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Radish Seed Growers' Association v. Northwest Bank

United States District Court, D. Oregon, Eugene Division

February 8, 2019

RADISH SEED GROWERS' ASSOCIATION, an Oregon cooperative; MID VALLEY FARMS, INC., and Oregon corporation; and KCK FARMS LLC, an Oregon limited liability Company, Plaintiffs,
v.
NORTHWEST BANK, a Pennsylvania state-chartered savings association formerly known as Northwest Savings Bank, Defendant.

          OPINION AND ORDER

          ANN AIKEN, UNITED STATES DISTRICT JUDGE

         On October 20, 2018, Magistrate Judge Mustafa T. Kasubhai issued his Findings and Recommendation (F&R) (doc. 49), recommending that defendant Northwest Bank's Motion to Dismiss (doc. 6) be DENIED. Defendant filed Objections to the F&R (doc. 52) and plaintiffs Radish Seed Growers' Association, Mid Valley Farms, Inc., and KCK Farms LLC filed a Response to the Objections (doc, 54). The matter is now before the Court pursuant to 28 U.S.C. § 636(b)(1) and Federal Rule of Civil Procedure 72(b).

         STANDARDS

         Under the Federal Magistrates Act ("Act"), the Court may "accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate." 28 U.S.C. § 636(b)(1). If a party files objections to a magistrate judge's F&R, "the court shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made." Id:, Fed. R, Civ. P. 72(b)(3).

         For those portions of a magistrate judge's F&R to which neither party has objected, the Act does not prescribe any standard of review. See Thomas v. Arn, 474 U.S. 140, 152 (1985) ("There is no indication that Congress, in enacting [the Act], intended to require a district judge to review a magistrate's report to which no objections are filed."); United Stales v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en banc) (holding that the Court must review a magistrate judge's findings and recommendations de novo if objection is made, "but not otherwise"). Although in the absence of objection no review is required, the Act "does not preclude further review by the district judge[] sua sponte .. . under a de novo or any other standard." Thomas, 474 U.S. at 154. Indeed, the Advisory Committee Notes to Rule 72(b) recommend that "[w]hen no timely objection is filed," the Court review the magistrate judge's recommendations for "clear error on the face of the record."

         BACKGROUND

         The parties are familiar with the facts underlying this case, and I will not retread them here, except those relevant to the following procedural history.

         In Northwest Bank v. McKee Family Farms et al., Civ. No. 3:15-cv-01576-MO, defendant filed a declaratory action in this Court seeking a declaration that it had a superior security interest in radish seed grown by plaintiffs. Plaintiffs prevailed at trial before Judge Mosman, and defendant appealed to the Ninth Circuit.

         While the appeal was pending, plaintiffs filed this suit against defendant, asserting claims for intentional interference with economic relations, conversion, and trespass to chattels under Oregon law. Defendant moved to dismiss the claims for failure to state a claim and because they were barred by the absolute litigation privilege, (doc. 6) Defendant also moved to strike the complaint pursuant to ORS 31.150, Oregon's bar to strategic lawsuits against public participation (Anti-SLAPP). (doc. 18)

         On October 3, 2017, Judge Russo issued her F&R (doc. 30) recommending that defendant's motion to dismiss be denied without prejudice, that the case be stayed pending the resolution of the Ninth Circuit appeal, and that the motion to strike be denied. In her F&R, Judge Russo found that the Complaint alleged facts sufficient to state two of the elements of the exception to the absolute litigation privilege, but that the pendency of the appeal from Judge Mosman's decision precluded plaintiffs from asserting the third element - that the antecedent proceedings were terminated in their favor. F&R (doc. 30) at 10-11. Judge Russo found that staying the proceedings in this case would better serve justice than dismissing the claims. Id. at 11. Judge Russo also concluded that the allegations in the Complaint stated a claim for intentional interference with economic relations. Id. at 12-13, Finally, Judge Russo concluded that Oregon's Anti-SLAPP statute did not bar plaintiffs' claims at that point in the litigation. Id. at 13. Judge Russo did not address the merits of the conversion and trespass to chattels claims. Id. at 12.

         On December 5, 2017, 1 issued an Opinion and Order (doc. 41) that adopted Judge Russo's reasoning, stayed all proceedings in the case, "including consideration of defendant's motion to dismiss (doc. 6), pending the resolution of the Ninth Circuit's decision in Northwest Bank v. McKee Family Farms," and denied defendant's motion to strike, "without prejudice to its renewal should defendant prevail on appeal." Opinion & Order at 2-3.

         On July 27, 2018, the Ninth Circuit affirmed Judge Mosman's judgment in favor of plaintiffs and against defendant, and on August 31, 2018, the Court lifted the stay. (doc. 42). The Court ordered the parties to file simultaneous briefs addressing the effect of the Ninth Circuit's ruling on the matters pending before the Court. (doc. 46).

         On October 30, 2018, Judge Kasubhai issued his F&R (doc. 49) recommending that the motion to dismiss (doc. 6) be denied. Judge Kasubhai incorporated by reference the prior F&R (doc. 30) and Opinion and Order (doc. 41) and specifically found that plaintiffs' allegations supported a prima facie case for intentional interference with economic relations and that neither the absolute litigation privilege ...


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