Advocates for Individuals With Disabilities, LLC v. Midfirst Bank

• Decision Date: 24 July 2018
• Docket Number: No. CV-16-01969-PHX-NVW,CV-16-01969-PHX-NVW
• Parties: Advocates for Individuals with Disabilities, LLC, and David Ritzenthaler, Plaintiffs, v. MidFirst Bank, Defendant.
• Court: U.S. District Court — District of Arizona

Advocates for Individuals with Disabilities,LLC, and David Ritzenthaler, Plaintiffs, v. MidFirst Bank, Defendant.

No. CV-16-01969-PHX-NVW

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

July 24, 2018

ORDER

Table of Contents

I. BACKGROUND .................................................................................................... 1

A. This Action Through Dismissal ...................................................................... 1

B. Motions Now Before the Court ...................................................................... 4

II. ATTORNEY FEES AND SANCTIONS ............................................................... 4

A. Legal Standards .............................................................................................. 4

1. Attorney Fees Under the Americans with Disabilities Act ..................... 4

2. Attorney Fees and Sanctions Under the Arizonans with Disabilities Act ............................................................................................................ 5

3. Sanctions Under 28 U.S.C. § 1927 .......................................................... 6

B. Analysis ......................................................................................................... 7

1. AID continued this action in bad faith for the purpose of increasing and extorting fees; MidFirst is entitled to fees and expenses of litigation under the ADA ......................................................................... 7 2. MidFirst is also entitled to an award of fees against AID's counsel Strojnik under 28 U.S.C. § 1927 for vexatious and unreasonable bad faith multiplication of the proceedings .................................................... 8

3. All of MidFirst's requested fees are reasonable ...................................... 9

4. Fees incurred after the case was mooted until AID's concession of lack of standing and jurisdiction resulted in dismissal of the ADA claim will be awarded under the ADA against Strojnik, AID, and Ritzenthaler, and all later fees will be awarded against Strojnik under 28 U.S.C. § 1927 ..................................................................................... 12

III. RECONSIDERATION OF DENIAL OF TAXABLE COSTS ............................ 12

IV. AID'S POST-JUDGMENT REASSERTION OF ITS ABANDONED CONTENTION OF STANDING .......................................................................... 13

A. AID expressly abandoned its contention of standing and federal subject-matter jurisdiction .......................................................................................... 13

B. Under Rule 59, AID's Motion fails as exceeding the 28-day limit and for lack of a contested ruling on standing and jurisdiction .................................. 16

C. It is not necessary in this case to decide whether mere error of law is always a basis for Rule 60(b) relief from judgment because AID conceded lack of standing without a contested ruling; but even an erroneous contested ruling would not be of the type of error of law remediable under Rule 60(b) and would still be subject to the Court's discretion if it was .......................................................................................... 18

1. AID made a deliberate choice to concede it lacked standing, and deliberate choices do not qualify for relief under Rule 60 ..................... 18

2. Correcting a mistake under Rule 60(b)(1) requires the Court to have made the mistake of its own initiative .................................................... 19

3. Relief under Rule 60(b)(6) requires "extraordinary circumstances," which are not present here ...................................................................... 20

4. As any relief under Rule 60(b) is also within the Court's discretion, the Court would exercise its discretion to deny the Motion as late, unfair, and empowering more abuse of the litigation process ................ 20

V. LATE APPEAL ..................................................................................................... 21

A. Legal Standard ................................................................................................ 21

B. As a matter of fact, AID's failure to appeal was not neglect, and its request for late appeal was a change of mind ................................................. 23

C. If the failure to appeal was negligent, not intentional, in the Court's discretion it was not excusable in light of all the circumstances involved .... 26

1. There is no danger of injustice to AID in denying a late appeal ............. 26

2. Continuing injustice to MidFirst is certain from a late appeal ................ 27

3. Even on AID's own story, which the Court does not credit, failure to timely appeal was the result of counsel's unexplained ignorance of procedure ................................................................................................. 28

4. The length of the delay is not insignificant ............................................. 28

5. AID acted in bad faith ............................................................................. 29

6. The other Pincay factors weigh against allowing a late appeal .............. 29

VI. STATE OF ARIZONA'S MOTION TO INTERVENE ........................................ 30

A. The State has no right to intervene under Rule 24(a) ..................................... 30

B. Permissive intervention is not warranted ....................................................... 32

Plaintiffs brought this action under federal and state civil rights disability statutes. Plaintiffs conceded they lacked standing and federal jurisdiction, and the Court dismissed the federal claim in accordance with Plaintiffs' stipulation. The state claim was certain to be dismissed on remand, so it too was dismissed here on grounds of futility. (Doc. 49.) To understand the many motions now before the Court, some background information is necessary.

I. BACKGROUND

A. This Action Through Dismissal

On May 17, 2016, Plaintiffs Advocates for Individuals with Disabilities, LLC, and David Ritzenthaler (collectively "AID") sued Defendant MidFirst Bank ("MidFirst") in Maricopa County Superior Court. (Doc. 1-1, Ex. 2.) MidFirst removed the case to this Court. (Doc. 1.)

AID alleged MidFirst violated federal and state disability laws by failing to comply with various parking lot specifications, such as adequate spaces and proper signage. Advocates for Individuals with Disabilities LLC v. MidFirst Bank, 279 F. Supp. 3d 891, 892-93 (D. Ariz. 2017). In particular, AID alleged violations of both the Americans with Disabilities Act ("ADA"), 42 U.S.C. §§ 12181 through 12189, and the Arizonans with Disabilities Act ("AZDA"), A.R.S. §§ 41-1492 through 41-1492.012. Yet the Complaint failed to allege a single harm to Ritzenthaler, let alone that he ever visited MidFirst's premises—or even that he was disabled. Id. at 893.

The Complaint was a template, which as the Court noted, has become the stock-in-trade of AID's attorneys Peter Strojnik and Fabian Zazueta. "As in many of their cases, the discrepancies in parking signage and striping here were minor, even trivial." Id. MidFirst corrected the violations immediately. Yet, as in other cases, Strojnik and Zazueta refused to dismiss the case unless they were paid their fees of "no less than $5,000." Id.

The Court noted that AID's attorneys' "extortionate practice has become pervasive." Id. Using Ritzenthaler as the aggrieved co-plaintiff, AID had pursued about 160 cookie-cutter lawsuits removed to federal court and more than 1,000 such suits in Arizona state court. The pleadings followed the same script "right down to the same typographical errors." Id.

On September 8, 2016, the Court ordered AID to show cause why the case should not be dismissed for lack of standing. (Doc. 20.) The Court also allowed, at AID's request, an amended complaint to cure the standing defects. (Docs. 22, 23.) AID failed to file its own requested amendment. Weeks after the Court's order to show cause, AID conceded "this Court does not have jurisdiction over the claims at issue." (Doc. 24 at 3.)

At oral argument on December 20, 2016, the Court accepted AID's acknowledgement of lack of standing and federal jurisdiction and orally directed dismissal of the federal claim rather than remand to state court as AID requested. (Doc. 45 at 81.) But AID still wanted to litigate its potential AZDA state law claim in state court. Advocates, 279 F. Supp. 3d at 893-94.

Then there was another twist. The Arizona Attorney General requested consolidation of the more than 1,000 identical cases filed by Strojnik and Zazueta in state court. Id. at 894. On March 2, 2017, the superior court dismissed all the consolidated cases, except one, for lack of standing. In the one undismissed case, another judge had already ruled the complaint was sufficient to withstand a motion to dismiss, and Arizona procedure strongly disfavors "horizontal appeals." Id.

This Court denied remand of the AZDA claim. Under Bell v. City of Kellogg, 922 F.2d 1418, 1425 (9th Cir. 1991), a federal court may dismiss rather than remand a state claim where there is "absolute certainty that remand would prove futile." When there are no comity concerns, the disposition on remand is certain, and the court can prevent waste of judicial resources and parties' legal fees, Bell permits dismissal rather than remand. Advocates, 279 F. Supp. 3d at 894-95.

Because the AZDA then read any "person who believes" a covered person had been aggrieved "may institute a civil action," AID contended that a Sherpa in Tibet would have standing under the statute despite lack of any injury to the Sherpa. Id. at 896 (citing A.R.S. § 41-1492.08(A) (2011)). Before this case was decided, the Arizona Legislature amended the AZDA effective on August 9, 2017, replacing the old language with the following: "Any aggrieved person . . . may institute a civil action." Id. (citing A.R.S. § 41-1492.08(A) (2017))...