Kleidman v. Murphy

Background

Peter Kleidman sued Bernie Murphy and other defendants over a settlement agreement connected to earlier litigation involving Feeva Technology Inc. Kleidman sought a declaration that the agreement was invalid because individuals who signed as representatives allegedly did not bind the people they purported to represent. He also challenged representation by Jonathan Gaskin, Alan Martini, and Murphy, and asserted due-process, equal-protection, declaratory-relief, and injunctive-relief claims against California judicial officials. He brought an additional claim against U.S. Specialty Insurance Company related to the earlier litigation.

The defendants argued that the claims were barred by claim preclusion, also called res judicata, which generally prevents a party from relitigating claims that were or could have been brought in earlier litigation. They also argued that some claims were untimely, that Kleidman lacked standing, and that he failed to state a claim. The court took judicial notice of the filing of other cases and documents and of judicial findings contained in them.

Motions to Dismiss

The court granted the Judicial Defendants’ motion to dismiss the federal claims based on sovereign immunity and failure to state a claim. Claims against Justices Greenwood and Lui were dismissed without leave to amend because they were sued in their official capacities and were barred by sovereign immunity. The court also concluded that Kleidman’s claims against Chief Justice Guerrero failed to state a claim, including his challenges to California’s vexatious-litigant statute.

The court granted U.S. Specialty’s motion to dismiss claims challenging the purported assignments or representations involving Martini and Murphy for lack of standing. The court concluded that Kleidman could not challenge the relationship between the other parties and their representatives because he was outside that relationship and the alleged assignment did not change his obligations under the settlement agreement.

The court further held that res judicata barred the remaining claims. It found that the current case and earlier related proceedings arose from the same underlying facts, involved the same parties or parties in a legally sufficient relationship, and followed final adjudications on the merits. The court determined that Kleidman had already had multiple opportunities to challenge the settlement agreement and related representation issues. The motions to dismiss were granted without leave to amend because amendment would be futile.

Vexatious-Litigant Motion

The court granted the motion to declare Kleidman a vexatious litigant. It found that he had adequate notice and an opportunity to oppose the motion, that the record of his repeated litigation was sufficient, and that his repeated attempts to relitigate the same issues were frivolous and harassing. The court entered a pre-filing review order requiring Kleidman to obtain court approval before filing or causing to be filed in this district a new action concerning the specified defendants, the underlying Feeva litigation, or the settlement agreement.

The order covers complaints involving Feeva, the other parties to the underlying litigation, U.S. Specialty, and their officers, directors, employees, representatives, or counsel, when the complaints concern the matters described in the order. To seek filing, Kleidman must provide the proposed complaint, a letter requesting filing, and a copy of the order to the Clerk, who must forward them to the duty judge for a decision. The court warned that violating the order could result in contempt proceedings, sanctions, or dismissal of an action filed in violation of it.

Sanctions and Disposition

The defendants sought sanctions under Federal Rule of Civil Procedure 11, including attorney fees, a monetary penalty, and restrictions on Kleidman’s future self-represented filings. The court denied the sanctions motion in its discretion.

Judge Gilliam granted the motions to dismiss, granted the motion to declare Kleidman a vexatious litigant, and denied the motion for sanctions. The court directed the Clerk to enter judgment for the defendants and close the case.