Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_02-cv-01608/USCOURTS-azd-2_02-cv-01608-2/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 42:2000e Job Discrimination (Employment)

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NOT FOR PUBLICATION

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Equal Employment Opportunity 

Commission, 

Plaintiff, 

vs.

Serrano's Mexican Restaurants, LLC, 

d/b/a Serrano's Fine Mexican Food 

Restaurants , 

Defendant. 

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No. CV 02-1608-PHX-FJM

ORDER

The court has before it defendant's motion for sanctions (doc. 264), plaintiff's response

(doc. 266) and defendant's reply (doc. 268). For the reasons stated below, we deny

defendant's motion.

Defendant seeks $221,468.75 in sanctions, arguing that plaintiff acted in bad faith

when it "flatly refused to negotiate any issue regarding a potential press release." Motion for

Sanctions at 13. Plaintiff contends that the motion before us is "in essence a motion for

reconsideration of Magistrate Judge Anderson's denial of Defendant's earlier motion for

sanctions filed in 2005." Response at 3. We agree with plaintiff's assessment.

On August 1, 2005, defendant filed a motion for Rule 16 sanctions (doc. 218). On

September 27, 2006, Magistrate Judge Anderson concluded that sanctions were not

Case 2:02-cv-01608-FJM Document 280 Filed 07/05/07 Page 1 of 4
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warranted under Rule 16(f), Fed. R. Civ. P. September 27, 2006 Order (doc. 248) at 3

(explaining that Rule 16 authorizes sanctions for a party's failure to comply with a scheduling

or pretrial order and "for failure to participate in a settlement conference in good faith"). The

order also noted that plaintiff complied with the settlement conference order, and that "any

inability on the part of [plaintiff] to resolve the press-release issue did not preclude

settlement," but that "the parties' positions on monetary damage and other relief" did. Id. at

4. 

Defendant argues that Judge Anderson denied its earlier motion by finding that (1) the

EEOC did not violate the settlement conference order, and (2) plaintiff's counsel had

authority to settle the case. Reply at 8. Defendant contends that its present motion argues

an issue Judge Anderson did not decide: that plaintiff's "refusal to negotiate the issue that it

knew to be of paramount importance to Serrano's was a bad faith refusal to come to the

bargaining table." Id. However, defendant's earlier motion sought sanctions for three

independent reasons, including plaintiff's bad faith conduct. Motion for Rule 16 Sanctions

at 2 (arguing for sanctions because plaintiff violated the January 19, 2005 settlement

conference order by "(1) failing to have a representative at the settlement conference with

full and complete authority to settle the case, (2) being unprepared to meaningfully

participate in the settlement conference, and (3) failing to participate in the settlement

conference in good faith"). Although Judge Anderson did not expressly hold that the conduct

defendant described did not constitute bad faith on the part of plaintiff, he denied defendant's

motion for sanctions. Therefore, he indirectly rejected the bad faith argument. 

Even if we construe defendant's present motion as one for reconsideration of Judge

Anderson's order we do not alter our conclusion. "Reconsideration is appropriate if the

district court (1) is presented with newly discovered evidence, (2) committed clear error or

the initial decision was manifestly unjust, or (3) if there is an intervening change in

controlling law." Sch. Dist. No. 1J. v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993). If

reconsideration is sought more than ten days after the order it seeks to overturn, good cause

must be shown. LRCiv 7.2(g). Here, defendant does not argue that any reason justifies

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reconsideration of Judge Anderson's September 27, 2006 order. Nor does defendant allege

any sort of good cause for its late filing. Although we have authority to grant a motion for

reconsideration filed over a year after the order at issue, see February 14, 2007 Order (doc.

259), we will not do so without proper justification. 

Finally, we reject defendant's attempt to distinguish the two motions. Both motions

contain similar descriptions of the conduct at issue. For example, both address counsel's

conduct in cases brought in other courts. Compare Motion for Rule 16 Sanctions at 7-9 with

Motion for Sanctions at 6-8. Both motions describe the parties' January 10, 2005 pretrial

conference and the March 14, 2005 settlement conference. Compare Motion for Rule 16

Sanctions at 6, 10 with Motion for Sanctions at 9-10. 

In addition, significant portions of defendant's present motion duplicate its earlier

motion verbatim. Numerous sentences have been superficially edited to differentiate them

from their original versions. Compare Motion for Sanctions at 6 ("Ms. Valenzuela and JPI

agreed on the terms of a confidential settlement, including the specific settlement amount,

in the Fall of 2004, but the EEOC refused to allow the settlement unless it could issue its

usual press release, with its usual quotes criticizing the employer and its alleged

discriminatory practices.") with Motion for Rule 16 Sanctions at 7 (“Valenzuela and JPI had

agreed on the terms of a confidential settlement, including the specific settlement amount,

in the Fall of 2004, but the EEOC refused to approve the settlement unless it could issue its

usual press release, with its usual quotes criticizing the employer and its allegedly

discriminatory practices."). This sort of editing does not convert the old motion into a new

one. 

Similarly, the motions rely on identical authority. See Motion for Rule 16 Sanctions

at 11, 12 (citing Pitman v. Brinker Int'l, Inc., 216 F.R.D. 481, 483 (D. Ariz. 2003), Guillory

v. Domtar Indus., 95 F.3d 1320, 1334 (5th Cir. 1996); Schwartzman, Inc. v. U.S., 167 F.R.D.

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1

 Defendant now argues that we have authority to impose sanctions pursuant to our

"inherent power," see Motion for Sanctions at 10-12. In its earlier motion, defendant argued

for sanctions pursuant to Rule 16, Fed. R. Civ. P., see Motion for Rule 16 Sanctions at 11-13.

However, the focus of defendant's motion is plaintiff's alleged bad faith conduct during

settlement negotiations. The authority defendant cites in support of its proposition that this

kind of bad faith conduct warrants sanctions is the same authority it cited in its earlier

motion. 

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694, 699 (D.N.M. 1996)); Motion for Sanctions at 12, 13 (citing the same three cases).

Defendant's analysis of these cases has not changed.1

THEREFORE, IT IS ORDERED DENYING defendant's motion for sanctions

(doc. 264).

Our denial of the defendant’s motion is not an expression of our view on the

underlying merits or the propriety of the EEOC in using press releases as part of its approach

to litigation. Lawyers have a professional obligation to avoid extrajudicial statements that

may prejudice a proceeding, see ER 3.6, and an obligation to be truthful in statements to

others, see ER 4.1. LRCiv 83.2(d). There is a big difference between promoting the public’s

right to know through keeping proceedings public, on the one hand, see Foltz v. State Farm

Mut. Auto. Ins. Co., 331 F.3d 1122 (9th Cir. 2003), and affirmatively issuing press releases,

on the other. The United States, and its employees, have a special duty not to injure the

reputations of its citizens. Nor should it use press releases as a bargaining tool in litigation.

DATED this 5th day of July, 2007.

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