Trendsettah USA, Inc. v. Swisher International Group Inc.

• Court: Court of Appeals for the Ninth Circuit
• Decided: September 5, 2025
• Docket: 23-4257
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS SEP 5 2025 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

TRENDSETTAH USA, No. 23-4257 INC.; TRENDSETTAH, INC., et al. D.C. No. 8:14-cv-01664-JVS-DFM Plaintiffs - Appellants, v. MEMORANDUM* SWISHER INTERNATIONAL GROUP INC.,

Defendant – Appellee.

TRENDSETTAH USA, No. 24-1313 INC.; TRENDSETTAH, INC., D.C. No. Plaintiffs - Appellees, 8:14-cv-01664-JVS-DFM

v.

SWISHER INTERNATIONAL GROUP INC.,

Defendant - Appellant.

Appeal from the United States District Court for the Central District of California James V. Selna, District Judge, Presiding

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Argued and Submitted March 12, 2025 Pasadena, California

Before: WARDLAW and RAWLINSON, Circuit Judges, and RAKOFF, District Judge.**

Trendsettah USA, Inc. (Trendsettah) appeals the district court’s award of

attorneys’ fees and costs to Swisher International, Inc. (Swisher) as sanctions for

Trendsettah’s litigation misconduct, and the district court’s calculation of

prejudgment interest. In its cross-appeal, Swisher contends that the district court

erred in failing to award its entire attorneys’ fees and costs in defending against

Trendsettah’s antitrust and breach-of-contract action. We have jurisdiction under

28 U.S.C. § 1291, and we conclude that the district court properly exercised its

inherent authority to reach a holistic and equitable resolution of this protracted

dispute.

We review the district court’s sanctions award, its award of prejudgment

interest, and its denial of Trendsettah’s motion under Federal Rule of Civil

Procedure 60 (Rule 60) for abuse of discretion. See America Unites for Kids v.

Rousseau, 985 F.3d 1075, 1087-88 (9th Cir. 2021); see also Westport Ins. Corp. v.

Cal. Cas. Mgmt. Co., 916 F.3d 769, 773 (9th Cir. 2019); Marroquin v. City of Los

Angeles, 112 F.4th 1204, 1211 (9th Cir. 2024).

** The Honorable Jed S. Rakoff, United States District Judge for the Southern District of New York, sitting by designation.

2 23-4257 After a jury verdict in favor of Trendsettah on its antitrust and breach-of-

contract claims, Swisher discovered that Trendsettah’s chief executive officer,

Alkrum Alrahib (Alrahib), engaged in a fraudulent scheme to “avoid payment of

federal excise taxes,” which “allowed [Trendsettah] to set artificially low prices

and continue to compete effectively in the relevant markets, thereby incurring its

asserted damages.” Trendsettah USA, Inc. v. Swisher Int’l, Inc., 31 F.4th 1124,

1127, 1137 (9th Cir. 2022). We reversed the district court’s ruling that Trendsettah

engaged in fraud on the court, but held that “relief from judgment on Trendsettah’s

antitrust claims [was] warranted under Rule[s] 60(b)(2) and (b)(3) based on newly

discovered evidence and fraud.” Id. at 1134, 1138. We also “reverse[d] the

district court’s dismissal of Trendsettah’s breach of contract claims and

remand[ed] with instructions to reinstate the jury’s verdict on those claims.” Id. at

1128.

On remand, the district court exercised its inherent authority to impose

sanctions, and denied Trendsettah’s motion under Rule 60(b)(5) to vacate a prior

attorneys’ fee award in favor of Swisher.1 Although we reinstated the breach-of-

1 Swisher’s motion for an award of attorneys’ fees as a sanction was timely following the district court’s order conditioning Trendsettah’s dismissal of its claims on a potential motion for attorneys’ fees under “the court’s inherent powers,” subsequent to our resolution of Trendsettah’s appeal. See Fed. R. Civ. P. 54(d)(2)(B) (setting time limits for a motion for attorney’s fees “[u]nless . . . a court order provides otherwise”); see also Chambers v. NASCO, Inc., 501 U.S. 32, 56 (1991) (noting that “sanctions may be imposed years after a judgment on the

3 23-4257 contract verdict, the rule that when a “fee award is based on the merits judgment,

reversal of the merits removes the underpinnings of the fee award” does not

address the different situation of attorneys’ fees as a post-appeal sanction.

California Med. Ass’n v. Shalala, 207 F.3d 575, 577-79 (9th Cir. 2000). While

Trendsettah’s fraudulent conduct was not imputed to its counsel, our prior decision

concluded that Trendsettah is responsible for Alrahib’s fraud in litigating this case.

See Trendsettah, 31 F.4th at 1134, 1137. As a result, the district court possessed

“inherent authority” to impose attorneys’ fees “as a sanction for [Trendsettah’s]

bad-faith litigation conduct.” Gregory v. State of Mont., 118 F.4th 1069, 1077 (9th

Cir. 2024). Notably, the district court reduced the fee award by $2,388,065.98 to

account for any overlap between the prior fee award and the sanctions, see id., and

did not abuse its discretion in imposing sanctions based on the equities of the case.

See id.

Nor did the district court abuse its discretion in awarding prejudgment

interest. “State law governs prejudgment interest in a diversity action. . . .”

Westport Ins. Corp., 916 F.3d at 781 (citation omitted). Under Florida law, which

governs the agreement between Trendsettah and Swisher, “prejudgment

merits”) (citation and footnote reference omitted). Swisher’s sanctions motion was also not “clearly inconsistent with its earlier position” in its attorneys’ fee motion. Consumer Fin. Prot. Bureau v. CashCall, Inc., 124 F.4th 1209, 1217 (9th Cir. 2025) (citation and internal quotation marks omitted).

4 23-4257 interest . . . is denied when its exaction would be inequitable.” Langsetmo v.

Metza, 335 So. 3d 708, 712 (Fla. Dist. Ct. App. 2022) (citation and internal

quotation marks omitted). The district court determined that “[e]quity [did] not

counsel calculating prejudgment interest from the original judgment through the

newly-entered judgment,” because “the delay in this case was occasioned on the

fraud of the prevailing party and cannot be rewarded with a higher interest rate.”

The district court did not abuse its discretion in its equitable calculation of

prejudgment interest in light of Trendsettah’s misconduct. See id.

Finally, the district court did not err in declining to award Swisher its entire

attorneys’ fees and costs in defending the action. The district court determined that

Trendsettah’s “fraud infected [its] damages, but not necessarily [Swisher’s]

liability.” Even if our mandate did not bar the district court from awarding

Swisher’s full fees and costs, the district court did not err in distinguishing between

Swisher’s breach-of-contract liability based on the jury’s verdict and Trendsettah’s

theory of damages. See id.

AFFIRMED. 2

2 In the prior appeal, we rejected Swisher’s jurisdictional challenge that it reasserts in its cross-appeal. See Trendsettah, 31 F.4th at 1131-32.

5 23-4257