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Johnson v. Oak Creek Investments

United States District Court, N.D. California, San Jose Division

December 19, 2019




         On November 22, 2019, Defendant Oak Creek Investments filed a motion for administrative relief requesting that the Court order Plaintiff to provide documentation of attorneys' fees and costs pursuant to General Order 56. Motion for Administrative Relief and for Monetary Sanctions (“Mot.”), Dkt. 22. The motion also seeks monetary sanctions (reimbursement for the costs associated with bringing this motion) for Plaintiff's refusal to comply with General Order 56. Plaintiff filed a motion to strike Defendant's motion for administrative relief, which seeks an order striking Defendant's motion and opposes the merits of Defendant's motion. Request to Strike Defendant's Motion for Administrative Relief and Response in Opposition (“Mot. to Strike/Opp.”), Dkt. 23. Defendant filed an opposition to Plaintiff's motion to strike. Opposition to Plaintiff's Motion to Strike Defendant's Motion for Administrative Relief (“Opp. to Mot. to Strike”), Dkt. 25. The Court GRANTS Defendant's Motion for Administrative Relief and DENIES Plaintiff's Motion to Strike.

         I. BACKGROUND

         On April 15, 2019, this Court granted the Parties' Joint Consent Decree for Injunctive Relief, which requires Defendant to remediate the subject-property by December 31, 2019. See Dkt. 14. Pursuant to the Joint Decree, the Parties jointly inspected the subject property. After this inspection, Plaintiff “made a demand in excess of $20, 000 to settle the matter in its entirety, without providing any fee or costs support.” Mot. at 2. Pursuant to General Order 56, Defendant requested (on multiple occasions) that any demand for settlement be supported by documents demonstrating attorney's fees and costs. Id. Around September 27, 2019, Plaintiff responded to Defendant's demands for documentation. Id. Plaintiff provided a reduced demand but failed to accompany its counteroffer with “any accompanying fee support documents.” Id.

         On August 26, 2019, Plaintiff filed a notice of need for mediation. This Court referred the case to mediation and set November 25, 2019 as the deadline to complete mediation.

         In preparation of that mediation, and before submitting their administrative motion, Defendant contacted Plaintiff on November 6, 2019 to “again demand[] fee and cost documents under General Order 56” to allow the parties ample time in advance of the mediation deadline of November 25, 2019 to review the document and attempt good-faith, reasonable settlement. Id., Ex. A. Plaintiff's counsel responded only after Defendant filed its administrative motion and after the deadline to complete mediation had passed. Mot. to Strike/Opp., Ex. 1. Defendant agreed to withdraw its administrative motion if Plaintiff provided it documentation. Id. Plaintiff seemingly refused to do this as it filed the motion to strike instead. Accordingly, as of the date of this Order, Plaintiff has failed to provide Defendant any documentation (even a cursory overview of Plaintiff's counsels' billing rates) and has only provided Defendant a settlement number.


         Plaintiff first argues that this Court should strike Defendant's motion because it contains information about confidential settlement negotiations. Mot. to Strike/Opp. at 1-2. Plaintiff fails to provide any rule supporting its motion to strike. Based on the briefing, the Court infers that Federal Rule of Evidence 408 underlies Plaintiff's motion. As a preliminary matter, Plaintiff's citation to Johnson v. Holden, No. 50 5:18-cv-01624-EJD (N.D. Cal. May 9, 2019) as support for its proposition that the inclusion of confidential information warrants striking an entire motion is misplaced. Johnson v. Holden, only struck the “portion of Defendants' statements that describe the settlement negotiations.” Hence, Johnson v. Holden lacks the expansive application advocated by Plaintiff.

         Moreover, as Defendant notes, Federal Rule of Evidence 408, protects compromise negotiations only if they are “offered to prove liability for, invalidity of, or amount of a claim that was disputed as to validity or amount, or to impeach through a prior inconsistent statement or contradiction.” Indeed, “at least some communications made in furtherance of [settlement] negotiations are discoverable, as Rule 408 permits their use in some aspects of trial.” Phoenix Solutions Inc. v. Wells Fargo Bank, N.A., 254 F.R.D. 568, 584 (N.D. Cal. Oct. 22, 2008). As the Advisory Committee Notes to Rule 408 explain, “evidence, such as documents, is not rendered inadmissible merely because it is presented in the course of compromise negotiations.” Therefore, mere reference to settlement discussions does not automatically support a motion to strike.

         Here, Defendant's reference to settlement discussions and its inclusion of a letter discussing settlement negotiations in its administrative motion is permissible. The purpose of referencing the discussions was not to prove liability or apportion fault (as forbidden by Rule 408). Rather, the purpose was to show noncompliance with General Order 56. This purpose is not forbidden by Rule 408. Plaintiff presents no alternative grounds supporting its Motion to Strike. Accordingly, Plaintiff's Motion to Strike is DENIED.


         Defendant argues that, pursuant to General Order 56(6), it is entitled to a detailed statement of costs and attorney's fees. Mot. at 4. General Order 56(6) provides:

If the parties reach a tentative agreement on injunctive relief, plaintiff shall forthwith provide defendant with a statement of costs and attorney's fees incurred to date, and make a demand for settlement of the case in its entirety (including any additional damages not included in the Rule 26(a) disclosures). Plaintiff should not require execution of a formal agreement regarding injunctive relief as a precondition to providing defendant with the statement of costs and attorney's fees, and additional damages. If requested by defendant, plaintiff should ...

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