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Advocates for Individuals with Disabilities Foundation Inc. v. Golden Rule Properties LLC

United States District Court, D. Arizona

November 4, 2016

Advocates for Individuals with Disabilities Foundation Incorporated, Plaintiff,
v.
Golden Rule Properties LLC, Defendant.

          ORDER

          HONORABLE G. MURRAY SNOW UNITED STATES DISTRICT JUDGE.

         Pending before the Court is Plaintiff Advocates for Individuals with Disabilities Foundation Incorporated's (“Advocates”) Motion to Reconsider (Doc. 31.) For the following reasons, the motion is denied.

         BACKGROUND

         Plaintiff Advocates filed suit against Defendant Golden Rule Properties, LLC (“Golden Rule”) for violations of the Americans with Disabilities Act (“ADA”) as well as its counterpart under Arizona law on June 9, 2016. (Doc. 1 at 1.) Golden Rule's counsel contacted Advocates on July 18, 2016 to inform Advocates and its counsel, Mr. Zazueta, that Golden Rule intended to remove every case Advocates filed with a federal claim. (Doc. 12 at 14-15.) This included this case as well as several others. (Id.) Defense counsel went on to inform Mr. Zazueta that failure to dismiss federal claims prior to removal would result in the defense incurring the “unnecessary additional cost of removal for nothing.” (Doc. 12 at 14.) In turn, Mr. Zazueta assured defense counsel that AID and its outside counsel, Mr. Strojnik, intended to pursue their causes of action under both state and federal law. (Id. at 13.)

         Golden Rule promptly removed the case to federal court. (Doc. 1.) Advocates moved to dismiss its federal claims less than ten days later. (Doc. 8.) There is no indication that anything changed in those ten days to incentivize the dismissal of the federal claims. (Doc. 22 at 13.) Pursuant to Mr. Zazueta's testimony at the oral argument on September 29, 2016, it was ultimately Mr. Zazueta's, Mr. Strojnik's, and an Advocates' representative, Mr. Alex Callen's, decision to dismiss the federal claims a week after removal. (Show Cause Hr'g Tr. 50:17-25, 51:1-2, Sept. 29, 2016.)

         The Motion to Reconsider introduces facts that are contrary to the moving parties' testimony in the record. At the hearing held on September 29, Mr. Zazueta stated that he has “complete autonomy” over legal decisions made on behalf of Advocates, although he “receive[s] advice from outside counsel.” (Id. at 48:8-11.) However, in his declaration attached to the Motion to Reconsider, Mr. Zazueta claims that he advised Advocates to dismiss the federal claims prior to removal, and that he was overruled by his client and Mr. Strojnik. (Doc. 31-1 at 1.) Likewise, as of the September 29, 2016 hearing there was no evidence that Advocates ever reimbursed a defendant for their removal costs. (Id. at 42:2-6.) Defense counsel directly asked Mr. Strojnik if he was aware of any such reimbursements, and Mr. Strojnik affirmatively stated that “I don't recall. It could have happened. I don't recall.” (Id.) Yet in its Motion to Reconsider, Advocates asserts that five days prior to the hearing in this case, the corporation reimbursed defense counsel's firm for costs incurred during removal in another case. (Doc. 31 at 2.) This was allegedly done at the “recommendation of Plaintiff's counsel Peter Strojnik and Fabian Zazueta.” (Doc. 31 at 2.)

         In light of the facts in the record at the time of the hearing, the Court entered an order dismissing the federal claims, remanding the remaining claims back to state court, awarding costs to Golden Rule under the Removal Statute, and sanctioning Advocates as well as their counsel under § 1927. (Doc. 28.) Advocates and their counsel filed a Motion to Reconsider the award of costs to Golden Rule and the sanctions against Plaintiff and Plaintiff's counsel, Mr. Zazueta and Mr. Strojnik. (Doc. 31.) Specifically, Advocates' Motion introduces new evidence to contest the Court's finding of facts and argues that the Court made a manifest error of law by awarding the Defendant costs under the Removal Statute.

         DISCUSSION

         Under Rule 59(e), a motion for reconsideration may be granted only on one of four grounds: “1) the motion is necessary to correct manifest errors of law or fact upon which the judgment is based; 2) the moving party presents newly discovered or previously unavailable evidence; 3) the motion is necessary to prevent manifest injustice or 4) there is an intervening change in controlling law.” Turner v. Burlington N. Santa Fe R.R. Co., 338 F.3d 1058, 1063 (9th Cir. 2003) (internal quotations and emphasis omitted). Motions for reconsideration are disfavored, and they should not be used to ask the Court to “rethink what the court has already thought through─rightly or wrongly.” See United States v. Rezzonico, 32 F.Supp.2d 1112, 1116 (D. Ariz. 1998) (quoting Above the Belt, Inc. v. Mel Bohannon Roofing, Inc., 99 F.R.D. 99, 101 (E.D. Va. 1983)).

         I. It is Improper to Introduce New Facts in a Rule 59(e) Motion.

         Advocates' Motion is a thinly veiled attempt to introduce new facts and arguments to the proceedings after judgment. “A Rule 59(e) motion may not be used to raise arguments or present evidence for the first time when they could reasonably have been raised earlier in the litigation.” Kona Enterprises, Inc. v. Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 2000). Therefore, it is improper to introduce new evidence that was available to the parties at the time the district court ruled in a Rule 59(e) motion. See Emmons v. McLaughlin, 874 F.2d 351, 358 (6th Cir.1989) (“[A] district court does not abuse its discretion in denying a Rule 59 motion when it is premised on evidence that the party had in his control prior to the original entry of judgment.”)

         Mr. Zazueta was confronted with the email he now disputes during his testimony on September 29. (Show Cause Hr'g Tr. 47; 2-25.) The correspondence at issue was also at the center of Defendant's Response to Plaintiff's Amended Motion to Dismiss in August. (Doc. 12.) Contrary to the moving parties assertions, they knew that the email was being used as evidence of defense counsel's “prior experience wherein Plaintiff dismissed its federal claim immediately upon removal” because it was clearly stated in the briefings. (Doc. 12 at 6.) Therefore, Advocates and its counsel could have reasonably raised the argument regarding the emails earlier in litigation and they did not. It is inappropriate to do so now. Kona Enterprises, Inc., 229 F.3d at 890.

         Advocates attached no less than three new declarations in its Motion introducing new facts in an attempt to contradict this Court's finding of bad faith conduct in its earlier order. Specifically, the new declarations claim that Advocates voluntarily paid defendant's removal fees in the past, “at the recommendation of Plaintiff's counsel.” (Doc. 31 at 2.) Advocates knew it reimbursed the defendant in Advocates for Individuals with Disabilities, Incorporated v. Sun West Dental Properties, No. CV-16-02416-PHX-JJT, long before the Court ruled in this case and thus it may not introduce this argument at this stage in the proceedings.

         According to the parties, Advocates voluntarily reimbursed a similarly situated defendant five days prior to the September hearing. (Doc. 31 at 3.) During the hearing, Mr. Strojnik was asked “are you aware of any prior cases where [Advocates] had agreed to reimburse defendants for the cost of removal when [Advocates] immediately dismissed the federal claim?” (Show Cause Hr'g Tr. at 42:2-6.) Mr. Strojnik stated that “I don't recall. It could have happened. I don't recall.”[1] (Id.) Certainly the parties were aware of the reimbursement at the time of the September hearing, ...


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