United States District Court, D. Nevada
CLAYTON A. LEWIS, et al., Plaintiffs,
CAESARS ENTERTAINMENT CORPORATION, et al., Defendants.
ORDERS AND REPORT & RECOMMENDATION
J. KOPPE UNITED STATES MAGISTRATE JUDGE.
before the Court is the third order for Defendant Bingli Yang
and her counsel (Aaron Aquino) to show cause why various
sanctions should not be imposed on them. Docket No. 77. On
November 9, 2018, the Court held a hearing on that order to
show cause and for Plaintiffs to prove up damages. Docket No.
and Defendant Yang have been employed as traveling poker
dealers. See, e.g., Compl. (Docket No. 1-1) at
¶¶ 10, 17. Plaintiffs claim Defendant Yang defamed
them for the intended purpose of interfering with their
future employment opportunities. See, e.g.,
id. at ¶¶ 17-48, 69-74. Plaintiffs allege
that Defendant Yang's tortious conduct was particularly
egregious in an encounter in March 2015, during which
Defendant Yang engaged in public outbursts in which she
accused Plaintiffs of, inter alia, theft. See
Id. at ¶¶ 19-20. Plaintiffs allege that
Defendant Yang has stated that she engaged in this conduct in
retaliation for Plaintiffs providing statements for a witness
against Defendant Yang in an earlier employment hearing.
See Id. at ¶ 17.
Yang appeared in this action. See, e.g., Docket No.
6 (joinder in notice of removal). Nonetheless, Defendant Yang
admitted through the discovery process the key facts
supporting Plaintiffs' claim, including that she
knowingly made false accusations against Plaintiffs for the
purpose of interfering with their employment opportunities.
See, e.g., Docket No. 56 at 6. On June 7, 2018,
summary judgment was entered against Defendant Yang on the
issue of liability. See Id. at 7.
7, 2018, United States District Judge Jennifer A. Dorsey also
ordered that a mandatory settlement conference be held.
Id. On June 8, 2018, the undersigned issued an order
setting that mandatory settlement conference (hereinafter,
“the August settlement conference”), and
establishing the requirements for that settlement conference.
Docket No. 57. One of those requirements was that each party
was required to submit a settlement statement containing
specified information. Id. at 2-3. The parties'
settlement statements were due by August 1, 2018.
See Docket No. 58 (advancing settlement conference
and deadline to submit settlement statements). The Court
FAILURE TO COMPLY WITH THE REQUIREMENTS SET FORTH IN
THIS ORDER WILL SUBJECT THE NON-COMPLIANT PARTY AND/OR
COUNSEL TO SANCTIONS UNDER FEDERAL RULE OF CIVIL PROCEDURE
Docket No. 57 at 3 (emphasis in original). The Court received
Plaintiffs' settlements statement, but, despite the above
warning, Defendant Yang and Mr. Aquino did not submit a
not received a settlement statement from Defendant Yang and
Mr. Aquino, on August 3, 2018, the Court ordered that they
submit a settlement statement by noon on August 6, 2018.
Docket No. 61. The Court again warned that
“[f]ailure to comply with this order may result in the
imposition of sanctions.” Id. Despite that
warning, Defendant Yang and Mr. Aquino did not submit a
still not received a settlement statement from Defendant Yang
and Mr. Aquino, on August 6, 2018, the Court provided them
one final opportunity to comply and ordered a settlement
statement be submitted by 10:00 a.m. on August 7, 2018.
Docket No. 62. The Court simultaneously ordered Defendant
Yang and Mr. Aquino to show cause why they should not be
sanctioned for violating the previous orders to submit a
settlement statement. Id. The Court also warned that
“FAILURE TO COMPLY WITH THIS ORDER MAY
RESULT IN THE INITIATION OF CONTEMPT
PROCEEDINGS.” Id. at 2. The
threat of sanctions arising out of the prior violations and
the warning against any further violation proved ineffective,
as Defendant Yang and Mr. Aquino still did not submit a
violation of the above orders resulted in the vacation of the
August settlement conference. Docket No. 63. It also resulted
in the issuance of a second order for Defendant Yang and Mr.
Aquino to show cause why they should not be sanctioned.
Docket No. 64. Mr. Aquino filed a preliminary response to the
two orders to show cause identifying health problems as the
cause for the noncompliance. Docket No. 67. Given the
underdeveloped nature of those representations, the Court
provided Defendant Yang and Mr. Aquino with an additional 30
days to file a complete response supported by declaration.
Docket No. 68. Notwithstanding the provision of a lengthy
extension, Defendant Yang and Mr. Aquino filed a further
response that included no additional detail. Docket No. 70.
Instead, they filed essentially the same response as before
that was supported this time by Mr. Aquino's declaration
stating only that:
Due to extreme illness as stated and recounted in this
response to myself and my family, deadlines in this case were
The inability to meet these deadlines were substantially
justified as the circumstances of the emergency were
unavoidable and unforeseeable.
Id. at 4. Because the further response continued to
be lacking, on September 17, 2018, the Court ordered Mr.
Aquino to appear for a show cause hearing to be held on
September 25, 2018. Docket No. 71. The Court also set that
hearing to explore the potential for resetting the settlement
conference. See Id. at 1 n.1. Mr. Aquino failed to
appear at that hearing. Docket No. 72; see also
Hearing Rec. (9/25/2018) at 3:16 - 3:17 p.m.
summary, as of late September, Defendant Yang and Mr. Aquino
had violated three orders to submit a settlement statement
and Mr. Aquino had violated an additional order to appear for
a show cause hearing. The Court gave them several
opportunities, but Defendant Yang and Mr. Aquino failed to
provide any reasonable justification for their violations of
these orders.Moreover, Mr. Aquino thwarted the
Court's ability to obtain a fuller explanation by
violating the order to appear for a show cause hearing.
See, e.g., Docket No. 76 at 3 n.2. Given the
circumstances, the Court ordered Defendant Yang and Mr.
Aquino to pay $3, 311 in attorney's fees by October 29,
2018. Id. at 5. The Court further ordered Mr. Aquino
to pay a fine of $2, 000 by October 29, 2018. Id.
The Court declined at that time to recommend default judgment
or to initiate contempt proceedings, but the Court issued
THE COURT EXPECTS STRICT COMPLIANCE MOVING FORWARD
WITH ITS ORDERS AND ALL GOVERNING RULES. FAILURE BY DEFENDANT
AND/OR MR. AQUINO TO COMPLY MAY RESULT IN THE IMPOSITION OF
SANCTIONS, UP TO AND INCLUDING, CASE-DISPOSITIVE SANCTIONS
AND CONTEMPT PROCEEDINGS. THERE WILL BE NO FURTHER
Id. (emphasis in original). The Court also reset the
settlement conference for November 5, 2018 (hereinafter,
“the November settlement conference”), and
ordered Defendant Yang to submit a settlement statement by
October 24, 2018. Id. at 6.
the August settlement conference, the November settlement
conference was doomed before it could even begin. Despite the
imposition of sanctions for past violations and the
Court's emphatic warning against further violations,
Defendant Yang and Mr. Aquino again failed to submit a
settlement statement as ordered. Docket No. 77. This fourth
failure to submit a settlement statement required the
vacation of the November settlement conference. Id.
at 2. It also resulted in the issuance of a third order to
show cause that required Defendant Yang and Mr. Aquino to
appear personally to explain why the latest failure to submit
a settlement statement should not result in (1) entry of
default judgment, (2) initiation of contempt proceedings, (3)
an award of further attorney's fees, (4) imposition of
fines of up to $10, 000 each, and (5) referral of Mr. Aquino
to the Nevada State Bar for potential disciplinary
proceedings. Id. at 1. The Court warned that:
“FAILURE TO APPEAR AS ORDERED WILL RESULT IN
THE IMPOSITION OF SEVERE
SANCTIONS.” Id. (emphasis in
all of the above, Defendant Yang did not appear at the show
cause hearing as ordered. See Docket No. 81. Mr.
Aquino did appear at that hearing. See Id. Mr.
Aquino provided no justification for Defendant Yang's
violations of the Court's orders. Instead, Mr. Aquino
represented that he had been providing written and telephonic
notices to Defendant Yang as to what the Court was requiring,
but that Defendant Yang had ceased responding months earlier.
See, e.g., Hearing Rec. (11/9/2018) at 10:12 - 10:13
a.m. Mr. Aquino expressly represented that he had given
Defendant Yang notice of the show cause hearing,
id., but Defendant Yang still did not appear.
Although Mr. Aquino represented that Defendant Yang had
previously indicated a willingness to defend this lawsuit,
the circumstances now demonstrate that Defendant Yang has
made the conscious decision to abandon this case. See,
e.g., id. at 10:12 - 10:14 a.m., 10:24 - 10:28
a.m. In short, there has been no justification provided for
Defendant Yang's continued violations of the above orders
and, instead, the record demonstrates that Defendant Yang has
chosen to cease participating in any defense of this case.
Mr. Aquino, he represented in vague terms that his latest
noncompliance stemmed from the fact that he had been
suffering from debilitating illness for several months and,
in support of that representation, he presented exhibits
showing two doctor's appointments. See, e.g.,
id. at 10:14 - 10:24 a.m. Mr. Aquino's
attestation is not credible. As a threshold matter, the Court
again notes that the evidence presented is flimsy and not
well-developed. One exhibit submitted shows a quick care
visit for Mr. Aquino on October 23, 2018, for cough,
history of bronchiectasis, and mild
intermittent asthma with exacerbation. Show Cause Hrg. Exh. A
(emphasis added). The other exhibit is an “excuse
slip” showing only that Mr. Aquino had some sort of
appointment on November 2, 2018. Show Cause Hrg. Exh. B.
These exhibits and Mr. Aquino's representations fall well
short of showing that he was completely incapacitated
throughout this time such that he could not comply with the
order to submit a settlement statement by October 24, 2018.
Mr. Aquino's representations are belied by the record. On
October 15, 2018, the Court expressly addressed the need for
Mr. Aquino to provide notice to the Court if he was truly too
sick to comply with an order. See Docket No. 76 at 3
n.2 (“Mr. Aquino fails to explain, however, why he was
unable to contact the Court or opposing counsel during this
period to seek an extension of the deadline to submit
settlement statements, seek a continuance of the settlement
conference, or otherwise provide notice of the
circumstances”). This was the same order setting
the November settlement conference and ordering the
submission of a settlement brief. See Id. at 6.
Were Mr. Aquino so sick that he could not submit a settlement
statement nine days later, on October 24, 2018, the remedy to
that solution was obvious: Mr. Aquino or his staff needed to
make that known to the Court. The fact that no such notice
was provided seriously undercuts Mr. Aquino's
representations of debilitating illness. This shortcoming is
especially pronounced given that the Court did not enter the
pending order to show cause for another 48 hours after the
deadline to submit a settlement statement had expired,
compare Docket No. 76 at 6 (settlement statement due
by 3:00 p.m. on October 24, 2018) with Docket No. 77
(notice of electronic filing showing that order was issued at
3:14 p.m. on October 26, 2018), but Mr. Aquino still did not
provide any notice or make any request for an extension
during that additional window.
when Mr. Aquino did appear at the show cause hearing on
November 9, 2018, he was not slowed by illness. This was most
evident when Mr. Aquino objected to Mr. Lewis' testimony
to prove-up damages and provided active, engaged, and
extensive cross-examination for which he had clearly expended
significant time to prepare beforehand, including researching
state court records. See, e.g., Hearing Rec.
(11/08/2018) at 10:51, 11:06, 11:14 - 11:38 a.m. Mr.
Aquino's assertion of a months-long debilitating illness
that prevented him from submitting a settlement statement on
October 24, 2018, stands in stark contrast with his ability
to prepare for and extensively participate in the prove-up
hearing two weeks later. In sum, the Court has provided Mr.
Aquino with numerous opportunities to substantiate the
assertion that he has been too sick to comply with the
Court's orders, and he has failed to do so.
short, the Court has issued during this period at least five
warnings to Defendant Yang and Mr. Aquino that failure to
comply with the Court's orders may result in sanctions,
including severe sanctions like default judgment. Docket No.
57 at 3, Docket No. 61, Docket No. 62 at 2, Docket No. 76 at
5, Docket No. 77 at 2. Despite those warnings, Defendant Yang
and Mr. Aquino have collectively violated four orders to
submit a settlement statement, two orders to appear for a
hearing, and two orders to pay sanctions. Two of these
violations (the violation of the fourth order to submit a
settlement statement and Defendant Yang's violation of
the order to appear at the show cause hearing) occurred after
sanctions were already imposed on both Defendant Yang and Mr.
are not suggestions or recommendations, they are directives
with which compliance is mandatory. See, e.g.,
Chapman v. Pacific Tel. & Tel. Co., 613 F.2d
193, 197 (9th Cir. 1979); see also Weddell v.
Stewart, 261 P.3d 1080, 1085 & n.9 (Nev. 2011).
There are several sources of legal authority by which federal
courts enforce their orders. Most pertinent here, Rule 16(f)
of the Federal Rules of Civil Procedure provides for
sanctions for failing to obey a “scheduling or other
pretrial order.” Fed.R.Civ.P. 16(f)(1)(C). When
attorneys or parties fail to comply with an order regarding a
settlement conference, Rule 16(f) is triggered. See,
e.g., Ayers v. City of Richmond, 895 F.2d 1267,
1270 (9th Cir. 1990).
16(f) is “broadly remedial and its purpose is to
encourage forceful judicial management.” Sherman v.
United States, 801 F.2d 1133, 1135 (9th Cir. 1986)
(per curiam). When a court determines that Rule
16(f) has been triggered, it has broad discretion in
fashioning an appropriate sanction. See, e.g.,
Official Airline Guides, Inc. v. Goss, 6 F.3d 1385,
1397 (9th Cir. 1993). Violations of orders are “neither
technical nor trivial, ” Martin Family Trust v.
Heco/Nostalgia Enters. Co., 186 F.R.D. 601, 603 (E.D.
Cal. 1999), and can have severe ramifications. Rule 16(f)
itself provides that courts may issue “any just
orders.” The range of sanctions include those
authorized by Rule 37(b)(2)(A)(ii)-(vii), such as entry of
case-dispositive sanctions. Fed.R.Civ.P. 16(f)(1). Although
not expressly enumerated, the imposition of a fine is also
among the “just orders” authorized by Rule 16(f).
See, e.g., Nick v. Morgan's Food, Inc., 270 F.3d
590, 595-96 (8th Cir. 2001).
noted above, the order to show cause presently before the
Court arises out of the violation of Defendant Yang and Mr.
Aquino of the fourth order to submit a settlement statement,
which resulted in the vacation of the November settlement
conference. That order to show cause identifies five
different potential repercussions for that violation: (1)
entry of default judgment, (2) initiation of contempt
proceedings, (3) award of further attorney's fees, (4)
imposition of fines of up to $10, 000, and (5) referral of
Mr. Aquino to the Nevada State Bar for potential disciplinary
proceedings. The Court will address each issue in turn below.
Court first addresses default judgment. In particular, the
Court must decide whether this harsh, case-dispositive
sanction against Defendant Yang is warranted and, if so, the
amount of damages and fees that should be awarded. For the
reasons discussed below, the undersigned recommends that
default judgment be entered against Defendant Yang and that
damages be set in the amount of $81, 319 in compensatory
damages and $162, 638 in punitive damages, as well as $2, 564
in additional attorney's fees.
Appropriateness of Entering to Default Judgment
are mindful that entry of default judgment is a severe
sanction that is justified by willfulness, bad faith, or
fault. Connecticut Gen. Life Ins. Co. v. New Images of
Beverly Hills, 482 F.3d 1091, 1096 (9th Cir. 2007). When
considering whether to impose default judgment, courts weigh
five factors identified by the Ninth Circuit: (1) the
public's interest in expeditious resolution of
litigation; (2) the court's need to manage its dockets;
(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.
Id. This is not a “mechanical” test, but
rather provides courts with a way to think about the
appropriate result. Id. The Court addresses each
factor in turn below.
Public Interest in Expeditious Resolution of Litigation
an order is violated, the first factor supports
case-dispositive sanctions. Adriana,913 F.2d 1412.
“Orderly and expeditious resolution of disputes is of
great importance to the rule of law. By the same token, delay
in reaching the merits, whether by way of settlement or
adjudication, is costly in money, memory, manageability, and
confidence in the ...