Court Opinion

ID: 4282300
Source: CourtListenerOpinion
Date Created: 2018-06-07 17:00:32.742986+00
Date Added: 2024-06-11T14:35:00.873417
License: Public Domain

FOR PUBLICATION

    UNITED STATES COURT OF APPEALS
         FOR THE NINTH CIRCUIT

 HAVENSIGHT CAPITAL LLC,                         No. 15-56607
          Plaintiff-Appellant,
                                                  D.C. No.
                   v.                       2:14-cv-08985-R-FFM

 NIKE, INC.,
               Defendant-Appellee.                  OPINION

         Appeal from the United States District Court
            for the Central District of California
          Manuel L. Real, District Judge, Presiding

                   Submitted August 18, 2017*
                    San Francisco, California

                         Filed June 7, 2018

 Before: Johnnie B. Rawlinson and Jacqueline H. Nguyen,
   Circuit Judges, and Sarah S. Vance,** District Judge.

                  Opinion by Judge Rawlinson

    *
     The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
    **
       The Honorable Sarah S. Vance, United States District Judge for the
Eastern District of Louisiana, sitting by designation.
2                 HAVENSIGHT CAPITAL V. NIKE

                            SUMMARY***

        Timely Appeal / Fed. R. Civ. P. 11 Sanctions

    The panel dismissed for lack of jurisdiction plaintiff’s
appeal of the sanctions imposed under 28 U.S.C. § 1927, the
vexatious litigant order, the denial of plaintiff’s motion to
strike, the denial of plaintiff’s application for default, and
the dismissal of the amended complaint; and affirmed the
district court’s order imposing fees as sanctions under
Fed. R. Civ. P. 11.

   The panel dismissed plaintiffs’ appeal as to the
sanctions imposed under § 1927, the vexatious litigant
order, the denial of plaintiff’s motion to strike and the
denial of plaintiff’s application for default because those
matters were not included in the notice of appeal. See
Fed. R. App. P. 3(c)(1)(B).

     The district court did not enter a separate judgment after
it dismissed plaintiff’s amended complaint on February 18,
2015, and judgment was deemed entered on July 15, 2015,
pursuant to Fed. R. Civ. P. 58 and Fed. R. App. P.
4(a)(7)(A)(ii). Plaintiff filed the notice of appeal on
October 15, 2015. One day after the district court dismissed
the amended complaint, plaintiff filed a motion for
reconsideration.

    The panel dismissed the amended complaint because the
notice of appeal was untimely. The panel concluded that

    ***
        This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
               HAVENSIGHT CAPITAL V. NIKE                     3

plaintiff’s premature filing of a post-judgment motion did not
extend the otherwise applicable appeal period.

    The panel deferred to the district court’s factual findings
as to whether plaintiff’s filings were sufficiently frivolous or
abusive such that Rule 11 sanctions were appropriate, and
affirmed the sanctions order because the findings were amply
supported by the record.

                         COUNSEL

Benjamin Woodhouse, Pismo Beach, California, for Plaintiff-
Appellant.

Sean S. Twomey, Gibson Dunn & Crutcher LLP, Irvine,
California; Austin Schwing, Gibson Dunn & Crutcher LLP,
San Francisco, California; for Defendant-Appellee.

                          OPINION

RAWLINSON, Circuit Judge:

    This appeal is the latest in an ongoing and bizarre dispute
between Havensight Capital LLC (Havensight) and Nike, Inc.
(Nike). Throughout these proceedings, Havensight has
portrayed its action as a battle between David and Goliath. In
reality, however, it is more akin to Don Quixote’s tilting at
windmills.

    The action from which this appeal was brought concerns
allegedly wrongful conduct by Nike against Havensight (the
tortious interference action). The tortious interference action
4                 HAVENSIGHT CAPITAL V. NIKE

was filed after Havensight’s prior action against Nike,
alleging infringement upon a soccer brand owned by
Havensight (the infringement action), was dismissed with
prejudice.

                        I. BACKGROUND

    Although the prior action is not before us on appeal, the
two cases are somewhat intertwined.             Havensight’s
infringement action was dismissed with prejudice on
November 19, 2014. The following day, Havensight filed the
tortious interference action, and six days later filed its
Amended Complaint.1 Attached to the Amended Complaint
was an affidavit purportedly reflecting an interview of a
sporting goods retailer who reported that Nike used its market
strength to force retailers to purchase its goods, thereby
excluding competitors like Havensight. After the tortious
interference action was reassigned to the same judge who
presided over the infringement action, Nike filed a motion to
dismiss under Federal Rule of Civil Procedure (FRCP)
12(b)(6).2

    1
      Havensight alleged six causes of action: (1) intentional interference
with contractual relations; (2) intentional interference with prospective
economic relations; (3) negligence; (4) vertical and horizontal price fixing;
(5) civil RICO (Racketeer Influenced and Corrupt Organizations) under
California law; and (6) unfair competition and trade practices.
    2
      Rule 12(b)(6) provides: “Every defense to a claim for relief in any
pleading must be asserted in the responsive pleading if one is required.
But a party may assert the following defenses by motion: . . . failure to
state a claim upon which relief can be granted. . .” Fed. R. Civ. P.
12(b)(6).
                  HAVENSIGHT CAPITAL V. NIKE                          5

    At this juncture, Havensight departed sharply from
ordinary procedure, filing multiple motions for default on the
basis that Nike’s motion to dismiss was untimely. Before the
district court could rule on the motions, Havensight filed a
writ of execution with the Clerk of the Court, claiming a
default judgment in excess of $600 million. Of course,
because Nike had timely filed its motion in lieu of an answer,
no default judgment was warranted, and the district court
ordered the writ of execution stricken.

    Nike subsequently filed a Motion for Relief
Regarding [Havensight’s counsel’s] Ethical Violations.
Undeterred, Havensight moved to recuse the assigned
judge from the tortious interference action and from
the (dismissed) infringement action. The judge assigned
to Havensight’s recusal motions denied both.
Nike subsequently sought sanctions under Rule 11 of the
Federal Rules of Civil Procedure (Rule 11) 3

   3
       Rule 11 provides in pertinent part:

                                    ...

          (b) Representations to the Court. By presenting to the
          court a pleading, written motion, or other
          paper–whether by signing, filing, submitting, or later
          advocating it–an attorney or unrepresented party
          certifies that to the best of the person’s knowledge,
          information, and belief, formed after an inquiry
          reasonable under the circumstances:

              (1) it is not being presented for any improper
              purpose, such as to harass, cause unnecessary
              delay, or needlessly increase the cost of litigation;
6                HAVENSIGHT CAPITAL V. NIKE

due to Havensight’s false and frivolous filings.

   On February 18, 2015, the district court granted Nike’s
motion to dismiss the Amended Complaint without leave to
amend, and imposed sanctions under Rule 11 against
Havensight’s counsel in the form of attorneys’ fees and
expenses. No separate judgment was entered for this order.
The following day, Havensight filed a motion to vacate the

             (2) the claims, defenses, and other legal
             contentions are warranted by existing law or by a
             nonfrivolous argument for extending, modifying,
             or reversing existing law or for establishing new
             law;

             (3) the factual contentions have evidentiary support
             or, if specifically so identified, will likely have
             evidentiary support after a reasonable opportunity
             for further investigation or discovery; and

             (4) the denials of factual contentions are warranted
             on the evidence or, if specifically so identified, are
             reasonably based on belief or a lack of
             information.

         (c) Sanctions.

             (1) In General. If, after notice and a reasonable
             opportunity to respond, the court determines that
             Rule 11(b) has been violated, the court may
             impose an appropriate sanction on any attorney,
             law firm, or party that violated the rule or is
             responsible for the violation. Absent exceptional
             circumstances, a law firm must be held jointly
             responsible for a violation committed by its
             partner, associate, or employee.

Fed. R. Civ. P. 11.
                  HAVENSIGHT CAPITAL V. NIKE                             7

dismissal and the Rule 11 sanctions (motion for
reconsideration). Included in Havensight’s motion was yet
another motion to recuse the judge who decided the earlier
recusal motions. Although the judge had previously
requested that Havensight refrain from filing further recusal
motions, Havensight decided to Just Do It. Understandably,
the court did not look favorably upon Havensight’s audacity,
and denied the motion on April 22, 2015, while issuing an
order to show cause why additional sanctions should not be
imposed under Rule 11 and 28 U.S.C. § 1927.4 These
sanctions were imposed on March 31, 2015.

    The district court entered a separate order declaring
Havensight to be a vexatious litigant, and Nike moved for
attorneys’ fees and costs pursuant to the Rule 11 sanctions
imposed in the February 18 order. The district court granted
Nike’s motion in full in an order entered on September 22,
2015.

    Havensight filed its Notice of Appeal on October 15,
2015. In its notice, Havensight referenced only the dismissal
of the Amended Complaint and the granting of the Rule 11
sanctions. Havensight now seeks to expand the scope of
rulings of its appeal to include the additional sanctions
imposed under 28 U.S.C. § 1927, the vexatious litigant order,
the denial of Havensight’s motion to strike “Nike’s alleged
illegal deposition and felonious entry of a confidential

    4
      28 U.S.C. § 1927 provides: “Any attorney or other person admitted
to conduct cases in any court of the United States or any Territory thereof
who so multiplies the proceedings in any case unreasonably and
vexatiously may be required by the court to satisfy personally the excess
costs, expenses, and attorneys’ fees reasonably incurred because of such
conduct.” 28 U.S.C. § 1927.
8              HAVENSIGHT CAPITAL V. NIKE

customer communication into the public record,” and denial
of Havensight’s Application for Default.

                     II. DISCUSSION

A. Standards of Review

    We review de novo a district court’s dismissal of a
complaint under Federal Rule of Civil Procedure 12(b)(6).
See Friedman v. AARP, Inc., 855 F.3d 1047, 1051 (9th Cir.
2017). A district court’s denial of a motion for leave to
amend, denial of a motion for reconsideration, imposition of
sanctions under Rule 11 and 28 U.S.C. § 1927, and
characterization of a party as a vexatious litigant are all
reviewed for abuse of discretion. See Kerr v. Jewell,
836 F.3d 1048, 1053 (9th Cir. 2016) (denial of motion for
reconsideration); De Dios v. Int’l Realty & Investments,
641 F.3d 1071, 1076 (9th Cir. 2011) (imposition of
sanctions); Ringgold-Lockhart v. County of Los Angeles,
761 F.3d 1057, 1062 (9th Cir. 2014) (characterization of party
as a vexatious litigant).

B. Jurisdiction

    “We have jurisdiction to determine our own jurisdiction.”
Agonafer v. Sessions, 859 F.3d 1198, 1202 (9th Cir. 2017)
(citation omitted). However, we lack jurisdiction to decide an
appeal if the notice of appeal is not timely filed under Rule 4
of the Federal Rules of Appellate Procedure (Rule 4) and the
appellee raises the untimeliness as a basis for dismissal. See
Hamer v. Neighborhood Hous. Serv. Of Chicago, 138 S. Ct.
13, 16–17 (2017); see also Classic Concepts, Inc. v. Linen
Source, Inc., 716 F.3d 1282, 1284 (9th Cir. 2013). We
similarly lack jurisdiction over matters not included in the
               HAVENSIGHT CAPITAL V. NIKE                   9

Notice of Appeal. See Smith v. Barry, 502 U.S. 244, 248
(1992).

    Rule 4 requires the notice of appeal to be filed “within
thirty days after the entry” of the judgment or order being
appealed. Orr v. Plumb, 884 F.3d 923, 927 (9th Cir. 2018).
If the district court did not enter a separate judgment,
judgment is deemed entered 150 days after “entry of the

judgment or order in the civil docket.” FRAP 4(a)(7)(A)(ii).

   1. Matters Not Included in the Notice of Appeal

    Rule 3 of the Federal Rule of Appellate Procedure
provides that “[t]he notice of appeal must . . . designate the
judgment, order, or part thereof being appealed.”
FRAP 3(c)(1)(B). “When a party seeks to argue the merits of
an order that does not appear on the face of the notice of
appeal, we consider: (1) whether the intent to appeal a
specific judgment can be fairly inferred and (2) whether the
appellee was prejudiced by the mistake.” West v. United
States, 853 F.3d 520, 523 (9th Cir. 2017) (citation and
internal quotation marks omitted).

    Havensight’s notice of appeal named “the order, and
sanctions imposed against the Plaintiff by the Court,”
referenced “document[s] 123 [order granting Rule 11
sanctions] and 124 [order granting defendant’s motion to
dismiss the Amended Complaint],” and attached the orders as
exhibits. No intent to appeal any other rulings can reasonably
be inferred from Havensight’s notice of appeal. See id.
Accordingly, Havensight’s appeal is dismissed as to the
sanctions imposed under § 1927, the vexatious litigant order,
the denial of Havensight’s motion to strike and the denial of
10                   HAVENSIGHT CAPITAL V. NIKE

Havensight’s Application for Default. See Valadez-Lopez v.
Chertoff, 656 F.3d 851, 859 n.2 (9th Cir. 2011).

     2. Dismissal of the Amended Complaint

    The district court did not enter a separate judgment after
it dismissed Havensight’s Amended Complaint on
February 18, 2015. Judgment was therefore deemed entered
on July 18, 2015, pursuant to Rule 58 of the Federal Rules of
Civil Procedure (Rule 58).5 Ordinarily, this analysis would
resolve the matter—if Havensight filed its notice of appeal
after July 18, we would lack jurisdiction to hear the appeal.

     5
         Rule 58 of the Federal Rules of Civil Procedure provides in pertinent
part:

            (a) Separate Document. Every judgment and amended
            judgment must be set out in a separate document . . .

                                       ...

            (c) Time of Entry. For purposes of these rules,
            judgment is entered at the following times:

                 (1) if a separate document is not required, when the
                 judgment is entered in the civil docket under Rule
                 79(a); or

                 (2) if a separate document is required, when the
                 judgment is entered in the civil docket under Rule
                 79(a) and the earlier of these events occurs:

                     (A) it is set out in a separate document; or

                     (B) 150 days have run from the entry in the
                     civil docket.

Fed. R. Civ. P. 58(a), (c).
               HAVENSIGHT CAPITAL V. NIKE                     11

See Classic Concepts, 716 F.3d at 1284. Indeed, Havensight
filed its notice of appeal on October 15, well after judgment
was deemed entered.

     This case, however, presents an unusual wrinkle. One
day after the district court dismissed the Amended Complaint,
Havensight filed a motion for reconsideration. When a party
files a motion for reconsideration, the time period to appeal
is tolled pending resolution of that motion. See United States
ex rel. Hoggett v. Univ. of Phoenix, 863 F.3d 1105, 1107–08
(9th Cir. 2017) (“[I]f a party files one of the motions listed in
[Rule] 4(a)(4)(A), the time to file a notice of appeal is tolled
during the motion’s pendency. . . .”). Included within this
category of motions is a motion to alter or amend the
judgment. Id. at 1107; see also FRAP 4(a)(4)(A)(iv). The
title of the pleading does not control this determination.
Rather, we “look to the substance” of the pleading “to
determine whether it is in substance a motion to alter or
amend the judgment.” Hoggett, 863 F.3d at 1108. If the
motion “involves reconsideration of matters properly
encompassed in a decision on the merits,” it is properly
characterized as a motion to alter or amend the judgment
under Rule 4(a). Id. (citations and internal quotation marks
omitted).

     Although Havensight styled its pleading as a motion to
vacate the judgment and re-open the case, the motion actually
sought reconsideration of the district court’s decision on the
merits as contemplated in Rule 4(a). See id. However, the
difficulty in applying Rule 4(a) in this case stems from the
fact that the motion that would ordinarily toll the time for
filing the notice of appeal was resolved prior to entry of the
underlying judgment. The proceedings evolved along the
following timeline:
12             HAVENSIGHT CAPITAL V. NIKE

•    Dismissal of Amended Complaint – February 18, 2015

•    Filing of Motion for Reconsideration – February 19, 2015

•    Denial of Motion for Reconsideration – April 22, 2015

• Judgment deemed entered pursuant to Rule 4(a)(7)(A)(ii)
– July 18, 2015

    We have not previously addressed this precise scenario.
More typically, we are called upon to address the timeliness
of an appeal when a pending motion for reconsideration is
being relied upon to extend the appeal period. See, e.g., Lolli
v. County of Orange, 351 F.3d 410, 414 (9th Cir. 2003). In
this case, however, there was no motion for reconsideration
pending when the judgment was deemed entered pursuant to
Rule 4(a)(7)(A)(ii). But, if Rule 4 is interpreted as tolling the
appeal period for the sixty-two days during which the motion
for reconsideration was pending, the appeal period would
expire on October 18, 2015, after adding the thirty days
provided for in Rule 4(a)(1)(A) (providing that the notice of
appeal must be filed “within 30 days after entry of the
judgment or order appealed from”), rendering Havensight’s
October 15 notice of appeal timely. See Menken v. Emm,
503 F.3d 1050, 1056 (9th Cir. 2007) (noting that the appellant
had “180 days (150 days plus 30 days) from entry of the
order” within which to appeal when appealing “a judgment
entered by operation of [Rule] 4(a)(7)”).

    Although not directly on point, our decision in ABF
Capital Corp. v. Osley, 414 F.3d 1061 (9th Cir. 2005), is
instructive on the interplay between Rule 58 and Rule 4. In
ABF Capital, orders of dismissal were entered on April 10,
2003, and April 11, 2003, respectively. See id. at 1064.
               HAVENSIGHT CAPITAL V. NIKE                  13

When ABF Capital (ABF) moved to alter or amend the
judgments, the district court construed the motions as ones to
reconsider because no judgments had yet been entered. See
id. The district court denied the motions in minute orders
entered on May 15, 2003, and on July 30, 2003, ABF filed
notices of appeal for both cases. See id.

     Because the court never set forth judgments in a separate
document as provided in Rule 58, ABF had 180 days to
appeal. See id. Although ABF filed its notices of appeal
within that 180-day period, the Appellees urged the court to
declare ABF’s appeal untimely due to ABF’s premature filing
of a motion to alter or amend the judgments. Appellees
contended that “the 180-day timetable was shortened” by the
filing of the premature motion. See id. In rejecting this
argument, we noted that the separate document requirement
serves to inform the parties with precision “when judgment
has been entered and when they must begin preparing post-
verdict motions or an appeal.” Id. (citation omitted). We
noted that accelerating the appeal period due to the filing of
a premature motion to alter or amend the judgments would
not be consistent with the considered interplay between
Rule 58 and Rule 4, and would lessen the degree of certainty
that was the goal of the Advisory Committee when amending
the rules. See id. at 1064–65.

    Because the district court decided Havensight’s motion on
April 22, 2015, we are presented with a question not often
encountered: when an appellant files a post-judgment motion
that is resolved before entry of the underlying judgment, is
the time period to file a notice of appeal extended? In ABF,
we held that a “premature post-judgment motion may not
accelerate the deadline for appeal before a separate judgment
has been entered.” Id. at 1065. We see no principled basis
14             HAVENSIGHT CAPITAL V. NIKE

for reaching a different outcome in the converse scenario:
when an Appellant seeks to lengthen the period for appeal
due to the filing of a premature post-judgment motion.

     Although a litigant is not to be penalized for prematurely
filing a post-judgment motion, neither should it gain a tactical
advantage by doing so. Nor does anything in the text of
Rule 4 suggest otherwise. Accordingly, we apply the same
rationale we articulated in ABF to conclude that Havensight’s
premature filing of the post-judgment motion did not extend
the otherwise applicable appeal period.

    The district court’s judgment was deemed entered on
July 18, 150 days after its February 18 order dismissing the
Amended Complaint. Although Havensight filed a motion
for reconsideration on February 19, the motion was resolved
on April 22, well before judgment was deemed entered.
Thus, Havensight had thirty days from the entry of judgment,
or until August 17, to file its notice of appeal. See
FRAP 4(a)(1)(A). Nevertheless, Havensight failed to file its
notice of appeal until October 15, nearly two months later.
Havensight’s appeal is therefore untimely, and we dismiss for
lack of jurisdiction its appeal challenging dismissal of the
Amended Complaint. See Classic Concepts, 716 F.3d at
1284; see also Hamer, 138 S. Ct. at 16–17.

C. Imposition of Rule 11 Sanctions

    The district court issued its order granting Nike attorneys’
fees as a sanction under Rule 11 on September 22, 2015.
This is the only issue for which Havensight’s October 15
appeal was timely.
               HAVENSIGHT CAPITAL V. NIKE                     15

    “District courts can use Rule 11 to impose sanctions on
any party that files a motion for an improper purpose or who
does so without a legal or factual basis.” Center for Auto
Safety v. Chrysler Grp., LLC, 809 F.3d 1092, 1102 (9th Cir.
2016) (citation and internal quotation marks omitted).

     We defer to the trial court’s factual findings as to whether
a litigant’s filings are sufficiently frivolous or abusive such
that Rule 11 sanctions would appropriately deter future
malfeasance. See Primus Auto. Fin. Servs., Inc. v. Batarse,
115 F.3d 644, 649 (9th Cir. 1997) (noting that “[t]he district
court has broad fact-finding powers with respect to sanctions,
and its findings warrant great deference”) (citation and
internal quotation marks omitted). Here, use of Rule 11
sanctions was properly within the district court’s discretion.
See Blixseth v. Yellowstone Mountain Club, LLC, 854 F.3d
626, 630, n.4 (9th Cir. 2017) (noting that a court may award
attorneys’ fees and costs “associated with sanctions
proceedings” under Rule 11). As discussed, Havensight filed
numerous and voluminous motions despite specific warnings
to desist filing these needless pleadings. The district court’s
findings were amply supported by the record, and its
sanctions order is affirmed. See id.

                    III. CONCLUSION

   Havensight’s appeal of the sanctions imposed under
28 U.S.C. § 1297, the vexatious litigant order, the denial of
Havensight’s motion to strike, the denial of Havensight’s
Application for Default, and the dismissal of the Amended
Complaint, is DISMISSED for lack of jurisdiction. The order
imposing fees as sanctions under Rule 11 is AFFIRMED.

    DISMISSED in part and AFFIRMED in part.