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Melaleuca, Inc. v. Hansen

United States District Court, D. Idaho

April 3, 2014

MELALEUCA, INC., Plaintiff,
v.
DARYL HANSEN, Defendant.

ORDER ON REPORT AND RECOMMENDATION

EDWARD J. LODGE, District Judge.

INTRODUCTION

On February 25, 2014, United States Magistrate Judge Ronald E. Bush issued a Report and Recommendation ("Report"), recommending that the Motion to Amend Complaint be granted in part and denied in part. (Dkt. 50.) Any party may challenge a Magistrate Judge's proposed recommendation by filing written objections to the Report within fourteen days after being served with a copy of the same. 28 U.S.C. § 636(b)(1) and District of Idaho Local Rule 72.1(b). The district court must then "make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made." Id. The district court may accept, reject, or modify in whole or in part, the findings and recommendations made by the Magistrate Judge. Id. ; see also Fed.R.Civ.P. 72(b).

Defendant filed objections to the Report arguing the Report fails to recognize Plaintiff's bad faith, ignores the application of judicial estoppel, overlooks Plaintiff's track record of frivolous litigation and prejudice from the delay, and neglects to identify the futility of the amended complaint. (Dkt. 51.)[1] Plaintiff did not file any objections but has responded to the Defendant's objections. (Dkt. 53.) The matter is now ripe for the Court's consideration. See Local Civil Rule 72.1(b)(2); 28 U.S.C. § 636(b)(1)(B).

FACTUAL AND PROCEDURAL BACKGROUND

This action began on November 10, 2010 when Plaintiff, Melaleuca, Inc., filed a Complaint against the Defendant, Daryl Hansen alleging claims for violations of the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 ("CAN-SPAM" Act), 15 U.S.C. § 7701, et seq., violation of the Idaho Consumer Protection Act ("ICPA"), Idaho Code § 48-603E(2), misappropriation of trade secrets in violation of the Idaho Trade Secrets Act ("ITSA"), Idaho Code § 48-801 et seq., and tortious interference with contract. (Dkt. 1.) These same claims were raised previously by Melaleuca against Mr. Hansen in an earlier case, Case No. CV07-212-E-EJL, (" Melaleuca I "), [2] filed on May 8, 2007.

In Melaleuca I, Mr. Hansen filed a Motion to Dismiss arguing Melaleuca did not have standing to raise the claims for violations of federal and state anti-span statutes. ( Melaleuca I, Dkt. 38.) The Court granted Mr. Hansen's Motion to Dismiss concluding Melaleuca lacked standing to bring the CAN-SPAM Act claim and declined to exercise jurisdiction over the remaining state law claims. ( Melaleuca I, Dkt. 69, 72.) The case was dismissed without prejudice. ( Melaleuca I, Dkt. 73.)

In this action, Mr. Hansen again filed a Motion to Dismiss which the Court granted on April 15, 2011. (Dkt. 9, 13.) The Court concluded that the claims raised in this case were the same as those previously dismissed in Melaleuca I and, therefore, were barred by collateral estoppel. (Dkt. 13.) On appeal, the Ninth Circuit affirmed the dismissal of the CAN-SPAM Act claim but remanded to this Court the question of whether diversity jurisdiction had been invoked so as to allow Melaleuca to raise the state law claims in this action. (Dkt. 20.) On remand, the parties briefed the diversity jurisdiction question and Melaleuca filed a Motion to Amend/Correct Complaint. (Dkt. 29.)[3] These matters are the subject of the Report which recommends granting the Motion to Amend/Correct to which Mr. Hansen has filed objections. (Dkt. 50, 51, 53.)[2] The Court finds as follows.

STANDARD OF REVIEW

Pursuant to 28 U.S.C. § 636(b)(1)(C), this Court "may accept, reject, or modify, in whole or in part, the findings and recommendations made by the magistrate judge." Where the parties object to a report and recommendation, this Court "shall make a de novo determination of those portions of the report which objection is made." Id. Where, however, no objections are filed the district court need not conduct a de novo review. In United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003), the court interpreted the requirements of 28 U.S.C. 636(b)(1)(C):

The statute [28 U.S.C. § 636(b)(1)(C)] makes it clear that the district judge must review the magistrate judge's findings and recommendations de novo if objection is made, but not otherwise. As the Peretz Court instructed, "to the extent de novo review is required to satisfy Article III concerns, it need not be exercised unless requested by the parties." Peretz, 501 U.S. at 939 (internal citation omitted). Neither the Constitution nor the statute requires a district judge to review, de novo, findings and recommendations that the parties themselves accept as correct. See Ciapponi, 77 F.3d at 1251 ("Absent an objection or request for review by the defendant, the district court was not required to engage in any more formal review of the plea proceeding."); see also Peretz, 501 U.S. at 937-39 (clarifying that de novo review not required for Article III purposes unless requested by the parties)....

See also Wang v. Masaitis, 416 F.3d 993, 1000 & n.13 (9th Cir. 2005). Furthermore, to the extent that no objections are made, arguments to the contrary are waived. See Fed.R.Civ.P. 72; 28 U.S.C. § 636(b)(1) (objections are waived if they are not filed within fourteen days of service of the Report and Recommendation). "When no timely objection is filed, the Court need only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation." Advisory Committee Notes to Fed.R.Civ.P. 72 (citing Campbell v. United States Dist. Court, 501 F.2d 196, 206 (9th Cir.1974)).

In this case, the Court has conducted a de novo review of those portions of the Report to which Mr. Hansen has objected. The Court has also reviewed the entire Report as well as the record in this matter for ...


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