Recusal—28 U.S.C. §144 vs. §455 (w/Text): Different Procedures, Same Standards — DQ: Only Past, Present Client Has Standing to Seek Disqualification — Pleadings of Conflicted Counsel Not Void — Clerk Must Initiate Default Judgment (R. 55)
Joseph v. City of San Jose, 2020 U.S. Dist. LEXIS 37611 (N.D. Cal. Mar. 3, 2020):
ORDER DENYING MOTION TO RECUSE; DENYING MOTION FOR DISQUALIFICATION; DENYING MOTION FOR DEFAULT JUDGMENT; GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS; STAYING IN PART
Re: Dkt. Nos. 48, 49, 52
Plaintiff Rhawn Joseph ("Plaintiff") brings the instant action against Defendants City of San Jose, City Manager Dave Sykes, City Attorney Richard Doyle, Director of San Jose Code Enforcement Rosalynn Hughey, San Jose Code Enforcement Division Manager and Administrative Hearing Officer Mollie McLeod, Code Enforcement Inspector Sean Flanagan, and Code Enforcement Inspector and Supervisor Jason Gibilesco (collectively, the "Named Defendants"); and Does 1-10. ECF No. 45. Before the Court is Plaintiff's motion to recuse, motion for disqualification, and motion for default judgment. Before the Court is also the Named Defendants' motion to dismiss Plaintiff's Second [*2] Amended Complaint ("SAC"). The Court DENIES Plaintiff's motion to recuse, motion for disqualification, and motion for default judgment. The Court GRANTS in part and DENIES in part the Named Defendants' motion to dismiss. The Court also STAYS the instant case in part.
A. Factual Background
Plaintiff Rhawn Joseph ("Plaintiff") appears to be party to a long-running dispute with his neighbor, Gene Kasrel ("Kasrel"). ECF No. 45 ("SAC") ¶ 8. Kasrel is not a party to this lawsuit. According to Plaintiff, during the time that Plaintiff and Kasrel have been neighbors in San Jose, California, Kasrel engaged in a lengthy campaign of harassment and abuse. Among other things, Plaintiff alleges that Kasrel "has repeatedly harassed, threatened, and physically assaulted Plaintiff"; climbed onto the adjoining fence and threatened Plaintiff; and threw rocks and dog feces into Joseph's yard. See id. Eventually, in 2016, Kasrel erected two bright floodlights near the fence adjoining Plaintiff's yard. Id. Although Plaintiff repeatedly complained to the City of San Jose about Kasrel's floodlights, which Plaintiff alleges were in violation of municipal code, the City of San Jose took no action. [*3] Id. ¶ 12.
In response to these indignities, on October 16, 2018, Plaintiff erected an "abatement consisting of three sheets of 24 inch polyurethane which Plaintiff erected in Plaintiff's yard, thereby legally abating Kasrel's illegal lights and preventing Kasrel from harassing, threatening, or harming Plaintiff and his property." Id. ¶ 14. On October 19, 2018, Named Defendant Jason Gibilesco ("Gibilesco"), "acting under 'color of authority' and without a search warrant and in the absence of exigent circumstances or statutory authority," searched Plaintiff's locked and gated yard. Id. ¶ 2. On October 22, 2018, Plaintiff delivered letters that complained of the October 19, 2018 search to the offices of Named Defendants Sean Flanagan ("Flanagan") and Rosalynn Hughey ("Hughey"). Id. ¶ 3. On that same day, October 22, 2018, however, Named Defendants Flanagan and Gibilesco again searched Plaintiff's locked, gated yard. Id. ¶ 4. In doing so, Named Defendants Flanagan and Gibilesco "dislodged and knocked down a portion of Plaintiff's fencing and a six foot tall, three panel-hand carved wooden screen thereby damaging property." Id.
On October 24, 2018, Named Defendant Gibilesco spoke with Plaintiff [*4] over the phone and indicated that "if Plaintiff had enough money, Plaintiff could avoid fines and problems with the city and maybe obtain a 'variance'" for the abatement. Id. ¶ 5. Plaintiff construed this as a solicitation for a bribe. Id. ¶ 6. According to Plaintiff, when Plaintiff rejected the bribe, Named Defendant "Gibilesco likely solicited and accepted money from and entered into a conspiracy with Kasrel" to violate many of Plaintiff's constitutional rights. Id. ¶ 17.
Specifically, Plaintiff claims that the Named Defendants "filed fake code violations against Plaintiff" notwithstanding numerous municipal code violations committed by Plaintiff's neighbors. Id. ¶ 19. According to Plaintiff, on November 6, 2018, Named Defendant Gibilesco filed a compliance order that warned "if Plaintiff's trees were not destroyed and his legal abatement removed, Plaintiff would be fined $2,500 a day for each fake violation, plus administrative costs." Id. ¶ 25. Additionally, the compliance order demanded that Plaintiff cut his wrought iron fence to a height of three feet or less or Plaintiff would be fined $2,500 each day. Id. ¶ 27. To support the order, Plaintiff argues that the Named Defendants [*5] altered evidence and backdated alleged violations. Id. ¶ 26.
Later in the month of November 2018, and in response to the Compliance Order, Plaintiff claims that Plaintiff sawed the wrought iron fence to below three feet and notified Named Defendant Gibilesco of this fact. Id. ¶ 28. Plaintiff also "filed official complaints with [Named] Defendants Hughey, Sykes and City of San Jose, documenting that [Named Defendants] Gibilesco and Flanagan were harassing Plaintiff, and conspiring with and faking and backdating fraudulent code violations," but "[n]o investigation took place." Id. ¶ 29.
In February 2019, Plaintiff received another letter from Named Defendant Gibilesco indicating that Plaintiff's trees and wrought iron fence still exceeded the maximum height under the municipal code. Id. ¶ 31. In response, Plaintiff demanded an administrative hearing to address the alleged violations, see id. ¶ 35, and an enforcement proceeding concerning the alleged violations indeed occurred on May 1, 2019. Id. ¶ 40. At the hearing, Plaintiff avers that Plaintiff was not permitted to present certain evidence or cross-examine witnesses, and Plaintiff complains that the enforcement proceeding was tainted [*6] by fabricated evidence and ex parte communications. Id. ¶¶ 40-52. The enforcement proceeding has yet to result in a final decision. Id. ¶ 54.
B. Procedural History
On March 11, 2019, Plaintiff filed an initial complaint in this Court. See ECF No. 1. Several weeks later, on March 29, 2019, the Named Defendants requested a thirty-day extension to respond to the original complaint. See ECF No. 5. On April 1, 2019, the Court issued an order extending the deadline to respond to the original complaint until May 2, 2019. ECF No. 6. On May 1, 2019, the Named Defendants filed a motion to dismiss the original complaint. ECF No. 11.
On June 10, 2019, Plaintiff then requested leave to file a First Amended Complaint ("FAC"), ECF No. 27, which the Court granted on June 24, 2019. ECF No. 29. Upon doing so, the Court also denied the Named Defendants' motion to dismiss the original complaint as moot. Id.
Plaintiff filed the FAC on June 28, 2019. ECF No. 30 ("FAC"). The Named Defendants filed their motion to dismiss the FAC several weeks later, on July 10, 2019. ECF No. 31. On August 12, 2019, Plaintiff filed a motion for default judgment. ECF No. 36.
On August 23, 2019, the Court denied Plaintiff's motion [*7] for summary judgment and granted the Named Defendant's motion to dismiss the FAC with leave to amend. ECF No. 43. The Court determined that Plaintiff's FAC violated Federal Rule of Civil Procedure 8 and failed to give the Named Defendants notice of the claims pleaded against them. Id. at 7. The Court gave Plaintiff thirty days to file an amended complaint. Id. at 10.
On September 10, 2019, Plaintiff filed a Second Amended Complaint ("SAC"). ECF No. 45 ("SAC"). The SAC alleges twelve Claims for Relief: (1) "Violation of the First Amendment, Civil Rights Claim (42 U.S.C. § 1981)"; (2) "Conspiracy, Hate Crimes (CPS Part 1, Title 2 Section 31, CPS §§ 182, 422.6; 42 U.S.C. § 1981)"; (3) Violation of the Fourth Amendment; (4) Violation of the Fifth Amendment; (5) Violation of the Sixth Amendment; (6) Violation of the Eighth Amendment; (7) Violation of the Fourteenth Amendment; (8) "Monell Liability, Constitutional Torts, Violation of Fourteenth Amendment (42 U.S.C. § 1983)"; (9) "Violations of Bane Act (Cal. Civ. Code § 52.1), and Ralph Act (Cal. Civ. Code § 51.7)"; (10) "Negligence (42 U.S.C. § 1983) 'Willful Indifference'"; (11) "Intentional Infliction of Emotional Distress, Malice, Harassment"; and (12) "Demand for Declarative and Injunctive Relief." SAC ¶¶ 182-325. The parties stipulated that the Named Defendants would have until October 14, 2019 to respond to the SAC. ECF No. 47.
On September 17, 2019, Plaintiff filed a declaration that the Court construes as a motion for [*8] recusal or disqualification of the Court. ECF No. 48. On September 23, 2019, Plaintiff then filed a "motion for summary judgment," which the Court construes as another motion for default judgment. ECF No. 49. The Named Defendants opposed the motion for default judgment on October 14, 2019, ECF No. 56, and Plaintiff replied on October 18, 2019, ECF No. 62.
On October 11, 2019, the Named Defendants filed a motion to dismiss the SAC. ECF No. 52. On October 18, 2019, Plaintiff opposed the Named Defendants' motion to dismiss the SAC, ECF No. 61, and on October 31, 2019, Named Defendants replied, ECF No. 64.
II. LEGAL STANDARD
A. Default Judgment
Pursuant to Federal Rule of Civil Procedure 55(b)(2), the Court may enter a default judgment when the Clerk of the Court, under Rule 55(a), has previously entered the party's default. Fed. R. Civ. P. 55(b). "The district court's decision whether to enter a default judgment is a discretionary one." Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). "Factors which may be considered by courts in exercising discretion as to the entry of a default judgment include: (1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff's substantive claim, (3) the sufficiency of the complaint, (4) the sum of money at stake in the action; (5) the possibility of a dispute [*9] concerning material facts; (6) whether the default was due to excusable neglect, and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits." Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986).
B. Motion to Dismiss Under Federal Rule of Civil Procedure 12(b)(6)
Rule 8(a)(2) of the Federal Rules of Civil Procedure requires a complaint to include "a short and plain statement of the claim showing that the pleader is entitled to relief." A complaint that fails to meet this standard may be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6). The U.S. Supreme Court has held that Rule 8(a) requires a plaintiff to plead "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009). "The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. (internal quotation marks omitted). For purposes of ruling on a Rule 12(b)(6) motion, the Court "accept[s] factual allegations in the complaint as true and construe[s] the pleadings in the light most favorable to the nonmoving party." Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008).
The Court, however, need not "assume the truth of legal conclusions [*10] merely because they are cast in the form of factual allegations." Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) (per curiam) (internal quotation marks omitted). Mere "conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss." Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004).
In the instant Order, the Court resolves three filings. The Court begins with a declaration filed by Plaintiff that the Court liberally construes as a motion to recuse under 28 U.S.C. § 144 and a motion for disqualification under 28 U.S.C. § 455. The Court then turns to Plaintiff's motion for default judgment. Third, and finally, the Court resolves the Named Defendants' motion to dismiss the SAC.
A. Motion to Recuse and Motion for Disqualification
On September 17, 2019, Plaintiff filed a declaration that asserted that the Court must be "disqualified pursuant to 28 U.S. § 351, § 352, § 455." ECF No. 48 at 1.1 The Court liberally construes this declaration as a motion to recuse under 28 U.S.C. § 144 and a motion for disqualification under 28 U.S.C. § 455. First, the Court addresses the motion to recuse under 28 U.S.C. § 144. The Court then turns to the motion for disqualification under 28 U.S.C. § 455.
1. Motion to Recuse under 28 U.S.C. § 144
[Note: 28 U.S.C. § 144 provides:
[“Whenever a party to any proceeding in a district court makes and files a timely and sufficient affidavit that the judge before whom the matter is pending has a personal bias or prejudice either against him or in favor of any adverse party, such judge shall proceed no further therein, but another judge shall be assigned to hear such proceeding.
[“The affidavit shall state the facts and the reasons for the belief that bias or prejudice exists, and shall be filed not less than ten days before the beginning of the term at which the proceeding is to be heard, or good cause shall be shown for failure to file it within such time. A party may file only one such affidavit in any case. It shall be accompanied by a certificate of counsel of record stating that it is made in good faith.”]
First, as to Plaintiff's motion to recuse under 28 U.S.C. § 144, "Section 144 expressly conditions relief upon the filing of a timely and legally sufficient [*11] affidavit." United States v. Sibla, 624 F.2d 864, 867 (9th Cir. 1980). "An affidavit filed pursuant to that section is not legally sufficient unless it specifically alleges facts that fairly support the contention that the judge exhibits bias or prejudice directed toward a party that stems from an extrajudicial source." Id. at 868. "[A] determination of the sufficiency of the facts and reasons given in the sworn statement must be made by the judge to whom the affidavit is presented." Grimes v. United States, 396 F.2d 331, 333 (9th Cir. 1968) (citing Berger v. United States, 255 U.S. 22, 36, 41 S. Ct. 230, 65 L. Ed. 481 (1921)); see also United States v. Azhocar, 581 F.2d 735, 738 (9th Cir. 1978) (rejecting argument that affidavit must be referred to another judge to determine legal sufficiency). "If the judge to whom a timely motion is directed determines that the accompanying affidavit specifically alleges facts stating grounds for recusal under section 144, the legal sufficiency of the affidavit has been established, and the motion must be referred to another judge for determination of its merits." Sibla, 624 F.2d at 868. Thus, this Court's review "is addressed to the facial sufficiency of the affidavit[,] not to the truth or falsity of the facts stated therein." Azhocar, 581 F.2d at 738.
As best the Court can discern, Plaintiff asserts three reasons that recusal under 28 U.S.C. § 144 is warranted. First, Plaintiff argues that the Court "is protecting and serving the interests of [the Named Defendants'] politically [*12] powerful criminal enterprise" because the Named Defendants "can do favors for those promoting [the Court's] ambitions." ECF No. 48 ¶¶ 8-10. Plaintiff's assertions that the Court "is protecting and serving the interests" of the Named Defendants because of the alleged influence wielded by the Named Defendants is speculative. In support, Plaintiff muses that the Named Defendants "can do favors" for the Court, because "[i]t is highly probable" that "the businesses in which [the husband of Dianne Feinstein] has invested, have had, or will have, direct dealings with" the Named Defendants. Id. ¶ 9. Recusal under 28 U.S.C. § 144 is not warranted based on speculation of this nature. Yagman v. Republic Ins., 987 F.2d 622, 626 (9th Cir. 1993) (recusal not warranted under 28 U.S.C. § 144 or § 455 based on speculation); see also United States v. Kubon, No. 18-cv-04788-PJH, 2019 U.S. Dist. LEXIS 114834, 2019 WL 3387651, at *3 (N.D. Cal. July 10, 2019) ("And the fourth, defendants' 'conspiracy' assertion, amounts to rank speculation that lacks any factual support and thus is insufficient to support recusal or disqualification.").
Second, Plaintiff argues that "this relationship sets the stage for ex parte communications, between [the Court] an intermediary [sic] and the [Named] Defendants." According to Plaintiff, "there is evidence [of ex parte communications] between [*13] the hours of 1:35 to 3:00 PM on 3/29/19; i.e. soon after [the Court] received Defendants' 'Administrative Motion', the Defendants were advised to amend and change the wording thereby giving Judge Koh and the Defendants greater leeway to obtain more time to file a motion to dismiss thus circumventing the rule 12 deadline." ECF No. 48 ¶¶ 8-10.
Plaintiff's declaration studiously and conspicuously avoids ever actually alleging that the Court engaged in ex parte communications with the Named Defendants. Instead, Plaintiff resorts to vague conjecture. Plaintiff asserts that the Court's alleged relationship with the Named Defendants "sets the stage for ex parte communications," that "there is evidence" of unspecified ex parte communications, and that the Court "has likely engaged in ex parte communications." Id. ¶¶ 8-10, 16. The thrust of Plaintiff's argument appears to be that the Named Defendants "were advised [by an unspecified individual] to amend and change the wording" of an administrative motion that the Named Defendants filed on March 29, 2019. Id. Plaintiff seems to refer to the fact that on March 29, 2019, the Named Defendants refiled an administrative motion for an extension of time they [*14] had made an hour-and-a-half earlier that day in order to correct "a typographical error in the caption." ECF No. 5 at 1 n.1. Specifically, the Named Defendants changed the caption of the administrative motion to clarify that it was a motion to extend the time for filing a "responsive pleading," not just for filing a "dispositive motion." Id. Because Plaintiff does not actually allege ex parte communications by the Court, Plaintiff's argument on this score is legally insufficient. See, e.g., Hiramanek v. Loftus, No. 5:13-CV-00228-RMW, 2015 U.S. Dist. LEXIS 107430, 2015 WL 4881469, at *2 (N.D. Cal. Aug. 14, 2015) ("First, plaintiff's declaration contains no legally sufficient allegations of any ex parte communications. The allegations are entirely conclusory and not supported by facts relevant to the conclusion plaintiff seeks to draw.").2
Third, Plaintiff argues that the Court has misrepresented Plaintiff's briefing, "adopted the Defendants' talking points and distorted the material facts of this case," "refused to reprimand or levy sanctions or strike," "refused this Plaintiff's Fifth Amendment right to be 'heard,' refused to allow Plaintiff to engage in Discovery, and refused to hear a motion that Defendants are in default because of their brazen violation of American Bar Association [*15] and California Bar Association Rule 1.7." ECF No. 48 ¶¶ 2-4, 13-17. Assertions of this nature amount to arguments about the Court's prior rulings in the instant case. However, it is well established that a "judge's prior adverse ruling is not sufficient cause for recusal."3 Taylor v. Regents of Univ. of Cal., 993 F.2d 710, 712 (9th Cir. 1993) (per curiam) (internal quotation marks omitted).
In sum, and as outlined in the foregoing, Plaintiff fails to make any legally sufficient allegations that state adequate grounds for recusal under 28 U.S.C. § 144. Accordingly, the Court need not refer Plaintiff's motion to another judge, and the Court DENIES the motion for recusal. See, e.g., Sibla, 624 F.2d at 868 ("An affidavit filed pursuant to that section is not legally sufficient unless it specifically alleges facts that fairly support the contention that the judge exhibits bias or prejudice directed toward a party that stems from an extrajudicial source."). The Court now proceeds to address Plaintiff's motion for disqualification under 28 U.S.C. § 455.
2. Motion for Disqualification under 28 U.S.C. § 455
[Note: 28 U.S.C. § 455 provides:
[(b) He shall also disqualify himself in the following circumstances:
[(1) Where he has a personal bias or prejudice concerning a party, or personal knowledge of disputed evidentiary facts concerning the proceeding;
[(2) Where in private practice he served as lawyer in the matter in controversy, or a lawyer with whom he previously practiced law served during such association as a lawyer concerning the matter, or the judge or such lawyer has been a material witness concerning it;
[(3) Where he has served in governmental employment and in such capacity participated as counsel, adviser or material witness concerning the proceeding or expressed an opinion concerning the merits of the particular case in controversy;
[(4) He knows that he, individually or as a fiduciary, or his spouse or minor child residing in his household, has a financial interest in the subject matter in controversy or in a party to the proceeding, or any other interest that could be substantially affected by the outcome of the proceeding;
[(5) He or his spouse, or a person within the third degree of relationship to either of them, or the spouse of such a person:
[(i) Is a party to the proceeding, or an officer, director, or trustee of a party;
[(ii) Is acting as a lawyer in the proceeding;
[(iii) Is known by the judge to have an interest that could be substantially affected by the outcome of the proceeding;
[(iv) Is to the judge’s knowledge likely to be a material witness in the proceeding.
[(c) A judge should inform himself about his personal and fiduciary financial interests, and make a reasonable effort to inform himself about the personal financial interests of his spouse and minor children residing in his household.
[(d) For the purposes of this section the following words or phrases shall have the meaning indicated:
[(1) “proceeding” includes pretrial, trial, appellate review, or other stages of litigation;
[(2) the degree of relationship is calculated according to the civil law system;
[(3) “fiduciary” includes such relationships as executor, administrator, trustee, and guardian;
[(4) “financial interest” means ownership of a legal or equitable interest, however small, or a relationship as director, adviser, or other active participant in the affairs of a party, except that:
[(i) Ownership in a mutual or common investment fund that holds securities is not a “financial interest” in such securities unless the judge participates in the management of the fund;
[(ii) An office in an educational, religious, charitable, fraternal, or civic organization is not a “financial interest” in securities held by the organization;
[(iii) The proprietary interest of a policyholder in a mutual insurance company, of a depositor in a mutual savings association, or a similar proprietary interest, is a “financial interest” in the organization only if the outcome of the proceeding could substantially affect the value of the interest;
[(iv) Ownership of government securities is a “financial interest” in the issuer only if the outcome of the proceeding could substantially affect the value of the securities.
[(e) No justice, judge, or magistrate judge shall accept from the parties to the proceeding a waiver of any ground for disqualification enumerated in subsection (b). Where the ground for disqualification arises only under subsection (a), waiver may be accepted provided it is preceded by a full disclosure on the record of the basis for disqualification.
[(f) Notwithstanding the preceding provisions of this section, if any justice, judge, magistrate judge, or bankruptcy judge to whom a matter has been assigned would be disqualified, after substantial judicial time has been devoted to the matter, because of the appearance or discovery, after the matter was assigned to him or her, that he or she individually or as a fiduciary, or his or her spouse or minor child residing in his or her household, has a financial interest in a party (other than an interest that could be substantially affected by the outcome), disqualification is not required if the justice, judge, magistrate judge, bankruptcy judge, spouse or minor child, as the case may be, divests himself or herself of the interest that provides the grounds for the disqualification.]
Second, the Court addresses Plaintiff's motion for disqualification under 28 U.S.C. § 455. Under 28 U.S.C. § 455, a judge must be disqualified "in any proceeding in which [her] impartiality might reasonably be questioned," [*16] 28 U.S.C. § 455(a), including where the judge "has a personal bias or prejudice concerning a party," id. § 455(b)(1). Unlike 28 U.S.C. § 144, 28 U.S.C. § 455 is "directed to the judge, rather than the parties, and is self-enforcing on the part of the judge." Sibla, 624 F.2d at 867-68. Section 455 does not provide a procedural mechanism to refer the recusal question to another judge. Id. at 868 ("Moreover, section 455 includes no provision for referral of the question of recusal to another judge; if the judge sitting on a case is aware of grounds for recusal under section 455, that judge has a duty to recuse himself or herself.").
Plaintiff's motion for disqualification under 28 U.S.C. § 455 fares no better than plaintiff's motion to recuse under 28 U.S.C. § 144. This is so because the same substantive standard applies to motions made under 28 U.S.C. § 144 and motions made under 28 U.S.C. § 455. Id. at 867 (noting that "[t]he same substantive standard" applies to both 28 U.S.C. § 144 and 28 U.S.C. § 455). Because the Court previously determined that Plaintiff's declaration does not make any legally sufficient allegations to warrant recusal, the Court necessarily concludes that Plaintiff does not make any legally sufficient allegations to warrant disqualification under 28 U.S.C. § 455. Accordingly, the Court DENIES Plaintiff's motion for disqualification.
Next, the Court turns to Plaintiff's motion for default judgment.
B. [*17] Motion for Default Judgment
On September 23, 2019, Plaintiff filed a "motion for summary judgment" against Defendants Sykes, Hughey, McLeod, Flanagan, and Gibilesco. ECF No. 49. Although Plaintiff styles this motion as a motion for summary judgment, it is clear that the motion is in actuality a motion for default judgment. As an initial matter, discovery in the instant case has been stayed pending the Court's decision on the Named Defendants' motion to dismiss the SAC. ECF No. 63; see, e.g., Iverson v. Johnson Gas Appliance Co., 172 F.3d 524, 530 (8th Cir. 1999) ("As a general rule, summary judgment is proper 'only after the nonmovant has had adequate time for discovery.'" (quoting In re TMJ Litig., 113 F.3d 1484, 1490 (8th Cir.1997)).
Thus, tellingly, Plaintiff does not argue that the record contains no genuine issue of material fact as to the allegations made in Plaintiff's SAC. Instead, Plaintiff simply argues that the Named Defendants "failed to file responsive pleadings by April 3, 2019." ECF No. 63 ¶ 10. Indeed, Plaintiff specifically cites "Rule 55(a),(b)(1)(2)" at various points in Plaintiff's motion, and Federal Rule of Civil Procedure 55 is the rule that governs default and default judgment. Id. ¶¶ 1, 2. Plaintiff also claims that the basis of the motion is that "Defendants Dave Sykes, Rosalynn Hughey, Mollie Mcleod, Sean Flanagan, [and] Jason Gibilesco [*18] were in default as of April 3, 2019." Id. ¶ 1 (emphasis added). Accordingly, the Court construes Plaintiff's motion as a motion for default judgment.
Default judgment is improper in the instant case. The Court reconstructs Plaintiff's default judgment theory as follows. "Rule 1.7 of the American Bar Association and California Bar Association . . . requires attorneys to obtain 'informed consent, confirmed in writing,' from any and all clients, before they can represent these clients, when there is a probability of a conflict of interest." Id. According to Plaintiff, in the instant case, "there are obvious conflicts of interest as to who authorized or initiated the conspiracy, what pressures were placed on the different Defendants to participate, who orchestrated the cover up of these crimes, who might be fired because of or held responsible for this conduct and for each individual crime, and so on." Id. ¶ 3.
Hence, Plaintiff argues that counsel for the Named Defendants should be disqualified. Plaintiff asserts that Plaintiff requested "proof that conflict of interest waivers were signed" from counsel for the Named Defendants, but that Named Defendants declined to supply the requested proof to [*19] him. Id. ¶¶ 4, 5. Accordingly, in the absence of such proof, Plaintiff now claims that the Court must determine that counsel for the allegedly conflicted Named Defendants was "never legally authorized" to file responsive pleadings. Id. ¶ 6. Because the responsive pleadings are "null and void," Plaintiff appears to believe that default judgment logically follows. Id. ¶ 10.
First, and most fundamentally, Plaintiff fails to demonstrate that counsel for the Named Defendants must be disqualified. As an initial matter, it is highly unclear whether Plaintiff even has standing to raise an argument concerning disqualification of counsel for the Named Defendants. See Great Lakes Constr., Inc. v. Burman, 186 Cal. App. 4th 1347, 1356, 114 Cal. Rptr. 3d 301 (2010) ("Generally, before the disqualification of an attorney is proper, the complaining party must have or must have had an attorney-client relationship with that attorney."); Colyer v. Smith, 50 F. Supp. 2d 966, 972 (C.D. Cal. 1999) ("The majority view is that only a current or former client of an attorney has standing to complain of that attorney's representation of interests adverse to that current or former client.").
Even assuming that Plaintiff has standing to raise the argument, however, disqualification of counsel for the Named Defendants is unnecessary. Disqualification of counsel [*20] is strongly disfavored and is considered a "drastic measure." Yumul v. Smart Balance, Inc., No. CV 10-00927 MMM (AJWx), 2010 U.S. Dist. LEXIS 116960, 2010 WL 4352723, at *3 (C.D. Cal. Oct. 8, 2010). This is so because arguments for disqualification are often made for improper purposes. See Optyl Eyewear Fashion Int'l Corp. v. Style Cos., Ltd., 760 F.2d 1045, 1050 (9th Cir. 1985) (noting concern for the "misuse of the rules for tactical purposes"); Multimedia Patent Trust v. Apple, Inc., No. 10-CV-2618 H(CAB), 2011 U.S. Dist. LEXIS 46237, 2011 WL 1636928, at *1 (S.D. Cal. Apr. 29, 2011) ("Because a motion to disqualify is often tactically motivated and can be disruptive to the litigation process, disqualification is considered to be a drastic measure that is generally disfavored and imposed only when absolutely necessary."). Plaintiff therefore must bear the "heavy burden" required to show that disqualification is necessary. SEC v. King Chuen Tang, 831 F. Supp. 2d 1130, 1139 (N.D. Cal. 2011) (referring to "the heavy burden that must be met to justify disqualification of opposing counsel").
Under Civil Local Rule 11-4, attorneys that practice in the Northern District of California must "[b]e familiar and comply with the standards of professional conduct required of members of the State Bar of California." L.R. 11-4(a)(1). California has not adopted the American Bar Association model rules. See, e.g., Real Estate Training Internat'l, LLC v. Nick Vertucci Cos., Inc., 124 F. Supp. 3d 1005, 1006 (C.D. Cal. 2015) ("Much to the chagrin of countless practitioners inside and outside of California, however, California has not adopted the ABA model rules."). Thus, the [*21] California Rules of Professional Conduct provide the operative framework for the ethical issue Plaintiff raises here.
"[T]he fact that an attorney is jointly representing multiple clients—either in the same or different litigations—does not necessarily mean that an actual conflict exists." Frank Gari Prods., Inc. v. Smith, No. CV 12-248-GHK (FFMx), 2012 WL 12895903, at *3 (C.D. Cal. June 15, 2012). However, California law imposes on counsel the duty to secure informed consent from parties "when a single attorney represents two parties in a matter because of the very real possibility that the interests of the clients in the litigation may at some point diverge and come into conflict." In re GFI Mortgage LLP, No. C 12-03956 SI, 2013 U.S. Dist. LEXIS 124077, 2013 WL 4647300, at *4 (N.D. Cal. Aug. 29, 2013) (internal quotation marks and citations omitted). Specifically, under Rule 1.7(b) of the California Rules of Professional Conduct, "[a] lawyer shall not, without informed written consent from each affected client and compliance with paragraph (d), represent a client if there is a significant risk the lawyer's representation of the client will be materially limited by the lawyer's responsibilities to or relationships with another client, a former client or a third person, or by the lawyer's own interests." Cal. Prof. Conduct, 1.7(b).
Here, counsel for the Named Defendants has filed a declaration under [*22] penalty of perjury that counsel is unaware of any current conflicts between the Named Defendants, and that each of the Named Defendants has signed an engagement agreement with a conflict waiver provision. ECF No. 56-1 ¶¶ 2-4. The Court is satisfied that in light of the early stage of litigation in the instant case, and the fact that counsel for the Named Defendants has sworn under penalty of perjury that each of the Named Defendants has provided informed written consent to counsel's concurrent representation, the actual engagement agreements need not be filed on the docket. In the event that an actual conflict develops between the various Named Defendants such that counsel's representation of one Named Defendant is "directly adverse" to others, counsel for the Named Defendants is advised that further informed written consent is required. Cal. Prof. Conduct 1.7(a), cmt. 2 ("If a lawyer initially represents multiple clients with the informed written consent as required under paragraph (b), and circumstances later develop indicating that direct adversity exists between the clients, the lawyer must obtain further informed written consent of the clients under paragraph (a).").
Second, the Court notes that disqualification [*23] of counsel, even in the event it were warranted, would not automatically result in the Named Defendants' responsive pleadings becoming "null and void" such that default judgment would then be appropriate. Indeed, other courts have squarely rejected this sweeping assertion. See Cal Pure Pistachios, Inc. v. Primex Farms, LLC, No. CV 09-7874-GW(RCx), 2010 U.S. Dist. LEXIS 148263, 2010 WL 11523590, at *1 (C.D. Cal. Jan. 7, 2010) ("Defendants have not cited any case authority that supports granting the relief they request—i.e., disqualifying counsel, striking all of the pleadings they have filed, and granting all of Defendants' motions."). Further, as the Court previously explained in an order denying Plaintiff's earlier motion for default judgment, the Court's decision whether to grant a default judgment is discretionary, not automatic. Aldabe, 616 F.2d at 1092. This discretion is constrained by the "general rule that default judgments are ordinarily disfavored," and that "[c]ases should be decided upon their merits whenever reasonably possible." Eitel, 782 F.2d at 1471. When "a defendant demonstrates a clear purpose to defend themselves, a court may not enter default against them." Best Deals on TV, Inc. v. Naveed, No. C 07-01610 SBA, 2008 U.S. Dist. LEXIS 86188, 2008 WL 2477390, at *7 (N.D. Cal. June 18, 2008). In this case, the Named Defendants have repeatedly demonstrated a clear purpose to defend themselves [*24] by filing motions to dismiss the original complaint, the FAC, and the SAC. ECF Nos. 11, 31, 52. Plaintiff's motion for default judgment contains virtually no argument that this case represents the appropriate circumstance for the Court to exercise its discretion to grant default judgment.
Moreover, Plaintiff filed the SAC on September 10, 2019, before Plaintiff filed the instant motion for default judgment, and Plaintiff does not allege that the Named Defendants were untimely in responding to the SAC. See ECF Nos. 45, 49. Instead, as in Plaintiff's earlier motion for default judgment, Plaintiff appears to focus on a failure to respond to Plaintiff's original complaint. Id. ¶ 7 ("Defendants failed to file any motion or responsive pleading within the 21 days Rule 12 deadline (i.e. April 3, 2019)."). However, the effect of Plaintiff filing the SAC is that Plaintiff's original complaint and FAC have been superseded. Therefore, any "default based on the original complaint must also be rendered ineffectual and non-existent." ThermoLife Int'l., LLC v. Sechel Holdings, Inc., 2015 U.S. Dist. LEXIS 44767, 2015 WL 1521779, at *1 (D. Ariz. Apr. 3, 2015); accord Ferdik v. Bonzelet, 963 F.2d 1258, 1262 (9th Cir. 1992) (explaining that an amended pleading supersedes the original pleading such that "after amendment the original pleading no longer performs any function and is treated [*25] 'thereafter as nonexistent'"). Thus, Plaintiff may not rely on the Named Defendants' alleged failure to timely respond to his original complaint to move for default judgment.
Moreover, as the Court previously explained, it is the Clerk of the Court, not the Court, who must determine that a party has defaulted as an initial matter. See Fed. R. Civ. P. 55(a) ("When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default." (emphasis added)). Here, the Clerk of the Court has not entered default against the Named Defendants, so the Court lacks any authority to grant default judgment. See Eitel 782 F.2d at 1471 (explaining the two-step default process required by Rule 55).
In sum, for all of the reasons outlined above, the Court must DENY Plaintiff's motion for default judgment. The Court now turns to the Named Defendants' motion to dismiss.
1 Plaintiff then filed a subsequent declaration on November 12, 2019, which contains substantially overlapping allegations. ECF No. 65.
2 Further, although the Court need not address "the truth or falsity of the facts stated" in Plaintiff's declaration, Azhocar, 581 F.2d at 738, the Court nevertheless notes that the Court did not engage in any ex parte communications with the Named Defendants concerning the administrative motion for an extension of time.
3 To the extent that Plaintiff's subsequent declaration makes any new allegations, these allegations concern the Court's rulings in other, unrelated cases. ECF No. 65. These, too, are legally insufficient to warrant recusal. See, e.g., Price v. City of Red Lodge, Mont., No. CV 14-00058-BLG-SPW-CSO, 2014 U.S. Dist. LEXIS 132600, 2014 WL 4656479, at *2 (D. Mont. Sept. 17, 2014) (allegations of bias from "prior rulings in this and other prior proceedings" inadequate to warrant recusal).
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