Opinion
CASE NO: 11-CV-0973 W (KSC)
07-03-2014
CHARLICE ARNOLD, on behalf of herself, all similarly situated and the general public Plaintiffs, v. FITFLOP USA, LLC, Defendant.
ORDER DENYING MOTION TO
PROCEED IN FORMA
PAUPERIS ON APPEAL
[DOC. 123]
On May 27, 2014, Michael Narkin ("Applicant") filed the pending Motion and Declaration for Leave to Proceed in Forma Pauperis ("IFP") on appeal. On June 10, 2014, Plaintiffs filed an opposition and on June 23, 2014, Applicant filed a reply.
A party seeking to proceed IFP on appeal must file a motion in the district court. See Fed R. App. P. 24(a)(1). The determination of whether a plaintiff is indigent, and thus unable to pay the filing fee falls within the district court's discretion. California Men's Colony v. Rowland, 939 F.2d 854, 858 (9th Cir. 1991), reversed on other grounds, 506 U.S. 194 (1993) ("Section 1915 typically requires the reviewing court to exercise its sound discretion in determining whether the affiant has satisfied the statute's requirement of indigency.").
It is well-settled that a party need not be completely destitute to proceed IFP. Adkins v. E.I. DuPont de Nemours & Co., 335 U.S. 331, 339-40 (1948). To satisfy the requirements of IFP status, "an affidavit [of poverty] is sufficient which states that one cannot because of his poverty pay or give security for costs . . . and still be able to provide himself and dependents with the necessities of life." Id. at 339. At the same time, however, "the same even-handed care must be employed to assure that federal funds are not squandered to underwrite, at public expense, . . . the remonstrances of a suitor who is financially able, in whole or in material part, to pull his own oar." Temple v. Ellerthorpe, 586 F.Supp. 848, 850 (D.R.I. 1984). District courts, therefore, tend to reject IFP applications where the applicant can pay the filing fee with acceptable sacrifice to other expenses. See, e.g., Stehouwer v. Hennessey, 851 F.Supp. 316, (N.D.Cal. 1994), vacated in part on other grounds, Olivares v. Marshall, 59 F.3d 109 (9th Cir. 1995) (finding that district court did not abuse discretion in requiring partial fee payment from prisoner with $14.61 monthly salary and $110 per month from family); Allen v. Kelly, 1995 WL 396860 at *2 (N.D. Cal. 1995) (Plaintiff initially permitted to proceed in forma pauperis, later required to pay $120 filing fee out of $900 settlement proceeds); Ali v. Cuyler, 547 F.Supp. 129, 130 (E.D. Pa. 1982) (in forma pauperis application denied: "plaintiff possessed savings of $450 and the magistrate correctly determined that this amount was more than sufficient to allow the plaintiff to pay the filing fee in this action."). Moreover, the facts as to the affiant's poverty must be stated "with some particularity, definiteness, and certainty." United States v. McQuade, 647 F.2d 938, 940 (9th Cir. 1981).
Additionally, subsection (a)(3) provides that "[a]n appeal may not be taken in forma pauperis if the trial court certifies in writing that it is not taken in good faith." 28 U.S.C. § 1915(a)(3). Thus, notwithstanding whether the applicant is able to pay or give security for the appellate costs, a district court may deny an IFP application if the appeal is not taken in good faith. Ellis v. United States, 356 U.S. 674, (1958).
Having read and considered the papers submitted, the Court finds the Applicant has failed to meet the requirements for IFP status under 28 U.S.C. § 1915. Applicant's declaration identifies a total monthly household income of $1,818. (See IFP Dec. [Doc. 123], ¶ 1.) Although the Applicant also lists household expenses of $3,405 (id., ¶ 9), Applicant admits that he is not paying $2,111 of those expenses (id., ¶¶ 9, 13). Accordingly, Applicant's household income exceeds his household expenses by $569, which may be used to pay his appellate costs.
Moreover, the Court also finds that the Applicant's appeal is not taken in good faith. Applicant, a former attorney who was the sole objector to the settlement, raised three objections to the settlement: (1) the proposed settlement bears no relationship to the alleged damages inflicted by Defendants on Plaintiffs; (2) Class counsels' actions are indicia of a consciousness of unfairness and collusion; and (3) the amount of attorney's fees and expenses constitutes over reaching, represents unjust enrichment, and shocks the conscience. (Objection [Doc. 119], p. 1.) In his reply in support of the IFP application, however, Applicant now appears to concede that his primary objection is "based on the denial of my right to scrutinize Class Counsel's discovery to see if it was extensive enough to determine what the case is worth, and if it examined the possibility of sub-classes that are not being properly represented." (Reply [Doc. 128], p. 3.)
But as admitted in Applicant's objection to the settlement, Applicant was not allowed to review documents because of a protective order, which was provided to him. (See Objection [Doc. 119], p.1.) The order specifically identified a process for challenging confidential designations. (See Prot. Order [Doc. 33], ¶ 13.) Yet, despite Applicant's alleged desire to scrutinize the discovery, the docket demonstrates that he took no action to either challenge the parties' confidentiality designations or to seek leave from the magistrate judge or this Court to review discovery before the final-approval hearing.
Further, Applicant's unsupported assertion in the objection that the parties may not have "engage[d] in real discovery" was contradicted by the record. As stated in this Court's final approval order, the evidence established that Class counsel began investigating the veracity of Defendant's advertising claims in September 2010, approximately nine months before this lawsuit was filed. (Final Approval Order [Doc. 121], p.11.) The investigations included the review and research of Defendant's advertising, pricing and components used in FitFlop Footwear and its competitors' products, and gathering scientific studies and industry statements regarding the ability of FitFlop Footwear and other toning shoe products to provide the advertised benefits. (Id.) They also researched and analyzed financial and sales information about FitFlop Footwear. (Id.)
After the lawsuit was filed, both parties engaged in a substantial amount of discovery. Plaintiffs propounded three sets of written interrogatories, one set of document requests, and two sets of requests for admission, and conducted seven depositions. (Final Approval Order, p.11.) The discovery requests resulted in Defendant's production of approximately 473,022 pages of documents. (Id.) Plaintiffs also conducted discovery in London, England related to FitFlop's parent corporation, as well as third-party researchers hired by FitFlop. (Id.)
Class counsel also took non-party depositions and issued approximately 17 third-party subpoenas that were served on Defendant's retail partners, the American Podiatric Medical Association, the QVC television network, and one of Defendant's former executives. (Final Approval Order, p.11.)
The discovery efforts were also demonstrated by significant discovery-related motion practice. (See Final Approval Order, p.11.) In total, Plaintiffs filed five motions to compel further discovery responses from Defendant. (Id.) Plaintiff Arnold was also deposed, provided documents and written discovery responses, and was the subject of a motion to compel by Defendant. (Id.) In short, Applicant's unsupported objection based on the contention that the parties may not have engaged in "real discovery" was completely contradicted by the record in this case.
Applicant's reply does not assert that the two other objections raised in his Objection to the settlement are being pursued in good faith on appeal. Regardless, as explained in this Court's final approval order, the two remaining objections lacking in any factual support and thus without merit. (See Final Approval Order, 13:6-14:6.)
Finally, Applicant also seeks to justify his objection by asserting that denying him access to discovery prevented Applicant from determining if "possible sub-classes such as class members who may have suffered personal injury as a result of wearing the FitFlop product" existed. (Reply, p.2.) Applicant contends this was important because such class members "could be later barred from recovery because their sub-class had not been recognized and properly represented." (Id.) However, the Second Amended Complaint specifically excluded claims for personal injuries: "... Excluded from the Class are Defendant and its officers, directors and employees, and those who purchased FitFlop Footwear for the purpose of resale or who assert claims for personal injury." (Sec. Amend. Compl. [Doc. 97], ¶ 47.) The Court's final approval order specifically stated that "the operative second amended complaint . . . clarifies that Arnold is not seeking recovery for personal injury on behalf of herself or the proposed class." (Final Approval Order, pp. 2-3.) Thus, Applicant's claimed need to determine if the lawsuit included personal injury claims lacks merit.
In support of the argument that Applicant's appeal is not in good faith, Plaintiff contends that the Applicant demanded $100,000 in exchange for dismissing his appeal. In reply, Applicant does not dispute that he made the demand, but explains that the demand was for a charity that he volunteers for, called Luvin Animal Rescue. (See Reply, p. 3, Ex. A.) However, the charity appears to belong to Applicant and his family, who are identified as its officers. See http://oregoncompanies.us/luvin-animal-rescue.75583.company#top_info (July 2, 2014).
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For the foregoing reasons, the Court DENIES Applicant's motion to proceed IFP [Doc. 123] on appeal.
IT IS SO ORDERED.
__________
Hon. Thomas J. Whelan
United States District Judge