Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_13-cv-01395/USCOURTS-casd-3_13-cv-01395-8/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 15:1114 Trademark Infringement (Lanham Act)

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

WAHOO INTERNATIONAL, INC,

Plaintiff,

CASE NO. 13cv1395-GPC(BLM)

ORDER DENYING DEFENDANT’S

MOTION TO ALTER OR AMEND 

[Dkt. No. 130.]

vs.

PHIX DOCTOR, INC., a Florida

Corporation; and DOES 1-10,

Defendants.

Before the Court is Defendant’s motion to alter or amend, pursuant to Federal

Rule of Civil Procedure (“Rule”) 59(e) and 60(b), the Court’s order “granting attorney

fees and set aside.” (Dkt. No. 130.) Plaintiff filed an opposition, and Defendant filed

a reply. (Dkt. Nos. 131, 134.) Based on the reasoning below, the Court DENIES

Defendant’s motion to alter or amend the Court’s order. 

Background

This case has an extensive procedural history and a more detailed factual

background is recited in the Court’s prior order filed on September 4, 2015. (Dkt. No.

126.) In sum, due to defense counsel’s dilatory conduct, default has been entered two

times in this case, and defense counsel has continuously filed numerous late filings 1

without requesting leave of Court. While not addressing all the late filings during the

While default has been entered three times in this case, the first default was not

1

due to defense counsel’s dilatory conduct.

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pendency of this case, the Court noted in a previous order, 

[s]ince the Court’s order denying Plaintiff’s initial request for

attorneys’ fees filed on March 17, 2014, Defendant filed a late motion

to dismiss on April 3, 2014 when the Court directed Defendant to file

a responsive pleading by March 31, 2014. (Dkt. Nos. 34, 36.)

Defendant filed a late reply to its motion to dismiss on May 20, 2014

when it should have been filed by May 16, 2014. (Dkt. Nos. 37, 45.) 

Then, Defendant failed to file an answer pursuant to Rule 12 when the

Court denied Defendant’s motion to dismiss. (Dkt. No. 49.) As a

result, default was entered. (Dkt. No. 54.) Then, Defendant failed to

timely file an opposition to Plaintiff’s motion to amend on September

12, 2014 but instead filed an opposition on September 17, 2014. (Dkt.

Nos. 60, 64.) As to Plaintiff’s motion for default judgment, Defendant

filed a late opposition on November 10, 2014, instead of October 31,

2014. (Dkt. Nos. 70, 77.) Even the reply to the instant motion to alter

judgment wasfiled one day late on January 24, 2015 instead ofJanuary

23, 2014 as required by the Civil Local Rules. (Dkt. No. 92.)

(Dkt. No. 99 at 5-6 n. 3.)

While Plaintiff sought attorney’s fees as a condition of setting aside default

regarding the default entered on November 20, 2013, (Dkt. No. 17), the Court, on

March 17, 2014, denied the request concluding that the errors, at the time, appeared to

be administrative mishaps. (Dkt. No. 34.) In that order, the Court warned Defendant

that if it continued to miss court deadlines without seeking leave of Court, the Court

may impose sanctions in the future. (Dkt. No. 34 at 8.) 

Then, after the second default was entered on July 18, 2014, (Dkt. No. 54), the

Court denied Plaintiff’s motion for default judgment and Defendant’s motion to set

aside default as moot. (Dkt. No. 80.) In that order, filed on December 2, 2014, the

Court also granted Plaintiff’s request for attorneys’ fees and costs. The Court

explained, 

Since the prior order setting aside default, the“administrative mishaps”

have continued with late and missed filing deadlines and another

default entered against Phix Doctor causing many months of delay. 

Defense counsel has continued his dilatory conduct and failed to

comply with court orders setting filing deadlines. In fact, defense

counsel has acknowledged that the default was due to his conduct and

not Defendant. (See Dkt. No. 71-1 at 5.) As a result of the continued

conduct, another default was entered against Defendant, a subsequent

motion to set aside default and a motion for default judgment had to be

unnecessarily filed expending valuable and costly attorney resources

of Plaintiff. Based on the continued conduct of defense counsel in

failing to comply with court orders and deadlines, the Court now finds

that sanctions are warranted.

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(Id. at 7-8.) Even though the Court denied the motion to set aside default as moot, the

Court granted Plaintiff’s request for sanctions in the amount of $9,749.50 in attorney’s

fees and costs based on Nilsson v. Louisiana Hydrolec, 854 F.2d 1538, 1546-47 (9th

Cir. 1988), holding that a district court has discretion to condition setting aside the

default “upon the payment of a sanction.” This Court concluded that “while the Court

did not set aside the default due to the filing of the amended complaint, the Court finds

it appropriate to issue sanctions against defense counsel for his continued dilatory

conduct in missing deadlines and failing to comply with Court orders.” (Dkt. No. 80

at 8.) 

On January 2, 2015, Defendant filed a motion to alter or amend judgment of the

Court’s order granting attorneys’ fees and costs filed on December 2, 2014 pursuant

to Rules 59(e) and 60(b). (Dkt. No. 84.) On January 29, 2015, the Court granted in

part Defendant’s motion to alter or amend and reduced the amount of attorneys’ fees

and cost award to $5,749.50 and directed Defendant to pay Plaintiff within three

months of the Order. (Dkt. No. 99.) Plaintiff did not receive payment of the sanctions

from either Defendant or defense counsel despite efforts to seek payment. (Dkt. No.

121-1, Barns Decl. ¶¶ 4-8.) Due to Defendant’s failure to pay, on July 13, 2015,

Plaintiff filed an amended motion to hold Defendant and its attorney in contempt. 

(Dkt. No. 121.) On September 4, 2015, the Court denied Plaintiff’s motion to hold

Defendants and its attorney in contempt. (Dkt. No. 126.) In that order, the Court

clarified its previous order that the sanctions were to be paid by defense counsel and

not Defendant since he was the cause of the dilatory conduct, and directed defense

counsel to pay the amount of the sanctions within four weeks. (Id. at 6.) 

Instead of paying the amount due to Plaintiff, on October 3, 2015, Defendant

filed the instant motion to alter or amend judgment, one day later than required by the

undersigned chambers rule. (Dkt. No. 130.) On October 16, 2015, Plaintiff filed an

opposition stating that the motion was moot because it had received payment by check,

dated October 6, 2015, from defense counsel. (Dkt. No. 131.) Then on October 20,

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2015, Plaintiff filed a supplemental declaration indicating that when it deposited the

check, defense counsel placed a stop payment on the check, the funds were withdrawn

and bank fees were incurred. (Dkt. No. 132, Wirtz Decl. ¶ 2.) Defendant filed a late

reply on October 24, 2015, instead of filing it timely on October 23, 2015. (Dkt. No.

134.)

Discussion

A. Motion to Alter or Amend

The Court notes that Defendant’s motion is faulty on several grounds. First, 

Defendant has not provided any legal authority that it can bring a second motion to

alter or amend on the same issues. The order granting attorneys’ fees and costs was

filed on December 2, 2014. On January 2, 2015, Defendant filed a motion to alter or

amend the Court’s order of December 2, 2014. On January 29, 2015, the Court granted

in part Defendant’s motion to alter or amend by reducing the amount of the attorneys’

fees and costs. The instant motion to alter or amend is another attempt to seek review

ofthe Court’s prior order imposing sanctions based on similar argumentsraised before,

and already addressed by the Court in its order filed on January 29, 2015. The instant

motion is duplicative of the prior motion filed on January 2, 2015, and not properly

before the Court. 

Second, as already raised in the prior order addressing Defendant’s motion to

alter or amend, Defendant’s argument is based on an incorrect understanding of the

Court’s prior order granting attorneys’ fees and costs filed on December 2, 2014. 

Defendant previously argued and again argues that the order imposing sanctions

consisting of attorney’s fee filed on December 2, 2014 is void and the Court lacked

jurisdiction to make such an order because the Court found that “the default was not

mooted and granted the set aside and attorney fees.” (Dkt. No. 130 at 2.) However, as

previously noted by the Court in its order ofJanuary 29, 2015, “the Court did not grant

Defendant’s motion to set aside default. Instead, in line with Defendant’s argument,

the Court denied Defendant’s motion to set aside default as moot. The Court does not

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disagree with Defendant that the amended complaint rendered the default moot.” (Dkt.

No. 3.) Therefore, Defendant’s argument concerning the Court’s prior order granting

attorneys’ fees and costs as sanctions is misplaced. 

Third, Defendant argues that the Court subsequently converted the award of

sanctions without providing notice and a finding of bad faith. It appearsthat Defendant

is challenging the Court’s recent order filed on September 4, 2015 denying Plaintiff’s

motion to hold Phix Doctor, Inc. and its attorney in contempt. (Dkt. No. 126.) First,

as noted by the caption of the Court’s order, it denied Plaintiff’s motion to hold

Defendant and its attorney in contempt. TheCourt did not impose additionalsanctions.

Instead, the Court clarified its prior order imposing sanctions and concluded that the

sanctions applied to Defendant’s attorney and not Defendant. (See Dkt. No. 126.) The

clarification should not come as a surprise to defense counsel asthe Court’s prior order

noted that it was defense counsel’s dilatory conduct that resulted in the sanctions. In

addition, Defendant assertsthat the sanction order is void because there was no finding

of bad faith under the Court’s inherent powers to sanction. However, as already noted

in the Court’s prior order, the Court did not impose sanctions based on its inherent

authority. (Dkt. No. 99 at 4.) 

The Court granted Plaintiff’s request to condition the setting aside the default on

the payment of attorneys’ fees and costs that have been incurred based on Defendant’s

dilatory conduct pursuant to Nilsson, Robbins et al. v. Louisiana Hydrolec, 854 F.2d

1538, 1546-47 (9thCir. 1988). While the Court found thatsetting aside the default was

moot, the Court found that sanctions were warranted based on the continued conduct

of defense counsel in failing to comply with court orders and deadlines. (Dkt. No. 80

at 8-9.) As stated by the Court in its prior order filed on January 29, 2015, Defendant

provided no authority that as a result of denying the motion to set aside default as moot,

the Court lacked jurisdiction to consider the request for attorney’s fees. (Dkt. No. 99

at 3.) The Court notes that it has further discretion and authority to impose sanctions

for failing to comply with court orders without a showing of bad faith or intentional

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conduct pursuant to Rule16(f) and Local Civil Rule 83.1 . See In re 2 3

Phenylpropanolamine Products Liability Litigation, 460 F.3d 1217, 1227 (9th Cir.

2006); see also Lucas Automotive Eng’g, Inc. v. Bridgestone/Firestone, Inc., 275 F.3d

762, 769 (9th Cir. 2001) (sanctions may be imposed when failure to comply is

unintentional); Martin Family Trust v. Heco/Nostalgia Enters. Co., 186 F.R.D. 601,

604 (E.D. Cal. 1999). 

In his numerous briefs, defense counsel has provided no explanation or reasons

for his continued dilatory conduct in complying with scheduling orders and filing

deadlines. Accordingly, because Defendant provides no basis for its motion, the Court

4

DENIES Defendant’s motion to alter or amend. 

B. Motion to Certify Issue on Appeal

Defendant requests, without providing any legal authority, that the Court certify

for appeal the issue of attorney fee sanctions imposed on defense counsel. It merely

Rule 16 specifies that “the court must order the party, its attorney, or both to pay

2

the reasonable expenses-including attorney’s fees-incurred because of any

noncompliance with this rule, unless the noncompliance was substantially justified or

other circumstances make an award of expenses unjust.” Fed. R. Civ. P. 16(f)(2). 

Civil Local Rule 83.1 provides, 3

Failure of counsel or of any party to comply with these rules, with the

Federal Rules of Civil or Criminal Procedure, or with any order of the

court may be ground for imposition by the court of any and all

sanctions authorized by statute or rule or within the inherent power of

the court, including, without limitation, dismissal of any actions, entry

of default, finding of contempt, imposition of monetary sanctions or

attorneys’ fees and costs, and other lesser sanctions.

Civil L. R. 83.1

With the exception of filing a late answer on December 19, 2014, defense 4

counsel has provided no reason why he has continuously missed court deadlines. On

December 19, 2014, the Court issued an order to show cause why sanctions should not

be imposed for failing to comply with the Court’s order directing Defendant to file an

answer within five days of the Court’s order filed on December 2, 2014. (Dkt. No. 

82.) Instead, Defendant filed an answer on December 19, 2014. (Dkt. No. 81.) At the

order to show cause hearing, defense counsel provided reasons and subsequently

submitted documentsfor in camera review why he did not timely file an answer. (Dkt.

Nos. 87, 97.) On January 29, 2015, the Court issued an order following order to show

cause hearing and concluded that sanctions were not warranted at the time but

admonished counsel to timely comply with all deadlines set by the Court, the Rules,

Local Civil Rule and Local Chambers Rule. (Dkt. No. 98.) 

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argues that there is a significant difference of opinion and certifying the issue on appeal

will promote settlement of the case. Plaintiff opposes arguing that Defendant has not

demonstrated certification of the issue for appeal and allowing certification would

allow Defendant to further drive up Plaintiff’s attorney’s fees. 

A district court may certify an order for interlocutory appellate review where the

order involves 1) a controlling question of law; 2) as to which there is substantial

ground for difference of opinion; and 3) where an immediate appeal fromthe order may

materially advance the ultimate termination of the litigation. 28 U.S.C. § 1292(b). A

district court’s decision whether to certify an order for interlocutory appeal should be

used “in extraordinary cases where decision of an interlocutory appeal might avoid

protracted and expensive litigation.” United States Rubber Co. v. Wright, 359 F.2d

784, 785 (9th Cir. 1966). 

Here, Defendant has not demonstrated that certification on appeal is warranted. 

Accordingly, the Court DENIES Defendant’s request to certify the sanctions issue on

appeal. 

Conclusion

Based on the above, the Court DENIES Defendant’s motion to alter or amend 

The Court also DENIES Defendant’s motion to certify the issue on appeal. Defense

counsel is directed to comply with the Court’s order and submit payment of $5,749.50 

to Plaintiff’s counsel within four weeks of this Order. Defense counsel statesthatsince

he is a solo practitioner, the monetary sanction will create a substantial hardship and

cause significant problems financially. (Dkt. No. 130-2, Mataele Decl. ¶ 24.) If the

monetary sanction will impose an undue hardship, defense counsel can make an offer

to provide payment in installmentsif necessary. Failure to pay the sanctions may result 

/ / / /

/ / / /

/ / / /

/ / / /

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in additional sanctions. The hearing scheduled on October 30, 2015 shall be vacated. 

IT IS SO ORDERED. 

DATED: October 27, 2015

HON. GONZALO P. CURIEL

United States District Judge

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