White v. LA Pilates Carlsbad ( 2021 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 DANIEL WHITE, Case No.: 20cv2054 DMS (MSB) 12 Plaintiff, ORDER DENYING DEFENDANTS’ 13 v. MOTION FOR SANCTIONS 14 LA PILATES CARLSBAD, an entity of unknown form, JLC MANAGEMENT, 15 LLC, a Nevada limited liability 16 corporation, JEFF CLARK, an individual, RAY CHUNG, an individual, and DOES 17 1-15, 18 Defendants. 19 20 21 This matter comes before the Court on Defendants’ motion for sanctions pursuant to 22 Federal Rule of Civil Procedure 11. Plaintiff filed an opposition to the motion, and 23 Defendants filed a reply. 24 “Rule 11 requires the imposition of sanctions when a motion is frivolous, legally 25 unreasonable, or without factual foundation, or is brought for an improper purpose.” Conn 26 v. Borjorquez, 967 F.2d 1418, 1420 (9th Cir. 1992) (citing Operating Engineers Pension 27 Trust v. A-C Company, 859 F.2d 1336, 1344 (9th Cir. 1988)). In determining whether a 28 claim is frivolous or brought for an improper purpose, the standard is one of objective 1 reasonableness. See id. at 1421. “‘If, judged by an objective standard, a reasonable basis 2 for the position exists in both law and fact at the time the position is adopted, then sanctions 3 should not be imposed.’” See id. (quoting Golden Eagle Dist. Corp. v. Burroughs Corp., 4 801 F.2d 1531, 1538 (9th Cir. 1986). The central purpose of the rule is to deter baseless 5 filings in district court and streamline administration and procedure of the federal courts. 6 See Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 393 (1990). The Ninth Circuit has 7 held: “Rule 11 is an extraordinary remedy, one to be exercised with extreme caution.” 8 Operating Engineers, 859 F.2d at 1345. 9 Here, Defendants argue Plaintiff’s First Amended Complaint1 is rife with false 10 allegations, and that Plaintiff’s case is clearly frivolous, legally unreasonable, without legal 11 foundation, and brought for an improper purpose. It is true Plaintiff’s original Complaint 12 alleged Plaintiff was the owner of a trademark on the “Principal Register,” when in fact the 13 mark was on the “Supplemental Register.” It is also true that Plaintiff’s Complaint alleged 14 Plaintiff first used the mark in April 2018, and that the First Amended Complaint alleged 15 Plaintiff first used the mark in February 2017. Neither of these discrepancies, however, 16 nor any of Defendants’ other allegations, rises to the level of a Rule 11 violation. Clearly, 17 there is a dispute between the parties on a number of issues, e.g., whether they entered into 18 a contract, the terms of any purported contract, and specifically, whether Plaintiff granted 19 Defendants any rights to the trademark at issue. Judging the case by an objective standard 20 at this early stage, before the Court has heard Defendants’ motion to dismiss, the Court 21 / / / 22 / / / 23 / / / 24 / / / 25 26 27 1 When this motion was filed, Defendants believed that Plaintiff’s First Amended Complaint was the operative pleading, and thus, their arguments are addressed to that 28 1 |/cannot say Plaintiffs allegations lack any reasonable basis in law or fact. Therefore, 2 Defendants’ motion for sanctions is denied.” 3 IT ISSO ORDERED. 4 ||Dated: April 27, 2021 em Dh 5 an Yn. 6 Hon. Dana M. Sabraw, Chief Judge United States District Court 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 27 ||* In his opposition to Defendants’ motion, Plaintiff requested attorneys fees for having to 28 oppose this motion. That request is also denied. Going forward, the Court encourages counsel for both sides to review and adhere to Civil Local Rule 2.1.