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Green v. Kanazawa

United States District Court, D. Hawaii

October 30, 2018

JEREMY GREEN and SHIZUKO GREEN, Plaintiffs,
v.
SIDNEY K. KANAZAWA, ESQ., a resident of California, MCGUIREWOODS, LLP, a Virginia limited liability partnership, and DOE DEFENDANTS 1-50, Defendants. HYE JA KIM, Plaintiff,
v.
SIDNEY K. KANAZAWA, ESQ., a resident of California, MCGUIREWOODS, LLP, a Virginia limited liability partnership, and DOE DEFENDANTS 1-50, Defendants.

          ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' APPEAL OF THE MAGISTRATE JUDGE'S ORDER STAYING AND DEFERRING RULING ON DEFENDANTS' MOTION FOR ATTORNEYS' FEES AND RELATED NON-TAXABLE COSTS AND BILL OF COSTS; AND AFFIRMING THE MAGISTRATE JUDGE'S ORDER, AS MODIFIED

          LESLIE E. KOBAYASHI, UNITED STATES DISTRICT JUDGE

         On July 2, 2018, United States Magistrate Judge Kevin S.C. Chang issued an Order Staying and Deferring Ruling on Defendants' Motion for Attorneys' Fees and Related Non-taxable Costs and Bill of Costs (“Stay Order”). [Dkt. no. 474.] Defendants Sidney Kanazawa and McGuireWoods, LLP (collectively “Defendants”) filed an appeal from the Stay Order (“Appeal”) on July 12, 2018. [Dkt. no. 476.] Plaintiffs Jeremy Green and Shizuko Green (“the Greens”), and Hye Ja Kim (collectively “Plaintiffs”) filed their memorandum in opposition to the Appeal on July 26, 2018, and Defendants filed a reply on August 8, 2018. [Dkt. nos. 480, 481.] The Court has considered the Appeal as a non-hearing matter pursuant to Rule LR7.2(e) of the Local Rules of Practice of the United States District Court for the District of Hawai`i (“Local Rules”). Defendants' Appeal is hereby granted in and part and denied in part, for the reasons set forth below. The Appeal is denied insofar as the imposition of the stay is affirmed, and the Appeal is granted insofar as: the Stay Order is modified by this Order; and the stay is conditioned upon Plaintiffs' posting of a supersedeas bond in the amount of $3, 034, 587.17. Thus, the Stay Order, as modified by the instant Order, is affirmed.

         BACKGROUND

         On February 8, 2016, the Greens filed their Complaint in CV 16-00054, and Mrs. Kim filed her Complaint in CV 16-00055. On May 4, 2016, Judge Chang approved the parties' stipulation to consolidate the cases. [Dkt. no. 34.]

         On November 30, 2017, this Court issued the Order: Denying Defendants' Motion for Summary Judgment on the Claims Asserted by Plaintiff Hye Ja Kim; Denying Defendants' Motion for Summary Judgment on the Claims Asserted by Plaintiffs in Counts I and II of the Complaint; and Granting in Part and Denying in Part Defendants' Motion for Summary Judgment for Lack of Actual Damages, or Alternatively, for Partial Summary Judgment Regarding Punitive Damages Arising out of the Acts or Omissions of Centex Homes (“Summary Judgment Order”). [Dkt. no. 200.]

         The trial on the remaining claims started on April 25, 2018 with jury selection. [Minutes, filed 4/25/18 (dkt. no. 355).] On May 22, 2018, the parties presented their closing arguments, and the jury began its deliberations. [Minutes, filed 5/22/18 (dkt. no. 422).] The jury returned its verdicts on May 25, 2018. [Dkt. nos. 436, 437.] On May 30, 2018, the Judgment in a Civil Case was entered in favor of Defendants, based on the jury's verdicts. [Dkt. no. 439.] Plaintiffs have appealed this case to the Ninth Circuit. [Notice of Appeal, filed 6/11/18 (dkt. no. 443).]

         On June 13, 2018, Defendants filed their: Bill of Costs (“BOC”); and Motion for Attorneys' Fees and Related Non-taxable Costs (“Motion”). [Dkt. no. 444, 445.] The Motion seeks an award of: $19, 345.54 in attorneys' fees from the Greens; $28, 837.21 in attorneys' fees from Kim; $2, 810, 355.27 in attorneys' fees from Plaintiffs, jointly and severally; and $176, 375.97 in non-taxable costs from Plaintiffs, jointly and severally. [Motion at 3.] The BOC seeks $47, 855.93 in taxable costs from Plaintiffs, jointly and severally. [BOC at 2.]

         On June 14, 2018, Judge Chang, sua sponte, directed the parties to file memoranda addressing whether the consideration of the BOC and the Motion should be stayed while the Ninth Circuit appeal was pending. [Dkt. no. 446.] On June 21, 2018, Plaintiffs filed a memorandum in support of a stay and, on June 28, 2018, Defendants filed a memorandum opposing a stay. [Dkt. nos. 470, 473.] The Stay Order followed.

         Judge Chang found “judicial economy [would] be served by deferring ruling on the Motion and BOC and staying their disposition until the appeal is resolved.” [Stay Order at 2.] Judge Chang noted: the amount of time that would be required to review the voluminous filings would be considerable; [id. at 5;] the “disposition of the Motion and BOC will very likely result in the filing of additional related motions in the future, such as motions for reconsideration and/or objections”; [id. at 6;] it was probable that the Motion and the BOC would not be resolved before Judge Chang retired; and, if Judge Chang issued findings and recommendations on the BOC and Motion prior to retirement, a new magistrate judge would have to resolve any remands from this Court, [id.]. Judge Chang therefore exercised his discretion and stayed and deferred ruling on the Motion and BOC, pending the resolution of the Ninth Circuit appeal. Judge Chang terminated the Motion and BOC, but stated that, once the Ninth Circuit decided the appeal, Defendants could request that the stay be lifted, and the Motion and the BOC would be deemed reactivated, effective as of the original filing date. [Id. at 7-8.]

         In the instant Appeal, Defendants argue Judge Chang erred in staying the consideration of the Motion and the BOC because the Ninth Circuit appeal will not simplify the issues presented in the Motion and the BOC. Further, Defendants argue they will be harmed by a stay, and Plaintiffs will not suffer hardship or inequity if the proceedings on the Motion and the BOC go forward. Defendants assert judicial economy supports going forward with the Motion and the BOC.

         STANDARD

         Local Rule 74.1 states, in pertinent part:

A magistrate judge may hear and determine any pretrial matter pending before the court, except those motions delineated in LR72.4(a). . . . Any party may appeal from a magistrate judge's order determining a motion or matter under LR72.3 . . . within fourteen (14) days after being served with a copy of the order.

         Although Local Rule 74.1 applies to the determination of pretrial matters, the Federal Rules of Civil Procedure provide:

By local rule, the court may establish special procedures to resolve fee-related issues without extensive evidentiary hearings. Also, the court may refer issues concerning the value of services to a special master under Rule 53 without regard to the limitations of Rule 53(a)(1), and may refer a motion for attorney's fees to a magistrate judge under Rule 72(b) as if it were a dispositive pretrial matter.

         Fed. R. Civ. P. 54(d)(2)(D). This district court has such a local rule. See Local Rule LR54.3(h). Thus, in this district court, a magistrate judge may issue orders related to his consideration of a motion for attorneys' fees[1] and those orders are subject to appeal to the ...


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