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Haley v. Clark Construction Group-California, Inc.

United States District Court, N.D. California

January 13, 2020

LAWRENCE HALEY, Plaintiff,
v.
CLARK CONSTRUCTION GROUP-CALIFORNIA, INC., Defendant.

          ORDER ON MOTION FOR SANCTIONS, MOTION FOR SUMMARY JUDGMENT, AND ADMINISTRATIVE MOTIONS TO SEAL RE: DKT. NOS. 59, 60, 71, 76

          HAYWOOD S. GILLIAM, JR., UNITED STATES DISTRICT JUDGE.

         Currently before the Court are Defendant's motions for sanctions and summary judgment, and the parties' administrative motions to file documents under seal. For the reasons articulated below, the Court DENIES Defendant's motion for sanctions, Dkt. No. 76; GRANTS Defendant's motion for summary judgment on the Title VI claim and REMANDS the remaining state law claims to state court, Dkt. No. 60; GRANTS Defendant's motion to file under seal, Dkt. No. 59; and GRANTS IN PART and DENIES IN PART Plaintiff's corrected motion to file under seal, Dkt. No. 71.

         I. RELEVANT PROCEDURAL HISTORY

         Plaintiff Lawrence Haley filed his complaint in San Francisco Superior Court on October 24, 2018. Dkt. No. 1-1 (“Compl.”). Plaintiff's complaint includes seven state causes of action and one federal cause of action, retaliation in violation of Title VI. Compl. ¶¶ 19-65. Defendant Clark Construction Group-California, Inc. removed the action on December 14, 2018, based on the Title VI federal cause of action. Dkt. No. 1 at ¶¶ 3-7.

         The Court had its initial case management conference with the parties in March 2019. Dkt. No. 17. Since the case management conference, the Court granted Defendant's motion to modify the scheduling order (which the Court construed as a motion to strike Plaintiff's jury demand) and denied Plaintiff's ex parte application to modify the scheduling order. Dkt. Nos. 56, 57, 58.

         Defendant filed its motion for summary judgment on October 10, 2019, seeking summary judgment on all of Plaintiff's causes of action. Dkt. No. 60. The Court held a hearing on the motion on November 27, 2019. Dkt. No. 73. At the hearing, Plaintiff conceded that summary judgment was appropriate as to the Title VI claim and told the Court that it was “inadvertently alleged as a Title VI” claim, when it “should have been a Title VII” claim. Dkt. No. 76-3, Ex. B at 2:21-3:3.[1] Plaintiff's counsel also represented that she “believe[s] that there are no facts to support retaliation anyway with respect to Title VII.” Id. The Court informed the parties that because summary judgment was appropriate as to the only federal cause of action, it would remand the case in light of the Ninth Circuit's clear direction on this point and in consideration of the factors under 28 U.S.C. § 1367(c). Id. at 5:23-7:4. Defendant expressed its intention to bring a motion for sanctions and requested that the Court retain jurisdiction to rule on the motion before remanding the case. Id. at 9:25-13:2.

         The Court now rules on both Defendant's motion for sanctions and the motion for summary judgment.

         II. MOTION FOR SANCTIONS

         Defendant requests sanctions based on Plaintiff and his counsel “litigating a frivolous Title VI claim that they admit is meritless and which they never intended to plead in the first place.” Dkt. No. 76 at 1. It contends that Plaintiff “recklessly and frivolously failed to dismiss his meritless Title VI claim, seek remand, or otherwise advise the Court and Clark that he has abandoned the only claim upon which federal jurisdiction rests.” Id. at 2. Defendant seeks sanctions under 28 U.S.C. § 1927 or the Court's inherent powers.[2] Id.

         A. Section 1927 and the Court's Inherent Powers

         Section 1927 states:

Any attorney or other person admitted to conduct cases in any court of the United States or any Territory thereof who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct.

28 U.S.C. § 1927. Sanctions are appropriate under § 1927 only on a showing “of the attorney's recklessness or bad faith.” Estate of Blas Through Chargualaf v. Winkler, 792 F.2d 858, 860 (9th Cir. 1986); see also Kohler v. Flava Enterprises, Inc., 779 F.3d 1016, 1020 (9th Cir. 2015) (section 1927 requires proving that “the opposing party acted with ‘subjective bad faith'” (citation and quotations omitted)). For purposes of § 1927, bad faith is present “when an attorney knowingly or recklessly raises a frivolous argument ... or argues a meritorious claim for the purpose of harassing an opponent.” Estate of Blas, 792 F.2d at 860 (citations omitted).

         Under the court's inherent power, federal courts may impose sanctions only when there is a “specific finding of bad faith.” In re Keegan Mgmt. Co., Sec. Litig., 78 F.3d 431, 436 (9th Cir. 1996). While recklessness is sufficient for § 1927, “mere recklessness, without more, does not justify sanctions under a court's inherent power.” Fink v. Gomez, 239 F.3d 989, 993-94 (9th Cir. 2001). Sanctions are available for a “variety of types of willful actions, including recklessness when combined with an additional factor such as frivolousness, harassment, or an improper purpose.” Id. at 994. “For purposes of imposing sanctions under the inherent power of the court, a finding of bad faith ‘does not require that the legal and factual basis for the action prove totally frivolous; where a litigant is substantially motivated by vindictiveness, obduracy, or mala fides, the assertion of a colorable claim will not bar the assessment of attorney's fees.'” Id. at 992 (citation and quotations omitted).

         B. Sanctions ...


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