Lall v. Corner Investment Co

District Court, D. Nevada·Decided September 21, 2023·No. 2:20-cv-01287·Unknown

Opinion

DISTRICT OF NEVADA Case No. 2:20-cv-01287-CDS-NJK Tracey Lall,

Order Granting in Part Motions for Plaintiff Attorneys’ Fees

v. [ECF Nos. 141, 142]

Corner Investment Company (d/b/a The Cromwell Hotel and Casino), et al., Defendants Sometimes in litigation, you’ve got to know when to hold ‘em, know when to fold ‘em, know when to walk away, and know when to run.1 Plaintiff’s counsel Michael Mcavoyamaya2 would have done well to heed that credo here. Instead, he repeatedly dug in his heels, refusing to admit that entire claims and aspects of his position were unsupported by the underlying facts or well-settled law. In response, the defendants bring these post-judgment motions to sanction Mcavoyamaya, seeking attorneys’ fees. Mcavoyamaya maintains that sanctions are inappropriate and that he represented his client in good faith. Upon Mcavoyamaya’s request, I recently held a hearing (the “Sanctions hearing”) to allow the parties to make further argument and to answer my questions. ECF No. 153. After reviewing the briefing and hearing additional arguments at the Sanctions hearing, I find that Mcavoyamaya acted recklessly by failing to voluntarily dismiss his client’s duty-of-fair-representation claim against the union—Local 165—when it became clear that such claim was meritless. I further find that he acted in bad faith by: (1) failing to inform 1 See Kenny Rogers, The Gambler, on The Gambler (United Artists 1978). 2 Throughout this case, there has been ongoing confusion about the proper spelling of Mcavoyamaya’s last name. See Order, ECF No. 130 at n.2. Local 165 refers to him as “McAvoyamaya,” while the Cromwell defendants refer to him as “McAvoy Amaya,” and he refers to himself as both “McAvoy Amaya” and sometimes “Mcavoyamaya.” Compare ECF No. 141-1 at 6 and ECF No. 142-1 at 6 with ECF No. 143 at 1. He has not yet availed himself of my invitation to clarify the correct spelling of his name. See ECF No. 130 at n.2. For the sake of consistency with my previous orders, I refer to him as “Mcavoyamaya” throughout this order, and I construe the parties’ various spellings as references to the same person. opposing counsel and the court that he was abandoning the Family and Medical Leave Act (FMLA) claim until after the issue had been fully briefed at the summary-judgment stage, (2) by making misrepresentations to the court about evidence (or a lack thereof) and case law, (3) by raising novel arguments for the first time in reply briefs and at oral argument, and (4) by violating various local rules. I thus grant in part both motions for attorneys’ fees, to be paid by Mcavoyamaya personally, awarding $93,030 in fees and $2,892 in costs for Local 165 and awarding $45,470 in fees for the Cromwell defendants.3 I defer granting costs for the Cromwell at this juncture. I. Legal standards a. Sanctions under 28 U.S.C. § 1927 and the court’s inherent power. “Nevada follows the American rule that attorney fees may not be awarded absent a statute, rule, or contract authorizing such award.” Thomas v. City of N. Las Vegas, 127 P.3d 1057, 1063 (Nev. 2006) (citations omitted). “District courts enjoy much discretion in determining whether and how much sanctions are appropriate.” Trulis v. Barton, 107 F.3d 685, 694 (9th Cir. 1995) (citing Frantz v. U.S. Powerlifting Federation, 836 F.2d 1063, 1066 (7th Cir. 1987)). Here, the two bases for sanctions raised in the briefs are 28 U.S.C. § 1927 and the court’s inherent power. Notably, “[w]hile Rule 11 authorizes sanctions only for filings that were frivolous when they were made . . . ‘Section 1927 imposes a continuing duty on counsel to dismiss claims that are no longer viable.’” Frost v. LG Electronics Inc., 2017 WL 2775041, at *2 (N.D. Cal. June 27, 2017) (quoting Burda v. M. Ecker Co., 2 F.3d 769, 778 (7th Cir. 1993)); accord Trulis, 107 F.3d at 692). “A filing is frivolous if it ‘is both baseless and made without a reasonable and competent inquiry.’” Pratt v. California, 11 F. App’x 833, 835 (9th Cir. 2001) (quoting In re Keegan Mgmt. Co., Secs. Litig., 78 F.3d 431, 434 (9th Cir. 1995) (internal citation omitted)).

3 As in previous orders, I refer to the three non-union defendants—Corner Investment Co. (doing business as The Cromwell Hotel and Casino); Caesars Entertainment, Inc.; and Caesars Growth Cromwell—collectively as “the Cromwell defendants.” I refer to defendant Unite Here Bartenders Union, Local 165 herein as “Local 165” or “the Union.” Under § 1927, attorneys “who so multipl[y] the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy the excess costs, expenses, and attorneys’ fees reasonably incurred because of such conduct.” 28 U.S.C. § 1927; see also Lozano v. Cabrera, 678 F. App’x 511, 513 (9th Cir. 2017). “Recklessness is all that is necessary to justify an award of fees and costs under § 1927, and the award must be satisfied by the offending attorney personally— not the client.” Mayorga v. Ronaldo, 2023 WL 2020075, at *1 (D. Nev. Feb. 14, 2023) (citing 28 U.S.C. § 1927). While “reckless suffices for § 1927 . . . bad faith is required for sanctions under the court’s inherent power.” Fink v. Gomez, 239 F.3d 989, 993 (9th Cir. 2001). “Bad faith is present when an attorney knowingly or recklessly raises a frivolous argument or argues a meritorious claim for the purpose of harassing an opponent.” Trulis, 67 F.3d at 788 (quoting New Alaska Dev. Corp. v. Guetschow, 869 F.2d 1298, 1306 (9th Cir. 1989)). Although district courts have the discretion to issue sanctions under both § 1927 and their inherent powers, such discretion must be exercised with restraint. Lahiri v. Universal Music & Video Distribution Corp., 606 F.3d 1216, 1223 (9th Cir. 2010). b. Requirements for fees motions under this district’s local rules. Local Rule 54-14 and Federal Rule of Civil Procedure 54(d)(2) govern fees motions. In part, a motion for attorneys’ fees must include a brief summary of: (A) [t]he results obtained and the amount involved; (B) [t]he time and labor required; (C) [t]he novelty and difficulty of the questions involved; (D) [t]he skill requisite to perform the legal service properly; (E) [t]he preclusion of other employment by the attorney due to acceptance of the case; (F) [t]he customary fee; (G) [w]hether the fee is fixed or contingent; (H) [t]he time limitations imposed by the client or the circumstances; (I) [t]he experience, reputation, and ability of the attorney(s); (J) [t]he undesirability of the case, if any; (K) [t]he nature and length of the professional relationship with the client; (L) [a]wards in similar cases; and (M) [a]ny other information the court may request.

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