Greenspan v. Qazi

• Court: District Court, N.D. California
• Decided: January 25, 2021
• Docket: 3:20-cv-03426
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 AARON JACOB GREENSPAN, Case No. 20-cv-03426-JD

8 Plaintiff, ORDER RE CONDUCT, SERVICE, 9 v. AND DEFAULT MOTIONS

10 OMAR QAZI, et al., Re: Dkt. Nos. 14, 77, 83, 96, 99 11 Defendants.

12 13 In the Court’s experience, the civility and professionalism shown by counsel and their 14 clients has measurably risen over the years. This is due in no small part to the promulgation of 15 guidelines for professional conduct such as those adopted by this District. See 16 https://www.cand.uscourts.gov/forms/guidelines-for-professional-conduct. Nothing is perfect, of 17 course, especially during litigation, but the overall trend has been positive. 18 Unfortunately, this case is an exception. From the start, it has been apparent that pro se 19 plaintiff Greenspan and defendant Qazi are unable to deal civilly with each other. The Court tried 20 to get ahead of this problem with an early order on litigation conduct, to no good effect. See Dkt. 21 No. 72. Multiple motions for sanctions and “contempt” have piled up since then, and there are 22 ancillary motions for an award of service fees and entry of default that have the same flavor of 23 dysfunctional interactions. See Dkt. Nos. 14, 77, 83, 96, 99. Overall, the parties’ inability to 24 handle their business in a professional manner has created a mountain of work that does nothing to 25 promote the fair and efficient resolution of this lawsuit. 26 All of the pending motions are denied. Although the Court has concerns about some of the 27 conduct engaged in by Qazi, his actions are best addressed on the merits of Greenspan’s 1 DISCUSSION 2 I. THE CONDUCT MOTIONS 3 Greenspan has filed three motions about conduct issues: (1) a “contempt” motion (Dkt. No. 4 77); (2) a Rule 11 motion for sanctions (Dkt. No. 83); and (3) a “compliance” motion (Dkt. No. 5 99). All of these motions are based on the same premise: Qazi has made scurrilous comments 6 about Greenspan online, in violation of the Court’s conduct order. Greenspan alleges that Qazi 7 “has published approximately 600 pages of aggressive insults and outrageous lies” on Qazi’s 8 personal website. Dkt. No. 99 at 1. Among other comments, Qazi is said to have posted that 9 Greenspan is a “criminal,” a “monster,” and in need of psychiatric care. Id. at 5-6. Qazi is also 10 said to have posted that Greenspan threatens people “until they want to kill themselves.” Dkt. No. 11 77 at 2. These are representative examples of the most extreme remarks attributed to Qazi, and 12 they capture the flavor of other comments that the Court will not catalog here. Greenspan includes 13 in his motions more benign comments such as an alleged mischaracterization of Greenspan’s legal 14 claims. Dkt. No. 83 at 8. Greenspan also says that Qazi publicly disclosed confidential settlement 15 communications, Dkt. No. 99 at 4-5, and filed a groundless anti-SLAPP motion under California 16 law, Dkt. No. 83 at 5-6. 17 On the record before the Court, there is much that gives pause in the comments attributed 18 to Qazi.1 If the evidence on summary judgment or at trial supports Greenspan’s accounting of the 19 facts, Qazi may face substantial consequences on Greenspan’s defamation and tort claims. But 20 that determination is for another day. The conduct motions raise a panoply of factual disputes 21 better suited for resolution in a merits proceeding on a fully developed record. That is all the more 22 true for the anti-SLAPP dispute, which the Court has not ruled on. In addition, Greenspan seeks 23 in effect an order requiring Qazi to be courteous, or at least circumspect, online. The parameters 24 of an enforceable order along those lines would be difficult to determine. While the Court 25 declines to intervene at this time, all parties are advised that it may act if the situation deteriorates. 26 27 1 That resolves the three conduct motions. An additional observation is warranted for the 2 Rule 11 motion. Qazi’s objection that the motion was premature, Dkt. No. 90 at 4, is not well 3 taken. Rule 11(b) provides for a 21-day cooling off period between service and filing. Fed. R. 4 Civ. P. 11(c)(2). This is designed to allow the parties reach a resolution without burdening the 5 courts. A Rule 11 motion that is filed before the 21 days elapse will not be considered. See 6 Barber v. Miller, 146 F.3d 707, 708-09 (9th Cir. 1998). 7 Qazi suggests that Greenspan jumped the gun by a few days when filing the sanctions 8 motion. He did not. Qazi acknowledges that he consented in writing to service of documents by 9 email on his lawyer, see Dkt. No. 90 at 2, and the record shows that Greenspan served a copy of 10 his motion in this manner 22 days before filing it, see Dkt. No. 90-1 ¶ 2; Dkt. No. 83. Qazi says 11 that Greenspan should have waited at least another three days under Rule 6(d), which extends 12 deadlines for responding to documents served via certain methods described in Rule 5(b). But 13 Rule 6(d) does not apply to electronic service by means that the other party has consented to in 14 writing. This method of service is described in Rule 5(b)(2)(E), which is not listed in Rule 6(d) as 15 a kind of service that allows for extra time to respond. See Fed. R. Civ. P. 6(d) (referring only to 16 Rules 5(b)(2)(C), (D), and (F), which describe other kinds of service); see also Fed. R. Civ. P. 6, 17 Committee Notes to 2016 Amendment (“Rule 6(d) is amended to remove service by electronic 18 means under Rule 5(b)(2)(E) from the modes of service that allow 3 added days to act after being 19 served.”). In addition, even if the motion had been a couple of days early, which is not the case, 20 some leeway for a pro se litigant during a pandemic would excuse a technical application of the 21 rules, especially when no meaningful prejudice would result to the responding party. 22 The question of possible disclosures of settlement communications also merits attention. 23 Needless to say, settlement communications are expected to be private and confidential, and not 24 subject to publication unless all parties agree. Settlement negotiations do not work otherwise. 25 See, e.g., Monster Energy Co. v. Schechter, 444 P.3d 97, 105 (Cal. 2019). The Court cannot tell 26 from the rather murky record on this issue exactly what happened in breach of settlement 27 confidentiality here. Even so, all parties and counsel are advised that all settlement 1 communications must be treated as confidential to the parties unless they expressly agree to waive 2 confidentiality. 3 While sanctions will not be imposed at this time, the parties have reached the end of the 4 line for any more motions of this sort. The docket already has too many of those on file, and the 5 moment has come for the Court to protect the “economy of time and effort for itself, for counsel, 6 and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254 (1936). No sanctions, conduct, or 7 “civility” motions of any kind may be filed without the Court’s prior approval. A request to file 8 such a motion may not exceed three pages, and must state objectively compelling circumstances in 9 support of the request. No exhibits, attachments or declarations may be filed with the request. 10 Requests that fail to identify compelling circumstances, or that do not follow these directions, will 11 be summarily denied. No party may file a response or opposition to a request unless the Court 12 specifically calls for one. Failure to conform to this order will result in monetary and other 13 sanctions, including professional conduct sanctions, and possible evidence or claim preclusion, or 14 dismissal under Rule 41(b). 15 II. COSTS OF SERVICE 16 Greenspan’s request for costs incurred in serving defendant Musk, Dkt. No. 14, is denied. 17 Federal Rule of Civil Procedure 4(d)(1) imposes a duty on parties to avoid unnecessary costs 18 associated with formal service of process, and allows a plaintiff to send the complaint and two 19 copies of a waiver of service to the defendant “by first-class mail or other reliable means.” Under 20 Rule 4(d)(2), if a defendant fails to sign and return the waiver “without good cause,” then that 21 defendant is responsible for the costs of service as well as costs associated with bringing a motion 22 to recover these costs. Greenspan says that he sent the required documents to Musk by email, and 23 that Musk failed to return the waiver form. Dkt. No. 14 at 2-3. Greenspan served Musk at a cost 24 of $927.93, and spent an additional $2.40 to mail Musk a copy of his motion for costs. Dkt. No. 25 14 at 3. 26 The record shows that Musk did not breach the service expectations in Rule 4. A member 27 of Tesla’s information security team filed a declaration stating that Greenspan’s emails were 1 attempted service because Greenspan had emailed a large volume of unsolicited messages that on 2 occasion featured confrontational language. See Dkt. No. 35-1 ¶¶ 3-4 (Rager Decl.); Dkt. No. 20- 3 12 (email from Greenspan accusing Musk of fraud, and stating that “I will e-mail this to you, the 4 Board, your auditors, your regulators, and your auditors’ regulators every day until I receive an 5 answer.”). Greenspan’s emails were diverted to an inbox managed by Tesla’s information security 6 team, and not delivered to Musk. Dkt. No. 35-1 ¶ 6. Consequently, although someone at Tesla 7 had the emails, Musk himself did not, and he did not receive the waiver of service request. See id. 8 ¶¶ 6-8 (explaining that emails were never forwarded to Musk); Dkt. No. 32-1 (Exh. 1 to Rager 9 Decl.) (showing email requesting waiver of service was diverted to Tesla security account). 10 This record is enough for the Court to conclude that Musk did not shirk his cooperative 11 service obligations. The parties also agree that Musk typically waives service in the course of 12 litigation in this District. See, e.g., Wochos v. Tesla, Inc., et al., Case No. 3:17-cv-05828-CRB, 13 Dkt. No. 25-1 (waiver of service); Yeager v. Tesla, Inc., et al., Case No. 3:18-cv-04912-EMC, 14 Dkt. No. 9 (same). Greenspan is not entitled to a recovery of service costs. 15 III. DEFAULT 16 Greenspan’s request for leave to file an application for default against Smick, Dkt. No. 96, 17 is denied. This is Greenspan’s fourth request for entry of default against Smick, a Delaware 18 corporation operated by Qazi. See Dkt. Nos. 15, 26, 45, 96. This time, Greenspan says that Smick 19 lacks capacity to defend itself because it has failed to register with the California Secretary of 20 State, file required corporate statements, and pay taxes, and that this allows for entry of default. 21 A “foreign corporation transacting intrastate business which has failed to qualify with the 22 Secretary of State” cannot “maintain” a civil action in California, and this issue may be raised by 23 way of an affirmative defense. See United Med. Mgmt. Ltd. v. Gatto, 49 Cal. App. 4th 1732, 24 1739-40 (1996). But a “foreign corporation transacting intrastate business which has failed to 25 qualify with the Secretary of State may nevertheless defend an action brought against it.” Id. at 26 1739 (emphasis in original). The California Corporations Code indicates that one result of failing 27 to register with the Secretary of State is automatic consent to the jurisdiction of California courts 1 § 2203(a). In addition, a corporation’s failure to file statements does not automatically terminate 2 || its litigation capacity; the corporation must first have been assessed a monetary penalty for failing 3 to file the statements, and the Secretary of State must then provide notice to the corporation that its 4 || corporate powers will be suspended if it does not seek relief within sixty days. See Cal. Corp. 5 || Code § 2205. The record does not show that this happened here. 6 A “foreign corporation which has qualified to do business does not forfeit its corporate 7 powers merely because it has not paid its taxes. The forfeit of corporate powers occurs only at the 8 time of the notice of forfeiture by the Franchise Tax Board. Thus, the mere failure to pay taxes 9 does not prevent a foreign corporation from bringing or defending an action.” Gatto, 49 Cal. App. 10 at 1741 (citation omitted); see also Cal. Rev. & Tax Code § 23302. 11 Consequently, leave to apply for a default is denied. No further requests for a default 12 against Smick will be allowed. 5 13 IT IS SO ORDERED. |! Dated: January 25, 2021

16 JAMES PONATO 17 United States District Judge 18 19 20 21 22 23 24 25 26 27 28