Williams & Cochrane, LLP v. Rosette

          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 ...