Kraszewski v. State Farm General Insurance

130 F.R.D. 111, 39 Fed. R. Serv. 2d 427, 1984 U.S. Dist. LEXIS 20165, 34 Empl. Prac. Dec. (CCH) 34,503, 36 Fair Empl. Prac. Cas. (BNA) 1367, 1984 WL 22073
CourtDistrict Court, N.D. California
DecidedJanuary 23, 1984
DocketNo. C 79-1261 TEH
StatusPublished
Cited by5 cases

This text of 130 F.R.D. 111 (Kraszewski v. State Farm General Insurance) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kraszewski v. State Farm General Insurance, 130 F.R.D. 111, 39 Fed. R. Serv. 2d 427, 1984 U.S. Dist. LEXIS 20165, 34 Empl. Prac. Dec. (CCH) 34,503, 36 Fair Empl. Prac. Cas. (BNA) 1367, 1984 WL 22073 (N.D. Cal. 1984).

Opinion

ORDER

THELTON E. HENDERSON, District Judge. ’

The defendants and their counsel have moved for reconsideration of this Court’s order of June 9, 1983 which assesses against them sanctions for discovery abuse. The matter has been exhaustively briefed and argued and, for the reasons stated below, the June 9th Order will be modified, in part, to reflect (1) the new evidence regarding production of the Mad-sen memo and (2) the appropriate statutory basis for the plaintiff’s award of costs and attorneys’ fees incurred in obtaining various motions to compel discovery. We find the moving parties’ remaining objections to the June 9th Order to be without merit. Accordingly, their motion for reconsideration will be granted in part and denied in part. In the present order, we also grant the request of defendants and their counsel for a stay of this Court’s consideration of the plaintiffs’ application for attorneys’ fees and costs under paragraph (5)(b) of the June 9th Order at 31-32, pending further and limited discovery.

In moving for reconsideration of this Court’s order of June 9, 1983, the defendants and their counsel challenge (1) the Court’s characterization of the sanctions levied in that order as civil, (2) the sufficiency of the evidence supporting the Court’s findings of discovery abuse, and (3) the adequacy of their opportunities to be heard. Each challenge is discussed briefly and in turn below. Additionally, in response to the discovery dispute which has arisen regarding the plaintiffs’ application for attorneys’ fees under the June 9th Order, an expedited discovery and briefing schedule is set. The precise order of the Court in these related matters appears at the conclusion of this decision.

I. MOTION FOR RECONSIDERATION

A. The Nature of the Sanctions

The defendants and their counsel first challenge the Court’s characterization of the sanctions levied in the June 9th Order as civil. They contend that the sanctions are punitive and were imposed without regard to the defendants’ and their counsel’s procedural rights under Rule 42(b) of the Federal Rules of Civil Procedure.1 In support of this position, they argue that (1) the order’s strong language is inconsistent with its compensatory purpose and effectively alters the nature of the sanctions from civil to criminal, and (2) the monetary sanctions imposed are not tailored to match the harm suffered by the plaintiffs and therefore cannot support their civil, compensatory label. Neither contention has merit.

First, sanctions are never “wholly civil nor altogether criminal.” Gompers v. Bucks Stove and Range Co., 221 U.S. 418, [113]*113441, 31 S.Ct. 492, 498, 55 L.Ed. 797 (1911). It is their primary purpose, however, rather than their incidental effects, which determines their civil or criminal nature. Falstaff Brewing Corp. v. Miller Brewing Corp., 702 F.2d 770, 778 (9th Cir.1983) (hereafter cited as “Falstaff Brewing Corp.”). The test is: what did the sanctioning court primarily seek to accomplish by imposing the sanctions? Falstaff Brewing Corp., 702 F.2d at 778. If the primary purpose of the sanction was to punish past defiance of a court’s judicial authority, and thereby vindicate the court—the sanction is considered punitive and criminal. If, however, the court intended to compel obedience to a court order or to compensate the injured party for the harm suffered by his adversary’s misconduct, the sanction is treated as civil. Id.

The defendants and their counsel suggest that this Court’s clearly stated and executed goal of fashioning appropriate civil, compensatory sanctions is undercut by the Order’s language which reveals this Court’s displeasure with their conduct. No authority is cited for this proposition and we have found none to support it. To the contrary, given the district court’s broad discretion to devise sanctions which effectively address discovery abuse, United States v. Westinghouse, 648 F.2d 642, 651 (9th Cir.1981), it seems unlikely that a court, greatly disturbed by the conduct of a party or its counsel, is constrained from expressing that displeasure simply because it chooses to deal with the offensive behavior by civil rather than criminal sanctions. We thus decline to alter the language of the June 9th Order on this ground.

Second, the defendants’ and their counsel argue that the monetary sanctions do not adequately reflect the harm or prejudice suffered by the plaintiffs. By so arguing, they rightly note that the goal of compensatory sanctions is to make the injured party whole. Falstaff Brewing Corp., 702 F.2d at 779. In fashioning a compensatory sanction, the Court must tailor its award to the pecuniary injury caused by the unexcused conduct. Id. The amount necessary to compensate the aggrieved party may be estimated by the sanctioning court. United States v. Sumitomo Marine & Fire Ins. Co., 617 F.2d 1365, 1371 (9th Cir.1980).

The June 9th Order provides for conditional and absolute monetary sanctions. The conditional sanctions, described at paragraphs 68 and 69 of the order, mature only if (1) the plaintiffs prevail on the merits, and (2) this Court approves any requested fees and recoveries as reasonable and appropriate. In other words, even if they prevail, the plaintiffs and their counsel will not be entitled to any compensatory awards until they make showings of need and injury, and those showings are tested by their adversaries and approved by this Court. We believe that this procedure will ensure that the awards approved, if any, will reflect the losses suffered by the plaintiffs and their counsel. Moreover, we reject the defendants’ and their counsel’s contention that the absolute award of $5000 provided by paragraph 88 of the June 9th Order, is an unreasonable estimation of the prejudice suffered by the plaintiffs because of their inability to present this Court with their version of critical financial information. See June 9th Order at 111137-45, 87-89. After fully reconsidering the propriety of the award, we believe that it adequately reflects and monetizes the strategic loss suffered by the plaintiffs and thus decline to alter the amount of the modest sum awarded.

B. Sufficiency of the Evidence

The defendants and their counsel next broadly challenge the sufficiency of the evidence supporting this Court’s findings of discovery abuse. After careful review of the record, we find the defendants’ and their counsel’s position as to the Madsen memo well-taken and the June 9th Order will be modified to reflect it. Their remaining arguments, however, we reject.

First, we agree that the record no longer supports the monetary and preclusionary sanctions levied in regard to the Madsen memo. With their motion for reconsideration, the defendants and their counsel present new and undisputed evi[114]*114deuce which reveals that the Madsen memo was properly listed as a trial exhibit.

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130 F.R.D. 111, 39 Fed. R. Serv. 2d 427, 1984 U.S. Dist. LEXIS 20165, 34 Empl. Prac. Dec. (CCH) 34,503, 36 Fair Empl. Prac. Cas. (BNA) 1367, 1984 WL 22073, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kraszewski-v-state-farm-general-insurance-cand-1984.