAL QUECHAN TRIBE OF THE FORT JUDGMENT 16 YUMA INDIAN RESERVATION, a federally-recognized Indian tribe; and 17 [ECF No. 219] DOES 1 THROUGH 100, 18 Defendants. 19 20 Before the Court is Plaintiff/Counter-Defendant Williams & Cochrane’s (“W&C”) 21 motion for reconsideration of the Court’s Order on Defendant/Counter-Plaintiff Quechan 22 Tribe of Fort Yuma Indian Reservation’s (“Quechan” or “the Tribe”) motion to dismiss 23 Plaintiff’s counterclaim in reply, and W&C’s motion for entry of final judgment. ECF 24 No. 219. Quechan filed an opposition on October 25, 2019. ECF No. 236. Plaintiff filed 25 a reply on November 1, 2019. ECF No. 237. Based on the reasoning below, the Court 26 DENIES Plaintiff’s motion for reconsideration and for entry of final judgment. 27 1 PROCEDURAL BACKGROUND 2 On December 10, 2018, W&C filed a “reply claim” 1 (ECF No. 179) in response to 3 several counterclaims raised by Quechan in Quechan’s Answer to the First Amended 4 Complaint (ECF No. 94). On December 31, 2018, Quechan filed a motion to strike and 5 dismiss. ECF No. 184. On September 10, 2019, this Court granted, with prejudice, 6 Quechan’s motion to dismiss on the following bases: (1) the individual Tribe members 7 (Keeny Escalanti and Willie White) are not parties to the agreement at issue; (2) W&C’s 8 counterclaim in reply for tortious breach of contract relies on communications that are 9 protected by litigation privilege. ECF No. 216. 10 FACTUAL BACKGROUND 11 The parties are familiar with the factual background, which is described at length 12 in the Court’s prior order (ECF No. 216) and does not bear repeating here.2 13 In brief and in most relevant part, W&C represented Quechan in negotiations with 14 the State of California with respect to payments owed by Quechan to the State. ECF No. 15 94 ¶ 22. In September 2016, Quechan hired W&C for representation in these 16 negotiations and signed an Attorney-Client Fee Agreement on September 29, 2016. Id. ¶ 17 23. On June 26, 2017, the Quechan President Keeny Escalanti sent a letter to W&C 18 terminating the firm (“June 26th letter”). Id. ¶ 44. The June 26th letter stated that W&C 19 had been “grossly overcompensated” given its failure to “produce better-than-boilerplate 20 terms in your negotiations so far with the State,” and therefore Quechan’s payment of 21 fees to date was “more than fair.” ECF No. 179 at 3-4. The letter also stated, “We 22 strongly advise you against pressing your luck further out of concern for the reputation of 23 24 1 In the Court’s prior order, the Court interpreted W&C’s “reply claim” as a counterclaim in reply. ECF 25 No. 216 at 10. 26 2 The Court draws on the factual allegations asserted in the “reply counterclaim” (properly, “counterclaim in reply”) (ECF No. 179) but notes that the operative complaint is now the fourth 27 amended complaint, which was filed on September 25, 2019. ECF No. 220. 1 your firm in Indian Country and in the State of California.” Id. In this letter, Escalanti 2 also asked W&C to transmit the Tribe’s entire case file and most recent draft compact to 3 its new counsel, Rosette LLP. ECF No. 94 ¶ 44. 4 On June 30, 2017, the Quechan Executive Secretary sent W&C a letter that was 5 also signed by Escalanti (“June 30th letter”). The June 30th letter included the following 6 statement: “Should you continue your obstruction of the Tribe’s interests, the Tribe will 7 be left with no other choice than to pursue the legal remedies available to it. We trust 8 that the Firm will see the wisdom in promptly complying with these demands.” ECF No. 9 179 at 5. 10 DISCUSSION 11 W&C argues that it should be permitted to pursue its tortious breach of contract 12 counterclaim in reply, and that the Court should reconsider its opinion, citing two 13 California Court of Appeals cases. W&C further requests that in the event that the Court 14 declines to reconsider its prior order, then the Court should enter final judgment on the 15 counterclaim in reply under Federal Rules of Civil Procedure (“Rule”) 54(b) since the 16 issue of litigation privilege is severable from the remainder of issues in this litigation. 17 The Court will address each issue in turn.3 18 I. MOTION FOR RECONSIDERATION 19 A motion for reconsideration, under Federal Rule of Civil Procedure 59(e), is 20 “appropriate if the district court (1) is presented with newly discovered evidence; (2) 21 clear error or the initial decision was manifestly unjust, or (3) if there is an intervening 22 change in controlling law.” Sch. Dist. No. 1J, Multnomah County, Or. V. ACandS, Inc., 5 23 F.3d 1255, 1263 (9th Cir. 1993); see also Ybarra v. McDaniel, 656 F.3d 984, 998 (9th 24 25 26 3 Quechan argues that Plaintiff has not moved for reconsideration of the Court’s order dismissing the individual defendants Mark White and Keeny Escalanti, and therefore Plaintiff’s motion for 27 reconsideration is a motion for partial reconsideration of the Court’s prior order. The Court agrees. 1 Cir. 2011). The Court has discretion in granting or denying a motion for reconsideration. 2 See Fuller v. M.G. Jewelry, 950 F.2d 1437, 1441 (9th Cir. 1991). A motion for 3 reconsideration “may not be used to raise arguments or present evidence for the first time 4 when they could reasonably have been raised earlier in the litigation.” Kona Enters., Inc. 5 v. Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 2000) (emphasis in original). It is an 6 “extraordinary remedy, to be used sparingly in the interests of finality and conservation 7 of judicial resources.” Id. 8 W&C argues that the Court should reconsider its order since the June 26th and 9 June 30th letters are not communicative and should not be protected by litigation 10 privilege, citing two California Court of Appeals cases: Mancini & Assocs. v. Schwetz, 39 11 Cal. App. 5th 656, 661 (Ct. App. 2019), as modified on denial of reh’g (Sept. 30, 2019); 12 People v. Toledano, 249 Cal. Rptr. 3d 100 (Ct. App. 2019), review denied and ordered 13 not to be officially published (Oct. 23, 2019). ECF 219-1 at 3-9. 14 In Mancini, the plaintiff law firm had successfully litigated sexual harassment and 15 other claims on behalf of its client and sought to collect money owed to it by the 16 judgment debtor, the client’s former employer. The judgment debtor rekindled his social 17 relationship with the law firm client, and they eventually executed a settlement releasing 18 the judgment debtor from his payment obligations to the law firm. The law firm brought 19 a claim against the judgment debtor alleging, inter alia, intentional interference with 20 contract, citing his settlement communications with the client. The judgment debtor 21 argued that his communications with the client were protected by litigation privilege, but 22 the California Court of Appeal disagreed, noting that the “threshold issue” in determining 23 the application of the litigation privilege is whether the defendant's conduct was 24 communicative or noncommunicative.” Id. at 661. Although the judgment debtor’s 25 execution of the settlement agreement was communicative, the Court found that the 26 debtor undertook several noncommunicative acts that were not protected by litigation 27 1 privilege – e.g., contacting the client to ascertain whether she had hired a judgment 2 collections attorney. Here, the June 26 and June 30 letters – including the disputed 3 excerpts – are plainly communicative. Therefore, Mancini does not support 4 reconsideration of the Court’s prior order. 5 Toledano is similarly inapposite. In Toledano, an attorney threatened to disclose a 6 witness’ extra-marital affair with his client unless the witness paid $350,000 in a case 7 where the witness was seeking to obtain a restraining order against the client. The 8 attorney argued that his threat should be protected by litigation privilege. The Toledano 9 court held that these communications were insufficiently related to the underlying 10 litigation and therefore not privileged, but ultimately reaffirmed the principle that 11 litigation privilege applies regardless of whether the communication was made with 12 malice or intent to harm, and whether the alleged conduct was fraudulent, perjurious, 13 unethical, or even illegal. Toledano, 249 Cal. Rptr. 3d at 110 (citing Blanchard v. 14 DIRECTV, Inc. 123 Cal.App.4th 903, 919-920 (2004)). Based on this well-established 15 legal principle, the Toledano court noted that the lawyer’s other statements – i.e., that he 16 had information that would “blow” the witness’ case against his client “out of the water,” 17 and his threat to reveal personal information about the witness unless the witness 18 withdrew her request for a restraining order – would be protected by litigation privilege. 19 Id. at 111. 20 As mentioned above, this line-drawing exercise is based on well-established legal 21 principles regarding privileged communications and does not constitute an intervening 22 change in controlling law as required by Rule 59(e) and therefore does not form the 23 proper basis for a motion for reconsideration. Nevertheless, even considering this case 24 and its implications, the Court finds that the June 26th and June 30th letters are 25 sufficiently related to the underlying litigation. Plaintiff argues that Quechan’s statement 26 in the June 30th letter (“We strongly advise you against pressing your luck further out of 27 1 concern for the reputation of your firm in Indian Country and the State of California”) 2 bears no connection to the ongoing litigation and therefore falls outside the scope of 3 privileged communication. Specifically, W&C argues that Quechan’s statement arises 4 earlier in the letter than Quechan’s repudiation of the Attorney-Client Fee Agreement, is 5 designed to “silence Williams & Cochrane,” and is an “open-ended and unrestricted 6 threat.” ECF 219-1 at 10. The Court disagrees. The June 30 letter was plainly a follow- 7 up request for the transfer of the Tribe’s materials to Rosette LLP, intending to 8 communicate that if W&C failed to do so, the Tribe would pursue litigation. The letter 9 describes W&C’s performance as the Tribe’s attorney, the Tribe’s termination of W&C, 10 and the Tribe’s request for the transfer of their case materials. The letter indicates that 11 the Tribe will pursue legal remedies for any continued obstruction of the Tribe’s interests 12 – including, the failure to transfer case materials to Rosette LLP. Unlike the attorney’s 13 threat in Toledano, which was separate and apart from the attorney’s other statements 14 related to the litigation, this statement in the June 30th letter is directly related to specific, 15 contemplated litigation as described by the rest of the letter. 16 In their reply W&C argues that the consequences of Quechan’s communications – 17 rather than the substance – are determinative and reiterates their prior argument that there 18 is no connection between Quechan’s statement and the litigative process. ECF No. 237. 19 In support W&C cites three cases where courts have held that a defendant has failed to 20 meet their burden under California’s anti-SLAPP statute (Cal. Code Civ. Proc., § 21 425.16): Miller Marital Deduction Tr. v. Zurich Am. Ins. Co., 41 Cal. App. 5th 247 (Ct. 22 App. 2019); Sifuentes v. Subrogation Div., Inc., 2019 WL 4670150 (Cal. Ct. App. Sept. 23 25, 2019); and Appel v. Wolf, No. 3:18-CV-814-L-BGS, 2019 WL 4534540 (S.D. Cal. 24 Sept. 19, 2019). To the extent that these cases touched on the question of whether the 25 conduct at issue was protected by the litigation privilege, they rely on the established 26 standard under California law, as discussed above. See Appel, 2019 WL 4534540, at *5 27 1 (litigation privilege did not apply to libelous statements from defendant to plaintiffs’ 2 counsel and additional counsel third-party counsel since these statements were not 3 functionally related to the ongoing action and inaccurately described plaintiff’s prior 4 conduct); Sifuentes, 2019 WL 4670150 at *9 (litigation privilege did not apply to 5 defendants’ extortion since defendants were not seriously contemplating litigation against 6 the plaintiffs in good faith).4 The June 26th and June 30th letters are distinguishable from 7 the communications considered in both the aforementioned cases, given the letters’ direct 8 connection to the Tribe’s request for their case file. 9 The Court therefore DENIES W&C’s motion for reconsideration. 10 II. MOTION FOR ENTRY OF FINAL JUDGMENT 11 W&C seeks partial judgment on its counterclaim in reply on the issue of litigation 12 privilege, arguing that the litigation privilege issue is separable from the remainder of the 13 litigation. 14 In evaluating whether dismissal of one or more claims under Rule 54(b) is 15 appropriate, the “district court must first determine that it is dealing with a ‘final 16 judgment.’” Curtiss–Wright Corp. v. Gen. Elec. Co., 446 U.S. 1, 7 (1980). For a 17 judgment to be “final,” it must be “an ultimate disposition of an individual claim entered 18 in the course of a multiple claims action.” Id. (quoting Sears, Roebuck & Co. v. 19 Mackey, 351 U.S. 427, 436, 76 S.Ct. 895, 100 L.Ed. 1297 (1956)). Once this element is 20 satisfied, the district court must evaluate “whether there is any just reason for 21 delay.” Id. at 8. The Supreme Court has made clear that “[n]ot all final judgments on 22 individual claims should be immediately appealable.” Id. For this reason, “[i]t is left to 23 the sound judicial discretion of the district court to determine the ‘appropriate time’ when 24 25 26 4 The Miller court’s analysis and the excerpts quoted by W&C in its reply address the requisite burden under the anti-SLAPP statute. The Miller court did not ultimately issue a holding as to litigation 27 privilege. 1 || each final decision in a multiple claims action is ready for appeal.” Jd. Evaluation of 2 || whether there are just reasons to delay “must take into account judicial administrative 3 ||interests as well as the equities involved.” Jd. “Consideration of the former is necessary 4 || to assure that application of the Rule effectively ‘preserves the historic federal policy 5 || against piecemeal appeals.’ “ Jd. (quoting Sears, Roebuck, 351 U.S. at 438). In this vein, 6 || the district court may properly consider “whether the claims under review were separable 7 the others remaining to be adjudicated and whether the nature of the claims already 8 determined was such that no appellate court would have to decide the same issues more 9 || than once even if there were subsequent appeals.” Id. 10 Plaintiff requests that the final judgment be entered in the issue of litigation 11 || privilege since it separable from the remainder of the litigation. Defendants counter that 12 || partial judgment would be inappropriate since the claim relies on the same set of facts 13 form the basis for W&C’s remaining claim against the Tribe and the Tribe’s pending 14 |/counterclaims against W&C. The Court agrees. Any inquiry into the remaining claims 15 || would be interconnected with the question of litigation privilege and would not 16 ||‘‘streamline the ensuing litigation.” Noel v. Hall, 568 F.3d 743, 747 (9th Cir. 2009) 17 || (citation omitted). 18 Accordingly, W&C’s motion for partial entry of final judgment on the question of 19 || litigation privilege is DENIED. 20 21 IT IS SO ORDERED. 22 ||Dated: December 11, 2019 <= 24 United States District Judge 25 26 27 28 17-CV-01436-GPC-MSB