United States District Court, D. Nevada
REPORT AND RECOMMENDATION OF U.S. MAGISTRATE
Report and Recommendation is made to the Honorable Robert C.
Jones, United States District Judge. The action was referred
to the undersigned Magistrate Judge pursuant to 28 U.S.C.
§ 636(b)(1)(B) and LR IB 1-4. Before the court is
plaintiffs' Seiko Epson Corporation and Epson America,
Inc., (“plaintiffs”) renewed motion to compel and
for terminating sanctions (ECF No. 91), regarding defendants
ART LLC, AF LLC, Inkredible LLC LLC, Andriy Kravchuk, Artem
Koshkalda, Igor Bielov, and Vitalii Maliuk (collectively,
“defendants”). Defendants opposed (ECF No. 94) and
plaintiffs replied (ECF No. 98). The court has thoroughly
reviewed the record and recommends that plaintiffs'
motion be granted.
26, 2017, plaintiffs filed an emergency motion to compel and
for sanctions. (ECF No. 80.) Plaintiffs motion was based on
“defendants' continued and unexcused discovery
failures, ” such as ignoring court orders, failing to
appear in court, missing discovery deadlines, failing to
provide even basic discovery, and generally abusing the
discovery process. (Id. at 1-5.) On June 8, 2017,
this court held a hearing on the emergency motion for
sanctions. (ECF No. 84.) The motion was granted in part and
denied in part, and defendants were ordered to provide
various discovery responses and pay $5, 554.79 in
attorney's fees and costs to plaintiffs. (ECF No. 84.)
16, 2017 plaintiff filed another motion to compel and for
sanctions (ECF No. 85). Plaintiffs' motion related to
depositions of defendant Kravchuk and defendants'
continued, willful noncompliance with court orders and
discovery obligations. (ECF No. 85.) Plaintiffs argued that
defendants are “willfully withholding relevant evidence
which clearly prejudices plaintiffs and supports the relief
requested, ” and defendants are “simply abusing
the discovery process to delay a final adjudication.”
(Id. at 6.) This court granted the motion and
ordered that: 1) defendants pay $16, 146.50 to plaintiffs; 2)
defendants be precluded from seeking any offset as to damages
using documents or information not disclosed or produced; 3)
a factual finding of willfulness is entered against
defendants as to plaintiffs' trademark claims; 4) Andrey
Ushakov is to be produced for deposition in the United States
on shortened notice; and 5) if defendants fail to comply with
the court's order, the court will issue a report and
recommendation that all of defendants' answers be
stricken and their defaults entered. (ECF No. 88.) On June
28, 2017, plaintiffs filed a renewed motion to compel and for
terminating sanctions due to defendants' continued
failure to comply with this court's prior orders. (ECF
have accurately recounted the history of defendants'
litigation tactics (See ECF Nos. 80, 85, 91).
Defendants have repeatedly disobeyed court orders, applicable
rules, and plaintiffs' properly propounded discovery
requests. Defendants continue to withhold evidence directly
related to the issues of this case and have repeatedly shown
their intention to continue to violate court orders and
ignore discovery obligations. Plaintiffs now seek
case-terminating sanctions against defendants for their
continued bad faith in the face of court orders, admonitions,
DISCUSSION AND ANALYSIS
seek case terminating sanctions based upon two alternative
grounds: (1) Fed.R.Civ.P. 37(b)(2)(A)(iii)-(vi) and Local
Rule IA 11-8; and (2) the court's inherent power to enter
a default judgment to ensure the orderly administration of
justice and the integrity of its orders. Having heard oral
argument and having reviewed all documents in the record, the
court finds such terminating sanctions appropriate.
Fed.R.Civ.P. 37(b) and Local Rule IA 11-8
37(b) and Local Rule IA 11-8 provides for sanctions where a
party fails to comply with a court order. FRCP
37(b)(2)(A)(iii)-(vi) states that if a party disobeys a
discovery order the court may issue an order striking
pleadings, staying proceedings, dismissing the action, or
rendering a default judgment against the disobedient party.
LR IA 11-8(d) states that the court may impose any and all
appropriate sanctions on a party who fails to comply with any
order of this court.
argue that due to defendants' willful violation of
numerous court orders, such as their failure to appear in
person for hearings and failure to produce complete discovery
responses and requests, the Federal and Local Rules allow the
Court to enter terminating sanctions. (ECF No. 91 at 7.) The
court agrees that terminating sanctions are appropriate at
this time. Defendants were specifically admonished in this
court's June 19, 2017 order, that if they again failed to
comply, this court would issue a report and recommendation
that all of defendants' answers be stricken and their
defaults entered. (See ECF No. 88.) Due to
defendants' repeated disobedience and failure to comply
with this court's orders, it is appropriate to strike
defendants' answers and enter default judgments against
The Court's Inherent Power to Sanction
pursuant to the court's inherent power to sanction,
dismissal is an available sanction when “a party has
engaged deliberately in deceptive practices that undermine
the integrity of judicial proceedings” or “has
willfully deceived the court and engaged in conduct utterly
inconsistent with the orderly administration of
justice.” Leon v. IDX Systems Corp., 464 F.3d
951, 968 (9th Cir. 2006), citing Anheuser-Busch, Inc. v.
Natural Beverage Distribs., 69 F.3d 337, 348 (9th Cir.
1995). The district court is required to consider the
following factors before imposing the “harsh
sanction” of dismissal: “(1) the public's
interest in the expeditious resolution of litigation; (2) the
court's need to manage its dockets; (3) the risk of
prejudice to the other party; (4) the public policy favoring
disposition of cases on their merits; and (5) the
availability of less drastic sanctions.” Hester v.
Vision Airlines, Inc., 687 F.3d 1162, 1169
(9th Cir. 2012) (quotation omitted).
The public's interest in the expeditious resolution of
and expeditious resolution of disputes is of great importance
to the rule of law ... [and b]y the same token, delay in
reaching the merits ... is costly in money, memory,
manageability, and confidence in the process.”
Allen v. Bayer Corp. (In re: Phenylpropanolamine (PPA)
Prods. Liab. Litig.), 460 F.3d 1217, 1227 (9th Cir.
2006). Here, defendants' behavior and continued failure
to comply with several court orders have greatly delayed this
matter and their behavior is inconsistent with the purpose of
the Federal Rules ...