M.A. Mobile Ltd. v. Indian Institute of Technology Kharagpur

          ORDER ON MOTION FOR ATTORNEY FEES AND MOTION TO WITHDRAW AS COUNSEL Re: Dkt. Nos. 658, 659, 667, 678, 683

          William H. Orrick United States District Judge.

         This long and complex litigation, and longer and more complex course of dealings between the parties, ended when I granted summary judgment in favor of defendant Indian Institute of Technology, Kharagpur (“IIT”) and against plaintiff M.A. Mobile Ltd. on September 5, 2019. Now before me are two more disputes. First, IIT moves for attorney fees, arguing that M.A. Mobile pursued its claim for misappropriation of trade secrets in bad faith. I disagree and will deny that motion. Second, M.A. Mobile attorney Sanjiv Singh moves to withdraw as counsel, while M.A. Mobile opposes that motion and asserts that Singh is obligated to represent it on appeal. For the reasons set forth below, I disagree that Singh is obligated to continue representing M.A.Mobile given the breakdown in their relationship, not to mention the limitation of his engagement agreement to litigation in the district case. Singh's motion to withdraw from this closed case is granted.

         BACKGROUND

         I will not repeat the lengthy factual history of this case, which I explained in detail in my September 5, 2019 Summary Judgment Order. See Order Granting Motion for Summary Judgment [Dkt. No. 655] 1-19. Relevant here, on September 19, 2019, IIT moved for attorney fees under California's Uniform Trade Secrets Act (“CUTSA”) and my inherent authority. Motion for Attorney Fees (“Fee Mot.”) [Dkt. No. 658-4]. After opposing that motion, on October 4, 2019, Singh moved to withdraw as counsel for M.A. Mobile.^[1] Motion to Withdraw (“Withdrawal Mot.”) [Dkt. No. 667]. He asserts that withdrawal is appropriate for several reasons, among them a breakdown in communication with M.A. Mobile's sole owner Mandana Farhang.

         On November 1, 2019, M.A. Mobile filed a motion for an extension of time in which to oppose through specially appearing counsel William Balin, which I granted. Dkt. Nos. 675, 676. Singh then filed an administrative motion requesting permission to oppose the motion I had already granted, arguing that it included “scandalous and false” information and noting that he intended to file a Rule 11 motion for sanctions if Balin refused to withdraw certain accusations. Dkt. No. 678. In its opposition to the motion to withdraw, M.A. Mobile recharacterized the dispute as one over whether Singh is obligated to represent it on appeal. M.A. Mobile Opposition to Motion to Withdraw (“M.A. Mobile Oppo.”) [Dkt. No. 680].

         DISCUSSION

         I. MOTION FOR ATTORNEY FEES

         IIT asks that I award it attorney fees for part of its defense of this case under California's Uniform Trade Secrets Act (“CUTSA”) and my inherent authority. “[A] district court may levy sanctions pursuant to its inherent power . . . when the losing party has acted in bad faith, vexatiously, wantonly, or for oppressive reasons.” Evon v. Law Offices of Sidney Mickell, 688 F.3d 1015, 1035 (9th Cir. 2012) (internal quotation marks omitted). Under CUTSA, courts have authority to award reasonable attorney's fees and costs to the prevailing party in the event that a claim of misappropriation is made in bad faith. Cal. Civ. Code § 3426.4. “California courts have held that bad faith ‘requires objective speciousness of the plaintiff's claim, as opposed to frivolousness, and its subjective bad faith in bringing or maintaining the claim.'” Direct Techs., LLC v. Elec. Arts, Inc., 836 F.3d 1059, 1071 (9th Cir. 2016) (quoting Gemini Aluminum Corp. v. Cal. Custom Shapes, Inc., 95 Cal.App.4th 1249, 116 (2002)); see also Gabriel Techs. Corp. v. Qualcomm Inc., 560 Fed.Appx. 966, 973-74 (Fed. Cir. 2014) (agreeing with the district court that there was objective speciousness and subjective bad faith where plaintiffs failed to articulate their trade secrets after seven attempts and where it was clear the claims were time-barred). Trial courts have broad discretion in ruling on fees motions. See Gemini, 95 Cal.App.4th at 1262; Integral Dev. Corp. v. Tolat, No. 12-cv-06575 JSW, 2015 WL 674425, at *10 (N.D. Cal. Feb. 12, 2015).

         M.A. Mobile's trade secret misappropriation claims were not objectively specious, nor is there evidence to support a finding of subjective bad faith. The facts that IIT relies on in support of its motion show weaknesses in M.A. Mobile's case, but those weaknesses do not establish speciousness. Neither does my summary judgment ruling. In addition, M.A. Mobile's decision to pursue its claims despite IIT pointing out contradictory evidence does not establish subjective bad faith. The motion for attorney fees is DENIED.

         At the end of its opposition, M.A. Mobile objects to IIT's bill of costs, asserting that it lacks detail, and asks that I stay the imposition of costs during the pendency of the appeal. When considering whether to stay an award of attorney fees and costs pending appeal, courts apply the factors set forth in Hilton v. Braunskill, 481 U.S. 770, 776 (1987). See League For Coastal Prot. v. Kempthorne, No. 05-cv-0991-CW, 2007 WL 1982778, at *3 (N.D. Cal. July 2, 2007). Those factors include:

(1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies.

Braunskill, 481 U.S. at 776. M.A. Mobile provides no reasons why these factors support a stay, and I see none. Parties are frequently responsible for costs imposed in the district court case even when an appeal is pending. See Kempthorne, 2007 WL 1982778, at *3 (rejecting defendants' “speculation” regarding inability to recover fees and costs paid in the event of success on appeal). I decline to stay payment of any costs to which IIT is entitled.

         II. MOTION TO WITHDRAW AS COUNSEL

         Singh's motion to withdraw raises two central reasons why his representation cannot continue; his communication with Farhang has broken down, and M.A. Mobile has breached the terms of his engagement. In his reply to IIT's response, Singh further asserts that he will likely be a material witness if not a plaintiff in a separate case that a third party is preparing against Farhang.^[2] See Withdrawal Mot. 4; Singh Decl. ISO Reply to IIT ¶ 3; Singh Decl. ISO Reply to M.A. Mobile ¶ 18.

         In response, M.A. Mobile argues that the question before me is different: “Whatever happened during the pendency of the case in District Court is now over; the only issue before the court now is whether counsel will represent his client on appeal.” M.A. Mobile Oppo. 6. In response to the “Issues” referenced by Singh, M.A. Mobile disputes that Farhang failed to engage with Singh in order to resolve them or that other aspects of her conduct have made Singh's representation unreasonably difficult.^[3] Id. at 6-11.

         The parties have two disputes: one over continued representation before me and one over appellate representation. I address each one in turn.

         A. ...