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Havensight Capital LLC v. Nike, Inc.

United States Court of Appeals, Ninth Circuit

June 7, 2018

Havensight Capital LLC, Plaintiff-Appellant,
v.
Nike, Inc., Defendant-Appellee.

          Submitted August 18, 2017 [*] San Francisco, California

          Appeal from the United States District Court for the Central District of California D.C. No. 2:14-cv-08985-R-FFM Manuel L. Real, District Judge, Presiding

          Benjamin Woodhouse, Pismo Beach, California, for Plaintiff-Appellant.

          Sean S. Twomey, Gibson Dunn & Crutcher LLP, Irvine, California; Austin Schwing, Gibson Dunn & Crutcher LLP, San Francisco, California; for Defendant-Appellee.

          Before: Johnnie B. Rawlinson and Jacqueline H. Nguyen, Circuit Judges, and Sarah S. Vance, [**] District Judge.

         SUMMARY[***]

         Timely Appeal / Fed.R.Civ.P. 11 Sanctions

         The panel dismissed for lack of jurisdiction plaintiff's appeal of the sanctions imposed under 28 U.S.C. § 1927, the vexatious litigant order, the denial of plaintiff's motion to strike, the denial of plaintiff's application for default, and the dismissal of the amended complaint; and affirmed the district court's order imposing fees as sanctions under Fed.R.Civ.P. 11.

         The panel dismissed plaintiffs' appeal as to the sanctions imposed under § 1927, the vexatious litigant order, the denial of plaintiff's motion to strike and the denial of plaintiff's application for default because those matters were not included in the notice of appeal. See Fed. R. App. P. 3(c)(1)(B).

         The district court did not enter a separate judgment after it dismissed plaintiff's amended complaint on February 18, 2015, and judgment was deemed entered on July 15, 2015, pursuant to Fed.R.Civ.P. 58 and Fed. R. App. P. 4(a)(7)(A)(ii). Plaintiff filed the notice of appeal on October 15, 2015. One day after the district court dismissed the amended complaint, plaintiff filed a motion for reconsideration.

         The panel dismissed the amended complaint because the notice of appeal was untimely. The panel concluded that plaintiff's premature filing of a post-judgment motion did not extend the otherwise applicable appeal period.

         The panel deferred to the district court's factual findings as to whether plaintiff's filings were sufficiently frivolous or abusive such that Rule 11 sanctions were appropriate, and affirmed the sanctions order because the findings were amply supported by the record.

          OPINION

          RAWLINSON, CIRCUIT JUDGE.

         This appeal is the latest in an ongoing and bizarre dispute between Havensight Capital LLC (Havensight) and Nike, Inc. (Nike). Throughout these proceedings, Havensight has portrayed its action as a battle between David and Goliath. In reality, however, it is more akin to Don Quixote's tilting at windmills.

         The action from which this appeal was brought concerns allegedly wrongful conduct by Nike against Havensight (the tortious interference action). The tortious interference action was filed after Havensight's prior action against Nike, alleging infringement upon a soccer brand owned by Havensight (the infringement action), was dismissed with prejudice.

         I. BACKGROUND

         Although the prior action is not before us on appeal, the two cases are somewhat intertwined. Havensight's infringement action was dismissed with prejudice on November 19, 2014. The following day, Havensight filed the tortious interference action, and six days later filed its Amended Complaint.[1] Attached to the Amended Complaint was an affidavit purportedly reflecting an interview of a sporting goods retailer who reported that Nike used its market strength to force retailers to purchase its goods, thereby excluding competitors like Havensight. After the tortious interference action was reassigned to the same judge who presided over the infringement action, Nike filed a motion to dismiss under Federal Rule of Civil Procedure (FRCP) 12(b)(6).[2]

         At this juncture, Havensight departed sharply from ordinary procedure, filing multiple motions for default on the basis that Nike's motion to dismiss was untimely. Before the district court could rule on the motions, Havensight filed a writ of execution with the Clerk of the Court, claiming a default judgment in excess of $600 million. Of course, because Nike had timely filed its motion in lieu of an answer, no default judgment was warranted, and the district court ordered the writ of execution stricken.

         Nike subsequently filed a Motion for Relief Regarding [Havensight's counsel's] Ethical Violations. Undeterred, Havensight moved to recuse the assigned judge from the tortious interference action and from the (dismissed) infringement action. The judge assigned to Havensight's recusal motions denied both. Nike subsequently sought sanctions under Rule 11 of the Federal Rules of Civil Procedure (Rule 11)[3] due to Havensight's false and frivolous filings.

         On February 18, 2015, the district court granted Nike's motion to dismiss the Amended Complaint without leave to amend, and imposed sanctions under Rule 11 against Havensight's counsel in the form of attorneys' fees and expenses. No separate judgment was entered for this order. The following day, Havensight filed a motion to vacate the dismissal and the Rule 11 sanctions (motion for reconsideration). Included in Havensight's motion was yet another motion to recuse the judge who decided the earlier recusal motions. Although the judge had previously requested that Havensight refrain from filing further recusal motions, Havensight decided to Just Do It. Understandably, the court did not look favorably upon Havensight's audacity, and denied the motion on April 22, 2015, while issuing an order to show cause why additional sanctions should not be imposed under Rule 11 and 28 U.S.C. § 1927.[4] These sanctions were imposed on March 31, 2015.

         The district court entered a separate order declaring Havensight to be a vexatious litigant, and Nike moved for attorneys' fees and costs pursuant to the Rule 11 sanctions imposed in the February 18 order. The district court granted Nike's motion in full in an order entered on September 22, 2015.

         Havensight filed its Notice of Appeal on October 15, 2015. In its notice, Havensight referenced only the dismissal of the Amended Complaint and the granting of the Rule 11 sanctions. Havensight now seeks to expand the scope of rulings of its appeal to include the additional sanctions imposed under 28 U.S.C. § 1927, the vexatious litigant order, the denial of Havensight's motion to strike "Nike's alleged illegal deposition and felonious entry of a ...


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