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United States, For the Use of: Technica, LLC v. Carolina Casualty Insurance Company

April 11, 2012


The opinion of the court was delivered by: Marilyn L. Huff, District Judge United States District Court


On March 19, 2012, Defendants' counsel, Robert J. Berens, filed an affidavit pursuant to 28 U.S.C. §§ 144 and 455, alleging this Court's bias or prejudice against Defendants and their counsel. (Doc. No. 153.) Counsel's allegations stem from the Court's rulings in United States ex rel. Ramona Equipment Rental, Inc. v. Carolina Casualty Insurance Co., et al., 08-CV-1685-H (MDD) ("Ramona"), and United States ex rel. Technica, LLC v. Carolina Casualty Insurance Co., et al., 08-CV-1673-H (KSC) ("Technica"). For the following reasons, the Court denies the request for recusal as without merit under section 455 and as legally insufficient under section 144.


I. United States ex rel. Ramona v. Carolina Casualty Insurance Co., et al.

The Ramona Miller Act action and related claims came to a non-jury trial before the Court. (Ramona, Doc. No. 112.) Plaintiff's claims in the lawsuit arose from a federal construction project-the El Centro ICE Detention Center-for unpaid equipment rentals supplied by Ramona to Otay, a subcontractor of the general contractor, Candelaria Corporation. (Ramona, Doc. No. 112.) On August 31, 2011, the Court issued a detailed memorandum decision in favor of Plaintiff Ramona Equipment Rental Inc. and against Defendants Carolina Casualty Insurance Company, Candelaria Corporation, and Otay Group, Inc. in the amount of $178,686.56 plus interest, attorney's fees, and costs as allowed by law. (Ramona, Doc. No. 112.) In its memorandum decision, the Court complimented the parties' presentation of the evidence. (Ramona, Doc. No. 112.)

Following the trial, the Court issued a briefing schedule for its determination of interest and attorney's fees. (Ramona, Doc. No. 113.) Concerning interest, the parties submitted their proposed prejudgment interest calculations. (Ramona, Doc. Nos. 114, 117.) The Court did not immediately enter judgment and instead permitted the parties to oppose entry of judgment, if desired. (Ramona, Doc. No. 119.) After due consideration, the Court awarded Plaintiff $106,686.56 plus $106,516.64 as interest for a total sum of $285,203.20, plus attorney's fees. (Ramona, Doc. No. 119.) The Court attached a proposed order to the order regarding interest, to be issued absent opposition from the parties. (Ramona, Doc. No. 119.) Defendants objected to the timing of the Court's entry of judgment, requesting the Court's entry of judgment be delayed until after attorney's fees had been determined by the Court. (Ramona, Doc. No. 121.) Therefore, the Court delayed entry of judgment and directed Defendants to file an opposition to the amount of attorney's fees requested by Plaintiff. (Ramona, Doc. Nos. 122.)

On November 10, 2011, after carefully considering the parties' arguments, papers, and oral argument, the Court awarded Plaintiff Ramona reasonable attorney's fees in the amount of $54,571.25 attributable to James Crosby, Plaintiff Ramona's current counsel, and $59,510.03 attributable to Kevin Carlin, Plaintiff Ramona's former counsel, for the total of $114,081.28, substantially less than Plaintiff's requested amount. (Ramona, Doc. No. 133.) On November 10, 2011, the Court entered judgment in favor of Plaintiff and against Defendants in the amount of $399,284.48. (Ramona, Doc. No. 134.) The award included the unpaid equipment rental of $175,658.57; simple, not compounded, contractual interest of $106,516.64; and attorney's fees of $114.81.28. (Ramona, Doc. No. 134.)

On December 1, 2011, Defendants filed a motion to alter judgment under Federal Rules of Civil Procedure 59(e) and 60(b). (Ramona, Doc. No. 136.) Defendants moved to exclude contractual interest from the amount awarded to Plaintiff Ramona. (Ramona, Doc. No. 136.) After considering the parties' arguments, on December 30, 2011 the Court denied Defendants' motion to alter or amend the judgment, concluding that Defendants had not met their burden of showing legal error under Rule 59(e) or substantive error of law and fact under Rule 60(b) that would warrant altering or amending the judgment in the case. (Ramona, Doc. No. 142.)

On January 23, 2012, Defendants filed a motion to stay the judgment pending appeal and requested the Court to not order a supersedeas bond. (Ramona, Doc. No. 145.) The Court granted Defendants' request for stay of the judgment but required Defendants to post a supersedeas bond pursuant to Local Rule 65.1.2. (Ramona, Doc. No. 154.) Defendants then sought clarification of the Court's order, requesting that the Court confirm the amount to be posted. (Ramona, Doc. No. 155.) On February 17, 2012, the Court clarified the order for Defendants to post a supersedeas bond for $399,284.49, the amount of the judgment, not the amount requested by Plaintiff of $499,105.60. (Ramona, Doc. Nos. 156, 157.)

II. United States ex rel. Technica v. Carolina Casualty Insurance Company, et al.

The Court was randomly assigned to Technica on March 12, 2012, after the previously assigned judge recused from the matter. (Technica, Doc. No. 144.) No party had filed a notice of related cases in either Technica or Ramona, as required by Local Civil Rule 40.1(f). The Court retained the previously scheduled pretrial conference set for March 14, 2012.*fn1

(Technica, Doc. No. 143.) The Court ordered the parties to meet and confer, and submit a joint proposed pretrial order before the pretrial conference. (Technica, Doc. No. 149.) The Court also ruled on the fully briefed and submitted motion for leave to file a third amended answer and counterclaim. (Technica, Doc. Nos. 124, 146.) At a March 15, 2012 hearing, in light of the Court's notice of counsel's intent to file an affidavit under 28 U.S.C. §§ 144 and 455 and the parties' inability to agree on a proposed pretrial order in accordance with Local Rule 16.1(f)(6), the Court postponed the pretrial conference until further notice. (Technica, Doc. No. 152.)

On March 19, 2012, counsel for Defendants Candelaria Corporation, Carolina Casualty Insurance Company, and Otay Group, filed a sworn affidavit pursuant to 28 U.S.C. §§ 144 and 455.*fn2 (Technica, Doc. No. 153.) Counsel also filed a certificate of counsel of record certifying that the affidavit was filed in good faith. (Technica, Doc. No. 154.) Counsel asserts that the Court is biased or prejudiced against Candelaria or against him personally based on the Court's rulings in Ramona and Technica. (Technica, Doc. No. 153.)


Requests for recusal are governed by 28 U.S.C. §§ 144 and 455. When a court considers a motion brought under section 144, the court should evaluate whether to "grant recusal pursuant to [section 455]," and if it determines that recusal is inappropriate under section 455, proceed to "determine the legal sufficiency of the affidavit filed pursuant to 144." United States v. Sibla, 624 F.2d 864, 868 (9th Cir. 1980).

I. Recusal Under Section 455

A. Legal Standard for Section 455

Section 455 provides, "Any . . . judge . . . shall disqualify himself in any proceeding in which his impartiality may reasonably be questioned." 28 U.S.C. § 455. It continues, "He shall also disqualify himself . . . [w]here he has a personal bias or prejudice concerning a party." Id. Therefore, in evaluating a section 455 motion, the operative test is "whether a reasonable person with knowledge of all the facts would conclude that the judge's impartiality may reasonably be questioned." United States v. Hernandez, 109 F.3d 1450, 1453-54 (9th Cir. 1997); see also Pesnell v. Arsenault, 543 F.3d 1038, 1043 (9th Cir. 2008); United States v. Holland, 519 F.3d 909, 914 (9th Cir. 2008); Yagman v. Republic Ins., 987 F.2d 622, 626 (9th Cir. 1993); Mayes v. Leipziger, 729 F.2d 605, 607 (9th Cir. 1985); United States v. Nelson, 718 F.2d 315, 321 (9th Cir. 1983). In Liteky v. United States, 510 U.S. 540 (1994), the Supreme Court analyzed the bases for recusal under section 455 and held that judicial rulings rarely constitute a valid basis. Liteky, 510 U.S. at 555; accord Velazquez v. Demore, 59 Fed. Appx. 984 (9th Cir. 2003). The Court explained, First, judicial rulings almost never constitute a valid basis for a bias or partiality motion. In and of themselves (i.e., apart from surrounding comments or accompanying opinion), they cannot possibly show reliance upon an extra-judicial source; and can only in the rarest circumstances evidence the degree of favoritism or antagonism required . . . when no extra-judicial source is involved. Almost invariably, they are proper grounds for appeal, not recusal. Second, opinions formed by the judge on the basis of facts introduced or events occurring in the course of the current proceedings, or of prior proceedings, do not constitute a basis for a bias or partiality motion unless they display a deep-seated favoritism or antagonism that would make fair judgment impossible.

Liteky, 510 U.S. at 555; see also Pesnell, 543 F.3d at 1044. In Liteky, the Supreme Court held as insufficient a recusal motion based on the district court's rulings, statements, and conduct during trial, including cutting off testimony, exhibiting an "anti-defendant tone," and denying motions subsequent to trial. Liteky, 510 U.S. at 556. The Court stated, "All these grounds are inadequate . . . . They consist of judicial rulings, routine trial administration efforts, and ordinary admonishments (whether or not legally supportable) to counsel and to witnesses." Id. The Court further explained that "[a]ll occurred in the course of judicial proceedings and neither (1) relied upon knowledge acquired outside such proceedings nor (2) displayed deep-seated and unequivocal antagonism that would render fair judgment impossible." Id.

B. Affidavit Is Without Merit Under Section 455

In light of the applicable legal standard, the Court turns to whether the reasons provided in counsel's affidavit would lead a reasonable person with knowledge of the facts of the case to question the Court's impartiality. See Hernandez, 109 F.3d at 1453-54. Based on the record, the Court concludes a reasonable person would not question the Court's impartiality.

1. Court's Rulings During Ramona Trial

Counsel challenges the Court's evidentiary rulings made during the bench trial in Ramona. (Technica, Doc. No. 153, ¶ 11.) Counsel alleges that this Court did not allow him to voir dire a witness concerning the evidentiary foundation for business records, the rental equipment invoices. (Technica, Doc. No. 153, ¶ 8; see Ramona, Doc. No. 148, at 131-37.) Instead, the Court suggested that counsel challenge the evidentiary foundation for the witness's testimony on cross-examination. (Ramona, Doc. No. 148, at 131 ll. 17-18.) Counsel also argues that the Court, over his objection, permitted Plaintiff to elicit expert opinion testimony through its lay witness at trial. (Technica, Doc. No. 153, ¶ 9.) Further, counsel argues that the Court, over his objection, permitted Plaintiff to reopen its direct examination of a witness concerning the compounded interest charges from the unpaid rental equipment charges.*fn3

(Technica, Doc. No. 153, ¶ 9.)

As a preliminary matter, recusal based on these allegations is improper because the alleged misconduct derives from conduct in the course of the proceeding, not from an extra-judicial source or a deep-seated antagonism toward Defendants. See Liteky, 510 U.S. at 555-56. Here, counsel argues that the Court is prejudiced or biased, as demonstrated by judicial rulings that were unfavorable to counsel's client, not by any facts showing "deep-seated and unequivocal antagonism." Liteky, 510 U.S. at 555-56. Counsel also has not alleged that the rulings were biased or prejudiced by an extra-judicial source. See id. Consistent with the law, the Court concludes that counsel's allegations are based on judicial rulings and trial administration efforts-inadequate grounds for recusal. Id. 555-56. Therefore, counsel's allegations that the Court's procedural rulings constitute bias are inadequate.

a. Counsel's Request to Interrupt Witness's Testimony

Even if counsel's allegations were not insufficient because they challenge judicial rulings, a reasonable and objective observer would not question the Court's impartiality in making these rulings. See Hernandez, 109 F.3d at 1453-54. With respect to counsel's allegations that the Court did not allow him the opportunity to interrupt Plaintiff's witness's direct testimony in the bench trial so that he could voir dire the witness, the record reflects that the Court did permit counsel to challenge the evidentiary foundation for the witness's testimony. (See Technica, Doc. No. 153, ΒΆ 9.) In response to counsel's request to interrupt direct examination to voir dire the witness in the bench trial, the Court responded that counsel could voir dire the witness during his cross-examination. (See Ramona, Doc. No. 148, at 131 ll. 17-18.)Because the Court permitted counsel to challenge the evidentiary foundation on cross-examination, a reasonable, ...

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