United States District Court, D. Hawaii
UNITED STATES OF AMERICA, ex rel. ATLAS COPCO COMPRESSORS LLC Plaintiff,
RWT LLC and ARCH INSURANCE COMPANY Defendants.
ORDER DENYING PLAINTIFF'S MOTION FOR
RECONSIDERATION AND GRANTING PLAINTIFF'S MOTION FOR
INTERLOCUTORY APPEAL AND STAY PENDING THAT APPEAL
C. Kay Sr. United States District Judge
reasons set forth below, the Court denies Plaintiff's
Motion for Reconsideration, ECF No. 51. The Court grants
Plaintiff's Motion for Interlocutory Appeal and Stay
Pending that Appeal, ECF No. 51.
4, 2016, Plaintiff Atlas Copco Compressors LLC
(“Plaintiff”) filed a Complaint against RWT LLC
(“RWT”) and Arch Insurance Company (“Arch,
” and together with RWT, “Defendants”).
Plaintiff alleged that Defendants violated the Miller Act, 40
U.S.C. §§ 3131, 3133. The alleged violation was
based on a subcontract in which Plaintiff agreed to supply
RWT four compressors and two air dryers (the
“equipment”) for a U.S. Department of Defense
project at Pearl Harbor.
17, 2017, the Court issued an Order denying Defendants'
Motion for Summary Judgment and denying Plaintiff's
Motion for Summary Judgment (“the May 17, 2017
Order”). ECF No. 50. The Court incorporates the
procedural and factual background as well as the defined
terms of the May 17, 2017 Order.
30, 2017, Plaintiff filed a Motion for Reconsideration or
Alternatively for Interlocutory Appeal and Stay Pending that
Appeal (“Motion”) pursuant to Federal Rule of
Civil Procedure 59(e), Local Rule 60.1, and 28 U.S.C. §
1292(b). ECF No. 51. In the May 17, 2017 Order, the Court
held that Plaintiff did not meet the requirements necessary
to establish its Miller Act claim. May 17, 2017 Order at 21.
Plaintiff's Motion for Reconsideration recasts the
central issue to be whether the inspection and force majeure
provisions in the General Terms and Conditions of Sale in the
Purchase Order constituted a waiver of Plaintiff's Miller
filed a Memorandum in Opposition to Plaintiff's Motion
for Reconsideration (“Opposition”) on June 13,
2017. ECF No. 53. On June 27, 2017, Plaintiff filed its Reply
to Defendants' Opposition (“Reply”). ECF No.
54. Pursuant to Local Rule 7.2(d), this matter is suitable
for disposition without a hearing.
may ask the court to reconsider and amend a previous order
pursuant to Federal Rule of Civil Procedure 59(e). White
v. Sabatino, 424 F.Supp.2d 1271, 1274 (D. Haw. 2006)
(Kay, J.). Rule 59(e) offers “an extraordinary remedy,
to be used sparingly in the interests of finality and
conservation of judicial resources.” Carroll v.
Nakatani, 342 F.3d 934, 945 (9th Cir. 2003) (internal
quotation marks and citation omitted). In the Ninth Circuit,
a successful motion for reconsideration must accomplish two
goals. First, “a motion for reconsideration must
demonstrate some reason why the court should reconsider its
prior decision.” Na Mamo O‘Aha ‘Ino v.
Galiher, 60 F.Supp.2d 1058, 1059 (D. Haw. 1999). Second,
it “must set forth facts or law of a strongly
convincing nature to induce the court to reverse its prior
have established three grounds justifying reconsideration:
(1) an intervening change in controlling law; (2) the
availability of new evidence; and (3) the need to correct
clear error or prevent manifest injustice. Allstate Ins.
Co. v. Herron, 634 F.3d 1101, 1111 (9th Cir. 2011);
Mustafa v. Clark County Sch. Dist., 157 F.3d 1169,
1178-79 (9th Cir. 1998). The District of Hawaii has
implemented these standards in Local Rule 60.1.
disagreement with a previous order is an insufficient basis
for reconsideration. See Leong v. Hilton Hotels
Corp., 689 F.Supp. 1572, 1573 (D. Haw. 1988) (Kay, J.).
In addition, a Rule 59(e) motion for reconsideration may not
present evidence or raise legal arguments that could have
been presented at the time of the challenged decision.
See Kona Enters., Inc. v. Estate of Bishop, 229 F.3d
877, 890 (9th Cir. 2000). “Whether or not to grant
reconsideration is committed to the sound discretion of the
court.” Navajo Nation v. Confederated Tribes and
Bands of the Yakama Indian Nation, 331 F.3d 1041, 1046
(9th Cir. 2003).
for interlocutory appeal is appropriate where: (1) the order
involves a controlling question of law; (2) a substantial
ground for difference of opinion exists; and (3) an immediate
appeal from the order may materially advance the ultimate
termination of the litigation. 28 U.S.C. § 1292(b).
movant seeking an interlocutory appeal has a heavy burden to
show that “exceptional circumstances justify a
departure from the basic policy of postponing appellate
review until after the entry of a final judgment.”
Coopers & Lybrand v. Livesay, 437 U.S. 463, 475
(1978) (internal quotation marks and citation omitted);
see also James v. Price Stern Sloan, Inc., 283 F.3d
1064, 1067 n. 6 (9th Cir. 2002) (“Section 1292(b) is a
departure from the normal rule that only final judgments are
appealable, and therefore must be construed
narrowly.”). Section 1292(b) is only to be used
“in exceptional situations in which allowing an
interlocutory appeal would avoid protracted and expensive
litigation.” In re Cement Antitrust Litig.,
673 F.2d 1020, 1026 (9th Cir. 1982) (citation omitted).
“A court has substantial discretion whether to grant a
party's motion for certification.” Pitts v.
Sequeira, Civil No. 11-00281 LEK/RLP, 2014 WL 346523, at
*2 (D. Haw. Jan. 29, 2014) (citation omitted).
Motion for Reconsideration
moves for reconsideration to correct clear errors in the
Court's May 17, 2017 Order and prevent manifest injustice
that would result from those errors. Motion at 1.
Plaintiff claims that the Court made the following errors:
(1) failing to find Comment to Section 2.5.1 in the Proposal,
as opposed to the General Terms and Conditions of Sale in the
Purchase Order, controlling as a matter of law; and (2)
failing to find United States ex rel. Walton Tech., Inc.
v. Weststar Eng'g, Inc., 290 F.3d 1199 (9th Cir.
2002) controlling authority.
in making these arguments, Plaintiff simply rehashes the same
arguments-albeit with a different “spin”-that it
initially presented. The Ninth Circuit has made clear that a
motion for reconsideration is properly denied when it
presents arguments that were already raised in the prior
motion. See Backlund v. Barnhart, 778 F.2d 1386,
1388 (9th Cir. 1985); see also United States v. Westlands
Water Dist., 134 F.Supp.2d 1111, 1131 (E.D. Cal. 2001)
(stating that a motion for reconsideration is not a vehicle
to rehash arguments previously presented).
extent that Plaintiff's arguments can be construed as not
previously raised, the Court still cannot grant
Plaintiff's Motion because “[a] Rule 59(e) motion
may not be used to raise arguments . . . for the
first time when they could reasonably have been raised
earlier in the litigation.” Kona Enters.,
Inc. v. Estate of Bishop, 229 F.3d 877, 890 (9th Cir.
2000) (emphasis in original); see Carroll v.
Nakatani, 342 F.3d 934, 945 (9th Cir. 2003) (holding
that it is improper to present new legal theories in a motion
for reconsideration for the first time when they could
reasonably have been raised earlier in the litigation);
Reliance Ins. Co. v. Doctors Co., 299 F.Supp.2d
1131, 1154 (D. Haw. 2003), aff'd sub nom. Reliance
Ins. Co. v. Doctors Co., 132 F. App'x 730 (9th Cir.
2005) (“A motion for reconsideration is not a proper
mechanism for presenting new legal theories that the movant
failed to raise with respect to the underlying motion for
summary judgment.”). Plaintiff fails to offer any
reason why the arguments it offers could not have been raised
before. Therefore, the Court denies Plaintiff's Motion
because the arguments it presents were previously raised or
could have been raised earlier. In addition, even if the
Court were to consider these arguments, as discussed in
detail herein, Plaintiff's Motion still fails.
Whether Comment to Section 2.5.1 of the Proposal
Plaintiff argues that the Comment to Section 2.5.1 of the
Proposal, rather than the General Terms and Conditions of the
Purchase Order, controls because between boiler plate terms
and the specific terms of the Proposal, the latter should
control as a matter of contract law. Plaintiff cites to two
cases-Bank of Commerce v. Hoffman, 829 F.3d 542 (7th
Cir. 2016) and Aramony v. United Way of Am., 254
F.3d 403, 413-14 (2d Cir. 2001)-to support this proposition.
In Hoffman, the court examined one settlement
agreement that had conflicting terms. On the one hand, a
provision in the settlement agreement absolved defendant of
liability arising from some but not all of the properties at
issue. 829 F.3d at 546-47. On the other hand, the same
agreement had a provision that released defendant from all
liabilities. Id. at 547. The court held that the
contract was ambiguous and examined extrinsic evidence and
the rules of construction to determine the contract's
specific meaning. Id. at 547-549. The court,
following Illinois state law, ultimately held that where
general language is inconsistent and conflicts with specific
language, the specific language controls. Id. at
Aramony, defendant argued that the district court
erred in interpreting the terms of an ERISA-governed pension
plan as ambiguous. 254 F.3d at 410. The court examined the
general provision set forth in Article I under the caption
“Purpose of the Plan, ” which said that the
purpose was “to provide a mechanism for securing the
pension benefit promises made to . . . highly compensated key
employees who may receive relatively smaller retirement
benefits under the existing pension arrangement than rank and
file employees will receive as a result of limitations
imposed by the Internal Revenue Code . . .”
Id. at 412. The court held that this general purpose
clause did not create ambiguity in the contract because of
another more specific section of the plan. Id. at
412-13. The court drew upon, inter alia, the
“fundamental rule of contract construction that
‘specific terms and exact terms are given greater
weight than general language.'” Id. at 413
(citing Restatement (Second) of Contracts § 203(c)
(1981)). The court further held that even where there is no
“true conflict” between two provisions,
“‘specific words will limit the meaning of
general words if it appears from the whole agreement that the
parties' purpose was directed solely toward the matter to
which the specific words or clause relate.'”
Id. at 413-14 (citing 11 Richard A. Lord,
Williston on Contracts § 32:10, at 449 (4th ed.
1999)). “Contracts would offer very little protection
to their signatories if ambiguities of the sort found in the
purpose clause could take precedence over carefully spelled
out terms.” Id. at 413.
Court finds neither Hoffman nor Aramony
persuasive here for several reasons. First, and most
important, differing from Hoffman, there is no
conflict between the two provisions in the contracts in the
present case. Comment to Section 2.5.1 of the Proposal states
that, “Atlas Copco is offering its standard factory
performance test with certificate for each compressor.”
Plaintiff CSF, Ex. F (ECF No. 33-10) at 17. The General Terms
and Conditions of Sale in the Purchase Order provide that RWT
“shall have a reasonable time after receipt of [the
equipment] and before payment to inspect [it] for conformity
hereto, and performance shall not be deemed accepted until
[RWT] has run an adequate test to determine whether the [the
equipment] conform[s] to the specifications hereof.”
Def. Opp. CSF, Ex. 2 (ECF No. 43-2) at 3. The force majeure
clause says, “neither party shall be liable for any
failure to perform . . . caused by circumstances beyond its
control . . . including . . . government action.” Def.
Opp. CSF, Ex. 2 (ECF No. 43-2) at 3. The terms in Comment to
Section 2.5.1 in the Proposal, therefore, relate to
Plaintiff's inspection and testing of the
equipment before RWT received it, whereas the
General Terms and Conditions of Sale in the Purchase Order
relate to whether RWT has run an adequate test to
determine whether the equipment conforms to specifications
after RWT received it.
the contract at issue here is for the sale of goods, which is
governed by the UCC rather than common law principles of
contract interpretation. See Utah Code § 70A-2-102
(“Unless the context otherwise requires, this chapter
applies to transactions in goods . . .”); Hilsen v.
Am. Sleep All., LLC, No. 2:15-CV-00714-DBP, 2016 WL
3948065, at *3 (D. Utah July 19, 2016) (applying Utah law and
stating that the UCC applies to contracts for the sale of
goods); see also Prime Start Ltd. v. Maher Forest Prod.,
Ltd., 442 F.Supp.2d 1113, 1121 (W.D. Wash. 2006)
(applying Washington law and stating that “[t]he
Uniform Commercial Code applies to sales of goods, while the
common law of contracts governs services
agreements”).Neither of the contracts in
Hoffman or Aramony was for the sale of
none of the provisions at issue here feature the broad
language discussed in Aramony. Fourth, the cases
Plaintiff cites involve different provisions in one contract,
whereas the provisions here are in two agreements. Last,
neither of the cases Plaintiff cites involves boilerplate
provisions. Therefore, the Court did not commit ...