DocketNumber: No. CV 02-03447 MMM(JTLx)
Judges: Morrow
Filed Date: 4/25/2003
Status: Precedential
Modified Date: 10/19/2024
ORDER DENYING PLAINTIFF’S MOTION TO CONTINUE TRIAL DATE, DISCOVERY CUT-OFF DATE AND RELATED DATES
Plaintiff Matrix Motor Co. (“Matrix”) filed suit against Toyota Jidosha Kabushiki Kaisha Va Toyota Motor Corp., Toyota Motor Sales, U.S.A., Inc., and Toyota Motor North America, Inc. (collectively “Toyota”) on April 26, 2002, alleging false designation of origin, unfair competition, trademark infringement under California law, and common law trademark infringement. On December 18, 2002, Matrix’s attorney filed a motion to withdraw as the company’s counsel. The motion was denied as moot on January 22, 2003, when Matrix filed a substitution of attorneys form. On March 13, 2003, the court held a telephone status conference, shortly in advance of the April 4, 2003, fact discovery cut-off date set by the court at the scheduling conference. Matrix’s new attorney stated that he was in poor health, and had agreed to
I. FACTUAL BACKGROUND
Some time prior to April 2002, Matrix’s CEO, Louis Beuzieron, approached Irwin M. Friedman, an attorney who periodically represented the company, to discuss the possibility of filing a trademark lawsuit against Toyota. Friedman purportedly told Beuzieron that he was not in a position to file the suit, at least in part because of his health, and referred Beuzieron to the law firm of Buchalter, Nemer, Fields <£ Younger.
On September 23, 2002, the court held a Rule 26(f) scheduling conference, and set case management dates. The court directed that plaintiff designate its experts on or before February 4, 2003; that defendant designate its experts by March 4, 2003; that fact discovery be completed by April 4, 2003; that rebuttal expert designations occur no later than April 15, 2003; and the expert discovery be completed on or before May 2, 2003. The court also set a motion hearing cut-off date of May 5, 2003, a pretrial conference date of June 2, 2003 and a trial date of June 24, 2003.
Beuzieron asserts the Buchalter firm never notified him of the discovery or expert deadlines, and did not advise him of the necessity of retaining experts in the case.
Margaret A. Esquenet, Toyota’s counsel, asserts that plaintiffs responses to Toyota’s first set of interrogatories and first set of requests, for document production were initially due on November 6, 2002.
Toyota ultimately filed a motion to compel responses to its document production requests, which Magistrate Judge Lum took off calendar on December 12, 2002, for failure to comply with the local rules. Toyota filed a new motion to compel on December 30, 2002, which was granted on January 22, 2003. In her order, Judge Lum noted that the requested document discovery had been due on November 20, 2002, and that a formal response had not yet been provided. She directed that the requested discovery be provided to defendants within thirty days.
On December 18, 2002, Reinis filed a motion on the Buchalter firm’s behalf seeking leave to withdraw as Matrix’s counsel. Rein-is’ declaration in support of the motion asserted that his communications with Matrix had completely broken down. He stated that he last spoke with Beuzieron on October 8, 2002, and that his multiple attempts to reach Beuzieron by telephone had been ignored. He further noted that Buchalter’s outstanding fees had not been paid.
Upon receiving the ease file from the Buchalter firm, Friedman states he was “shocked to discover just how little had been done.” Specifically, he found that: (1) there was no research in the file; (2) there was no
Beuzieron maintains that he has sought counsel to replace Friedman diligently, commencing in December 2002.
Plaintiff raised the possibility of a continuance of the discovery cut-off and other dates at a telephone status conference held with the court on March 13, 2003. The court declined to grant a continuance on the basis of plaintiffs oral request, and instructed plaintiff to file a formal motion to modify the court’s scheduling order if it wished a continuance of the case management dates. The instant motion was filed on March 21, 2003.
II. DISCUSSION
A. Standard Governing Modification Of Pretrial Scheduling Orders
Rule 16 of the Federal Rules of Civil Procedure authorizes the court to enter pretrial scheduling orders, which set dates for the completion of discovery, the hearing of dispositive motions, trial, and other matters. Rule 16(b) provides that the “scheduling order shall not be modified except by leave of court and upon a showing of good cause.” Fed.R.Civ.Proc. 16(b). Thus, when a plaintiff seeks to continue the dates set by the court at a scheduling conference, it must first show “good cause” for modification of the scheduling order under Rule 16(b). See Zivkovic v. Southern California Edison Co., 302 F.3d 1080, 1087 (9th Cir.2002); Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 608 (9th Cir.1992).
This “good cause” standard “primarily considers the diligence of the party seeking the amendment.” Johnson, supra, 975 F.2d at 609. A party demonstrates good cause for the modification of a scheduling order by showing that, even with the exercise of due diligence, he or she was unable to meet the timetable set forth in the order. See Zivkovic, supra, 302 F.3d at 1087; Johnson, supra, 975 F.2d at 609. “If the party seeking the modification ‘was not diligent, the inquiry should end’ and the motion to modify should not be granted.” Zivkovic, supra, 302 F.3d at 1087 (citation omitted). See also Johnson, supra, 975 F.2d at 609 (“Although the existence or degree of prejudice to the party opposing the modification might supply additional reasons to deny a motion, the focus of the inquiry is upon the moving party’s reasons for seeking modification”).
B. Whether Matrix Has Demonstrated Diligence In Meeting The Court’s Scheduling Order
1. Matrix And Its Attorneys Have Not Acted Diligently
No party seriously disputes that Matrix has faded diligently to prosecute this action.
Friedman asserts that, since substituting in as counsel, he has attempted to comply with discovery requirements and deadlines.
Matrix at no time sought a continuance of the scheduled dates until Friedman mentioned the matter informally during the telephone status conference conducted on March 13, 2003. This was more than a month after the date for the designation of Matrix’s expert had passed, and only twenty-two days before the fact discovery cut-off date established by the court. Attorney Greenberg, whom Matrix contacted only days before the conference, asserts that he conducted an internet search regarding Toyota’s infringement of the “Matrix” mark and found substantial evidence of infringement. He contends he needs an additional ninety days of discovery to develop admissible evidence of such infringement to present to a jury.
The Buchalter firm clearly did not make a diligent effort to comply with the case management schedule established by the court. Matrix contends that it should not be charged with its lawyers’ lack of diligence. Rather, it contends that its efforts to locate new counsel since December 2002 demonstrate that, unlike its prior attorneys, it has “done everything in its power” to prosecute the case.
2. Whether Gross Negligence On The Part Of The Buchalter Firm Justifies A Finding Of Good Cause Despite Plaintiffs Lack Of Diligence
Matrix asserts that its inability to meet the schedule set by the court is due to the Buchalter firm’s gross negligence, i.e., its failure to conduct discovery and to disclose to Beuzieron the lack of progress in the case.
a. Attribution Of Attorney Negligence To Client
It has been long held that a party to litigation “is deemed bound by the acts of his lawyer-agent and is considered to have ‘notice of all facts, notice of which can be charged upon the attorney.’” Link v. Wabash R. Co., 370 U.S. 626, 634, 82 S.Ct. 1386,
More recently, the Court held that, in examining whether to relieve creditors in a bankruptcy proceeding of a default for “excusable neglect]” analysis should focus not on “whether respondents did all they reasonably could in policing the conduct of their attorney, [but] rather ... on whether their attorney, as respondents’ agent, did all he reasonably could to comply with the court-ordered bar date.” Pioneer Investment Services, supra, 507 U.S. at 396, 113 S.Ct. 1489. In Pioneer, the creditors had failed to file proofs of claim in a timely fashion in the bankruptcy court, purportedly because of their attorney’s negligence. Emphasizing that “respondents [should] be held accountable for the acts and omissions of their chosen counsel,” the Court stated that the proper inquiry was “whether the neglect of respondents and their counsel was excusable.” Id. at 397, 113 S.Ct. 1489 (emphasis original).
Despite this well settled rule, the Ninth Circuit has joined other circuits in distinguishing between “a client’s accountability for his counsel’s neglectful or negligent acts — too often a normal part of representation — and his responsibility for the more unusual circumstance of his attorney’s extreme negligence or egregious conduct.” Community Dental Services v. Tani, 282 F.3d 1164, 1168 (9th Cir.2002).
In reaching this result, the court made clear that it was not applying the “excusable neglect” standard of Rule 60(b)(1). See id. at 1170, n. 12 (“Our holding that gross negligence on the part' of the attorney may constitute ‘extraordinary circumstances’ under Clause 60(b)(6) does not affect what may be defined as ‘excusable neglect’ under Clause 60(b)(1). The clauses are mutually exclusive....The ‘excusable neglect’ clause is interpreted as encompassing errors made due to the ‘mere neglect’ of the petitioner whereas (b)(6) is intended to encompass errors or actions beyond the petitioner’s control”). The court also distinguished Link, noting that it involved a dismissal for failure to prosecute, rather than a motion to vacate a default judgment under Rule 60(b)(6). See id. at 1170 (“The Supreme Court’s decision in Link does not require a contrary result. While it is true that Link states that an attorney’s actions are chargeable to the client, the Court expressly declined to state whether it would have held that the district court abused its discretion if the issue had arisen in the context of a motion under Rule 60(b)____ Thus, Link does not serve as a barrier to establishing the rule that gross negligence by a-party’s counsel may constitute ‘extraordinary circumstances’ under Rule 60(b)(6)”).
Here, the standard is neither “extraordinary circumstances” nor “excusable neglect,” but “good cause.” Several courts have held that “good cause” requires more than “excusable neglect.” See, e.g., In re Kirkland, 86 F.3d 172, 175 (10th Cir.1996) (stating that “[t]he Pioneer court did not in any way link its discussion of ‘excusable neglect’ with ‘good cause,’ ” and concluding that “ ‘good cause’ requires a greater showing than ‘excusable neglect’ ”); Lujano v. Omaha Pub. Power Dist., 30 F.3d 1032, 1035 (8th Cir.1994) (“Several courts of appeals have held that good cause requires at least excusable neglect”); Colasante v. Wells Fargo Corp., Inc., 211 F.R.D. 555, 560 (S.D.Iowa 2002) (“The good cause standard requires more than excusable neglect”); Corkrey v. Internal Revenue Service, 192 F.R.D. 66, 67 (N.D.N.Y.2000) (stating, in the context of a Rule 16(b) request for modification of a scheduling order, that “[a] difference exists in the standards for ‘excusable neglect’ and for ‘good cause’ ” and citing Kirkland). .The Johnson court held that Rule 16(b)’s reference to “good cause” was “a close correlate” of “extraordinary circumstances.” See Johnson, supra, 975 F.2d at 610. Applying these standards, if all Matrix has shown is ordinary negligence on the part of its attorneys, then Link applies, and it must be held accountable for its lawyers’ lack of diligence. If, on the other hand, it has shown that its lawyers were guilty of gross negligence or abandonment, then, applying Johnson and Tani, a finding of extraordinary circumstances or good cause, justifying a modification of the scheduling order, would be warranted.
b. Whether Matrix Has Shown That The Buchalter Firm Was Grossly Negligent
The record reflects that Reims participated in the early meeting of counsel,
Furthermore, Beuzieron concedes that he provided no documents to Reims for production to Toyota until November 2002.
The record, in short, differs significantly from that before the court in Tani. There, the attorney “virtually abandoned” his client, failing to make court appearances, file pleadings, and oppose motions. Tani, supra, 282 F.3d at 1170-71. Here, Reims made court appearances, filed necessary pleadings, and responded to some discovery, despite the fact that he was unable to communicate with his client and was not being paid. In Tani, the attorney deliberately misled his client about the progress of the ease. Id. at 1171. Here, at most, Reims put Beuzieron off with vague comments that discovery to Toyota was “in the works.” Unlike the statements of the attorney in Tani, this is not the type of remark that “depriv[ed Matrix] of the opportunity to take action to preserve [its] rights.” Id. at 1171. If anything, it should have spurred Matrix into action, demanding to
This conclusion is reinforced when the recent history of the action is considered. The Buchalter firm sought leave to withdraw in December 2002. Friedman appears to have agreed to enter the ease sometime that month, and formally substituted into the action as counsel in January 2003. Friedman obtained the case file from Buchalter, and by his own admission, was able to determine what had been done, and what remained to be accomplished. Represented by Friedman, Matrix had two to three months before the fact discovery cut-off date within which it could have initiated discovery and prepared the case for trial.
Yet Friedman did not act diligently. He failed (1) to respond fully and timely to outstanding discovery requests; (2) to comply with court-ordered document production in a timely fashion; (3) to designate experts; and (4) to propound discovery.
There is no question that Matrix is charged with Friedman’s lack of diligence. The company knew when it asked Friedman to substitute into the case that he was willing to serve on a temporary basis only, and that he did not intend to initiate affirmative discovery or move the case forward to trial. It is also charged with his knowledge of the case file — including the case management dates set by the court, the fact that no affirmative discovery had been conducted, and the fact that responses to Toyota’s discovery requests were delinquent. It is particularly appropriate to impute such knowledge to Matrix since Friedman appears to have been acting as its corporate counsel with respect to the claims against Toyota since prior to the time the action was filed. Irrespective of the Buchalter firm’s conduct, therefore, Matrix did not act diligently during the period it was represented by Friedman to meet the case management schedule established by the court, or to call to the court’s attention the need for a modification
III. CONCLUSION
For the foregoing reasons, plaintiffs motion to continue dates is denied.
. Declaration of Louis Beuzieron in Support of Motion to Continue Trial and Related Dates (“Beuzieron Decl."), ¶ 2; Declaration of Irwin Friedman in Support of Motion to Continue Trial and Related Dates ("Friedman Decl.”), V 3.
. Defendants’ Opposition to Plaintiff’s Motion to Continue Trial and Related Dates (“Defs.' Opp.”), Ex. D (Cease and Desist Letter).
. Defs.’ Opp., Ex. E (Oct. 23 Letter).
. Declaration of Louis Beuzieron in Support of Motion to Continue Trial and Related Dates ("Beuzieron Decl.”), ¶ 2; Declaration of Irwin Friedman in Support of Motion to Continue Trial and Related Dates ("Friedman Decl.’’), ¶ 3.
. Defs.' Opp., Ex. F (Settlement Demand Letter).
. Beuzieron Decl., ¶ 4.
. Beuzieron Decl., ¶¶ 6, 8. In his deposition, Beuzieron stated that he asked these questions three or four times, but did not recall the dates on which he did so. (Defs.’ Opp., Ex. B (Deposition of Louis Beuzieron ("Beuzieron Depo.”)) at 133:23-134:16).
. Beuzieron Decl., ¶¶ 6, 8.
. Beuzieron Decl., ¶ 7. Beuzieron testified at his deposition that he made this request on at least two occasions, but did not recall the date of the requests. (Beuzieron Depo. at 133:4-19).
. Beuzieron Decl., ¶ 5.
. Beuzieron Decl., ¶ 9.
. Beuzieron Depo. at 135:11-136:8.
. Defendants' Opposition to Motion to Withdraw as Counsel ("Withdraw Opp."), Ex. B ("Renewed Motion to Compel Document Production”), Declaration of Margaret A. Esquenet in Support of Defendants’ Renewed Motion to Compel Document Production ("Esquenet Compel Decl.”), ¶ 4.
. Esquenet Compel Decl., ¶¶ 2-4.
. Esquenet Compel Decl., ¶ 5.
. Renewed Motion to Compel Document Production, Ex. D (Nov. 22 Letter).
. Declaration of Mitchell N. Reinis in Support of Motion to Withdraw as Counsel ("Reinis Decl.”), ¶¶ 3-4.
. Beuzieron Decl., ¶ 10; Friedman Decl, ¶ 4.
. Friedman Decl., ¶ 5.
. Friedman Decl., ¶ 9.
. Beuzieron Decl., ¶ 11.
. Beuzieron Depo. at 137:10-138:4.
. Beuzieron Depo. at 138:5-7; Declaration of David H. Greenberg in Support of Motion to Continue Trial and Related Dates ("Greenberg Decl."), ¶ 2.
. Friedman Decl., ¶ 9.
. Friedman Decl., ¶¶ 2, 7.
. Friedman Decl., ¶ 9.
. Friedman Decl., ¶ 10(d).
. Greenberg Decl., ¶¶ 2-3.
. Motion to Continue Trial Date, Discovery Cut-Off Date and Related Dates (“Pl.’s Mot.”) at 7:27-28.
. Courts recognizing a distinction between negligence and gross negligence grant parties relief from default judgment where their attorneys have displayed "neglect so gross that it is inexcusable.” Boughner v. Sec'y of Health, Educ. & Welfare, 572 F.2d 976, 978 (3d Cir.1978). See also Shepard Claims Service, Inc. v. William Darrah & Assocs., 796 F.2d 190, 195 (6th Cir.1986) (“Although a party who chooses an attorney takes the risk of suffering from the attorney’s incompetence, we do not believe that this record exhibits circumstances in which a client should suffer the ultimate sanction of losing his case without any consideration of the merits because of his attorney’s neglect and inattention”); L.P. Steuart, Inc. v. Matthews, 329 F.2d 234, 235 (D.C.Cir.1964) (the "extraordinary circumstance” standard of Rule 60(b)(6) "is broad enough to permit relief when as in this case personal problems of counsel cause him grossly to neglect a diligent client’s case and mislead the client"); Primbs v. United States, 4 Cl.Ct. 366, 370 (1984) (“The usual understanding of the attorney-client agency relationship, however, should not bar relief under Rule 60(b) when the evidence is clear that the attorney and his client were not acting as one. The agency analysis is particularly inappropriate when the plaintiff has proven that his diligent efforts to prosecute the suit were, without his knowledge, thwarted by his attorney’s deceptions and negligence”).
. See Joint Report of Counsel, filed August 28, 2002.
. Reinis appeared at the scheduling conference on September 23, 2002.
. See Docket Entry No. 16.
. Beuzieron Depo. at 135:18-23.
. Beuzieron Decl., ¶¶ 6, 8.
. Beuzieron Decl., ¶ 9.
. Beuzieron Decl., ¶¶ 5-6, 8; Beuzieron Depo. at 133:23-134:16.
. Esquenet Compel Decl., ¶¶ 2-5; Renewed Motion to Compel Document Production, Ex. D (Nov. 22 Letter).
. Reinis Decl., ¶ 3-4.
. Friedman’s age and alleged ill health are not an adequate explanation for this lack of diligence. If Friedman was unable to assume responsibility for management of the case, he should not have substituted in as Matrix's counsel. Having done so, the court and defendants were entitled to rely on his substitution into the case as an indication that he was able competently to perform the duties required of him as Matrix’s attorney of record.
. Nor does it appear that Beuzieron acted diligently to obtain replacement counsel for Friedman. While Beuzieron asserts in conclusoiy fashion that he did, his declaration provides no specifics as to what steps he took or when he took them. During his deposition, Beuzieron stated that he interviewed two or three attorneys. Yet he could not recall the dates of the interviews, and Greenberg states that he was contacted only days before the March 13, 2003, status conference.