United States District Court, S.D. California
ORDER DENYING PLAINTIFF'S MOTION FOR
RECONSIDERATION AND DENYING PLAINTIFF'S MOTION FOR ENTRY
OF FINAL JUDGMENT [ECF NO. 219]
Hon.
Gonzalo P. Curiel United States District Judge
Before
the Court is Plaintiff/Counter-Defendant Williams &
Cochrane's (“W&C”) motion for
reconsideration of the Court's Order on
Defendant/Counter-Plaintiff Quechan Tribe of Fort Yuma Indian
Reservation's (“Quechan” or “the
Tribe”) motion to dismiss Plaintiff's counterclaim
in reply, and W&C's motion for entry of final
judgment. ECF No. 219. Quechan filed an opposition on October
25, 2019. ECF No. 236. Plaintiff filed a reply on November 1,
2019. ECF No. 237. Based on the reasoning below, the Court
DENIES Plaintiff's motion for
reconsideration and for entry of final judgment.
PROCEDURAL
BACKGROUND
On
December 10, 2018, W&C filed a “reply
claim”[1] (ECF No. 179) in response to several
counterclaims raised by Quechan in Quechan's Answer to
the First Amended Complaint (ECF No. 94). On December 31,
2018, Quechan filed a motion to strike and dismiss. ECF No.
184. On September 10, 2019, this Court granted, with
prejudice, Quechan's motion to dismiss on the following
bases: (1) the individual Tribe members (Keeny Escalanti and
Willie White) are not parties to the agreement at issue; (2)
W&C's counterclaim in reply for tortious breach of
contract relies on communications that are protected by
litigation privilege. ECF No. 216.
FACTUAL
BACKGROUND
The
parties are familiar with the factual background, which is
described at length in the Court's prior order (ECF No.
216) and does not bear repeating here.[2]
In
brief and in most relevant part, W&C represented Quechan
in negotiations with the State of California with respect to
payments owed by Quechan to the State. ECF No. 94 ¶ 22.
In September 2016, Quechan hired W&C for representation
in these negotiations and signed an Attorney-Client Fee
Agreement on September 29, 2016. Id. ¶ 23. On
June 26, 2017, the Quechan President Keeny Escalanti sent a
letter to W&C terminating the firm (“June 26th
letter”). Id. ¶ 44. The June 26th letter
stated that W&C had been “grossly
overcompensated” given its failure to “produce
better-than-boilerplate terms in your negotiations so far
with the State, ” and therefore Quechan's payment
of fees to date was “more than fair.” ECF No. 179
at 3-4. The letter also stated, “We strongly advise you
against pressing your luck further out of concern for the
reputation of your firm in Indian Country and in the State of
California.” Id. In this letter, Escalanti
also asked W&C to transmit the Tribe's entire case
file and most recent draft compact to its new counsel,
Rosette LLP. ECF No. 94 ¶ 44.
On June
30, 2017, the Quechan Executive Secretary sent W&C a
letter that was also signed by Escalanti (“June 30th
letter”). The June 30th letter included the following
statement: “Should you continue your obstruction of the
Tribe's interests, the Tribe will be left with no other
choice than to pursue the legal remedies available to it. We
trust that the Firm will see the wisdom in promptly complying
with these demands.” ECF No. 179 at 5.
DISCUSSION
W&C
argues that it should be permitted to pursue its tortious
breach of contract counterclaim in reply, and that the Court
should reconsider its opinion, citing two California Court of
Appeals cases. W&C further requests that in the event
that the Court declines to reconsider its prior order, then
the Court should enter final judgment on the counterclaim in
reply under Federal Rules of Civil Procedure
(“Rule”) 54(b) since the issue of litigation
privilege is severable from the remainder of issues in this
litigation. The Court will address each issue in
turn.[3]
I.
MOTION FOR RECONSIDERATION
A
motion for reconsideration, under Federal Rule of Civil
Procedure 59(e), is “appropriate if the district court
(1) is presented with newly discovered evidence; (2) clear
error or the initial decision was manifestly unjust, or (3)
if there is an intervening change in controlling law.”
Sch. Dist. No. 1J, Multnomah County, Or. V. ACandS,
Inc., 5 F.3d 1255, 1263 (9th Cir. 1993); see also
Ybarra v. McDaniel, 656 F.3d 984, 998 (9th Cir. 2011).
The Court has discretion in granting or denying a motion for
reconsideration. See Fuller v. M.G. Jewelry, 950
F.2d 1437, 1441 (9th Cir. 1991). A motion for reconsideration
“may not be used to raise arguments or present
evidence for the first time when they could reasonably have
been raised earlier in the litigation.” Kona
Enters., Inc. v. Estate of Bishop, 229 F.3d 877, 890
(9th Cir. 2000) (emphasis in original). It is an
“extraordinary remedy, to be used sparingly in the
interests of finality and conservation of judicial
resources.” Id.
W&C
argues that the Court should reconsider its order since the
June 26th and June 30th letters are not communicative and
should not be protected by litigation privilege, citing two
California Court of Appeals cases: Mancini & Assocs.
v. Schwetz, 39 Cal.App. 5th 656, 661 (Ct. App. 2019),
as modified on denial of reh'g (Sept. 30, 2019);
People v. Toledano, 249 Cal.Rptr.3d 100 (Ct. App.
2019), review denied and ordered not to be officially
published (Oct. 23, 2019). ECF 219-1 at 3-9.
In
Mancini, the plaintiff law firm had successfully
litigated sexual harassment and other claims on behalf of its
client and sought to collect money owed to it by the judgment
debtor, the client's former employer. The judgment debtor
rekindled his social relationship with the law firm client,
and they eventually executed a settlement releasing the
judgment debtor from his payment obligations to the law firm.
The law firm brought a claim against the judgment debtor
alleging, inter alia, intentional interference with
contract, citing his settlement communications with the
client. The judgment debtor argued that his communications
with the client were protected by litigation privilege, but
the California Court of Appeal disagreed, noting that the
“threshold issue” in determining the application
of the litigation privilege is whether the defendant's
conduct was communicative or noncommunicative.”
Id. at 661. Although the judgment debtor's
execution of the settlement agreement was communicative, the
Court found that the debtor undertook several
noncommunicative acts that were not protected by litigation
...