FILED NOT FOR PUBLICATION JAN 08 2018 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
JOSEPH PADGETT, No. 15-15867
Plaintiff-Appellant, D.C. No. 5:04-cv-03946-EJD
and MEMORANDUM* DARLA PADGETT,
Plaintiff,
v.
CITY OF MONTE SERENO; BRIAN LOVENTHAL; A. CURTIS WRIGHT; ERIN GARNER; MARK BRODSKY; BARBARA NESBET; DAVID BAXTER,
Defendants-Appellees,
and
THE LAW FIRM OF KALLIS & ASSOCIATES, P.C; BUSTAMANTE & GAGLIASSO, P.C.,
Creditors-Appellees.
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Appeal from the United States District Court for the Northern District of California Edward J. Davila, District Judge, Presiding
Argued and Submitted April 18, 2017 San Francisco, California
Before: SCHROEDER and RAWLINSON, Circuit Judges, and DRAIN,** District Judge.
Joseph Padgett (Padgett) appeals the district court’s decision to allow his
former attorneys to pursue attorneys’ fees after being terminated by Padgett. In
addition, Padgett asserts that the district court erred in dismissing his claim for fees
as a sanction for failing to file a new motion on remand.
1. We agree that the district court potentially erred by allowing The Law
Firm of Kallis & Associates P.C. (Kallis) and Bustamante & Gagliasso P.C.
(Bustamante) to seek attorneys’ fees after they no longer represented Padgett. The
district court improperly relied on our decision in United States ex rel. Virani v.
Jerry M. Lewis Truck Parts & Equip., Inc., 89 F.3d 574 (9th Cir. 1996),
abrogation recognized by United States v. Kim, 806 F.3d 1161, 1174 (9th Cir.
2015), to permit Kallis’ and Bustamante’s continued request for fees. Virani,
however, involved a qui tam action, which is functionally different than a civil
** The Honorable Gershwin A. Drain, United States District Judge for the Eastern District of Michigan, sitting by designation. 2 rights case. See Virani, 89 F.3d at 575. In a qui tam action, “a substantial portion of
the damages collected goes to the federal government, not to the qui tam plaintiff .
. . .” Gilbrook v. City of Westminster, 177 F.3d 839, 874 (9th Cir. 1999). In a civil
rights case, by contrast, attorney fees belong to the plaintiff absent contractual
provisions to the contrary or an attorney lien. See United States v. $186,416.00 in
U.S. Currency, 642 F.3d 753, 756 (9th Cir. 2011). Because the district court did
not consider whether contractual provisions or an attorney lien justified the award
of fees to counsel rather than to the plaintiff, we vacate and remand for the district
court to make that determination in the first instance.
2. The district court did not violate the rule of mandate by ordering the
parties to file motions and supplemental documents to support a request for
attorneys’ fees on remand. The rule of mandate allows a lower court to “decide
anything not foreclosed by the mandate.” See Stacy v. Colvin, 825 F.3d 563, 568
(9th Cir. 2016) (citation and internal quotation marks omitted). The mandate in
Padgett’s earlier appeal concerned articulation of the rationale supporting the
district court’s award of fees and costs. See Padgett v. Loventhal, 706 F.3d 1205,
1208 (9th Cir. 2013). The factual and procedural circumstances of this case are
unusual. While the case was on appeal to this Circuit, the presiding judge retired.
Subsequently, the case was reassigned. Our mandate cannot reasonably be
3 construed as requiring the newly assigned judge to provide the reasoning of his
predecessor, especially considering the lack of explanation provided by his
predecessor, which was the very reason for our remand. The district court’s
request for motions and supporting documents on remand was reasonably in
pursuit of compliance with the mandate. See United States v. Perez, 475 F.3d 1110,
1113 (9th Cir. 2007) (“The ultimate task is to distinguish matters that have been
decided on appeal, and are therefore beyond the jurisdiction of the lower court,
from matters that have not.”) (citation and alterations omitted).
3. The Court’s sua sponte dismissal of Padgett’s claim for fees as a sanction
for failure to file a new motion was excessive under the circumstances of this case.
Before entering a dismissal under FED. R. CIV. P. 41(b), the district court is
required to weigh “(1) the public’s interest in expeditious resolution of litigation;
(2) the court's need to manage its docket; (3) the risk of prejudice to the
defendants; (4) the public policy favoring disposition of cases on their merits and
(5) the availability of less drastic sanctions.” Henderson v. Duncan, 779 F.2d 1421,
1423 (9th Cir. 1986). In Hamilton v. Neptune Orient Lines, Ltd., 811 F.2d 498 (9th
Cir. 1987), this Court considered a district court’s sua sponte dismissal arising
after a breakdown in the relationship between the plaintiff and his attorneys. We
reversed the district court’s dismissal, reasoning that the district court did not give
4 “clear warning” to the Plaintiff that dismissal would result or consider the
availability of less drastic sanctions. Id. at 500. We said that “[w]hile there is no
requirement that every conceivable sanction be examined, meaningful alternatives
must be explored.” Id. (citation omitted); see also In re Phenylpropanolamine
(PPA) Prod. Liab. Litig., 460 F.3d 1217, 1229 (9th Cir. 2006) (this Court
“focus[es] more closely on the lack of warning and absence of consideration of less
drastic alternatives when the dismissal is sua sponte rather than in response to a
noticed motion”). On the record before us, there is no indication that clear warning
was given to Padgett that dismissal would occur as a result of his failure to meet
the Court’s December 13, 2013 deadline. Nor does the district court’s January 10,
2014 order show that it considered imposing less drastic sanctions on Padgett.
Absent any consideration of these factors, reversal is warranted.
There is a remaining issue of appellate jurisdiction. It is undisputed that
Padgett’s appeal from the March 31, 2015 order awarding fees to his attorneys was
timely. Wright contends, however, that the January 10, 2014 order dismissing
Padgett’s own claim to attorneys’ fees was a final, appealable order so that his
appeal is untimely as to that dismissal. Yet the January 10, 2014 order was not a
final order because it did not resolve “all the claims or the rights and liabilities” of
all the parties. See FED. R. CIV. P. 54(b). Nor did it finally resolve issues relating
5 to fees and costs.
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FILED NOT FOR PUBLICATION JAN 08 2018 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
JOSEPH PADGETT, No. 15-15867
Plaintiff-Appellant, D.C. No. 5:04-cv-03946-EJD
and MEMORANDUM* DARLA PADGETT,
Plaintiff,
v.
CITY OF MONTE SERENO; BRIAN LOVENTHAL; A. CURTIS WRIGHT; ERIN GARNER; MARK BRODSKY; BARBARA NESBET; DAVID BAXTER,
Defendants-Appellees,
and
THE LAW FIRM OF KALLIS & ASSOCIATES, P.C; BUSTAMANTE & GAGLIASSO, P.C.,
Creditors-Appellees.
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Appeal from the United States District Court for the Northern District of California Edward J. Davila, District Judge, Presiding
Argued and Submitted April 18, 2017 San Francisco, California
Before: SCHROEDER and RAWLINSON, Circuit Judges, and DRAIN,** District Judge.
Joseph Padgett (Padgett) appeals the district court’s decision to allow his
former attorneys to pursue attorneys’ fees after being terminated by Padgett. In
addition, Padgett asserts that the district court erred in dismissing his claim for fees
as a sanction for failing to file a new motion on remand.
1. We agree that the district court potentially erred by allowing The Law
Firm of Kallis & Associates P.C. (Kallis) and Bustamante & Gagliasso P.C.
(Bustamante) to seek attorneys’ fees after they no longer represented Padgett. The
district court improperly relied on our decision in United States ex rel. Virani v.
Jerry M. Lewis Truck Parts & Equip., Inc., 89 F.3d 574 (9th Cir. 1996),
abrogation recognized by United States v. Kim, 806 F.3d 1161, 1174 (9th Cir.
2015), to permit Kallis’ and Bustamante’s continued request for fees. Virani,
however, involved a qui tam action, which is functionally different than a civil
** The Honorable Gershwin A. Drain, United States District Judge for the Eastern District of Michigan, sitting by designation. 2 rights case. See Virani, 89 F.3d at 575. In a qui tam action, “a substantial portion of
the damages collected goes to the federal government, not to the qui tam plaintiff .
. . .” Gilbrook v. City of Westminster, 177 F.3d 839, 874 (9th Cir. 1999). In a civil
rights case, by contrast, attorney fees belong to the plaintiff absent contractual
provisions to the contrary or an attorney lien. See United States v. $186,416.00 in
U.S. Currency, 642 F.3d 753, 756 (9th Cir. 2011). Because the district court did
not consider whether contractual provisions or an attorney lien justified the award
of fees to counsel rather than to the plaintiff, we vacate and remand for the district
court to make that determination in the first instance.
2. The district court did not violate the rule of mandate by ordering the
parties to file motions and supplemental documents to support a request for
attorneys’ fees on remand. The rule of mandate allows a lower court to “decide
anything not foreclosed by the mandate.” See Stacy v. Colvin, 825 F.3d 563, 568
(9th Cir. 2016) (citation and internal quotation marks omitted). The mandate in
Padgett’s earlier appeal concerned articulation of the rationale supporting the
district court’s award of fees and costs. See Padgett v. Loventhal, 706 F.3d 1205,
1208 (9th Cir. 2013). The factual and procedural circumstances of this case are
unusual. While the case was on appeal to this Circuit, the presiding judge retired.
Subsequently, the case was reassigned. Our mandate cannot reasonably be
3 construed as requiring the newly assigned judge to provide the reasoning of his
predecessor, especially considering the lack of explanation provided by his
predecessor, which was the very reason for our remand. The district court’s
request for motions and supporting documents on remand was reasonably in
pursuit of compliance with the mandate. See United States v. Perez, 475 F.3d 1110,
1113 (9th Cir. 2007) (“The ultimate task is to distinguish matters that have been
decided on appeal, and are therefore beyond the jurisdiction of the lower court,
from matters that have not.”) (citation and alterations omitted).
3. The Court’s sua sponte dismissal of Padgett’s claim for fees as a sanction
for failure to file a new motion was excessive under the circumstances of this case.
Before entering a dismissal under FED. R. CIV. P. 41(b), the district court is
required to weigh “(1) the public’s interest in expeditious resolution of litigation;
(2) the court's need to manage its docket; (3) the risk of prejudice to the
defendants; (4) the public policy favoring disposition of cases on their merits and
(5) the availability of less drastic sanctions.” Henderson v. Duncan, 779 F.2d 1421,
1423 (9th Cir. 1986). In Hamilton v. Neptune Orient Lines, Ltd., 811 F.2d 498 (9th
Cir. 1987), this Court considered a district court’s sua sponte dismissal arising
after a breakdown in the relationship between the plaintiff and his attorneys. We
reversed the district court’s dismissal, reasoning that the district court did not give
4 “clear warning” to the Plaintiff that dismissal would result or consider the
availability of less drastic sanctions. Id. at 500. We said that “[w]hile there is no
requirement that every conceivable sanction be examined, meaningful alternatives
must be explored.” Id. (citation omitted); see also In re Phenylpropanolamine
(PPA) Prod. Liab. Litig., 460 F.3d 1217, 1229 (9th Cir. 2006) (this Court
“focus[es] more closely on the lack of warning and absence of consideration of less
drastic alternatives when the dismissal is sua sponte rather than in response to a
noticed motion”). On the record before us, there is no indication that clear warning
was given to Padgett that dismissal would occur as a result of his failure to meet
the Court’s December 13, 2013 deadline. Nor does the district court’s January 10,
2014 order show that it considered imposing less drastic sanctions on Padgett.
Absent any consideration of these factors, reversal is warranted.
There is a remaining issue of appellate jurisdiction. It is undisputed that
Padgett’s appeal from the March 31, 2015 order awarding fees to his attorneys was
timely. Wright contends, however, that the January 10, 2014 order dismissing
Padgett’s own claim to attorneys’ fees was a final, appealable order so that his
appeal is untimely as to that dismissal. Yet the January 10, 2014 order was not a
final order because it did not resolve “all the claims or the rights and liabilities” of
all the parties. See FED. R. CIV. P. 54(b). Nor did it finally resolve issues relating
5 to fees and costs. The January 10, 2014 order left Defendants’ requests for costs
unresolved. And in the same order, the district court stayed the proceedings so
Padgett’s former attorneys could participate with defendants in a judicially-
supervised settlement conference on fees. Since the January 10, 2014 order was
not final with respect to fees, it merged into the final March 31, 2015 order for
purposes of appeal. See Munoz v. Small Bus. Admin., 644 F.2d 1361, 1364 (9th
Cir. 1981) (“[A]n appeal from the final judgment draws in question all earlier
non-final orders and all rulings which produced the judgment.”).
Each party shall bear their own costs.
VACATED AND REMANDED in part.
6 FILED Padgett v. City of Monte Sereno, Case No. 15-15867 JAN 08 2018 Rawlinson, Circuit Judge, concurring in part and dissenting in part: MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS I agree with the majority that the district court should determine whether the
attorneys’ fees belonged to counsel or to the plaintiff. I also agree that the district
court acted within our mandate when it ordered the parties to file motions and
supplemental documents to support a request for fees on remand.
However, I part company with the majority on its review of the district
court’s sanctions order. In my view, we lack jurisdiction over Appellant Joseph
Padgett’s challenge to the dismissal of his attorney’s fee claim for the services
provided by the McManis Faulker Law Firm. The dismissal was a sanction for
failure to submit a fee motion on remand. Padgett filed his notice of appeal over
one year after entry of the order denying his motion for reconsideration of the
district court’s dismissal, rendering his appeal untimely. See Fed. R. App. 4(a)(1),
4(a)(4)(A)(vi). The final award of fees to attorneys Kallis and Bustamante O’Hara
& Gagliasso was a separate order resulting in a separate appeal. See Oregon Nat.
Desert Ass’n v. Locke, 572 F.3d 610, 614 (9th Cir. 2009) (holding that a post-
judgment attorney fee award requires a separate appeal). Therefore, there was no
underlying judgment with which the dismissal order could possibly merge. I
respectfully dissent from this portion of the majority disposition.