Category: Rule 37 Sanctions

Plaintiff Given One More Chance – Rule 37 Sanctions Denied


In Rhodes v. Hilton Resorts Corporation, LLC 2-19-cv-00938-JAD-EJY, the defendant served discovery requests on the plaintiff. Plaintiff did not answer any of them and the defendant moved for Rule 37 sanctions and requested dismissal of the case.

Plaintiff has not complied with her discovery obligations pursuant to Fed. R. Civ. P. 33 or 34. Plaintiff’s responses to discovery propounded by Defendants was untimely (resulting in a waiver of all objections), incomplete, and misleading. After a meet and confer in which Plaintiff’s Counsel did not disagree with Defendants’ position, Plaintiff continued to ignore her duties to engage in discovery in a timely and appropriate manner.

The Court is empowered with wide discretion, pursuant to Fed. R. Civ. P. 37, to fashion a sanction for Plaintiff’s repeated discovery failures. When a party believes its opponent has failed to timely comply with the requirements of disclosure, that party may move for sanctions under Rule 37(c). Rule 37 “gives teeth” to the disclosure requirements of Rule 26(e). Yeti by Molly, Ltd. v. Deckers Outdoor Corp.,259 F.3d 1101, 1106 (9th Cir. 2001). District courts are entrusted with wide latitude when exercising their discretion to impose Rule 37(c) sanctions. Id.

Defendants are correct that dismissal of Plaintiff’s Complaint is severe. In fact, even in the face of bad faith or willfulness courts are loathe to enter a case-terminating sanction in the first instance. See Cooley v. Leung, Case No. 2:10-cv-1138-RLH-RJJ, 2013 WL 209730, *1-2 (D. Nev. Jan. 16, 2013). Here, Plaintiff’s conduct is egregious; however, the Court considers alternative sanctions before it will order dismissal of Plaintiff’s Complaint. Specifically, the Court provides Plaintiff one opportunity to change her course and participate timely and in good faith in the case that she brought to Court. Plaintiff’s failure to obey this Court Order will result in an Order to Show Cause why her case should not be dismissed.

Comment: the court granted the motion to compel and gave the plaintiff one more chance to comply with discovery.

Ed Clinton, Jr.

Litigant Should Have Moved to Compel – Sanctions Denied


This case, Finato v. Fink, 18-55044, Ninth Circuit February 18, 2020, is unpublished but does illustrate an important point. Finato sued his former lawyers for legal malpractice. They obtained summary judgment against him. He claimed that the district court erred in rejecting his Rule 37 sanctions motion because the defendant disclosed insufficient information about its attorney fees. The trial court and the Ninth Circuit disagreed.

The district court did not err by denying Finato’s motion for Rule 37 sanctions. We review a district court’s decision on “the imposition of discovery sanctions under Rule 37 for abuse of discretion,” Fjelstad v. Am. Honda Motor Co., 762 F.2d 1334, 1337 (9th Cir. 1985), giving “particularly wide latitude to the district court’s discretion,” Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1106 (9th Cir. 2001). Under Rule 26(a)(1)(A)(iii), a party must provide in its initial disclosures “a computation of each category of damages claimed by the disclosing party—who must also make available for inspection . . . the documents or other evidentiary material . . . on which each computation is based.” If it does not, the party may be subject to Rule 37 sanctions, “unless the failure to disclose is `substantially justified or harmless.'” Ingenco Holdings, LLC v. Ace Am. Ins. Co., 921 F.3d 803, 821 (9th Cir. 2019) (quoting Fed. R. Civ. P. 37(c)(1)).

Finato moved for sanctions on the ground that KFA provided no notice of its claimed fees or how they were computed in its Rule 26 disclosures, but instead presented them for the first time at trial. KFA’s Rule 26 disclosures were brief and not at all detailed. But if Finato believed the computations needed to be more specific, he should have filed a motion to compel, not a Rule 37 motion for sanctions. Cf. Patelco Credit Union v. Sahni, 262 F.3d 897, 913 (9th Cir. 2001) (finding the defendants’ Rule 37 motion was, “in essence, a motion to compel discovery from plaintiffs,” and thus any “failure to obtain the requested documents [was] due to [defendants’] own lack of diligence” in not filing a motion to compel). In addition, Finato signed the final pretrial order, which explicitly stated that “[a]ll disclosures under [Rule] 26(a)(3) have been made.” Even if KFA violated Rule 26, any failure to disclose was harmless. The court had all the evidence before it at trial, including KFA’s estimates and the witnesses’ testimonies regarding the hours they worked, and Finato failed to show how not having this information prior to trial harmed his case. Thus, the district court did not abuse its discretion in denying Finato’s Rule 37 motion for sanctions.

The take-away here is that if you receive disclosures which are insufficient you must move to compel and obtain a court order requiring more information. Then, when the other party fails to comply with the court order, you can move for Rule 37 sanctions.

Edward X. Clinton, Jr.

Undisclosed Expert Opinion Survives Rule 37 Motion


The case, Centrella v. Ritz-Craft Corporation, 16-729- cv, decided by the Second Circuit on November 5, 2019 (unpublished) allowed a party to present an undisclosed opinion of its expert at trial despite a motion to exclude that opinion. The district court took active measures to allow the other side to cross-examine and rebut the opinion. The Second Circuit affirmed the judgment.

Ritz-Craft argues that the district court erred by permitting the Centrellas’ expert, James Bradley, to testify regarding an opinion that Bradley did not include in his expert report. The district court responded to Bradley’s undisclosed testimony by permitting Ritz-Craft to cross-examine Bradley on his undisclosed testimony and allowing Ritz-Craft’s expert to rebut Bradley’s undisclosed testimony.

Federal Rule of Civil Procedure 37 permits the court to sanction a party that fails to make the disclosures that Federal Rule of Civil Procedure 26 requires. Fed. R. Civ. P. 37(c)(1). “A district court has wide discretion to impose sanctions, including severe sanctions, under Federal Rule of Civil Procedure 37, and its ruling will be reversed only if it constitutes an abuse of discretion.” Design Strategy, Inc. v. Davis, 469 F.3d 284, 294 (2d Cir. 2006). We consider four factors to determine whether the district court’s Rule 37 sanctions in this case were an abuse of discretion: “(1) the party’s explanation for the failure to comply with the disclosure requirement; (2) the importance of the testimony . . .; (3) the prejudice suffered by the opposing party as a result of having to prepare to meet the new testimony; and (4) the possibility of a continuance.” Patterson v. Balsamico, 440 F.3d 104, 117 (2d Cir. 2006) (alteration omitted) (internal quotation marks omitted). The Centrellas have not offered any explanation for their failure to disclose Bradley’s opinion prior to his testimony, and the testimony, an expert’s opinion that Ritz-Craft modular homes could not meet Vermont energy code because of a design flaw, was certainly important to the case. These factors support a strong sanction. However, Ritz-Craft agrees in its brief on appeal that the trial court’s “effort[] in permitting Ritz-Craft’s experts to testify on this issue was sufficient to cure any error,” Appellant’s Br. at 30, and there is no indication that Ritz-Craft sought a continuance to meet the testimony. Given these considerations, the district court acted within its substantial discretion by permitting Ritz-Craft to cross-examine Bradley on his undisclosed testimony and permitting Ritz-Craft’s expert to offer an opinion in response.

This is an interesting opinion, which cannot be cited because it was unpublished. It does offer a pathway for a lawyer who mistakenly omits an opinion to correct that error at trial.

Ed Clinton, Jr.

http://www.clintonlaw.net

You Gotta Warn Em First


In Smith v. Fischer, 13-cv-6127 (September 30, 2019), the defendant moved for Rule 37 sanctions – specifically dismissal when the plaintiff did not comply with discovery requests.

The result – motion denied because the court had not given the plaintiff a warning.

Under Rule 37(b), a court may dismiss a case or impose other sanctions if a party does not obey an order to provide or permit discovery. Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99, 106-07 (2d Cir. 2002). In evaluating whether to dismiss a case for this reason, a court considers: “1) the willfulness of the non-compliant party or the reason for noncompliance; 2) the duration of the period of non-compliance; 3) whether the non-compliant party had been warned of the consequences of noncompliance; and 4) the efficacy of lesser sanctions.” Ferrer v. Fischer, No. 9:13-CV-0031 NAM/ATB, 2014 WL 5859139, at *2 (N.D.N.Y. Nov. 12, 2014) (citation omitted). Dismissal is a “harsh remedy” to be used “only in extreme situations.” Id. (citation omitted).

The Court declines to analyze each factor here because it finds that the third factor precludes dismissal; that is, Plaintiff has not been warned that his non-compliance with Defendants’ discovery demands could result in the dismissal of his case. The Second Circuit has repeatedly affirmed that courts may not dismiss a pro selitigant’s case under Rule 37 without warning him of the consequences of not complying with discovery obligations. See, e.g., S.E.C. v. Setteducate, 419 F. App’x 23, 24 (2d Cir. 2011) (“[e]ven the most severe Rule 37 sanctions may be imposed even against a plaintiff who is proceeding pro se, so long as a warning has been given that noncompliance can result in a sanction”) (quotation marks omitted and emphasis added) (summary order); Agiwal v. Mid Island Mortg. Corp.,555 F.3d 298, 302 (2d Cir. 2009) (same).

Consistent with this settled authority, courts routinely deny motions to dismiss based on a pro se litigant’s non-compliance with discovery orders where the litigant had not been warned in advance that his non-compliance could result in dismissal. See, e.g., Velazquez v. Vermont Dep’t of Corr., No. 2:07 CV 244, 2009 WL 819445, *2 (D. Vt. 2009) (declining to order dismissal where pro se plaintiff did not appear for a deposition or respond to written discovery requests but “ha[d] not yet been warned that his failure to participate in discovery might result in the dismissal of his case”); Burke v. Miron, No. 3:07CV1181(RNC), 2009 WL 952097, *1 (D. Conn. 2009) (declining to dismiss the pro se plaintiff’s case for non-compliance with discovery, even though he was “a prolific and experienced litigator” because “Second Circuit precedent require[es] a clear warning to pro selitigants” that their case may be dismissed). Accordingly, the Court denies Defendants’ motion to dismiss this case.

Comment: A warning is required before you can move for dismissal.

Edward X. Clinton, Jr.

Rule 37 Dismissal Sanction Unavailable In Absence of A Court Order Compelling Discovery


The case of King v. Harwood, 15-cv-762 WD Kentucky September 30, 2019 presents an interesting question – can a defendant obtain dismissal of a case where the plaintiff refuses to answer questions in her deposition? Here the court answered this question with a “No.”

King brought a civil rights case against Harwood after she was exonerated of a murder. During her deposition, King refused (on Fifth Amendment grounds) to answer certain questions concerning bullet holes in her floor. The Defendant moved under Rule 37 for the dismissal of the case because King did not answer those questions.

The Magistrate and the District Judge rejected the Rule 37 motion because Harwood never moved to compel. Because he did not move to compel, there was no court order requiring King to answer the questions. Because she did not violate a court order, the Rule 37 sanction of dismissal was not available.

Fed. R. Civ. P. 37(b) provides that if a party “fails to obey an order to provide or permit discovery, including an order under Rule 26(f), 25, or 37(a), the court where the action is pending may issue further just orders.” Fed. R. Civ. P. 37(b)(2)(A). Such “just orders” may include “dismissing the action or proceeding in whole or in part.” Id. at 37(b)(2)(A)(v). However, the Sixth Circuit has stated that “[b]y its terms, Rule 37(b) requires a party seeking a sanction of default against a party to secure a court order compelling disclosure or discovery.” Burley v. Gagacki, 729 F.3d 610, 618 (6th Cir. 2013). In Burley, the Sixth Circuit affirmed the district court’s denial of a motion for a sanction of default under Rule 37, because the moving party had never moved to compel discovery even though “it was apparent that [the opposing party] did not fully respond to the interrogatories.” Id. at 618. That being the case, there was no violation of a court order to justify any sanction under Rule 37. Id.Further, the Sixth Circuit has made clear that dismissal is the sanction of last resort. See id.; Beil v. Lakewood Eng’g and Mfg. Co., 15. F.3d 546, 552 (6th Cir. 1994).

The court also determined that the bullet holes found in the floor of King’s home were not relevant to the lawsuit. The bullet holes were not fired by the same gun used in the murder and were found years after the murder had occurred.

Comment: if you wish to obtain Rule 37 sanctions, you should move to compel and obtain an order compelling discovery. Once that order is violated, you can move for Rule 37 sanctions.

If you have any questions about Rule 37 or federal procedure, do not hesitate to contact me.

Edward X. Clinton, Jr.

http://www.clintonlaw.net

Wrongful Discharge Case Dismissed Due to Rule 37 Violations


In February 2019, the Fourth Circuit affirmed the dismissal of all claims in the case Rangarajan v. John Hopkins University, 917 F.3d 218 (2019) a rare published opinion affirming Rule 37 sanctions.

Rangarajan was a nurse practitioner at Johns Hopkins before she was terminated. She sued for wrongful discharge and discrimination. During discovery she certified that her production was complete and Johns Hopkins moved for summary judgment. That’s when things got out of hand.

After discovery closed in September 2016 as directed in the district court’s scheduling order, Johns Hopkins filed a motion for summary judgment in both consolidated actions, based on the record that discovery had produced. Johns Hopkins contended that summary judgment in its favor was justified by “overwhelming evidence that Ms. Rangarajan did not satisfy the basic requirements of her job[ ] and that there were legitimate, non-discriminatory and non-retaliatory reasons for any adverse employment action that she allegedly suffered.”

In response to Johns Hopkins’ motion for summary judgment, Rangarajan took a number of steps to expand, embellish, alter, and recast her deposition testimony. First, she submitted a 51-page errata sheet to her deposition, proposing hundreds of edits to her testimony and justifying many of the changes by claiming that the court reporter had intentionally altered both the transcript and the audio 223*223 and video recording of her deposition. She stated:

The Court Reporters’ Office has informed me that they edited my video, audio and typed deposition transcripts. It is clear that key testimony is deleted, altered, cloned from various sound bites etc., to accomplish two things. 1. Change the testimony 2. To induce grammar mistakes thus making me sound as if I am speaking broken English.

She also sent an ex parte letter to the district court for the district judge’s “eyes only,” claiming similarly that the court reporter improperly edited her deposition.

Second, in support of her opposition to the summary judgment motion, Rangarajan filed a 54-page Declaration in which she introduced new allegations, attached 19 exhibits that had never before been produced during discovery, and revised testimony that allegedly contradicted her deposition testimony. While the district court did not find the Declaration to be “diametrically opposed” to Rangarajan’s statements in the deposition, it nonetheless concluded that reliance on the Declaration “would render the taking of [Rangarajan’s] deposition essentially useless.” Rangarajan’s opposition to Johns Hopkins’ motion for summary judgment was grounded mainly on her Declaration and not the evidence produced during discovery. As the district court noted, while Rangarajan cited her deposition testimony only 3 times in her opposition, she cited her subsequently filed Declaration “over 750 times.”

In addition, the newly disclosed exhibits revealed major failures by Rangarajan to produce documents requested of her during discovery. For instance, several exhibits — screenshots of Rangarajan’s emails — revealed her computer’s entire display showing retained copies of emails in two inboxes labeled “Jhmi” and “Jhmi 1,” and one of those inboxes contained 8,612 emails, most of which had never been produced during discovery; Rangarajan had only produced 1,658 documents during discovery.

Somehow Rangarajan filed four highly similar cases against Johns Hopkins. The District Court dismissed all of the lawsuits as Rule 37 sanctions and as sanctions for Rangarajan’s attempts to undermine the summary judgment process by changing her deposition testimony.

The Fourth Circuit affirmed the dismissal of the four lawsuits as a Rule 37 sanction. Part of the explanation is included here:

When reviewed it its totality, the record in this case reveals a totally dysfunctional performance by Rangarajan and her counsel, but mostly by her, as she acknowledged in her brief that “[t]hough [I] was, in fact, represented by an attorney, the court was well aware that [I] was in many ways acting without the benefit of counsel.”

To begin, Rangarajan commenced four actions, when only one was proper and would have sufficed, repeatedly reasserting claims that the district court had dismissed. After the district court denied her motion to replead qui tam claims in the first action, she nonetheless repleaded 228*228 them in the third action, and when the district court dismissed the third action, she refiled the same claims in the fourth action.

In the course of discovery, Rangarajan flagrantly failed to produce thousands of documents, several of which were core documents relating to her claims. She later produced some of those documents for the first time during the summary judgment process, because she thought she needed them to make her points. Also, after giving a daylong deposition, she sought to undermine and recant her testimony in a long, 54-page Declaration that, as the district court found, rendered her deposition essentially useless. Finally, she challenged the transcription of her deposition, claiming it was deliberately altered and recreated by the court reporter, a conclusion that the district court found to be conclusively false. In short, she rendered virtually useless the entire discovery process, in which the parties had invested substantial time and money.

During summary judgment, which required additional expenditures of time and money, Rangarajan relied almost exclusively on her Declaration, which had not been made part of the discovery record and which was often inconsistent with her deposition testimony, placing the summary judgment practice on an untenable and virtually useless footing.

In addition to these specifics, it was also apparent throughout the entire proceedings that, while Rangarajan was represented by an attorney, she refused to follow his advice and engaged in inappropriate actions, such as communicating arguments directly to the court ex parte and including substantive matters in her errata sheet. And the district court attributed this dysfunction between attorney and client to Rangarajan personally, a finding that Rangarajan has not disputed. As the court stated:

It [was] [Rangarajan] who continue[d] the attempt to support the unsupportable contention that the court reporting service made hundreds of alterations to her deposition video and transcript. It is clear that it was [Rangarajan] who authored the embellished narrative contained in her Declaration. It was [Rangarajan] who failed to turn over to her counsel documents that were clearly responsive to discovery requests and it [was] [Rangarajan] who misrepresented the amount of emails from her work email account that were stored on her home computer.

This opinion is an outlier because of the repeated violations of the rules by the plaintiff. I am also amazed that this behavior was tolerated by any attorney and, if anyone presented a situation remotely similar to this one, I would encourage the lawyer to withdraw from the case. Indeed, the lawyer is quite lucky he did not face professional sanctions or other consequences due to the failure to control his client.

Ed Clinton, Jr.

Plaintiff Sanctioned for Withholding Tape Recording


In Jarrell v. Shelter Mutual Insurance Co, 18 cv 183 KS-MTP (Southern District Mississippi, August 1, 2019, plaintiffs sued for insurance coverage after their home was damaged in a fire. Discovery began. Depositions were taken. Then it emerged that the plaintiffs had withheld a recording of a conversation between plaintiffs’ counsel and the insurance company’s adjuster. The recording was made surreptitiously.

In response to an interrogatory requesting any recordings, plaintiffs gave a non answer:

 Included was Interrogatory No. 9, which stated as follows:

State whether or not you, your attorney, anyone acting on your behalf or any other person has obtained any statement (whether signed or otherwise adopted by the person making it, or a stenographic, mechanical, electrical, or other recording, or a transcription) from any person concerning any occurrence or allegation or alleged damages which is a subject of this suit and, if the answer is in the affirmative, please identify each and every person giving such statement and the custodian of the statement.

On March 19, 2019, Plaintiffs answered Interrogatory No. 9 as follows:

Objection is made to Interrogatory No. 9 as the same would invade the work product and work efforts of Plaintiff’s attorneys. Plaintiffs personally have not obtained any written statements from anyone, expect those produced in discovery and already provided to Defendants and their attorneys from contractors, engineers and other person acting on behalf of Plaintiffs.

The insurance company moved for sanctions and requested the dismissal of the complaint.

The court held that the recording should have been turned over with the plaintiffs’ initial disclosures under Rule 26. Further, the failure to disclose the recording merited sanctions under Rule 37.

The court declined to dismiss the case and instead ordered the plaintiffs to pay the defendant’s reasonable attorney fees in bringing the motion. The court also ordered that the plaintiffs were precluded from using the deposition testimony of two witnesses who worked for the insurance company.

While the Court does not condone the belated production of the recording, the Court finds that dismissal of this action is not warranted in this case. Shelter argues that the recording undermines the allegations found in Plaintiffs’ complaint. A Rule 37 motion, however, is not the proper method to test the merits of Plaintiffs’ claims. Additionally, the prejudice caused by Plaintiffs’ failure to timely produce the recording can be cured by precluding Plaintiffs from using the deposition testimony of Haines and Cartledge and allowing their depositions to be retaken. See, Mason,229 F.R.D. at 537. The Court also finds that the desired deterrent effect can be achieved by a monetary sanction. See Griffin v. Javeler Marine Services, LLC,2016 WL 1559170, at *5 (W.D. La. Apr. 18, 2016).

The Court finds that Shelter should be awarded the reasonable attorney’s fees incurred in attending the depositions of Haines and Cartledge on May 30, 2019, and preparing the instant Motion. 

Comment: this is an interesting case as it involved recordings between an adjuster and the plaintiffs’ attorney. In my view, plaintiffs are lucky their case survived this underhanded action.

Ed Clinton, Jr.

http://www.clintonlaw.net