Chep USA v. Paco, Jr.

Background

CHEP moved under Federal Rule of Civil Procedure 59(e) to amend the judgment. The opinion identifies the requested additional instructions as orders directing Speedy to notify CHEP by email within five calendar days whenever Defendant came into possession of CHEP pallets, and to cooperate fully with CHEP’s retrieval of pallets after 24 hours’ notice. The opinion’s caption identifies the defendant as FABIAN D. PACO, JR., while the earlier judgment and the requested instructions refer to Speedy.

The court had previously adopted in part and modified in part a magistrate judge’s recommendation concerning default judgment. The resulting relief awarded CHEP $127,785; declared that CHEP had sole and exclusive ownership and possession of the CHEP pallets; permanently enjoined Speedy from purchasing, selling, transferring, or using those pallets and from further conversion of them; ordered Speedy to deliver detained pallets in its possession to CHEP; and granted CHEP permission to seek periodic inspections of Speedy’s premises. The court entered judgment on December 13, 2024.

CHEP’s Position

CHEP argued that Speedy had failed to comply with the court’s order and that amending the judgment was necessary to eliminate uncertainty about what Speedy was required to do. CHEP relied on the Rule 59(e) ground of preventing manifest injustice. The court noted that CHEP did not claim newly discovered evidence, a manifest error of law or fact underlying the judgment, or an intervening change in controlling law. The opinion also states that CHEP’s complaint did not request either of the two additional forms of relief.

Rule 59(e) Standard

Rule 59(e) permits a party to ask the court to alter or amend a judgment. The court explained that, in the Ninth Circuit, such relief may be appropriate to correct a manifest error of law or fact, address newly discovered or previously unavailable evidence, prevent manifest injustice, or account for an intervening change in controlling law. The court described Rule 59(e) relief as an extraordinary remedy that should be used sparingly.

Ruling

The court concluded that the alleged manifest injustice was not an unjust act by the court but Speedy’s alleged failure to comply with the existing order. In the court’s view, CHEP was essentially seeking to enforce the order. Because a Rule 59(e) motion was not the proper vehicle for that purpose, the court denied without prejudice CHEP’s motion to amend the judgment. The court also vacated the hearing scheduled for February 13, 2025.