Thibodeau v. ADT Security Services

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 CLAYTON DEL THIBODEAU, Case No.: 16-cv-2680-GPC 12 Plaintiff, ORDER REGARDING PLAINTIFF’S 13 v. MOTION FOR INTEREST AND PENALTIES 14 ADT LLC, d/b/a ADT SECURITY SERVICES, a/k/a ADT HOLDINGS 15 INC., 16 Defendants. [ECF No. 183] 17 18 On January 14, 2022, Plaintiff Clayton Del Thibodeau (“Plaintiff”) filed a Motion 19 for Interest and Penalties based on Defendant ADT LLC’s (“Defendant” or “ADT”) 20 failure to timely pay the money judgment ordered by this Court on October 21, 2019 21 (ECF No. 154, Order on Cross Motions for Re-Taxation of Costs). ECF No. 183. 22 Defendant opposed, ECF No. 185, and Plaintiff replied, ECF No. 186. On March 3, 2022, 23 the Court vacated the motion hearing set for March 4, 2022, and took the matter under 24 submission. ECF No. 187. 25 26 27 1 I. BACKGROUND 2 This employment action initially involved nine causes of action: (1) violation of 3 California’s Unfair Competition Law; (2) whistleblower retaliation; (3) violation 4 Defendant’s fiduciary duty to Plaintiff through the unauthorized distribution of 5 information related to Plaintiff’s customers; (4) failure to adequately reimburse Plaintiff 6 for expenses he incurred while using his personal vehicle for work; (5) failure to pay 7 overtime; (6) failure to provide rest days; (7) failure to provide wage statements; (8) 8 denial of timely access to employee file; and (9) failure to display a list of employees’ 9 rights and responsibilities. ECF No. 14. On January 31, 2018, this Court granted partial 10 summary judgment to Defendant as to Plaintiff’s second, third, fifth, sixth, and ninth 11 causes of action. ECF No. 69 at 29. On November 20, 2019, Plaintiff appealed the 12 Court’s Summary Judgment Order, ECF No. 69, to the Ninth Circuit Court of Appeals. 13 ECF No. 155. On June 11, 2021, the Ninth Circuit affirmed this Court’s grant of partial 14 summary judgment to Defendants except as to Plaintiff’s fifth claim for unpaid overtime 15 wages, and remanded the case to this Court as to the fifth cause of action only. ECF No. 16 167. 17 Meanwhile, the remaining causes of action—the first, fourth, seventh, and eighth 18 claims—proceeded to a bench trial before this Court, which was held on January 16, 19 2019. ECF No. 126. Following the bench trial, the Court found that Plaintiff prevailed on 20 the first, fourth, and eighth causes of action. ECF No. 130. Judgment was entered for 21 Plaintiff on his first and fourth causes of action in the amount of $11,254.93. ECF No. 22 131. Judgment was also entered for Plaintiff in the amount of $750.00 on Plaintiff’s 23 eighth cause of action. Id. The Court found that Plaintiff failed to establish a violation 24 under his seventh cause of action, CLC § 226, and entered judgment against Plaintiff as 25 to that claim. Id. On cross-motions from the parties for re-taxation of costs, the Court sua 26 sponte amended its prior judgment, ECF No. 130, to award $5,252.30 as interest on 27 1 Plaintiff’s reimbursement damages under the fourth cause of action. ECF No. 154 at 1. 2 The Court also found that, in light of the total damages awarded, Defendant was not 3 rendered the prevailing party and that Plaintiff was entitled to costs. Id. at 2. The Court 4 then awarded Plaintiff $2,841.94 in costs. Id. In sum, the Court directed Defendant to pay 5 Plaintiff a total of $20,099.17 in its October 21, 2019 Order on Re-Taxation of Costs. 6 Defendant paid Plaintiff $20,900.17 on June 15, 2021, 603 days after the Court’s 7 Order directing payment of the judgment. ECF No. 178 at 3; ECF No. 183 at 3. This 8 amount purports to include $801.00 in accumulated interest up to June 15, 2021. Id.; ECF 9 No. 185 at 5. Plaintiff now moves the Court for post-judgment interest in the amount of 10 $2,716.36, calculated at a 10% non-compounding interest rate, because of the delay in 11 receiving the judgment ordered by the Court. ECF No. 183 at 3. Plaintiff also contends 12 that payment of the judgment was improperly withheld in order to coerce Plaintiff into 13 dropping his appeal in exchange for a waiver of costs. Id. at 4. Plaintiff thus requests that 14 the Court grant punitive relief based on Defendant’s alleged misconduct, including 15 further damages and whatever fines, penalties, or fees that the Court deems appropriate. 16 Id. at 9-10. 17 II. DISCUSSION 18 A. Whether Plaintiff is Entitled to Post-Judgment Interest 19 28 U.S.C. § 1961 governs interest on money judgments recovered in civil cases in 20 a district court. Under the statute, “the award of post judgment interest on a district court 21 judgment is mandatory.” Barnard v. Theobald, 721 F.3d 1069, 1078 (9th Cir. 2013). 22 Where a plaintiff is the prevailing party, “[c]osts of the loss of use of a money judgment 23 should not be borne by the injured plaintiff, but by the defendant whose initial wrongful 24 conduct invoked the judicial process and who has had the use of the money judgment 25 throughout the period of delay.” Air Separation, Inc. v. Underwriters at Lloyd’s of 26 London, 45 F.3d 288, 290 (9th Cir. 1995) (quoting Perkins v. Standard Oil Co., 487 F.2d 27 1 672, 674 (9th Cir. 1973)). A failure to award post-judgment interest would “create an 2 incentive for defendants to exploit the time value of money by frivolously appealing or 3 otherwise delaying payment.” Id. 4 This appears to be the case here, where Defendant has delayed payment of the 5 money judgment ordered by this Court for over 19 months. Defendant offers this Court 6 no explanation for this delay. Defendant attempts to argue that Plaintiff is not entitled to 7 post-judgment interest at this time because of the Ninth Circuit’s ruling which remanded 8 Plaintiff’s fifth cause of action for further proceedings. ECF No. 185 at 4. Defendant 9 argues that, because this cause of action was remanded, under the “one judgment rule, no 10 final judgment has yet to be entered by this Court that would otherwise trigger the start of 11 post-judgment interest.” Id. The Court finds this argument wholly unconvincing and 12 bordering on frivolous. To begin, Defendant cites no authority for this proposition.1 13 Second, Defendant attempts to conflate the remand of the fifth cause of action with 14 Plaintiff’s request for post-judgment interest on the first, fourth, and eighth causes of 15 action. As to the first, fourth, and eighth causes of action, the Court awarded a money 16 judgment on those claims, and neither Plaintiff nor Defendant appealed that award. 17 Plaintiff appealed only the Court’s partial summary judgment order, ECF No. 69, which 18 19 20 1 The one judgment rule provides guidance to courts and promotes efficient judicial administration by avoiding piecemeal disposition of a case. Century Natl. Insurance Co. 21 v. United States, 2017 WL 7887593, at *2 (C.D. Cal. Aug. 3, 2017). “The rule’s intent is 22 to avoid having litigation punctuated by piecemeal appellate review of trial court decisions which do not terminate the litigation.” Id. Defendant seems to imply that the 23 one judgment rule precludes this Court from entering any decision, as to any cause of 24 action, unless and until all causes of action have been ruled on and exhausted on appeal. This is not the purpose or the outcome of applying the one judgment rule, especially 25 where, as here, judicial efficiency was properly promoted by the Court’s partial summary 26 judgment order and bench trial, which did terminate the litigation before this Court prior to the Ninth Circuit’s limited remand. 27 1 involved only the second, third, fifth, sixth, and ninth causes of action. Therefore, the 2 Ninth Circuit’s ruling on Plaintiff’s appeal did not affect the Court’s judgment in ECF 3 Nos. 130 and 131, nor the final amount of the judgment, including prejudgment interest 4 and costs, which the Court awarded Plaintiff in ECF No. 154. Therefore, as of October 5 2019, a final judgment had been entered by this Court as to all causes of action, including 6 the first, fourth, and eighth causes of action which underlie the money judgment at 7 issue—and nothing about the appeal process on the remaining counts has changed that 8 circumstance. Since a final judgment was issued, and Defendant did not request a stay of 9 judgment pending Plaintiff’s appeal, the Court finds that Plaintiff is entitled to post- 10 judgment interest on the $20,099.17 judgment awarded to him in ECF No. 154. 11 The question then becomes how much interest to award. Defendant’s argument 12 that no post-judgment interest has accrued is not well-taken. As a preliminary matter, the 13 Court disposes of Defendant’s argument that this Court “cannot issue post-judgment 14 interest from the October 2019 date [of the judgment], only the final judgment that may 15 otherwise be issued after the upcoming trial.” ECF No. 185 at 4 (emphasis in original). 16 This is incorrect. Though Defendant attempts to argue that “the law is clear on this issue” 17 by citing two cases, neither of the citations support Defendant’s argument. Instead, 18 Defendant’s cases deal with completely different circumstances than the one before this 19 Court, in which an appeals court remands to modify or reverse a judgment with a 20 direction that a money judgment be entered in the district court. See Planned Parenthood 21 of Columbia/Willamette Inc. v. Am. Coal. of Life Activities, 518 F.3d 1013, 1018 (9th Cir. 22 2008); Afewerki v. Anaya Law Grp., 2021 WL 5773865, at *6 (C.D. Cal. Mar. 24, 2021). 23 Those circumstances are clearly not relevant here, where the Ninth Circuit has not handed 24 down a mandate directing that a money judgment be entered in the district court (and, as 25 the Court explained above, where the mandate does not even touch on the money 26 judgment previously awarded by this Court in ECF No. 154). 27 1 According to Defendant’s own cited case, “post-judgment interest must run from 2 the date of a judgment when the damages were supported by the evidence and 3 meaningfully ascertained.” Planned Parenthood, 518 F.3d at 1017-18 (emphasis added). 4 This accords with the statutory command found in 28 U.S.C. § 1961, which states that 5 “[s]uch interest shall be calculated from the date of the entry of the judgment . . .” 28 6 U.S.C. § 1961(a). Therefore, the Court will award interest beginning from the date of the 7 judgment entered on October 21, 2019. 8 Section 1961 also dictates how post-judgment interest shall be calculated: “at a rate 9 equal to the weekly average 1-year constant maturity Treasury yield, as published by the 10 Board of Governors of the Federal Reserve System, for the calendar week preceding the 11 date of the judgment.” 28 U.S.C. § 1961(a). Furthermore, “[i]nterest shall be computed 12 daily to the date of payment . . . and shall be compounded annually.” Id. Plaintiff’s 13 calculation of interest at a non-compounding interest rate of 10% is therefore incorrect. 14 ECF No. 183 at 3. Plaintiff’s Reply explains that the 10% rate comes from the Court’s 15 previous Order, ECF No. 154, in which the Court awarded 10% per annum on the 16 principal under California state law, and elected not to compound the interest. ECF No. 17 154 at 7. However, the 10% rate applied to the Court’s award of prejudgment interest, 18 whereas here, the Court is determining post-judgment interest. “In diversity actions, state 19 law determines the rate of prejudgment interest, and postjudgment interest is governed by 20 federal law.” Amer. Tel. & Tel. Co. v. United Comput. Sys., Inc., 98 F.3d 1206, 1209 (9th 21 Cir. 1996). Accordingly, the post-judgment interest analysis is governed by the federal 22 statute, 28 U.S.C. § 1961, rather than the Court’s previous award of prejudgment interest. 23 The Court uses historical interest rate information published by the Board of 24 Governors of the Federal Reserve System, as set forth in § 1961. These rates are 25 published on the JNET website by the Administrative Office of the United States Courts. 26 27 1 The relevant interest rate for a civil judgment entered on October 21, 2019 is 1.60%.2 2 The final judgment of $20,099.17, with a 1.60% interest rate compounded annually over 3 19 months (the 603 days between judgment on October 21, 2019 and Defendant’s 4 payment of the judgment on June 15, 2021) yields $533.37 in interest. Because 5 Defendant paid Plaintiff $20,900.17 on June 15, 2021, an amount which was $801.00 in 6 excess of the judgment owed to the Plaintiff, the Court finds that although Plaintiff is 7 entitled to post-judgment interest, that interest has been paid and no further payment is 8 due to Plaintiff. 9 Plaintiff also requests various forms of punitive relief and sanctions based on 10 Defendant’s failure to timely pay the judgment, including additional damages, contempt 11 of court citations, referral of defense counsel to the State Bar for disciplinary action, and 12 referral of defense counsel for criminal prosecution. ECF No. 183 at 9-10. A district court 13 possesses inherent powers, including those necessary to level contempt sanctions, in 14 order to enforce compliance with its lawful orders. Cal. Dept. of Soc. Serv. v. Leavitt, 523 15 F.3d 1025, 1033 (9th Cir. 2008). However, before imposing sanctions under its inherent 16 powers, a court must make an explicit finding that counsel’s conduct constituted or was 17 tantamount to bad faith. Primus Auto. Fin. Serv., Inc. v. Batarse, 115 F.3d 644, 648 (9th 18 Cir. 1997). A party demonstrates bad faith by “delaying or disrupting the litigation or 19 hampering enforcement of a court order.” Id. at 649. The bad faith requirement sets a 20 “high threshold.” Id. (finding that bad faith requirement was not met even where lower 21 court found attorney’s conduct “outrageous” and “inexcusable”); see also F.J. Hanshaw 22 23 24 25 2 Post Judgment Interest Rates, “Historical Rate Information” 26 https://jnet.ao.dcn/financial-management/accounting/post-judgment-interest-rates (last accessed February 23, 2022). 27 1 Enter., Inc. v. Emerald River Dev., Inc., 244 F.3d 1128, 1137 (9th Cir. 2001) (“Because 2 of their very potency, inherent powers must be exercised with restraint and discretion.”) 3 Though the Court sympathizes with the delay Plaintiff faced in receiving the 4 money judgment, in this case the Court cannot find that defense counsel’s behavior rises 5 to the level of bad faith that would support sanctions. While Defendant did not 6 immediately pay the money judgment as ordered by the Court, and has offered little 7 explanation to this Court as to why the delay was reasonable, whether this was 8 “hampering” the Court’s Order intentionally or waiting to pay based on a good-faith 9 belief that the appeal would have some effect on the payment of the judgment is subject 10 to reasonable debate. At this juncture, the Court will give defense counsel the benefit of 11 the doubt in accepting that defense counsel truly believed that the pending appeal 12 justified withholding payment of the judgment. Though this belief was erroneous, the 13 Court does not base sanctions on this behavior because other courts have found more 14 egregious behavior not to warrant sanctions either. See In re Outlaw Laboratories, LP 15 Litigation, No. 18-cv-840-GPC-BGS, 2020 WL 7641820, at *4 (S.D. Cal. Dec. 23, 2020) 16 (finding that personal attacks by counsel did not rise to the level of bad faith warranting 17 sanctions); Salinas v. Cornwell Quality Tools Co., No. 5:19-cv-2275-FLA (SPx), 2021 18 WL 4805316, at *5 (C.D. Cal. July 8, 2021) (finding that defendant’s months-long press 19 of unfounded accusations against plaintiff did not warrant sanctions even though plaintiff 20 expended considerable time, energy, and expense in defending against them). However, 21 as previously noted, defense counsel’s arguments in this matter border on the frivolous, 22 and Plaintiff is entitled to retain the $237.63 overage paid by defense counsel in addition 23 to the $533.37 in interest to which Plaintiff is entitled. Defense counsel is hereby 24 cautioned that any failure to strictly abide by the Court’s orders in future may be met with 25 sanctions, including judgment in Plaintiff’s favor as to the remaining cause of action in 26 this case. See F.J. Hanshaw, 244 F.3d at 1136 (“As a function of this [inherent] power, 27 1 || courts can dismiss cases in their entirety, bar witnesses, award attorney’s fees and assess 2 || fines.’’). 3 Defendant also requests that this Court levy sanctions against Plaintiff for filing the 4 || subject motion. ECF No. 185 at 6. The Court declines to do so, given that Plaintiff was 5 || ultimately correct about his entitlement to post-judgment interest. 6 B. Defendant’s Request for Judicial Notice 7 Defendant requests that the Court take judicial notice of historical post-judgment 8 || interest rates published by the United States Bankruptcy Court for the Southern District 9 || of California. ECF No. 185-1 at 2. Because the Court did not rely on these rates, the 10 || Court declines to take judicial notice of them. 11 CONCLUSION 12 The Court finds that Plaintiff was entitled to post-judgment interest on the 13 || $20,099.17 money judgment entered for Plaintiff in ECF No. 154 as of October 21, 2019. 14 || However, given that Defendant has paid Plaintiff more than the amount of the interest 15 principal owed on the money judgment, the Court finds that no further payment is 16 required and that Plaintiffs entitlement to post-judgment interest 1s satisfied. 17 || Accordingly, the Court HEREBY DENIES Plaintiff's Motion for Interest and Penalties 18 || insofar as it requests further payment of interest. The Court also DENIES Plaintiff's 19 request for penalties against Defendant, excepting that Plaintiff is entitled to retain the 20 || overage paid by Defendant. The Court cautions Defendant that further failures to abide 21 || by the Court’s orders may warrant sanctions. 22 IT IS SO ORDERED. 23 Dated: March 4, 2022 =< 5 United States District Judge 26 27 28 16-cv-2680-GPC