facts that would support its allegations that the defendants committed bankruptcy

fraud. Cervantes claimed that defendant NWFM “filed a false sworn declaration in

the bankruptcy proceeding,” but Cervantes failed to specify the contents of the

declaration, or explain in what way the declaration was false. Cervantes’

implausible theory that the defendants conspired to conceal from the bankruptcy

court a settlement agreement that would have revealed a plan to decrease the value

of the defendants’ own collateral was similarly unsupported by specifics.

The district court did not err in dismissing Cervantes’ discrimination claims.

Cervantes alleged “no facts supporting [its] conclusion that the [defendants’]

actions were driven by discrimination.” In “the face of [the defendants’] obvious

2 That the defendants informed Cervantes that it would face “immediate problems,” if it did not pay its debts was not extortion but a demand for lawful payment of an overdue obligation. “Threats of economic harm made to obtain property from another, are not generally considered ‘wrongful,’” as required to establish RICO liability, “where the alleged extortioner has a legitimate claim to the property obtained.” Levitt v. Yelp! Inc., 765 F.3d 1123, 1130 (9th Cir. 2014) (citation and internal quotation marks omitted).

3 explanations for their actions in attempting to collect payment from [Cervantes] for

outstanding debts, [Cervantes] offered only conclusory allegations [of

discrimination].”

2. Judicial bias

Cervantes’ claims of judicial bias are unavailing. Cervantes fails to offer

evidence that the district judge’s “impartiality might reasonably be questioned.”

Pau v. Yosemite Park and Curry Co., 928 F.2d 880, 884 (9th Cir. 1991).

Cervantes also failed to move for disqualification below. See E & J Gallo Winery

v. Gallo Cattle Co., 967 F.2d 1280, 1295 (9th Cir. 1992). Indeed, Cervantes

appears to rely entirely on the judge’s adverse rulings in claiming bias, and we

have held that judicial rulings alone “almost never constitute valid basis for a bias

or partiality motion.” United States v. Hernandez, 109 F.3d 1450, 1454 (9th Cir.

1997) (citation omitted).

3. Rule 11 sanctions

We review for abuse of discretion the district court’s decision to impose

Rule 11 sanctions. Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405 (1990).

Rule 11 prohibits attorneys from filing complaints for “any improper purpose, such

as to harass, cause unnecessary delay, or needlessly increase the cost of litigation.”

Fed. R. Civ. P. 11(b)(1). “The district court is best acquainted with the local bar’s

litigation practices and thus best situated to determine when a sanction is warranted

4 to serve Rule 11’s goal of specific and general deterrence.” Cooter, 496 U.S. at

404.

The district court did not abuse its discretion in ordering sanctions “to deter

[Webb and Stafne] from again filing such a baseless lawsuit.” Webb and Stafne

began this lawsuit in district court by filing a 337-page complaint asserting 60

claims for relief against over 30 defendants. Webb and Stafne filed nearly 1000

pages of complaint papers in total, including a 143-page First Amended Complaint

accompanied by a 469-page RICO case statement. The district court described the

original complaint as a “quagmire of wordy and repetitious verbiage.”

Webb and Stafne’s filings were “both baseless and made without a

reasonable and competent inquiry.” Townsend v. Holman Consulting Corp., 929

F.2d 1358, 1362 (9th Cir. 1990) (en banc). Webb and Stafne have been litigating

on behalf of Cervantes against the defendants for over a decade in the bankruptcy

and district courts, and in this litigation have consistently failed to support their

claims with specific facts. The defendants have spent “hundreds of thousands of

dollars in legal fees” defending against Webb and Stafne’s allegations. The Wyles

and Deere defendants complied with Rule 11’s safe harbor requirements. And the

district court notified Webb and Stafne in December, 2014 that “they may be held

liable for unreasonably and vexatiously multiplying the proceedings of this case.”

5 Webb and Stafne subsequently asserted claims in their Second Amended

Complaint that were plainly barred by applicable statutes of limitations.3

Webb and Stafne claim that the district court abused its discretion in limiting

their Second Amended Complaint to thirty pages, but fail to identify facts that they

would have alleged to support their allegations had they been given more space.4

Even in 30 pages, they should have been able to state the key predicate facts to

support their RICO claims, and their prior prolix complaints lacked such facts.

Webb and Stafne were warned repeatedly that they could face sanctions if they

failed to allege specific facts to support their claims, and they failed to furnish such

specifics in nearly 1000 pages of complaint papers.

4. Conduct beyond the Second Amended Complaint and amount of fees

We review for abuse of discretion the district court’s decision to award

attorney’s fees as part of a Rule 11 sanction. Cooter, 496 U.S. at 405. “Generally,

a district court’s order on attorney’s fees may be set aside if the court fails to state

reasons for its decision.” Mattel, Inc. v. Walking Mountain Prods., 353 F.3d 792,

815 (9th Cir. 2003). And “Rule 11 sanctions are limited to ‘paper[s]’ signed in

3 We deny the Wyles’ request to sanction Webb and Stafne again on appeal. 4 Webb and Stafne’s argument that they were “not afforded due process before the imposition of sanctions . . . itself borders on the frivolous.” Buster v. Greisen, 104 F.3d 1186, 1190 (9th Cir. 1997). Webb and Stafne received “notice that the court [was] considering sanctions and [had] an opportunity to be heard in opposition.” Id. Due process required no more. Pan-Pacific and Low Ball Cable Television Co. v. Pacific Union Co., 987 F.2d 594, 597 (9th Cir. 1993).

6 violation of the rule. Conduct in depositions, discovery meetings of counsel, oral

representations at hearings, and behavior in prior proceedings do not fall within the

ambit of Rule 11.” See Christian v. Mattel, Inc., 286 F.3d 1118, 1131 (9th Cir.

2002).

Here, the district court failed to adequately explain its reasons for awarding

$18,744.00 to the Wyles defendants, and $111,771.53 to the Deere defendants.

The record does not illuminate why these amounts were appropriate; notably, the

sanctions award includes fees incurred prior to the filing of the Second Amended

Complaint, and incurred for issues on which Cervantes prevailed. Because the

district court awarded fees that did not result from the Second Amended Complaint

and did not explain why the sanction it awarded was “limited to what suffices to

deter” frivolous filings in the future, Fed. R. Civ. P. 11(c)(4), we must vacate the

district court’s attorney’s fees award. Id. We remand for further explanation

regarding the basis, amount, and reasonableness of the attorney’s fees.

AFFIRMED in part, VACATED in part, and REMANDED. Each party

shall bear its own costs and fees on appeal.

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