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Altbaier v. Down-Lite International, Inc.

United States District Court, N.D. California

September 4, 2019

CHAD ALTBAIER, et al., Plaintiffs,
v.
DOWN-LITE INTERNATIONAL, INC., Defendant.

          ORDER DENYING PLAINTIFF'S MOTION FOR LEAVE TO FILE MOTION FOR RECONSIDERATION DOCKET NO. 29

          EDWARD M. CHEN UNITED STATES DISTRICT JUDGE.

         On August 6, 2019, this Court denied Plaintiffs' Motion for a Temporary Restraining Order and stayed the case for a brief time, noting that if the Ohio district court continued to exercise jurisdiction, this Court would issue an order to show cause why the case should not be dismissed. On August 16, 2019, Plaintiffs filed a Motion for Leave to File a Motion for Reconsideration.

         I. DISCUSSION

         A. Legal Standard

         Under Civil Local Rule 7-9, a party must seek leave of the court to file a motion for reconsideration. N.D. Civ. L.R. 7-9(a). To prevail, a party “must specifically show reasonable diligence in bringing the motion” and establish one of the following:

(1) That at the time of the motion for leave, a material difference in fact or law exists from that which was presented to the Court before entry of the interlocutory order for which reconsideration is sought. The party also must show that in the exercise of reasonable diligence the party applying for reconsideration did not know such fact or law at the time of the interlocutory order; or
(2) The emergence of new material facts or a change of law occurring after the time of such order; or
(3) A manifest failure by the Court to consider material facts or dispositive legal arguments which were presented to the Court before such interlocutory order.

N.D. Civ. L.R. 7-9(b). Motions for reconsideration are generally disfavored and are not the place for parties to make new arguments not raised in their original briefs. Northwest Acceptance Corp. v. Lynnwood Equip., Inc., 841 F.2d 918, 925-26 (9th Cir. 1988). “Nor is reconsideration to be used to ask the Court to rethink what it has already thought.” Gray v. Golden Gate Nat. Recreational Area, 866 F.Supp.2d 1129, 1132 (N.D. Cal. 2011) (citing United States v. Rezzonico, 32 F.Supp.2d 1112, 1116 (D. Ariz. 1998)).

         B. Analysis

         Plaintiffs ask the Court to reconsider its previous order “on the grounds that: (1) there was an emergence of new material facts occurring after the time of the interlocutory order; and (2) the order represents a manifest failure by the Court to consider material facts which were presented to the Court before such interlocutory order.” Motion for Leave to File Motion for Reconsideration (“MFL”) at 1, Docket No. 29. The new material fact emerges from Plaintiff's discovery (“[s]ubsequent to the hearing”) that “Defendant is not registered with the California Secretary of State to conduct business in California - and that under pertinent legal authorities any contracts it entered into with Altbaier in California would thereby be voidable by Altbaier.” Id. at 2. Plaintiff alleges that the “manifest failure by the Court” stems from both the Court's “holding that the 2013 Shareholder Agreement was not a condition of employment for Altbaier” and from the Court's “fail[ure] to provide plaintiffs with adequate notice to present further material facts to address the first-to-file arguments.” MFL at 10-11.

         1. New Material Fact

         With respect to the claim that a new material fact emerged, Plaintiffs allege that “[f]ollowing the August 6, 2019 hearing . . . Plaintiffs sought to determine whether to serve Defendant with the Summons issued by the Court and discovered that that [sic] there is no registered agent for service for Defendant listed with the California Secretary of State - and no record that Defendant was ever registered to conduct business within the State. Thus, contrary to Defendant's representations, [1] public records indicate Defendant is not - and has not ever been - registered to conduct business in California.” MFL at 7. Plaintiffs contend that this fact enables Mr. Altbaier to “void the 2009 Employment Agreement and the 2013 Shareholder Agreement and thus prevail on Plaintiffs' Motion for TRO.” Id. at 9. Plaintiffs further argue that Mr. Altbaier's ability to void the Agreements “further warrants maintaining this action in California, as without those Agreements there can be no enforceable TRO in Ohio and the only claim at issue in Ohio is a claim for misappropriation of trade secrets under Ohio state law.” Id. at 9.

         In requesting leave to file a Motion to Reconsider, a party “must show that in the exercise of reasonable diligence the party applying for reconsideration did not know such fact or law at the time of the interlocutory order.” Civ. Loc. R. 7-9. Plaintiffs contend that they discovered that Defendant was never registered to conduct business in California after the August 6, 2019 hearing, when they “sought to determine whether to serve Defendant with the Summons issued by the Court and discovered that that there is no registered agent for service for Defendant listed with the California Secretary of State.” MFL at 7. But Plaintiffs fail to demonstrate why this public fact would not have been discovered earlier had Plaintiffs exercised reasonable diligence. A quick online search could have provided Plaintiffs ...


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