Testone v. Barleans Organic Oils, LLC

• Court: District Court, S.D. California
• Decided: January 4, 2021
• Docket: 3:19-cv-00169
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 MICHAEL TESTONE, COLLIN Case No.: 19-CV-169 JLS (BGS) SHANKS, and LAMARTINE PIERRE, 12 on behalf of themselves, all others ORDER: (A) DENYING 13 similarly situated, and the general public, DEFENDANT’S MOTION (1) TO DISQUALIFY NAMED PLAINTIFFS 14 Plaintiffs, AS CLASS REPRESENTATIVES, 15 v. (2) TO DISQUALIFY PLAINTIFFS’ ATTORNEYS AS CLASS COUNSEL, 16 BARLEAN’S ORGANIC OILS, LLC, AND (3) FOR STAY OF ACTION 17 Defendant. PENDING DETERMINATION BY COURT; (B) DENYING 18 PLAINTIFFS’ RULE 11 MOTION 19 FOR SANCTIONS; AND (C) LIFTING STAY 20

21 (ECF Nos. 50, 51, 57) 22

23 Presently before the Court are Defendant Barlean’s Organic Oils, LLC’s 24 (“Defendant”) Motion: (1) to Disqualify Named Plaintiffs as Class Representatives; (2) to 25 Disqualify Plaintiffs’ Attorneys as Class Counsel; and (3) for Stay of Action Pending 26 Determination by Court (“Disqual. Mot.,” ECF No. 50), and Plaintiffs Michael Testone, 27 Collin Shanks, and Lamartine Pierre’s (collectively, “Plaintiffs”) Rule 11 Motion for 28 Sanctions (“Sanctions Mot.,” ECF No. 57). Also before the Court are the Amended 1 Declaration of Marylin Jenkins in Support of Defendant’s Disqualification Motion (“Am. 2 Jenkins Decl.,” ECF No. 51-1),1 Plaintiffs’ Opposition to the Disqualification Motion 3 (“Disqual. Opp’n,” ECF No. 58), Plaintiffs’ Objection to Defendant’s Evidence Submitted 4 in Support of the Disqualification Motion (“Evid. Obj.,” ECF No. 58-6), Defendant’s Reply 5 to Plaintiffs’ Opposition to the Disqualification Motion (“Disqual. Reply,” ECF No. 59), 6 Defendant’s Opposition to Plaintiffs’ Objection to Evidence in Support of the 7 Disqualification Motion (“Evid. Obj. Opp’n,” ECF No. 59-3), Defendant’s Opposition to 8 Plaintiffs’ Sanctions Motion (“Sanctions Opp’n,” ECF No. 61), and Plaintiffs’ Reply in 9 Support of the Sanctions Motion (“Sanctions Reply,” ECF No. 62). The Court took these 10 matters under submission without oral argument pursuant to Civil Local Rule 7.1(d)(1). 11 See ECF No. 63. Having carefully reviewed the Parties’ arguments and evidence and the 12 relevant law, the Court DENIES Defendant’s Disqualification Motion and DENIES 13 Plaintiffs’ Sanctions Motion. 14 BACKGROUND 15 “Defendant has manufactured, distributed, marketed, and sold various Barlean’s 16 brand coconut oil Products beginning in or around May 2008.” First Amended Complaint 17 (“FAC,” ECF No. 35) ¶ 48. Defendant sells its coconut oil products nationally at major 18 retailers. Id. ¶ 49. Plaintiffs contend that Defendant “misleadingly markets its coconut oil 19 Products as inherently healthy, and a healthy alternative to butter and various cooking oils, 20 despite that coconut oil is actually inherently unhealthy, and a less healthy option to these 21 alternatives.” Id. ¶ 1 (emphasis in original). 22 On January 24, 2019, Plaintiffs filed their Complaint for a putative class action 23 alleging California and New York state law claims based on Defendant’s allegedly 24 misleading marketing of its coconut oil products as healthy. See generally ECF No. 1. 25 Defendant answered on February 27, 2019. See ECF No. 10. On May 28, 2019, this action 26

27 1 It appears that the Amended Jenkins Declaration is substantively identical to the original Jenkins 28 Declaration, but that Ms. Jenkins inadvertently failed to sign the original. Compare ECF No. 50-2 with 1 was transferred to the Honorable Barry T. Moskowitz pursuant to Civil Local Rule 40.1. 2 See ECF No. 20. However, the Parties filed a joint motion to retransfer the case to this 3 Court, see ECF No. 21, which was granted, see ECF No. 22. 4 On September 4, 2019, Plaintiffs filed the operative First Amended Complaint 5 (“FAC”). See ECF No. 35. Defendant answered on September 10, 2019. See ECF No. 6 36. 7 On May 13, 2020, Defendant filed an ex parte motion to file under seal one of the 8 exhibits in support of the Disqualification Motion. See ECF No. 46. On May 15, 2020, 9 the Court granted the motion. See ECF No. 48. On May 18, 2020, Defendant filed its 10 Disqualification Motion, see ECF No. 50, and on May 21, 2020, Defendant filed the 11 Amended Jenkins Declaration, see ECF No. 51. On May 26, 2020, Defendant filed an ex 12 parte motion to stay pending resolution of the Disqualification Motion. See ECF No. 52. 13 Following briefing on the motion to stay, see ECF Nos. 53, 54, the Court granted the 14 motion, see ECF No. 55.2 On June 19, 2020, Plaintiffs filed the instant Sanctions Motion. 15 See ECF No. 57. 16 DISQUALIFICATION MOTION 17 I. Relevant Facts and Evidence 18 Plaintiffs’ counsel, Jack Fitzgerald and Paul Joseph, have brought several class 19 actions asserting claims similar to those in this action against other manufacturers or sellers 20 of coconut oil. Am. Jenkins Decl. ¶ 4. Those cases include James Boswell et al. v. Costco 21 Wholesale Corp, et al., Case No. 8: 16-CV-00278-DOC-DFM (C.D. Cal., filed Jan. 20, 22 2016) [hereinafter the “Costco Case”], and Christine Cumming v. BetterBody Food & 23 Nutrition LLC, Case No. 37-2016-00019510-CU-BT-CTL (Cal. Sup. Ct., filed June 9, 24 2016) [hereinafter the “BetterBody Case”]. Id.; see also id. Exs. B & C. The Costco Case 25 settled on May 2, 2017, and the BetterBody Case settled on February 24, 2017. Id. ¶ 5. 26

27 2 In light of Defendant’s separately filed and previously granted motion seeking a stay of the proceedings, 28 the Court DENIES AS MOOT the portion of the Disqualification Motion seeking a stay pending 1 The administrator of both settlements was Dahl Administration (“Dahl”). Id.; see also id. 2 Exs. D & E. One of the named Plaintiffs in this action, Collin Shanks, was previously a 3 named plaintiff in another coconut oil class action brought by Messrs. Fitzgerald and 4 Joseph, Collin Shanks, et al. vs. Jarrow Formulas, Inc., Case No. CV 18-9437 (C.D. Cal., 5 filed Nov. 6, 2018) [hereinafter the “Jarrow Case”]. Id. ¶ 6; see also id. Ex. F. 6 The named Plaintiffs were deposed in mid-October 2019 by Ms. Jenkins. Id. ¶ 8. 7 During his deposition for this case, Mr. Shanks declared that he purchased Jarrow and 8 Barlean’s brand coconut oil, and, when asked if there was “[a]ny other brand,” he 9 responded, “No, not that I remember.” Id. ¶ 9; see also id. Ex. I.3 Mr. Shanks also declared 10 that he became involved in the Jarrow Case after receiving an e-mail from Mr. Joseph, but 11 that he did not know Mr. Joseph before then and had “[no idea] whatsoever” how Mr. 12 Joseph came to contact him. Id. ¶ 15; see also id. Ex. R. Mr. Shanks received the e-mail 13 at “a default, fake e-mail address” he uses when a website, “for example . . . will ask for 14 an e-mail address to proceed, but I don’t know if I want to have a relationship with that 15 website in the future yet or not.” Id. ¶ 15; see also id. Ex. V. Mr. Shanks’s deposition was 16 defended by Mr. Joseph. Id. ¶ 41. 17 During his deposition for this case, Mr. Pierre declared that the first brand of coconut 18 oil he bought “wasn’t Barlean’s,” but that he could not recall the brand. Id. ¶ 11; see also 19 id. Ex. K. Mr. Pierre also declared that he purchased Defendant’s products from Walmart, 20 id. ¶ 11; see also id. Ex. L; however, Defendant “has never sold any of its coconut oil 21 products to Wal-Mart,” id. ¶ 12; see also ECF No. 50-42 (“Barlean Decl.”) ¶ 6. When 22 asked, “Are you participating in any class actions concerning coconut oil other than this 23 one?”, Mr. Pierre answered, “No.” Am. Jenkins Decl. ¶ 14; see also id. Ex. N. And, when 24 asked, “Are you aware that there are other class actions concerning other brands of coconut 25

26 3 As addressed more fully infra at 12, Defendant initially contended that Mr. Shanks also was untruthful 27 in his deposition in the Jarrow Case, see, e.g., Disqual. Mot. at 6–7; Am. Jenkins Decl. ¶ 7, but Defendant 28 later withdrew that argument, see Sanctions Opp’n at 17. Because that argument has been withdrawn, the 1 oil?”, Mr. Pierre responded, “I’m not aware.” Id. ¶ 14; see also id. Ex. N. Mr. Pierre 2 testified that the Law Offices of Paul Joseph contacted him via e-mail about this litigation, 3 “probably around [July 7, 2018],” and that he “d[id not] know” how they knew he had 4 purchased Barlean’s coconut oil. Id. ¶ 15; see also id. Ex. P. Mr. Pierre’s deposition was 5 defended by Mr. Joseph. Id. ¶ 41. 6 During his deposition for this case, Mr. Testone declared that he did not recall the 7 brand of the first coconut oil he purchased. Id. ¶ 13; see also id. Ex. M. When asked, 8 “Have you been a member of a class in any other coconut oil litigations?”, Mr. Testone 9 replied, “No.” Id. ¶ 14; see also id. Ex. O. When asked, “Do you have any idea as you sit 10 here today how Mr. Joseph got your email address to send this to you?”, Mr. Testone 11 answered, “I’m not sure . . . . I don’t really know.” Id. ¶ 15; see also id. Ex. T. Mr. 12 Testone’s deposition was defended by Mr. Fitzgerald. Id. ¶ 42. 13 Defendant subpoenaed Dahl on December 6, 2019, seeking production of the lists 14 of class members who participated in the common funds for both the Costco Case and the 15 BetterBody Case. Id. ¶ 20; see also id. Exs. X & Y. On December 23, 2019, Messrs. 16 Fitzgerald and Joseph informed Ms. Jenkins that they were representing Dahl with respect 17 to Defendant’s subpoenas. Id. ¶ 21; see also id. Ex. Z. Ms. Jenkins and Messrs. Fitzgerald 18 and Joseph met and conferred concerning the subpoenas on January 7, 2020, by telephone. 19 Id. ¶ 22. During the meet and confer, Ms. Jenkins conveyed her belief that Messrs. 20 Fitzgerald and Joseph “had a conflict of interest in representing both the plaintiffs in the 21 instant case and Dahl in [the] subpoenas matter.” Id. A further telephonic meet and confer 22 was held on January 13, 2020, during which Mr. Paul indicated to Ms. Jenkins that Dahl 23 was preparing additional objections to the subpoenas and would not be producing the 24 requested class lists. Id. ¶ 29. 25 Defendant filed a motion to compel compliance with the subpoenas on January 22, 26 2020, in federal court in the District of Minnesota. Id. ¶ 30; see also id. Ex. CC. Dahl 27 failed to file any objections, and on February 21, 2020, the court issued an order compelling 28 compliance. Id. ¶¶ 30–31; see also id. Ex. DD. On February 24, 2020, Mr. Fitzgerald 1 informed Ms. Jenkins by e-mail that Dahl was not properly served with the motion to 2 compel and Dahl would not be complying with the order. Id. ¶ 32; see also id. Ex. EE. On 3 February 27, 2020, Mr. Fitzgerald followed up by e-mail, indicating that, if Defendant 4 intended to enforce the subpoenas, “we are going to hire local counsel.” Id. ¶ 33; see also 5 id. Ex. FF. On March 6, 2020, Dahl filed objections to the February 21, 2020 order 6 compelling compliance with the subpoenas. Id. ¶ 33;4 see also id. Ex. GG. On April 29, 7 2020, the court affirmed its order compelling compliance with the subpoenas. See id. ¶ 34; 8 see also id. Ex. HH. 9 On May 8, 2020, Dahl’s local counsel sent Defendant’s local counsel the class action 10 membership list for the BetterBody Case. Id. ¶ 35. Dahl’s local counsel indicated that, by 11 agreement of the parties, the membership list in the Costco Case had been destroyed. Id. 12 All three of the named Plaintiffs appear on the class action membership list for the 13 BetterBody Case. Id. ¶ 37; see also ECF No. 49 (“Herman Aff.”) Ex. B (sealed). 14 Ms. Jenkins attempted to subpoena the class membership records for two additional 15 coconut oil cases in which Messrs. Fitzgerald and Joseph have acted as class counsel—for 16 both of which RG/2 Claims Administration, LLC, acted as class administrator—but the 17 process server informed her “that each time he tried to serve the subpoenas, he was told 18 that the office had moved, from San Francisco to Philadelphia to Wilmington, DE to 19 Springfield IL.” Am. Jenkins Decl. ¶¶ 38–39;5 see also id. Ex. JJ. Due to the imminent 20 discovery cut-off, Ms. Jenkins ultimately had to abandon these efforts. Id. ¶ 39.6 21 / / / 22 / / / 23 24 25 4 There are two paragraph 33’s in the Amended Jenkins Declaration; this citation is to the second. See ECF No. 51-1 at 18–19. 26 5 Again, there are multiple paragraphs 38 and 39 in the Amended Jenkins Declaration; this citation is to 27 the first of these. 28 1 II. Analysis 2 As to the class representatives, Defendant asserts that the named Plaintiffs’ 3 misrepresentations in their depositions were material, and as a result the named Plaintiffs 4 lack credibility and cannot adequately represent the class as required by Federal Rule of 5 Civil Procedure 23(a)(4). Disqual. Mot. at 8–11. Furthermore, a named representative’s 6 engagement in fraud or deceit makes him an inadequate representative as a matter of law. 7 Id. at 11 (citing Hall v. National Recovery Sys., No. 96-132-CIV-T-17(c), 1996 U.S. Dist. 8 LEXIS 11992, at *12–13 (M.D. Fla. Aug. 9, 1996); Del Campo v. Am. Corrective 9 Counseling Servs., Inc., No. C 01-21151 JW (PVT), 2008 U.S. Dist. LEXIS 106837, *13 10 (N.D. Cal. May 9, 2008); Weisman v. Darneille, 78 F.R.D. 669, 671 (S.D.N.Y. 1978)). 11 Defendant also argues that the named “Plaintiffs’ participation in other coconut oil class 12 action settlements dilutes their claims of reliance upon the Barlean’s labels in question,” 13 distinguishing them from the other members of the putative class and therefore creating a 14 conflict of interest. Id. at 11–12. 15 Plaintiffs make many arguments in opposition to Defendant’s motion, but as relevant 16 to the Court’s analysis, Plaintiffs assert that Defendant’s argument that Plaintiffs cannot 17 satisfy the adequacy requirement is “premature,” rendering the Disqualification Motion 18 procedurally improper. Disqual. Opp’n at 3–4. Moreover, Plaintiffs note that Defendant 19 fails to cite any authority permitting a disqualification motion against parties. Id. at 1. 20 As to class counsel, Defendant also argues that Plaintiffs’ counsel should be 21 disqualified from representing the putative class due to their knowing violations of 22 California Rules of Professional Conduct 1.2 and 3.3. Disqual. Mot. at 12–16. Defendant 23 claims that Plaintiffs’ counsel represented Dahl in order “to do all they could to prevent 24 the class membership lists from being produced to Barlean’s,” showing “they must have 25 known that the three plaintiffs were in fact members of the settlement class in the 26 BetterBody case.” Id. at 15. Even if Plaintiffs’ counsel did not know at the time of the 27 named Plaintiffs’ depositions, “they clearly knew by December of 2019, when they began 28 the process of attempting to block production of those records by Dahl,” because, 1 otherwise, “it is difficult to understand why they would have fought the subpoenas so 2 urgently.” Id. Plaintiffs’ counsel’s conduct of “allow[ing] a case to proceed with 3 knowledge that plaintiffs have testified falsely” misled both Defendant’s counsel and the 4 Court, and therefore “‘taints’ the trial or legal system.” Id. at 18 (quoting Fed. Deposit Ins. 5 Co. v. Isham, 782 F. Supp. 524, 528 (D. Colo. 1992)). 6 Again, Plaintiffs assert numerous arguments against Defendant’s motion, but 7 primarily Plaintiffs claim that Defendant’s argument that Plaintiffs’ counsel cannot satisfy 8 the adequacy requirement is “premature,” rendering the Disqualification Motion 9 procedurally improper. Disqual. Opp’n at 3–4. Furthermore, Plaintiffs argue that 10 Defendant lacks standing to make this argument, as Defendant does not allege having ever 11 had an attorney-client relationship with Plaintiffs’ counsel. Id. at 2–3. 12 There is precedent within the Ninth Circuit for the raising of issues regarding the 13 adequacy of named plaintiffs as class representatives and/or the adequacy of class counsel 14 in advance of an opposition to a motion for class certification—although few such motions 15 appear to have been successful. See, e.g., Huricks v. Shopkick, Inc., No. C-14-2464 MMC, 16 2014 WL 4954662, at *2–3 (N.D. Cal. Oct. 1, 2014) (denying without prejudice motion to 17 disqualify class counsel and class representatives filed concurrently with motion to 18 dismiss); Perez v. State Farm Mut. Auto. Ins. Co., No. C 06-01962 JW, 2011 WL 8601203, 19 at *2–3 (N.D. Cal. Dec. 7, 2011) (denying motion to disqualify class representative brought 20 shortly after granting of motion to dismiss a fourth amended complaint and denial of 21 motion for class certification as premature); Krzesniak v. Cendant Corp., No. C 05-05156 22 MEJ, 2007 WL 640594, at *3–4 (N.D. Cal. Feb. 27, 2007) (denying motion to disqualify 23 the named plaintiff as class representative brought before motion for class certification); 24 see also Valladares v. Insomniac, Inc., No. EDCV1400706VAPDTBX, 2015 WL 25 12656267, at *1 (C.D. Cal. Jan. 29, 2015) (granting early motion for partial summary 26 judgment as to claims of sole named plaintiff filed in advance of motion for class 27 certification and thereby effectively “disqualify[ying] ‘the named plaintiff[] as [a] proper 28 / / / 1 class representative[]’”) (quoting Cowen v. Bank United of Texas, FSB, 70 F.3d 937, 941 2 (7th Cir. 1995)). 3 Nor does Defendant necessarily lack standing to bring a motion to disqualify class 4 counsel. See, e.g., Moreno v. Autozone, Inc., No. C05-04432 MJJ, 2007 WL 4287517, at 5 *16–17 (N.D. Cal. Dec. 6, 2007) (granting the defendant’s motion to disqualify law firm 6 from serving as class counsel where alleged ethical breaches “‘so infect the litigation in 7 which disqualification is sought that [they] impact[ ] the moving party’s interest in a just 8 and lawful determination’ of its claims,” and finding the defendant had standing to bring 9 the motion) (quoting Colyer v. Smith, 50 F. Supp. 2d 966, 971–72 (C.D. Cal. 1999)). 10 Nonetheless, the Court finds persuasive the reasoning of Krzesniak, supra, in which 11 the court stated: 12 Here, Defendants filed a motion challenging Plaintiff’s ability to meet the FRCP 23 requirements before Plaintiff filed a 13 motion for class certification. Because Plaintiff has not yet filed 14 his motion, he has not been afforded the opportunity to bear his burden and the record before the Court is incomplete and ill- 15 suited to the task of informing its judgment. Without a complete 16 record, this Court is unable to conduct the rigorous analysis required by Rule 23. . . . 17

18 Further, the Advisory Committee Notes to FRCP 23(d) indicate that the objective of FRCP 23(d) is “fair and efficient 19 conduct of the action.” As to fairness, as stated above, Plaintiff 20 has not had ample opportunity to establish his qualifications as a class representative. As to efficiency, “[I]n evaluating the 21 pleading process in class actions the court and the parties always 22 should keep in mind two of the basic philosophies of the federal rules-simplicity of procedure and a desire for the speedy 23 determination of litigation on its merits.” . . . Here, adhering to 24 the normal and accepted procedural course will best ensure that the proposed class action is conducted in a simple and speedy 25 manner. 26 27 2007 WL 640594, at *3–4 (citations omitted). Although Plaintiffs had the opportunity to 28 oppose Defendant’s Disqualification Motion, the fact remains that establishing the 1 adequacy of the named Plaintiffs and class counsel is Plaintiffs’ burden. See, e.g., Cochoit 2 v. Schiff Nutrition Int’l, Inc., 326 F.R.D. 631, 635 (C.D. Cal. 2018) (“To satisfy the 3 adequacy requirement, the named plaintiff must show that she and her counsel will fairly 4 and adequately represent the class.”) (citing Hanlon v. Chrysler Corp., 150 F.3d 1011, 5 1020 (9th Cir. 1998)). The Court is wary of disqualifying either before Plaintiffs have had 6 a full and fair opportunity to present their evidence and arguments in their motion for class 7 certification. 8 Accordingly, the Court DENIES Defendant’s Disqualification Motion, without 9 prejudice to renewing these arguments once Plaintiffs have had the opportunity to carry 10 their evidentiary burdens with regard to Federal Rule of Civil Procedure 23.7 11 RULE 11 SANCTIONS MOTION 12 Plaintiffs filed their Sanctions Motion in response to Defendant’s Disqualification 13 Motion, claiming that the Disqualification Motion “rests on misrepresentations of the 14 record and rank speculation following inadequate investigation.” See ECF No. 57-1 15 (“Sanctions Br.”) at 1. Plaintiffs contend that Defendant’s Disqualification Motion 16 contains “five categories of frivolous factual contentions” that merit sanctions: (1) 17 “[g]eneral assertions of wrongdoing,” (2) “[a]ssertions that Plaintiff Collin Shanks testified 18 in another case that Jarrow was the only brand of coconut oil he had ever purchased,” (3) 19 “[a]ssertions that Plaintiffs LaMartine Pierre and Michael Testone denied participating in 20 the Cumming v. BetterBody settlement by making a claim,” (4) “[a]ssertions that Plaintiff 21 could not recall other brands of coconut oil they had purchased,” and (5) “[a]ssertions that 22 Plaintiffs’ inability to recall other brands of coconut oil they had purchased were false.” 23 Id. at 2; see also id. at 2–14. Plaintiffs also argue that “[t]he whole premise to Barlean’s 24 misguided speculation about Plaintiffs’ perjury is that their participation in the BetterBody 25 settlement renders them inadequate class representatives in this case,” but this “is 26 27 28 7 In light of the Court’s disposition of the Disqualification Motion, the Court DENIES AS MOOT 1 unwarranted by the law.” Id. at 14. Finally, Plaintiffs contend that the Disqualification 2 Motion was brought for improper purposes, as Defendant lacks standing to seek 3 disqualification of Plaintiffs’ counsel, id. at 19–20, and the motion is a premature 4 opposition to class certification brought to distract Plaintiffs’ counsel from discovery and 5 to obtain an undue procedural advantage, id. at 20–24. Plaintiffs request the Court to strike 6 the Disqualification Motion, require Defendant and Ms. Jenkins to file letters of apology, 7 order all future filings to be certified to comply with Rule 11, and award monetary sanctions 8 ($1,000 payable by Ms. Jenkins to the Court, as well as Plaintiffs’ reasonable fees incurred 9 in connection with the Sanctions Motion and the Disqualification Motion). Id. at 25. 10 Defendant vigorously opposes the motion, and, in fact, asserts that Plaintiffs’ 11 Sanctions Motion is frivolous and requests an award of its fees in defending the motion. 12 Sanctions Opp’n at 16–17. 13 “Rule 11 sanctions are warranted when a party files a lawsuit or motion that is 14 frivolous, legally unreasonable, without factual foundation, or is otherwise brought for an 15 improper purpose.” Katz v. Aurora Loan Servs., LLC, No. 11-cv-1806-IEG (POR), 2012 16 WL 78894 at * 2 (S.D. Cal. Jan. 10, 2012) (citing Warren v. Guelker, 29 F.3d 1386, 1388 17 (9th Cir. 1994)). The court “may impose an appropriate sanction on any attorney, law firm, 18 or party that violated the rule or is responsible for the violation.” Fed. R. Civ. P. 11(c)(1). 19 “If warranted, the court may award to the prevailing party the reasonable expenses, 20 including attorney’s fees, incurred for the motion.” Fed. R. Civ. P. 11(c)(2). “[S]anctions 21 should be reserved for the ‘rare and exceptional case where the action is clearly frivolous, 22 legally unreasonable or without legal foundation, or brought for an improper purpose.’” 23 Primus Auto. Fin. Serv., Inc. v. Batarse, 115 F.3d 644, 649 (9th Cir. 1997) (quoting 24 Operating Eng’rs Pension Trust v. A-C Co., 859 F.2d 1336, 1344 (9th Cir. 1988)). 25 The Court declines Plaintiffs’ request to sanction Defendant or Ms. Jenkins. The 26 filing of the Disqualification Motion was not frivolous, as there is precedent for the filing 27 of such motions before a motion for class certification (although, as discussed supra at 8– 28 10, the Court ultimately finds the authorities deeming such motions premature prior to class 1 || certification more persuasive), and Defendant has a colorable argument of standing to seek 2 || disqualification of Messrs. Fitzgerald and Joseph. Moreover, the Court does not find the 3 ||positions undertaken in the Disqualification Motion to be so foundationless or 4 || uninvestigated as to be sanctionable. While the more fulsome excerpts from Mr. Shanks’ 5 || deposition transcript in the Jarrow Case provided by Plaintiffs in their Opposition to the 6 || Disqualification Motion, see ECF No. 57-2 (“Fitzgerald Sanctions Decl.”) Ex. 1, refute one 7 |\|of the arguments advanced by Defendant in its Disqualification Motion, Ms. Jenkins 8 ||declared under oath that she attempted to obtain the full transcripts, and she gamely 9 || admitted her error when confronted with the testimony that contradicted her argument. See 10 No. 61-1 (“2d Jenkins Decl.”) § 5-6. Defendant then withdrew its argument 11 premised on the alleged misstatement. Sanctions Opp’n at 17. The Court does not find 12 || Defendant’s error to rise to a sanctionable level. 13 Accordingly, the Court DENIES Plaintiffs’ Sanctions Motion. The Court likewise 14 || DENIES Defendant’s request for its costs in defending the Sanctions Motion, which itself 15 || was not so baseless as to rise to the level of frivolousness. 16 CONCLUSION 17 For the foregoing reasons, the Court DENIES Defendant’s Disqualification Motion 18 DENIES Plaintiffs’ Sanctions Motion. The docketing of this Order LIFTS the stay 19 |/entered by this Court pending resolution of the Disqualification Motion. See ECF No. 55 20 6. 21 IT IS SO ORDERED. 22 ||Dated: January 4, 2021 (een 73 on. Janis L. Sammartino United States District Judge 24 25 26 27 28