United States District Court, D. Arizona
ORDER
Dominic W. Lanza United States District Judge
Pending
before the Court is a motion to strike filed by CWT Canada II
Limited Partnership, Resource Recovery Corporation, and Jean
Noelting (collectively, the “Judgment
Creditors”). (Doc. 228.) Wyo Tech Investment Group LLC
(“Wyo Tech”) opposes the motion to strike and
also seeks the undersigned judge’s recusal under 28
U.S.C. § 455(a). (Doc. 231.) For the following reasons,
both motions will be denied.
BACKGROUND
This is
a civil interpleader action in which Wyo Tech and the
Judgment Creditors have asserted competing claims to a sum of
money, $546, 282.55, that was previously deposited in Wyo
Tech’s bank account at Wells Fargo. On October 31,
2018, this case was transferred to the undersigned judge.
(Doc. 93.) In the 11 months since the reassignment, the
undersigned judge has issued numerous rulings, some of which
are discussed in detail below.
On
August 22, 2019, a group of non-party subpoena recipients
filed a motion for recusal. (Doc. 204.)
On
August 27, 2019, the Court issued an order denying the
motion. (Doc. 209.) In a nutshell, the Court concluded that
recusal wasn’t warranted because “the reasons
identified in the Subpoenaed Individuals’ motion-(1)
issuing discovery rulings with which they apparently
disagree, (2) being friends with a lawyer who has a brother
who has a law partner who is serving as local counsel in this
case, (3) working for the [U.S. Attorney’s Office] at
the same time that a different [attorney in that office],
separated by three levels of supervisors, was pursuing an
unrelated criminal investigation involving a non-party, and
(4) having a phone call four years ago with a non-party about
an unrelated matter-would not cause a reasonable person to
question the undersigned judge’s impartiality.”
(Id. at 9.)
This
order also included a footnote concerning the timeliness of
the recusal motion. Specifically, the Court “note[d]
that, had Wyo Tech attempted to file a recusal motion at this
late juncture of the case, such a motion would have been
untimely. . . . Here, because the only entities formally
seeking recusal are the Subpoenaed Individuals (who had no
prior involvement in this case), their motion will not be
denied on timeliness grounds. That said, the motion is
predicated on information that likely came from Wyo Tech and
[Dennis] Danzik (and that Wyo Tech’s counsel, Wilenchik
& Bartness, must have known at the time this case was
reassigned to the undersigned judge). The Subpoenaed
Individuals would have no other way of knowing about
non-public criminal investigations that didn’t result
in charges. Further, the proposed order granting the recusal
motion was emailed to the Court’s chambers email
address by Wyo Tech’s counsel, not by the Subpoenaed
Individuals’ counsel. Such coordination raises the
possibility that Wyo Tech is using the Subpoenaed Individuals
as a stalking horse to evade the time limits on recusal
motions.” (Id. at 6 n.5, citation omitted.)
On
September 12, 2019, Wyo Tech (through its counsel, Dennis
Wilenchik of the law firm Wilenchik & Bartness) filed a
document entitled “Supplement To Clarify The Record Re:
Denial Of Motion For Recusal Filed By Non-Parties”
(hereinafter “the Supplement”) (Doc. 227.) In the
Supplement, Wyo Tech “takes issue with certain
gratuitous statements” in the order denying the recusal
motion. (Id. at 1.) First, Wyo Tech disputes that it
“was fully aware of all of the facts set forth in the
Subpoenaed Parties’ recusal motion” at the time
this case was reassigned to the undersigned judge in October
2018. (Id. at 2.) Specifically, Wyo Tech asserts
that it “only just recently” learned of the
familial relationship between a friend of the undersigned
judge and an attorney who works for the law firm that is
representing the Judgment Creditors in this case.
(Id.) Second, Wyo Tech characterizes as
“presumptuous and insulting” the suggestion in
the order that Wyo Tech had anything to do with the
Subpoenaed Parties’ decision to file the recusal
motion, arguing that “[u]ndersigned counsel was not
even aware of it.” (Id. at 2-3.)
On
September 13, 2019, the Judgment Creditors filed a motion to
strike the Supplement. (Doc. 228.) First, the Judgment
Creditors argue the Supplement is procedurally improper
because it is “functionally a post-decision
objection” to the order denying the recusal motion, yet
“a party is not authorized by any statute, rule, or
court order to submit additional argument or facts merely to
‘clarify the record.’” (Id. at
1-2.) Second, the Judgment Creditors argue that the premise
underlying the Supplement-that Wyo Tech had nothing to do
with the Subpoenaed Individuals’ decision to file the
recusal motion- is false. (Id. at 2-3.) In support
of this claim, the Judgment Creditors enclose a series of
emails they recently obtained via a subpoena to a Wyo Tech
investor. (Doc. 229 at 2 ¶ 2.) These emails show that,
on August 16, 2019, Mr. Wilenchik sent an email to other
attorneys at Wilenchik & Bartness, asking, “[C]an u
[sic] send me a draft objection we can ask [the Subpoenaed
Individuals’ counsel] to file?” (Doc. 229-1 at
4.) Mr. Wilenchik’s email added, “Also we shd
[sic] file our own.” (Id.) In response, one of
those attorneys wrote: “See attached. We are setting up
a meeting with [the Subpoenaed Individuals’ counsel]
for Monday to discuss this and the motion for recusal as you
requested.” (Doc. 229-1 at 3.) Mr. Wilenchik then
forwarded this email chain to Wyo Tech’s CEO, who in
turn forwarded it to a distribution list of at least 12
individuals (all of whom appear to be Wyo Tech investors).
(Doc. 229-1 at 2.) At the top of this email, also sent on
August 16, 2019, Wyo Tech’s CEO wrote in part:
“[W]e are going to file a motion to have a Judge recuse
himself . . . .” (Id.)
On
September 16, 2019, Wyo Tech filed a “Response To . . .
Motion To Strike And . . . Motion For Recusal.” (Doc.
231.) Wyo Tech begins by arguing that the Court’s
earlier rulings in this case were erroneous and constitute
proof of bias. (Id. at 2-4.) Next, Wyo Tech argues
the motion to strike should be denied because the
“Supplement is not prohibited by any statute, rule, or
court order” and the Judgment Creditors have not
“pointed to any authority to support that
assertion.” (Id. at 4-6.) Wyo Tech also argues
that the emails enclosed as an exhibit to the motion to
strike (which show that Wyo Tech and its counsel were
involved in the preparation of the earlier recusal motion) do
not contradict any of the assertions in the Supplement:
“Wyo [Tech] and its counsel have never actually ever
denied . . . that they agreed with and assisted [the
Subpoenaed Individuals’ counsel] in representing his
clients based on providing him with the relevant facts and
evidence, from which he then decided . . . to file the
recusal motion.” (Id. at 4 n.3.) Furthermore,
Wyo Tech contends the Judgment Creditors acted improperly in
attaching the emails to the motion because they “are
clearly attorney-client privileged communications which were
obviously inadvertently disclosed by Wyo [Tech].”
(Id.) Finally, Wyo Tech makes its own recusal
request under 28 U.S.C. § 455(a). (Id. at
7-10.) It incorporates the arguments contained in the earlier
recusal motion and also contends that certain “newly
discovered information” supports its request.
(Id.)
DISCUSSION
I.
Motion To Strike
The
first motion before the Court is the Judgment
Creditors’ motion to strike. (Doc. 228.) It is governed
by LRCiv 7.2(m)(1), which provides that “a motion to
strike may be filed only if it is authorized by statute or
rule, such as Federal Rules of Civil Procedure 12(f),
26(g)(2) or 37(b)(2)(A)(iii), or if it seeks to strike any
part of a filing or submission on the ground that it is
prohibited (or not authorized) by a statute, rule, or court
order.” On the one hand, the Court agrees with the
Judgment Creditors that the elements of LRCiv 7.2(m)(1) are
satisfied here. The Court is not aware of any “statute,
rule, or court order” that would authorize a litigant
to file a “supplement” whose sole purpose is to
criticize an order, issued 16 days earlier, that denied a
motion which hadn’t been filed by that litigant. Thus,
the Supplement filed by Wyo Tech could be stricken under
LRCiv 7.2(m)(1).
Nevertheless,
the Court will decline to grant the Judgment Creditors’
motion. “Motions to strike, ” at least in the
Rule 12(f) context, “are viewed with disfavor and are
not frequently granted.” Operating Engineers Local
324 Health Care Plan v. G & W Constr. Co., 783 F.3d
1045, 1050 (6th Cir. 2015).[1] There are sound reasons for this
disfavored status. Motions to strike often needlessly run up
the cost of litigation and squander judicial resources, and
there is a quick, simple, and cost-free alternative to
striking an irrelevant pleading-ignoring it. Cf.
AIRFX.com v. AirFX LLC, 2012 WL 129804, *1 (D. Ariz.
2012) (“Defendant moves to strike plaintiffs’
reply . . ., arguing that the reply raises new arguments . .
. . [A] motion to strike in this case is unnecessary, as we
do not consider new arguments raised in a reply.”). For
these reasons, some district courts have concluded that
“[a] motion to strike should not be granted unless the
matter to be stricken clearly could have no possible bearing
on the subject of the litigation. If there is any doubt
whether the portion to be stricken might bear on an issue in
the litigation, the court should deny the motion.”
Platte Anchor Bolt, Inc. v. IHI, Inc., 352 F.Supp.2d
1048, 1057 (N.D. Cal. 2004) (citation omitted). Thus, the
Court will decline to strike the Supplement.
Wyo
Tech should not, however, construe this outcome as an
invitation to keep filing procedurally-improper documents.
This is the second time Wyo Tech has filed an unauthorized
“supplement” in this case. (Docs. 176, 227.) Any
similar future filing will be stricken by the Court, without
the need for a motion by the Judgment Creditors.
II.
Motion For Recusal
The
second motion before the Court is Wyo Tech’s motion for
recusal, which is incorporated into its response to the
motion to strike. (Doc. 231.)[2]
A.
The Prior Rulings
Wyo
Tech’s first argument is that the Court’s
previous rulings in this case were not just wrong, but so
obviously wrong that they must have been motivated by a
secretly-harbored bias and sense of antipathy toward Wyo Tech
and Danzik. (Doc. 231 at 1-4, 9.)
This
argument is baseless. Although the Court is hesitant to
comment on its previous rulings-they speak for themselves-Wyo
Tech’s decision to advance such an argument in its
recusal motion triggers a need to address it. 1. April 9,
2019 Ruling The first ruling with which Wyo Tech
apparently disagrees is the Court’s April 9, 2019
order, which concluded that the Judgment Creditors should be
entitled to conduct discovery in this case.
As
background, in February 2019, the parties notified the Court
(via a joint letter) that they had a disagreement concerning
the enforceability of a particular subpoena. (Doc. 101.) Two
days later, the Court held a telephonic hearing to address
the dispute. (Doc. 103.) At the outset of the hearing, the
Court stated it was “tentatively inclined to quash the
subpoena” at Wilenchik & Bartness’s request,
based on one of the cases cited in the joint letter, but also
noted that “[i]n Shepardizing that case just recently
in preparing for this hearing, [the Court] found several
other cases by federal courts in New York” that also
touch upon the availability of discovery in
restraining-notice cases. (Doc. 106 at 2-4.) The Court
ultimately took the matter under advisement, rather than
ruling from the bench, so it could further review the
newly-discovered cases. (Id. at 17.) About a week
later, the Court issued an order explaining that,
“[a]lthough the Court initially hoped to rule on the
discovery dispute promptly, the Court has concluded, after
further consideration, that the issues presented by this
dispute are intertwined with broader unresolved issues in the
case. Accordingly, the Court will order the parties to file
supplemental briefing.” (Doc. 109 at 1.) This order
then summarized three interrelated legal issues and gave the
parties an opportunity to address those issues via 10-page
briefs. (Id. at 5-11.)
On
April 9, 2019, after reviewing the parties’
supplemental briefs (Docs. 113, 114) and after hearing oral
argument (Docs. 118, 121), the Court issued a lengthy order
that, among other things, concluded the Judgment Creditors
should be entitled to conduct discovery. (Doc. 119.)
2.
May ...