Beautyko LLC et al v. Amazon Fulfillment Services, Inc

RESPONSE

W.D. Wash.October 30, 2017

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 BEAUTYKO’S RESPONSE IN OPPOSITION TO AMAZON’S MOTION TO CORRECT CASE SETTING No. 2:16-cv-00355-RSM Page 1 SCHLEMLEIN FICK & SCRUGGS, PLLC 66 S. Hanford Street, Suite 300 Seattle, WA 98134 Phone: (206) 448-8100 Fax: (206) 448-8514 The Honorable Ricardo S. Martinez UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE BEAUTYKO LLC, et al., Plaintiffs, v. AMAZON FULFILLMENT SERVICES, INC., Defendant. No. 2:16-cv-00355-RSM BEAUTYKO’S RESPONSE IN OPPOSITION TO AMAZON’S MOTION TO CORRECT CASE SETTING The Beautyko Entities submit this memorandum in opposition to Defendant Amazon Fulfillment Services, Inc.’s (“Amazon”) “Motion to Correct Case Setting” (“Motion”) (Dkt. No. 91) and ask that the Court enter an order that the issues raised in the parties’ respective claims and defenses be adjudicated by jury pursuant to Federal Rule of Civil Procedure 39(b) (“Rule 39”) in the event that the Court does not outright conclude that Amazon is estopped from bringing its Motion at this late date and time. 1 Rule 39 vests the district court with limited discretion in determining whether a party that did not strictly comply with Rule 38 is nonetheless entitled to a jury trial. See, e.g., Roth v. Nationstar Mortgage Company, (“[b]y failing to object to Plaintiffs’ jury demands in the original 1 To the extent that Rule 39(b) contemplates the filing of a motion to request trial by jury where no demand has been formally made, the Beautyko Entities hereby ask that the Court treat this response as a cross-motion for a jury trial to the extent that the Court deems it procedurally necessary. See Fed. R. Civ. Pro 39(b) (“When No Demand Is Made . . . But the court may, on motion, order a jury trial on many issue for which a jury might have been demanded.”) Case 2:16-cv-00355-RSM Document 93 Filed 10/30/17 Page 1 of 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 BEAUTYKO’S RESPONSE IN OPPOSITION TO AMAZON’S MOTION TO CORRECT CASE SETTING No. 2:16-cv-00355-RSM Page 2 SCHLEMLEIN FICK & SCRUGGS, PLLC 66 S. Hanford Street, Suite 300 Seattle, WA 98134 Phone: (206) 448-8100 Fax: (206) 448-8514 and amended complaints, and by signing the parties’ Case Management Report selecting the ‘jury trial’ option, Nationstar consented to a jury trial and thus waived the right to subsequently invoke the waivers”); see also Gulf Bay Capital, Inc. v. Textron Fin. Corp., 2016 WL 4009942, at 2 (M.D. Fla. July 27, 2016) (holding that despite plaintiff's failure to demand jury trial, defendant consented to jury trial on all claims by agreeing to jury designation in joint case management report). The district court’s discretion is grounded in the fact that “the right to a jury trial is a fundamental right guaranteed to our citizenry by the Constitution, . . . courts should indulge in every reasonable presumption against waiver.” U.S. Securities & Exchange Commission v. Jensen, 835 F.3d 1100, 1107 (9th Cir. 2016) (quoting Solis v. City of Los Angeles, 514 F.3d 946, 955 (9th Cir. 2008)). The court should exercise its discretion here. This is because Amazon (1) acknowledges that it has been aware since the matter was transferred to this Court from arbitration that the Beautyko Entities sought adjudication by jury; (2) failed to act when the Court set the matter for jury; (3) proceeded throughout the case as if the matter would be tried to by a jury (including its entry into the Stipulated Motion Regarding Motions in Limine and exchange of proposed jury instructions within a week of filing this Motion); and (4) offers absolutely no evidence that it was prejudiced by the lack of strict compliance with Rule 38. In both law and fact, Palmer v. Angelica Health Care, 170 F.R.D. 88 (N.D. N.Y. 1997) is on all fours with the instant case: Even if Palmer waived her right to a jury trial under Rule 38(d), her jury demand will be permitted in the alternative under Rule 39(b). That rule permits a court discretion to grant trial to a party who has waived its right under Rule 38(d). What appears to be a broad grant of discretion in the rule, however, has been narrowed by case law in this circuit to the point where a party must now demonstrate more than mere inadvertence in failing to make a timely demand in a case, as here, originating in federal court. Palmer has demonstrated more than mere inadvertence. Palmer indicated a demand for a jury trial in the docket sheet filed with the complaint, gave notice to Angelica of the demand within ten days of filing of the answer, and a jury trial was contemplated by both parties in the CCMP and through the completion of discovery and two conferences with the Court. The jury demand was, therefore, not the result of any change in trial strategy but a known and stated intention from the inception of the case. Case 2:16-cv-00355-RSM Document 93 Filed 10/30/17 Page 2 of 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 BEAUTYKO’S RESPONSE IN OPPOSITION TO AMAZON’S MOTION TO CORRECT CASE SETTING No. 2:16-cv-00355-RSM Page 3 SCHLEMLEIN FICK & SCRUGGS, PLLC 66 S. Hanford Street, Suite 300 Seattle, WA 98134 Phone: (206) 448-8100 Fax: (206) 448-8514 Moreover, Angelica received timely, actual notice of the demand, acted throughout the proceedings to date in the belief that the trial of the case would be to a jury, and thus suffered no prejudice from the late filing of a formal demand. In the circumstances of this case, the discretion afforded by Rule 39(b) will be exercised to order a trial by jury. Angelica Health, 170 F.R.D. at 90 (emphasis added). Amazon relies heavily on MEECO Mfg Co. v. Imperial Mfg, Case No. C03-3061-JLR (W. Dist. Wash. 2005) in its Motion. As applied to the facts here, however, MEECO is inapposite. Indeed, MEECO sets forth the same legal standard as that applied in Angelica Health: both courts recognize that the district court’s discretion has been narrowed by case law and that more than mere inadvertence is required before discretion should be exercised. The reason that the court did not exercise its discretion in MEECO is because MEECO failed to demonstrate more than mere inadvertence. In Angelica Health, however, discretion was exercised because (1) notice of intent to seek a jury (albeit not formal compliance with Rule 38) was made within the applicable time period; (2) trial by jury was actually contemplated by both parties at the time of the initial case scheduling order; and (3) trial by jury was contemplated through the close of discovery. Angelica Health, 170 F.R.D. at 89. All of the Angelica Health factors are present in this case. In fact, here, the case for a jury trial is even more compelling: within fourteen days of the time to file the jury demand Amazon was not only on notice of the fact that the Beautyko Entities sought trial by jury, but Amazon actually acquiesced to the Beautyko Entities’ jury request. Indeed, on May 5, 2016 (five days prior to the time by which Amazon claims a jury demand should have been filed), Amazon wrote to prior counsel for the Beautyko Entities: First, I understand from our call that Beautyko intends to withdraw its declaratory judgment claim and make a jury demand. Without waiving any rights, Amazon will not object if Beautyko makes a jury demand. But Amazon does not intend to withdraw its declaratory judgment claim on its right to set off payments. It is an equitable issue that will remain for the Court’s determination, and we can discuss raising it via motion for resolution. See Declaration of Charles A. Lyman dated October 30, 2017 (“Lyman Decl.”) Ex. 1 (emphasis added). Thereafter, the parties filed the Joint Status Report and Discovery Plan on May 18, 2016 Case 2:16-cv-00355-RSM Document 93 Filed 10/30/17 Page 3 of 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 BEAUTYKO’S RESPONSE IN OPPOSITION TO AMAZON’S MOTION TO CORRECT CASE SETTING No. 2:16-cv-00355-RSM Page 4 SCHLEMLEIN FICK & SCRUGGS, PLLC 66 S. Hanford Street, Suite 300 Seattle, WA 98134 Phone: (206) 448-8100 Fax: (206) 448-8514 (Dkt. No. 12). The next day the Court entered its order issuing the trial date and ordering a jury trial (Dkt. No. 13), to which Amazon raised no objection. Since that time, Amazon continued to acquiesce to the jury trial. In fact, Amazon did more than acquiesce. It drafted the stipulations to continue the trial date, each of which contemplated a jury trial. (See, e.g., Dkt Nos. 19, 24, 26, 28 and 53.) More recently, the parties entered into their “Stipulated Motion Regarding Motions In Limine” where both parties expressly reaffirmed that the matter was set for “a five-day jury trial to begin on November 13, 2017.” (Dkt. No. 85.) Most recently, the parties exchanged proposed jury instructions per the most recent case scheduling order. Lyman Decl., ¶ 3. Given Amazon’s own actions, it should be outright estopped from seeking the relief it requests now. The facts are also such that this Court should exercise its discretion under Rule 39(b) to order trial by jury. Based upon the foregoing, the Beautyko Entities respectfully request that this Court enter an order that the parties’ respective claims and defenses be adjudicated by jury. DATED this 30th day of October, 2017. SCHLEMLEIN FICK & SCRUGGS PLLC /s/ Charles A. Lyman Charles A. Lyman, WSBA No. 30495 Brian K. Keeley, WSBA No. 32121 Michael P. Scruggs, WSBA No. 19066 66 S. Hanford St., Suite 300 Seattle, Washington, 98134 Telephone: (206) 448-8100 Facsimile: (206) 448-8514 Email: cal@soslaw.com bkk@soslaw.com mps@soslaw.com Attorneys for Plaintiffs Case 2:16-cv-00355-RSM Document 93 Filed 10/30/17 Page 4 of 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 BEAUTYKO’S RESPONSE IN OPPOSITION TO AMAZON’S MOTION TO CORRECT CASE SETTING No. 2:16-cv-00355-RSM Page 5 SCHLEMLEIN FICK & SCRUGGS, PLLC 66 S. Hanford Street, Suite 300 Seattle, WA 98134 Phone: (206) 448-8100 Fax: (206) 448-8514 CERTIFICATE OF SERVICE I hereby certify that on October 30, 2017, I electronically filed the foregoing with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following registered CM/ECF users in this action: Attorneys for Defendant Amazon Fulfillment Services, Inc. Stevan D. Phillips Vanessa Soriano Power KC Harding STOEL RIVES LLP 600 University Street, Suite 3600 Seattle, WA 98101-3197 /s/ Charles A. Lyman Charles A. Lyman, WSBA No. 30495 Case 2:16-cv-00355-RSM Document 93 Filed 10/30/17 Page 5 of 5