United States District Court, D. Idaho
THE FINLEY GROUP AS RECEIVER FOR INDUSTRIAL PIPING, INC., Plaintiff,
TAO MIKE ZHANG, and DAYI SEAN LIU Defendants.
MEMORANDUM DECISION AND ORDER
Lynn Winmill, U.S. District Court Judge
Court has before it a motion to reconsider filed by the
plaintiff Industrial Piping Inc. (IPI). The motion is fully
briefed and at issue. For the reasons explained below, the
Court will deny the motion.
asks the Court to reconsider its ruling awarding sanctions
for IPI's conduct that caused defendants to incur
unnecessary expenses. See Memorandum Decision (Dkt. No.
152). As that decision described, IPI had filed a motion
to amend to add Count III to the complaint. Defendants
incurred expenses in objecting, but the Court granted the
motion, and IPI filed its amended complaint including Count
III. Defendants then incurred further expenses in arguing
that the trial date should be moved and further discovery
allowed, and that motion was granted. See Order (Dkt. No.
103). But less than 3 weeks after that Order - and 41
after IPI filed its amended complaint including Count III -
IPI filed a motion to withdraw Count III, a motion that was
granted, rendering unnecessary the expenses incurred by
defendants in opposing IPI's motion to amend and in
pursuing their own motion to move the trial and obtain
further discovery. The sanctions were intended to reimburse
defendants for the wasted expenses incurred due to IPI's
withdrawal of Count III.
argues that it never intended to harass defendants and that
its conduct was not a ploy to gain leverage in mediation
proceedings. The Court agrees, and there is nothing in its
decision that bases sanctions on those grounds. IPI argues
that it was improperly sanctioned for seeking to add Count
III. That is not accurate; nothing in the Court's
decision found that the act of filing the motion to add Count
III was reckless by itself. IPI argues that it was improperly
sanctioned for opposing defendants' motion to vacate the
trial date. Again, that is not accurate; nothing in the
Court's decision found that IPI's filing an
opposition to the motion to vacate trial was reckless by
itself. Up to the point that IPI sought to withdraw Count
III, IPI had not done any act that by itself warranted
sanctions. It was the withdrawal of Count III that rendered
defendants' efforts and expenses unnecessary. And it was
IPI's failure to anticipate this predictable result that
justifies the finding that it acted recklessly.
withdrawal of Count III had been prompted by something that
could not have been anticipated, sanctions would not be
appropriate. But the reasons offered by IPI for that
withdrawal were easily anticipated - IPI withdrew Count III
because defendants were requesting further discovery and a
longer trial, due to Count III's addition, driving up
costs and fostering delay. See Weber Declaration (Dkt.
No. 153-3) at ¶¶ 11-12. These were the
predictable results of filing a motion to amend so close to
the trial date and should have been anticipated prior to
filing the motion to amend.
gist of the Court's decision was set forth in the
When IPI filed its motion to amend to add count III on
January 30, 2018, this case was over two years old. The
deadline for factual discovery was fast approaching - just 17
days away - and the trial setting was just over 5
months away. See Scheduling Order (docket no. 56)
(setting discovery deadline for March 16, 2018, and trial for
July 17, 2018). Any reasonable attorney would know that
seeking to add a claim that close to existing deadlines, and
in a case so old, would prompt vigorous opposition along with
a plea that if the amendment was granted, the deadlines and
trial date be moved. That is precisely what happened as
defendants incurred expenses in (1) opposing the motion to
amend, (2) seeking to extend the discovery deadlines and
trial date after the Court granted the motion, and (3)
reviewing the substantive law on Count III. This chain of
events was so obvious and predictable that any reasonable
attorney would know that such a risk must be weighed against
the need for the additional count before any motion
to amend was filed.
in IPI's motion to reconsider prompts the Court to alter
this analysis. IPI also argues that the Court used the wrong
legal standard in relying on recklessness. While it is
certainly true that the Circuit's case law on this
subject has “been less than a model of clarity, ”
the Circuit reconciled its disparate line of cases and held
that “recklessness suffices for § 1927 . . .
.” B.K.B. v. Maui Police Dep 't, 276 F.3d
1091, 1107 (9th Cir. 2002). It is certainly
well-within the purview of the statute to make sanctions
available for reckless conduct that increases expenses
of these reasons, the motion to reconsider will be denied.
accordance with the Memorandum Decision above,
THEREFORE IT IS HEREBY ORDERED, that the motion for