Unreported / Non-Citable
Background
LA Tech and Consulting, LLC, a California limited liability company, sued American Express Company under California Penal Code section 496(c), alleging that American Express knowingly concealed stolen property. The dispute concerned funds and transactions that LA Tech said were stolen. The appeal came from the Central District of California, where District Judge David O. Carter presided, and was argued and submitted in Pasadena on September 17, 2026.
The district court granted American Express's late-filed motion for summary judgment, concluding in part that LA Tech had not produced evidence showing American Express had actual knowledge that the property was stolen. LA Tech appealed that judgment and challenged the district court's acceptance of the late motion. American Express, in turn, sought sanctions under Federal Rule of Appellate Procedure 38 and 28 U.S.C. sections 1912 and 1927.
The Court’s Holding
The Ninth Circuit first held that the district court did not abuse its discretion by considering the late summary-judgment motion without making an on-the-record excusable-neglect determination. Rule 6(b)(1)(B) permits an extension for good cause when a party's failure to act resulted from excusable neglect. No precedent barred treating the late filing as a request to modify a deadline calculated under Rule 6(a)(1)(C), and LA Tech showed no prejudice to its ability to litigate the merits. The panel also reasoned that American Express's miscalculation could reasonably constitute excusable neglect because a distinctive Central District local rule governed the deadline.
On the merits, the panel explained that section 496(c) requires actual knowledge that property was stolen, not merely circumstances suggesting that a defendant should have known. LA Tech offered no direct evidence of actual knowledge and relied instead on inference. Its possession-plus-slight-corroboration authorities were distinguishable because American Express plausibly explained its skepticism: LA Tech had not alerted Chase Bank and waited two years after the alleged theft to alert American Express. Evidence that American Express associated the transactions with Mr. Domah while reporting them under Mr. Gamzeletova's name did not necessarily establish fraud, because cardholder and payment-beneficiary names can differ. That evidentiary failure was dispositive, so the court did not address LA Tech's other arguments.
The court denied sanctions. American Express could not use an appellate sanctions motion to punish conduct before the district court, because each court sanctions conduct before it; that denial was without prejudice to a district-court motion. Nor were LA Tech's appellate arguments wholly without merit: it correctly calculated the motion deadline, identified circumstances in which express findings are required, made reasonable arguments about Mr. Anand's testimony, and advanced an actual-knowledge theory the Ninth Circuit had previously found sufficient at the pleading stage. The judgment was affirmed, and sanctions were denied without prejudice to renewal in district court.
Key Takeaways
- A section 496(c) claimant must establish actual knowledge that property was stolen; a mismatch between authorized-cardholder and payment-beneficiary names does not necessarily supply that proof.
- A district court may accept a late summary-judgment motion under Rule 6(b)(1)(B) without making an express on-the-record excusable-neglect finding in every case.
- The unusual local deadline rule supported the conclusion that American Express's miscalculation could reasonably amount to excusable neglect.
- An appellate court generally will not sanction district-court conduct through a motion filed on appeal, although the requesting party may pursue sanctions in the district court.
- The failure of LA Tech's knowledge evidence resolved the appeal without requiring the panel to address its remaining arguments.
Why It Matters
The unpublished memorandum separates the demanding actual-knowledge element of California's stolen-property statute from suspicion based on irregular transaction records. It also illustrates how excusable neglect, local scheduling rules, and the absence of demonstrated prejudice can preserve a district court's discretion to consider an untimely dispositive motion, and it confirms that a plaintiff's failure on one necessary element is dispositive without reaching the remaining arguments.
The sanctions ruling draws a practical boundary between appellate and district-court conduct while emphasizing that an unsuccessful appeal is not necessarily sanctionable. LA Tech's deadline calculation and its previously viable pleading-stage theory helped show that its positions were not wholly without merit, and the denial without prejudice leaves American Express free to seek sanctions in the district court for conduct there.