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Complete Logistical Services, LLC v. Rulh

United States District Court, E.D. Louisiana

April 10, 2019


         SECTION "L" (5)

          ORDER & REASONS

          Eldon E. Fallon, United States District Judge.

         Before the Court is Defendant Donald Rulh's Motion for Reconsideration of the Court's Order Affirming Magistrate Judge North's Order granting a Motion to Intervene filed by Movant Fowler Rodriguez, LLC (“Fowler”). R. Doc. 190. The motion is unopposed.

         I. BACKGROUND

         In the underlying action, Plaintiff Complete Logistical Services, LLC (“CLS”), a Louisiana LLC that provides contract labor to various marine industries, brings claims against Defendants Donald Rulh, Arnold Baker, Morris Kahn, Michelle Elwell, and Shawana Harris, alleging its former member, Defendant Rulh, breached his fiduciary duties to CLS, misappropriated CLS' assets, damaged CLS' image, and took confidential and proprietary information after he was removed from the LLC by its remaining members. R. Doc. 98 at 1-3. Based on these allegations, CLS brings claims against Defendants for violations of the Defend Trade Secrets Act (“DTSA”); Louisiana Uniform Trade Secrets Act (“LUTSA”); Computer Fraud and Abuse Act (“CFA”); Louisiana Unfair Trade Practices Act (“LUTPA”); and for unjust enrichment; breach of fiduciary duties, duty of loyalty, and duty of due care; conversion; conspiracy; and fraud. Id. at 3. CLS also seeks injunctive relief in the form of a declaratory judgment. Id. at 4.

         On May 7, 2018, Defendants answered the complaint and filed counterclaims against CLS and a third-party complaint against CLS members Spencer Sens and Natchez Morice, III. R. Doc. 30. In their counterclaim, Defendants claim CLS wrongfully seized information from them in violation of the Defend Trade Secrets Act and the Louisiana Unfair Trade Practices Act (“LUTPA”). Additionally, Mr. Rulh brings claims against CLS for breach of fiduciary duties and due care, breach of contract, unjust enrichment, conversion, and derivative action. Mr. Rulh also seeks an accounting of CLS. R. Doc. 30 at 18-24. On June 25, 2018, Plaintiff moved to dismiss Defendants' counterclaims, which the Court granted in part, dismissing Defendants' LUTPA claim and Defendant Rulh's claims for unjust enrichment, conversion, and derivative action. R. Doc. 93.

         Up until this point in the litigation, Defendants were represented by Movant, Fowler. On August 10, 2018, however, Defendant Rulh filed a motion to substitute Randall Smith and Geoffrey Ormsby as counsel of record in place of Fowler, which the Court granted on August 13, 2018. R. Docs. 86, 89. On September 19, 2018, Fowler moved to withdraw as counsel for the remaining Defendants, which the Court granted on September 21, 2018. R. Docs. 106, 107.

         On November 26, 2018, Fowler filed a motion seeking to intervene in the case, alleging Mr. Rulh had terminated the firm as counsel without paying any of the legal fees it had incurred. R. Doc. 144. In its motion to intervene, Fowler stated it held a contract with Mr. Rulh, pursuant to which Fowler would be paid attorney's fees on an hourly basis. Id. In filing its motion, Fowler seeks to recover its hourly fees from any monies awarded to Mr. Rulh based on his counterclaims against CLS. Id. The motion was referred to Magistrate Judge North who granted the motion following oral argument on December 14, 2018. R. Doc. 163. On December 27, 2018, Mr. Rulh objected to Judge North's decision. R. Doc. 165. On February 12, 2019, the Court affirmed Judge North's order. Although to Court held Fowler's intervention could not be sustained as a matter of right, the Court exercised its discretion to grant a permissive intervention. R. Doc. 184.


         On March 12, 2019, Mr. Rulh filed a motion seeking reconsideration of the Court's order affirming Judge North's order granting Fowler's motion to intervene. R. Doc. 190. In his motion, Mr. Rulh argues this Court's order is contrary to law, as Fowler has failed to meet the standard for intervention as a matter of right, nor did it meet the standard for permissive intervention. Id. at 2. Mr. Rulh argues that, because Fowler's interest in hourly attorney's fees is unrelated to the underlying cause of action-namely the alleged misappropriation of trade secrets-Fowler may not intervene in this action. Id. at 6. According to Mr. Rulh, the Court's order granting Fowler's intervention was legally erroneous.

         In support of his argument, as he did in his initial motion, Mr. Rulh again points to Premier, Inc. v. Commercial Underwriters Insurance Co., No. 02-3199, 2004 WL 32918 (E.D. La. Jan. 5, 2004), in which the court distinguished between contingency fee-based payment arrangements and hourly fee-based payments, concluding that, although the former entitles a discharged attorney to intervene as a matter of right, the latter does not. Id. at *3. Although the Court discussed Premier at length in its order affirming Judge North, Mr. Rulh contends this Court “in ignoring to Premier could cite to no case in this or any other circuit permitting an intervention for the reasons espoused by Fowler Rodriguez, its decision to permit intervention was legal error.” Id. at 5.


         Although the Federal Rules of Civil Procedure do no provide specifically for motions for reconsideration, in this Circuit, motions styled as motions for reconsideration are evaluated under Rules 54(b), 59, or 60. In re Gulf States Long Term Acute Care of Covington, L.L.C., No. 11-1659, 2014 WL 1365950, at *1 (E.D. La. Apr. 7, 2014). Because Rules 59 and 60 apply to final judgments only, a motion to reconsider that challenges an interlocutory order is analyzed pursuant to Rule 54(b), which provides courts with “the inherent procedural power to reconsider, rescind, or modify an interlocutory order for cause seen by it to be sufficient.” Martikean v. United States, No. 11-1774, 2014 WL 4631620, at *2 (N.D. Tex. Sept. 16, 2014) (quoting Iturralde v. Shaw Group, Inc., 512 Fed.Appx. 430, 432 (5th Cir. 2013)); Gulf Fleet Tiger Acquisition, LLC v. Thoma- Sea Ship Builders, LLC, 282 F.R.D. 146, 151-52 (E.D. La. 2012).

         Rule 54(b) permits this Court to reconsider an interlocutory order for any reasons it deems sufficient. United States v. Randa, 709 F.3d ...

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