CHRISTINA A. SNYDER, District Judge.
The Court has ordered that the entire action of Plaintiff and Counter-Defendant Tahaya Misr Investment Inc. ("Tahaya", formerly known as The Globe Corporation) is voluntarily dismissed without prejudice and Defendant and Counter-Claimant Helwan Cement Company S.A.E. ("Helwan", formerly known as Helwan Portland Cement Company of ASEC Group) be awarded its reasonable attorneys' fees in the total amount of $445,835.69 pursuant to Federal Rules of Civil Procedure 41(a)(2). As a result thereof, the Court has further ordered that Helwan's entire counter-action is dismissed without prejudice as well.
Tahaya's action and Helwan's counter-action were decided by the Honorable Christina A. Snyder on Tahaya's motion for voluntary dismissal, as reflected in the Court's November 14, 2016 and January 23, 2017 Orders (Dkts. Nos. 109 and 116, respectively), both of which are incorporated herein by reference in their entirety as Exhibits 1 and 2, respectively.
Accordingly,
Plaintiff Tahaya Misr Investment, Inc. ("Tahaya"), filed the instant action on December 29, 2015 in Los Angeles County Superior Court against defendants Helwan Cement S.A.E. ("Hawaii"), Suez Cement Company ("SCC"), and Italcementi Group ("Italcementi"). Dkt. 1.1. On February 12, 2016, defendants removed this action to this Court on the basis of diversity jurisdiction. Id. On May 23, 2016. the Court issued an order dismissing defendants SCC and Italcementi from this action for lack of personal jurisdiction. Dkt. 38.
The operative complaint asserts claims against the remaining defendant, Helwan, for breach of contract and breach of the implied covenant of good faith and fair dealing. Dkt. 22. Plaintiff alleges that, on or about March 6, 2002, plaintiff entered into an "Exclusive Agency Agreement" (the "Agreement") with defendant Helwan. FAC ¶ 17. The alleged Agreement provided, in relevant part: (1) that plaintiff would serve as Helwan's sales agent for cement sales outside of Egypt; (2) that Helwan would pay plaintiff a commission of $2.00 (USD) for every ton of cement sold outside of Egypt, regardless of whether plaintiff was involved in the particular transaction; and (3) that Helwan would pay plaintiffs commissions within ten days of Helwan's receipt of payment from its customer, and that any delay in a commission payment would be subject to a charge of 1% compound interest per week. Id. Plaintiff alleges that Helwan breached the Agreement by failing and refusing to pay plaintiff commissions from cement sold to non-Egyptian buyers. Id. ¶ 20. Significantly, the alleged Agreement contains a forum selection clause, which provides:
FAC, Ex. A.2. Both parties have substantial ties to Egypt. Notwithstanding the alleged Agreement's forum selection clause, on or about April 28, 2011, plaintiff filed an action in Egyptian court against Helwan ("the Egyptian Action"). Dkt. 42, Request for Judicial Notice, Ex. A, Egyptian Complaint.
On April 25, 2016, defendant filed an answer to the FAC, asserting a counterclaim divided into three counts, namely, a request for declaratory judgment regarding the validity of the Agreement, a request for declaratory judgment regarding plaintiff's corporate suspension, and a request for an anti-suit injunction. Dkt. 23. Regarding the Agreement's validity, the defendant alleges:
On May 26, 2016, defendant filed a motion seeking an anti-suit injunction against plaintiff based on the forum selection clause of the Agreement. Dkt. 39. On June 27, 2016, the Court ordered plaintiff "not to proceed further in the case before the Egyptian Courts," until the Court issued a ruling regarding defendant's motion for an anti-suit injunction ("the June Order"). Dkt. 49. On July 27, 2016, the Court granted defendant's motion for an anti-suit injunction wherein the Court ordered plaintiff to "Immediately take steps to dismiss the Egyptian Action," ("the Injunction"). Dkt. 57.
There are several motions presently before the Court.
On August 8, 2016, plaintiff filed an appeal of the Injunction to the Ninth Circuit Court of Appeals. Dkt. 60. On August 16, 2016, plaintiff filed a motion to stay the Injunction pending an appeal of the Court's order ("the Motion for a Stay"). Dkt. 65. On August 22, 2016, defendant filed an opposition to the Motion for a Stay. Dkt. 69. On August 29, 2016, plaintiff filed a reply. Dkt. 77. Plaintiff failed to properly notice a hearing on the Motion for a Stay, Dkt. 74, but the Court took the matter under submission, Dkt. 78.
On August 11, 2016, defendant filed a motion for an order to show cause why the Court should not order sanctions and find plaintiff in civil contempt of both the June Order and the Injunction ("the Contempt Motion"). Dkt. 63. On August 22, 2016, plaintiff filed an opposition. Dkt. 70. On August 29, 2016, defendant filed a reply. Dkt. 75. On September 1, 2016, the Court took the Contempt Motion under submission. Dkt. 78.
On September 6, 2016, plaintiff filed a motion to voluntarily dismiss the complaint. Dkt. 79. Plaintiff attached a declaration from Mohamed Abouelsaad, Tahaya's president, wherein Abouelsaad states that "contradictory" orders from the Egyptian Action and this Court have forced him "to decide one over the other. . . I feel that I have no choice other than to comply fully with the orders [in the Egyptian Action]. Hence, I regrettably cannot fully comply with the US or progress Tahaya's case in the US. . . As a result Tahaya respectfully has to withdraw from the cases in the US and continue to wait for a final decision from the courts in Egypt." Abouelsaad Decl. vil 42-43. On September 6, 2016, Maier Shoch LLP filed a motion to withdraw as counsel for plaintiff because Tahaya had informed Maier Shoch LLP that it "would no longer be participating in the proceedings before this Court." Dkt. 82 at 4.
On September 7, 2016, defendant filed a supplemental request for judicial notice in support of the Contempt Motion, requesting consideration of plaintiffs motion to voluntarily dismiss this action and accompanying Abouelsaad declaration. Dkt. 84. On September 19, 2016, defendant filed an opposition to the motion for voluntarily dismissal, Dkt. 89, and an opposition to Maier Shoch LLP's motion to withdraw, Dkt. 89. Plaintiff did not file a reply in support of the motion to voluntarily dismiss. On October 3, 2016, Maier Schoch LLP filed a reply in support of its motion to withdraw. Dkt. 97.
On September 19, 2016, defendant filed a motion to dismiss the complaint with prejudice based on plaintiffs failure to prosecute this action and comply with court orders. Dkt. 87. On October 3, 2016, defendant filed a reply regarding non-opposition to defendant's motion to dismiss with prejudice. Dkt. 97.
On September 28, 2016, defendant filed a motion for summary judgement. Dkt. 95. Defendant's motion for summary judgment is premised, in part, upon its argument that the alleged Agreement is fraudulent and cannot be authenticated. To date, plaintiff has not filed an opposition.
On October 17, 2016, the Court held oral argument on plaintiffs motion to voluntarily dismiss the FAC, Helwan's motion for involuntary dismissal of the action, and Maier Schoch LLP's motion to withdraw as counsel. During the hearing, the Court distributed a tentative order and discussed with the parties its concern that defendant, having obtained an injunction against plaintiff based upon the alleged Agreement's forum selection clause, should be judicially estopped from arguing in its summary judgment motion that the alleged Agreement upon which plaintiffs claims depend is fraudulent. In light of its argument that the alleged Agreement is bogus, the Court asked defendant whether it would agree to dissolve the anti-injunction. Defendant declined to agree and requested time to consider its position. The Court ordered the parties to confer and file a joint report wherein defendant should state whether or not it intended to continue to pursue its argument that the Agreement is invalid and seek summary judgment on that basis.
The parties then filed a joint status report on October 24, 2016, wherein defendant stated:
Dkt. 103 at 10.
Having carefully considered the parties' arguments, the Court finds and concludes as follows.
On August 8, 2016, plaintiff filed an appeal of the Injunction to the Ninth Circuit Court of Appeals. Dkt. 60. However, plaintiff subsequently filed a motion to dismiss its appeal, which the Court of Appeals granted on September 7, 2016. Dkt. 85. Accordingly, plaintiffs Motion for a Stay, dkt. 65, is
On September 6, 2016, plaintiff filed a motion seeking voluntary dismissal pursuant to Federal Rule of Civil Procedure 41(a)(2). Dkt. 79. "Federal Rule of Civil Procedure 41(a)(2) allows a plaintiff, pursuant to an order of the court, and subject to any terms and conditions the court deems proper, to dismiss an action without prejudice at any time."
"When ruling on a motion to dismiss without prejudice, the district court must determine whether the defendant will suffer some plain legal prejudice as a result of the dismissal."
In support of plaintiffs motion for voluntary dismissal, Tahaya has submitted a declaration from its president.
In opposition to plaintiffs motion, defendant argues that plaintiffs motion to voluntarily dismiss this action seeks only to avoid adverse rulings by this Court. Specifically, defendant argues that plaintiff intends to avoid a finding of contempt, the issuance of sanctions, and ultimately an adjudication on the merits. The principal potential prejudice to defendant from voluntary dismissal would be plaintiffs avoidance of the Court's anti-suit injunction, which defendant sought as protection against the Egyptian action.
Under ordinary circumstances, had the injunction been issued pursuant to the Agreement and defendant then sought to proceed pursuant to the Agreement, the Court would find this action inappropriate for voluntary dismissal. However, defendant has elected to simultaneously seek relief under the Agreement while arguing that the Agreement is invalid.
Accordingly, the Court must choose between two results. First, the Court could conclude that defendant is judicially estopped from disclaiming the Agreement and force both parties' to proceed under circumstances that they oppose.
Rule 41(a)(2) permits a plaintiff to voluntarily dismiss its complaint unless the defendant will suffer legal prejudice. Under the unique circumstances presented by this case, the Court concludes that defendant will not suffer legal prejudice if plaintiff is permitted to voluntarily dismiss this action. In light of the fact that defendant has declined to agree to dissolve the injunction and, at the same time, continues to argue the alleged Agreement has no force or effect, it cannot be said that defendant will suffer legal prejudice if the action is dismissed.
The only potential legal prejudice to defendant from dismissal arises from the dissolution of the Court's anti-suit injunction issued pursuant to the Agreement. However, defendant cannot attempt to preclude voluntary dismissal of this action with one argument, relying upon the Agreement, and simultaneously seek a resolution on the merits based upon its argument that the Agreement does not exist. Rather than compel both parties to proceed under conditions they oppose, it is more appropriate to dissolve the anti-suit injunction, grant plaintiff's Rule 41 motion to voluntarily dismiss, and dismiss this action in its entirety.
In light of the foregoing, the Court's anti-suit injunction is Dissolved. Plaintiff's motion to voluntarily dismiss the FAC is GRANTED. Plaintiff's FAC is
Maier Shoch LLP seeks to withdraw as counsel for plaintiff in light of plaintiff's apparent decision not to cooperate or proceed in this action. Because Tahaya now refuses to participate in this action, Maier Shoch LLP's request appears consistent with the California Rules of Professional Conduct.
Local Rule 83-2.9.2.1 requires that counsel give reasonable advance notice to the client of their application for leave to withdraw. Maier Shoch LLP avers that it has done so and that "Tahaya knowingly and freely assented to termination of Maier Shoch LLP's employment." Shoch Decl. ¶ 4.
Tahaya, a California corporation, may not represent itself pro se.
In light of the Court's decision to dismiss the FAC without prejudice, there does not appear to be prejudice to defendant from granting Maier Shoch LLP's motion to withdraw. Accordingly, Maier Shoch LLP's motion to withdraw is GRANTED. Maier Shoch LLP is ordered to provide defendant with contact information for its former client and to notify Tahaya of this order.
Because the FAC has been dismissed, there is no basis for granting defendant summary judgment based upon any claim in the FAC. However, defendant (counterclaimant) alleges a counterclaim against plaintiff (counter-defendant), over which the Court maintains jurisdiction. In addition to addressing the FAC, defendant's motion for summary judgment seeks summary judgment on its counterclaim against Tahaya. Defendant's counterclaim seeks (1) declaratory relief regarding the validity of the alleged Agreement, (2) a declaration regarding the effect of counter-defendant's corporate suspension upon its ability to recover damages from counter-claimant, and (3) an anti-suit injunction.
The first two counts of the counterclaim rely upon defendant's allegation that "fain actual and justiciable controversy exists between Helwan and Counter-Defendant, because Helwan disputes the authenticity, genuineness, validity and enforceability of the purported Agreement upon which Counter-Defendant's entire action is based." Counterclaim ¶ 15, Dkt. 30 (emphasis added). In light of the Court's dismissal of the FAC without prejudice, "counter-defendant's entire action" has been dismissed. Accordingly, defendant's motion for summary judgment with respect to the first two counts of the counterclaim should be dismissed because there is no actual and justiciable controversy pursuant to which defendant might be entitled to declaratory relief With respect to the third count of defendant's counterclaim, defendant does not allege that there is an Agreement under which it may be entitled to injunctive relief
Defendant's purported counterclaim merely duplicates its defenses to liability for Tahaya's claims. Because the Court has dismissed Tahaya's claims against defendant, defendant's counterclaim is appropriately subject to dismissal for failure to state an independent claim upon which relief can be granted.
The Court's anti-suit injunction is hereby dissolved.
Plaintiff's motion to voluntarily dismiss the FAC is
Maier Shoch LLP's motion to withdraw is
Defendant's counterclaim is
IT IS SO ORDERED.
On November 14, 2016, the Court granted plaintiff's motion to voluntarily dismiss this action. The background and procedural history are set forth at length in the Court's order granting plaintiff's motion to voluntarily dismiss the complaint.
On December 19, 2016, Gasparetti filed a second declaration regarding Helwan's attorneys' fees. Dkt. 114 ("Gasparetti Decl."). To date plaintiff has not filed any opposition to Helwan's requested attorneys' fees.
Having carefully considered defendant's submission, the Court finds and concludes as follows.
Where fee awards are appropriate and available, "the fee applicant bears the burden of establishing entitlement to an award and documenting the appropriate hours expended and hourly rates."
Helwan seeks a total of $552,467.79 in attorneys' fees. Helwan has submitted extensive documentation of its attorneys' fees, including its counsel's invoices for legal services rendered by five attorneys and one paralegal who worked as Helwan's defense counsel in this action.
Litigation in this matter was relatively complex because it implicated legal proceedings occurring simultaneously in Egypt, involved numerous substantive motions, and proceeded through partial discovery before the Court granted plaintiff's motion to voluntarily dismiss the complaint. In relation to removal proceedings, defendant's motion to dismiss due to improper service, defendant's answer and cross-claims, scheduling, defendant's motion for an anti-suit injunction, cross-motions to dismiss by both plaintiff and Helwan, preparation of a joint report regarding plaintiff's motion to voluntarily dismiss, and defendant's motion for sununary judgment, Helwan presents evidence that its defense counsel expended 507.451 hours of work between five attorneys and a paralegal. The Court concludes that the foregoing hours were reasonably expended and calculates the appropriate, lodestar for the foregoing proceedings as follows:
In accordance with the foregoing, Helwan is awarded $311,255.38 in fees incurred as a result of the proceedings listed in the previous paragraph.
Helwan also seeks fees incurred as a result of 231.39 hours of work it claims were expended on file administration, fact investigation, and "Case Analysis/Strategy." Gasparetti Decl. Ex. 3. Specifically, Helwan seeks the following additional fees:
The Gasparetti declaration states that the foregoing was reasonable because plaintiff's claims sought more than $3 billion in damages and because the case involved the alleged breach of a contract which required performance in Egypt and elsewhere over a 13-year period. Defendant disputed the authenticity and genuineness of the alleged contract and was not able to obtain the original document prior to plaintiff's voluntary dismissal of the action.
Hawaii has not satisfied its burden of demonstrating that the foregoing hours were reasonable. Helwan's counsel reasonably expended many hours of work on the motions practice in this case, which necessarily entailed factual investigation and strategy; however, Hawaii has not demonstrated that this case required uniquely complex strategic discussions or factual investigations beyond those required for the motions practice. The invoices offered by Helwan are so substantially redacted that the Court cannot discern why these hours were reasonably necessary to the defense of the case. Accordingly, the Court awards Helwan fifty percent of the billed time for these entries, $79.031.60, for a cumulative amount of $390,286.98 thus far discussed.
Lastly, Helwan seeks $83,339.81 spent in relation to the contentious, partial discovery in this matter. Specifically, Helwan claims to have expended the following hours on discovery, a motion to compel discovery, and seeking sanctions when plaintiff failed to comply with a production order:
On August 4, 2016, the parties filed a short stipulation to divide discovery proceedings into two phases, the first of which would address the validity and enforceability of the contract on which plaintiffs claims were based. Dkt. 58. On August 29, 2016, the parties submitted a joint stipulation setting forth a dispute regarding plaintiff's discovery compliance. Thereafter, defendant brought a motion to compel production of the original wet-signature agreement and for a deposition of the plaintiffcompany's president. Dkt. 76. On September 6, 2016, Helwan submitted a supplemental memorandum regarding the discovery dispute. Dkt.
On September 20, 2016, Magistrate Judge Alexander MacKinnon granted the motion to compel production. Dkt. 91. Judge MacKinnon ordered plaintiff to produce the original wet-signature document and plaintiffs president to appear for deposition on or before September 30, 2016.
No opposition was ever filed. Judge MacKinnon granted Helwan's motion for sanctions, but ordered defendant to submit additional information tailored to fees that were "caused by Plaintiffs failure to comply" with the production order rather than all fees associated with the discovery proceedings. Dkt. 105 at 3. Thereafter, Gasparetti submitted a declaration explaining that he had expended 7.4 hours preparing Helwan's motion for sanctions and attending the hearing on the motion. Dkt. 106. Gasparetti also explained that Alexa Hankard had spent "no less than 4.1 hours" on legal research for the motion for sanctions.
Defendant has not demonstrated its entitlement to $83,339.81 ill attorneys' fees associated with discovery. There appears to be a discrepancy between Gasparetti's initial claim to have expended 25 hours on discovery proceedings and Gasparetti's present claim to have expended 59.31 hours, himself: on discovery proceedings. As with the fees already discussed above, the Court cannot discern from the redacted invoice records which hours were expended on discovery matters as opposed to other matters. Accordingly, the Court awards Helwan fees for 25 hours expended by Gasparetti in addition to the remaining hours requested. Hawaii is hereby awarded $55,548.71 in fees incurred as a result of discovery in this matter.
In accordance with the foregoing, the Court
IT IS SO ORDERED.
In its motion seeking an anti-suit injunction, defendant argued that the "filing of a foreign action in contravention of the parties' chosen forum and `[a]ny continuation of the [foreign] action denigrates the integrity of the parties' prior written commitment that disputes concerning the Agreement would be litigated in California.'" Dkt. 39 at 9 (quoting
