United States District Court, W.D. Washington, Tacoma
ORDER DENYING PLAINTIFF'S SECOND MOTION FOR
BENJAMIN H. SETTLE, UNITED STATES DISTRICT JUDGE
matter comes before the Court on Plaintiff Brandon
Austin's (“Austin”) second motion for
sanctions. Dkt. 36. The Court has considered the pleadings
filed in support of and in opposition to the motion and the
remainder of the file and hereby denies the motion for the
reasons stated herein.
PROCEDURAL AND FACTUAL HISTORY
a products liability and negligence case arising out of burn
injuries Austin sustained while using a
GreenwoodTM Propane Torch manufactured by
Defendant Harbor Freight Tools USA, Inc. (“Harbor
Freight”). Dkt. 1. Austin filed this lawsuit on
December 11, 2017. Id. Without notifying Austin,
Harbor Freight announced a recall of its Greenwood torches on
January 23, 2019. Dkt. 45 at 4; Dkt. 41 at 6 (citing Dkt.
43). On January 31, 2019, the Court granted Austin's
first motion for discovery-related sanctions. Dkt. 33. On
February 8, 2019, the parties agreed that Austin would
dismiss his lawsuit in exchange for $375, 000.00. Dkt. 36 at
2. On February 25, 2019, the parties agreed upon final
settlement language. Id. On February 27, 2019,
Austin notified the Court that the parties had settled. Dkt.
35. Also on February 27, 2019, the United States Consumer
Product Safety Commission (“CPSC”) issued a
recall of the torches based on “two reports of the
trigger failing to disengage, including one report of a burn
injury.” Dkt. 36 at 2.
March 28, 2019, Austin filed the instant motion for
sanctions. Dkt. 36. On April 8, 2019, Harbor Freight
responded. Dkt. 41. On April 12, 2019, Austin replied. Dkt.
45. On April 17, 2019, Harbor Freight surreplied. Dkt. 49.
Civ. P. 37(c) provides that “[i]f a party fails to
provide information or identify a witness as required by Rule
26(a) or (e), the party is not allowed to use that
information . . . unless the failure was substantially
justified or harmless.” In response to a motion, courts
may also “order payment of the reasonable expenses,
including attorney's fees, caused by the failure”
and “impose other appropriate sanctions.”
Fed.R.Civ.P. 37(c)(1)(A), (B).
is well settled that a district court has the equitable power
to enforce summarily an agreement to settle a case pending
before it.” Callie v. Near, 829 F.2d 888, 890
(9th Cir. 1987). “The construction and enforcement of
settlement agreements are governed by principles of local law
which apply to interpretation of contracts generally.”
Jeff D. v. Andrus, 899 F.2d 753, 759 (9th Cir.
1989). Under Washington law, a contract is binding on the
parties when the intention of the parties is plain and the
parties or their counsel agree on the terms of the contract
even if one or both parties contemplated signing a more
formal writing in the future. Veith v. Xterra Wetsuits,
L.L.C., 144 Wn.App. 362, 366 (2008).
motion, Austin argues that based on the timeline of CPSC
recalls, Harbor Freight “deliberately withheld product
defect evidence from Austin throughout the life of this
lawsuit.” Id. at 3. Austin argues that had
Harbor Freight not withheld this information,
“Plaintiff and Plaintiff's counsel would have
required a much higher settlement figure.” Id.
Austin requests $300, 000 in additional sanctions to
compensate him for the loss of value to his claim as well as
attorneys' fees and costs beyond the Court's January
31, 2019 sanctions order. Id. at 14. Austin also
states that the parties agreed on the amount of settlement
and agreed on final language of the release of claims.
Id. at 2. Thus, Austin's opening brief appears
to inform the Court that the parties have entered a contract
for settlement and the terms are fixed.
response, Harbor Freight argues that the settlement's
broad release of claims encompasses Austin's instant
claims for sanctions. Dkt. 41 at 5 (citing Dkt. 42, ⁋
15). In reply, Austin makes three substantive arguments: (1)
that Harbor Freight's conduct amounts to fraudulent
inducement of settlement, (2) that the parties' release
is not binding because it has not been signed, and (3) that
even if the release is binding the Court should interpret its
special recitals to exclude claims arising from fraudulent
inducement of settlement. Dkt. 45 at 3-5. In surreply, Harbor
Freight asks the Court to strike Austin's three
substantive arguments because they were improperly raised for
the first time in reply. Dkt. 49 at 2-4. The Court agrees
that these arguments could have been advanced in the opening
brief and that raising them in reply deprives Harbor Freight
of the opportunity to respond. See Karpenski v. Am. Gen.
Life Ins. Co., LLC, 999 F.Supp.2d 1218, 1226 (W.D. Wash.
2014) (granting motion to strike when facts introduced in
reply should have been introduced in opening brief).
Therefore, the Court grants the motion to strike.
the Court considered Austin's improperly presented
arguments, he provides no valid authority for the
proposition that the Court may award as sanctions an
increased settlement amount or compensation for other
discovery violations. Instead, he cites Haeger v.
Goodyear Tire & Rubber Co., 906 F.Supp.2d 938 (D.
Ariz. 2012) for the proposition that “concealment of
material facts and fraudulent inducement of settlement”
are “eminently sanctionable” and states that
Haeger was “vacated and remanded on other
grounds” by Goodyear Tire & Rubber Co. v.
Haeger, 137 S.Ct. 1178, 1185 (2017). Contrary to
Austin's contention, the Supreme Court vacated and
remanded on one of the issues Austin presents here, which is
whether the Court may compensate Austin for legal fees that
are not causally linked to the alleged or proven misconduct.
Id. at 1186 (“That means, pretty much by
definition, that the court can shift only those
attorney's fees incurred because of the misconduct at
issue.”). Instead of submitting evidence of when Harbor
Freight knew of the CPSC's investigation and possible
recall or requesting post-settlement discovery on this issue,
Austin speculates that Harbor Freight
“necessarily” knew of the consumer complaints
before the October 8, 2018 destructive testing and “may
have even been aware of them prior to . . . July 13,
2018.” Dkt. 36 at 3. At this point, Austin is basing
his motion on speculation, which does not establish the
required causal link for actual fees incurred after the
alleged discovery violation. Thus, the Court denies this
portion of the motion without prejudice.
the request for sanctions of an increased settlement amount,
Austin fails to cite and the Court is unaware of any
authority to support such a proposition. The Supreme Court
stated that a Court may not award sanctions that are punitive
in nature without “procedural guarantees applicable in
criminal cases, such as a ‘beyond a reasonable
doubt' standard of proof.” Haeger, 137
S.Ct. at 1186. Even if the Court implemented such procedural
guarantees, it is highly unlikely that Austin will be able to
establish beyond a reasonable doubt that he could have
obtained an additional settlement amount of $300, 000 if
Harbor Freight would have disclosed the CPSC information. It
seems that the best way to prove the higher settlement amount
would be to rescind the settlement based on the alleged
fraudulent inducement and institute new negotiations.
Regardless, the Court denies Austin's motion on this
issue as well.
it is hereby ORDERED that Austin's
second motion for ...