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Desert Palace, Inc. v. Michael

United States District Court, D. Nevada

January 11, 2018

DESERT PALACE, INC., d/b/a CAESARS PALACE, Plaintiff,
v.
ANDREW P. MICHAEL, Defendant.

          ORDER AND REPORT AND RECOMMENDATION

          GEORGE FOLEY, JR. United States Magistrate Judge

         This matter is before the Court on Plaintiff's Motion for Discovery Sanctions (ECF No. 124), filed on November 27, 2017. Defendant filed an Opposition (ECF No. 132) on December 11, 2017 and Plaintiff filed a Reply (ECF No. 134) on December 18, 2017.

         BACKGROUND

         Following the District Judge's June 22, 2017 Order (ECF No. 77) granting summary judgment in Plaintiff's favor on its breach of contract claim, the Court reopened discovery. See Scheduling Order (ECF No. 87). Thereafter, Plaintiff served Defendant with an amended notice of deposition, which was to take place in Las Vegas, Nevada on October 20, 2017. This was Plaintiff's second attempt at deposing Defendant Michael, who had failed to appear at a previously scheduled deposition on December 13, 2016. See Motion to Compel (ECF No. 44).

         In response to the amended notice of deposition, Defendant Michael filed a motion for protective order on September 29, 2017. See ECF No. 111. The Court held a hearing on Defendant's motion on October 16, 2017 and denied the same. Based on the Court's ruling, Plaintiff proceeded with the October 20, 2017 deposition date. Defendant Michael again failed to appear. As a result, Plaintiff now seeks sanctions against Defendant for his failure to appear at the October 20, 2017 and December 13, 2016 depositions. Plaintiff argues that Defendant's conduct has prevented it from obtaining testimony from Defendant that would support its claims against him and has caused Plaintiff to incur unnecessary attorney's fees and costs associated with the depositions and related motion practice. Motion for Sanctions (ECF No. 124), 4.

         DISCUSSION

         Rule 37(b) of the Federal Rules of Civil Procedure provides the court with a wide range of sanctions for a party's failure to adequately engage in discovery or comply with discovery orders. “The Rule provides a panoply of sanctions, from the imposition of costs to entry of default.” United States v. Taylor, 166 F.R.D. 356, 363 (M.D. N.C. ), aff'd, 166 F.R.D. 367 (M.D. N.C. 1996). “Discovery sanctions serve the objectives of discovery by correcting for the adverse effects of discovery violations and deterring future discovery violations from occurring.” Taylor v. Illinois, 484 U.S. 400, 425 (1988). The Ninth Circuit reviews a district court's sanction order under an abuse of discretion standard. Sigliano v. Mendoza, 642 F.2d 309 (9th Cir. 1981); See also United States v. Sumitomo Marine & Fire Ins. Co., 617 F.2d 1365, 1369 (9th Cir. 1980); David v. Hooker, Ltd., 560 F.2d 412, 418-19 (9th Cir. 1977); 6 J. Moore, Federal Practice s 37.08 (2d ed. 1976). Thus, the district court has great latitude in imposing sanctions under Rule 37. Lew v. Kona Hosp., 754 F.2d 1420, 1425-26 (9th Cir. 1985).

         Rule 37(d)(1) specifically authorizes a court to issue sanctions when a party or its representative, or a person designated under Rule 30(b)(6) or 31(a)(4), fails to appear for that person's deposition. Fed.R.Civ.P. 37(d)(1)(A)(i). Such sanctions may include (i) directing that the matters embraced in the order or other designated facts be taken as established for purposes of the action, as the prevailing party claims, (ii) prohibiting the disobedient party from supporting or opposing designated claims or defenses, or from introducing designated matters into evidence, and (iii) ordering the disobedient party to pay the reasonable expenses (including attorney fees) caused by the party's failure to appear. See Fed. R. Civ. P. 37(d)(3). The sanctions must, however, bear a reasonable relationship to the subject of discovery that was frustrated by the sanctionable conduct. Navellier v. Sletten, 262 F.3d 923, 947 (9th Cir.2001), cert. denied sub nom., McLachlan v. Simon, 536 U.S. 941, 122 S.Ct. 2623, 153 L.Ed.2d 806 (2002). Such sanctions “are appropriate only in ‘extreme circumstances' and where the violation is ‘due to willfulness, bad faith, or fault of the party.'” Fair Housing of Marin v. Combs, 285 F.3d 899, 905 (9th Cir.), cert. denied, 537 U.S. 1018, 123 S.Ct. 536, 154 L.Ed.2d 425 (2002) (citations omitted); Computer Task Group, Inc. v. Brotby, 364 F.3d 1112, 1115 (9th Cir.2004) (per curiam). “Disobedient conduct not shown to be outside the litigant's control meets this standard.” In re Phenylpropanolamine (PPA) Products Liability Litig., 460 F.3d 1217, 1233 (9th Cir.2006) (citations omitted).

         Further, in deciding whether to grant a motion for sanctions under Rule 37(b)(2)(A) for noncompliance with discovery, the Court should consider five factors: “(1) the public's interest in expeditious resolution of litigation; (2) the court's need to manage its docket; (3) the risk of prejudice to [the party seeking sanctions]; (4) the public policy favoring disposition of cases on their merits; and (5) the availability of less drastic sanctions.” Rio Props., Inc. v. Rio Int'l Interlink, 284 F.3d 1007, 1022 (9th Cir.2002); Computer Task Group, Inc., 364 F.3d at 1115. “Where a court order is violated, the first two factors support sanctions and the fourth factor cuts against a default. Therefore, it is the third and fifth factors that are decisive.” Payne v. Exxon Corp., 121 F.3d 503, 507 (9th Cir.1997); Computer Task Group, Inc., 364 F.3d at 1115.

         Plaintiff seeks the following sanction order against Defendant Michael based on his failure to appear for two scheduled depositions:

(1) ordering facts as established that Defendant Michael did not have funds sufficient to cover the credit advances that he requested and received from Caesars on September 20-21, 2014, the detail of such facts which constitute fraud upon Caesars;
(2) prohibiting Defendant Michael from supporting his defenses to or opposing Caesars' fraud claim or from introducing any evidence to oppose Caesars' fraud claim; and
(3) awarding Caesars' its reasonable expenses (including attorneys' fees) for two depositions where Defendant Michael failed to appear, as well as the need to file two (2) discovery motions related to such failures.

         Motion (ECF No. 124), at 3:9-17. Defendant argues that these essentially dispositive sanctions are not warranted. Specifically, Defendant argues that at the time of the October 20, 2017 deposition he had filed an appeal of the District Court's Order (ECF No. 77), which acted as a stay of this case even though ...


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