Ponce v. CalEnergy Operating Corporation

• Court: District Court, S.D. California
• Decided: March 7, 2024
• Docket: 3:22-cv-01808
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 ALBERTO PONCE, Case No.: 22cv1808-W(LR)

12 Plaintiff, REPORT AND 13 v. RECOMMENDATION REGARDING DEFENDANT’S MOTION FOR 14 CALENERGY OPERATING TERMINATING SANCTIONS CORPORATION, et al., 15 Defendants. [ECF No. 45] 16 17 18 This Report and Recommendation is submitted to United States District Judge 19 Thomas J. Whelan pursuant to 28 U.S.C. § 636(b)(1) and Local Civil Rule 72.1(c) of the 20 United States District Court for the Southern District of California. Presently before the 21 Court is an unopposed motion by Defendant CalEnergy Operating Corporation 22 (“Defendant”) for terminating sanctions pursuant to Federal Rule of Civil Procedure 23 37(b) and (d) against Plaintiff Alberto Ponce (“Plaintiff”) for repeated failures to comply 24 with Court orders. (ECF No. 45.) For the reasons stated below, the Court 25 RECOMMENDS that: (1) Defendant’s motion be GRANTED in part, (2) this case be 26 DISMISSED WITH PREJUDICE, and (3) that District Judge Whelan decline to 27 impose further monetary sanctions against Plaintiff. 28 / / / 1 I. RELEVANT BACKGROUND AND PROCEDURAL HISTORY 2 Plaintiff—a former mechanic at Defendant’s facilities in Imperial County, 3 California—filed a complaint in Imperial County Superior Court on October 20, 2022, 4 alleging wrongful termination and approximately ten additional employment causes of 5 action. (See ECF No. 1-2 at 5.) Defendant removed the action to this court on November 6 17, 2022 and filed an answer on the same day. (See ECF Nos. 1 & 2.) The undersigned 7 held an Early Neutral Evaluation (“ENE”) and Case Management Conference (“CMC”) 8 and issued a scheduling order regulating discovery and other pretrial proceedings on 9 February 2, 2023. (See ECF No. 10.) The scheduling order set a fact discovery cutoff of 10 July 28, 2023. (See id. at 3.) 11 Two days before the fact discovery cutoff, the parties filed a joint motion 12 requesting that they be allowed to complete Plaintiff’s deposition past the discovery 13 deadline, but no later than August 31, 2023. (See ECF No. 24 at 1-3.) The joint motion 14 noted that the parties had engaged in settlement discussions that proved unsuccessful, that 15 they were attempting to re-start settlement negotiations, and that Plaintiff would not be 16 available until the month of August for his deposition. (See id.) The Court granted that 17 motion, allowing Plaintiff’s deposition to be completed by August 31, 2023. (See ECF 18 No. 25.) On August 28, 2023, the parties filed a second joint motion requesting that the 19 Court further extend the deadline by which they be allowed to conduct Plaintiff’s 20 deposition—indicating that Plaintiff had chosen September 20, 2023 to appear and 21 testify. (See ECF No. 28 at 2.) The Court granted this request as well, setting the 22 deadline by which the parties were required to complete Plaintiff’s deposition on 23 September 20, 2023. (See ECF No. 29.) 24 It was not until the eve of a regularly scheduled telephonic case management 25 conference (“TCMC”) the following month that the Court was alerted to the issues that 26 precipitated the instant motion. On October 3, 2023, Plaintiff’s counsel filed an ex parte 27 motion to withdraw as counsel of record for Plaintiff without substitution, explaining that 28 Plaintiff had “failed to respond to any and all of Counsel’s several communication 1 attempts regarding this case.” (See ECF No. 30 at 1.) In support of that motion, 2 Plaintiff’s counsel, Camron Dowlatshahi, attached two previous emails to Plaintiff dated 3 in September of 2023 that had gone unanswered. (See id. (citing ECF No. 30-1).) At the 4 TCMC the following day, the Court expressed concern about Plaintiff’s counsel’s lack of 5 contact with his client, as well as counsel’s failure to inform the Court about these 6 problems before filing the motion to withdraw as counsel of record, and set a follow-up 7 discovery conference for October 20, 2023. (See ECF No. 32.) The Court explained that 8 if Plaintiff’s counsel had not made any progress in contacting Plaintiff by the day of the 9 discovery conference, the Court would be forced to allow Defendant to file a motion to 10 compel Plaintiff’s attendance at his deposition. District Judge Whelan subsequently 11 denied Plaintiff’s counsel’s motion to withdraw on October 11, 2023, citing concerns that 12 Plaintiff’s counsel had not even attempted to inform Plaintiff of his plan to withdraw in 13 advance of the discovery conference before the undersigned on October 20, 2023. (See 14 ECF No. 33.) 15 Plaintiff’s counsel was not able to contact Plaintiff by the day of the discovery 16 conference. Defendant subsequently filed a motion to compel Plaintiff to appear for his 17 deposition, as well as for monetary sanctions. (See ECF No. 36.) Alternatively, 18 Defendant requested that the Court issue terminating sanctions, citing prejudice that 19 Defendant had experienced from delaying Plaintiff’s deposition, as well as the unlikely 20 utility of monetary sanctions against Plaintiff, who had severed all communication with 21 his counsel. (See id. at 7-8.) Plaintiff’s counsel did not oppose either request. (See id. at 22 9.) On November 13, 2023, the Court granted Defendant’s motion insofar as it sought to 23 compel Plaintiff’s appearance for his deposition, ordering Plaintiff to appear by 24 December 15, 2023. (See ECF No. 37 at 8.) The Court also ordered Plaintiff to pay 25 Defendant $3,503 for costs incurred as a result of his failure to appear and in preparing 26 the motion to compel, but declined to recommend terminating sanctions at that juncture. 27 (See id.) In its order, the Court explicitly cautioned Plaintiff that further failures to 28 appear at his deposition would likely subject him to additional sanctions as provided for 1 in Federal Rule of Civil Procedure 37(b)(2), up to and including an order dismissing this 2 action in whole or in part. (See id.) 3 On January 23, 2024, Defendant’s counsel informed the Court of his intention to 4 file a motion for terminating sanctions related to Plaintiff’s failure to comply with the 5 Court’s order requiring him to appear for his deposition on December 15, 2023. (See 6 ECF No. 40.) The Court held another discovery conference related to the anticipated 7 motion, during which Plaintiff’s counsel explained that he was still unable to contact his 8 client, and intended to renew his motion to withdraw as counsel of record. (See ECF No. 9 41.) Although the Court explained that it would allow Plaintiff’s counsel a short period 10 of time to file a renewed motion to withdraw, it would eventually be forced to allow 11 Defendant to file its motion for terminating sanctions. Plaintiff did not file a renewed 12 motion to withdraw as counsel, and the Court set a briefing schedule requiring the parties 13 to address Defendant’s motion for terminating sanctions in the joint motion format 14 prescribed by the undersigned’s civil chambers rules. (See ECF No. 42.) 15 The instant motion for terminating sanctions followed. (See ECF No. 45 (“Mot. 16 for Sanctions”).) Defendant contends that terminating sanctions pursuant to Federal Rule 17 of Civil Procedure 37(b) and (d) are now warranted because Plaintiff has failed to comply 18 with three court orders to date—the original extended deadline of September 20, 2023 by 19 which Plaintiff was required to appear for his deposition, the Court’s order on 20 Defendant’s motion to compel which required Plaintiff’s deposition to be completed by 21 December 15, 2023, and the Court’s order requiring Plaintiff to pay $3,503 in monetary 22 sanctions to Defendant for expenses incurred in rescheduling the deposition and filing the 23 earlier motion to compel. (See id. at 2.) Additionally, Defendant’s counsel includes 24 multiple exhibits in support of the motion, which describe his efforts to meet and confer 25 with Plaintiff’s counsel about obtaining Plaintiff’s deposition testimony, as well as 26 Plaintiff’s repeated failures to attend his deposition after they were noticed by defense 27 counsel. (See ECF No. 46. Joseph Desiderio Decl. (“Desiderio Decl.”), Exs. A-K.) 28 Plaintiff did not oppose the motion. (See generally Mot. for Sanctions.) 1 II. LEGAL STANDARD 2 Federal Rule of Civil Procedure 37 authorizes the Court “to impose a wide range 3 of sanctions when a party fails to comply with the rules of discovery or with court orders 4 enforcing those rules.” Wyle v. R.J. Reynolds Indus., Inc., 709 F.2d 585, 589 (9th Cir. 5 1983). Those sanctions may include adverse inferences, “striking pleadings in whole or 6 in part,” or dismissal of “the action or proceeding in whole or in part.” Fed. R. Civ. P. 7 37(b)(2)(A). “In evaluating the propriety of sanctions, the Court considers ‘all incidents 8 of a party’s misconduct.’” Blundell v. Cnty. of L.A., No. CV 08-2212-DDP (EX), 2010 9 WL 344320, at *4 (C.D. Cal. Jan. 29, 2010) (quoting Adriana Int’l Corp. v. Thoeren, 913 10 F.2d 1406, 1411 (9th Cir. 1990)). 11 The Ninth Circuit has explained that only “‘willfulness, bad faith, and fault’ justify 12 terminating sanctions.” Conn. Gen. Life Ins. Co. v. New Images of Beverly Hills, 482 13 F.3d 1091, 1096 (9th Cir. 2007) (quoting Jorgensen v. Cassiday, 320 F.3d 906, 912 (9th 14 Cir. 2003)). This prerequisite “does not require wrongful intent.” Sanchez v. Rodriguez, 15 298 F.R.D. 460, 463 (C.D. Cal. 2014) (citing Hyde & Drath v. Baker, 24 F.3d 1162, 1167 16 (9th Cir. 1994)). Instead, “[d]isobedient conduct not shown to be outside of the control 17 of the litigant is sufficient to demonstrate willfulness, bad faith, or fault.” Jorgensen, 320 18 F.3d at 912 (internal quotations omitted). “Delay, failure to appear for depositions, 19 failure to answer interrogatories resulting from a party being out of town, and 20 misunderstanding a party’s own counsel are not matters outside of a party’s control.” 21 Nat’l Corp. Tax Credit Funds III, IV, VI, VII v. Potashnik, No. CV 07–3528 PSG 22 (FMOx), 2010 WL 457626, at *4 (C.D. Cal. Feb. 4, 2010) (citing Henry v. Gill Indus., 23 Inc., 983 F.2d 943, 949 (9th Cir. 1993)). 24 In determining whether to dismiss an action pursuant to Rule 37, the Court 25 considers a five-part test, with three subparts to the fifth part: 26 (1) the public’s interest in expeditious resolution of litigation; (2) the court’s need to manage its dockets; (3) the risk of prejudice 27 to the party seeking sanctions; (4) the public policy favoring 28 disposition of cases on their merits; and (5) the availability of 1 less drastic sanctions. The sub-parts of the fifth factor are whether the court has considered lesser sanctions, whether it tried 2 them, and whether it warned the recalcitrant party about the 3 possibility of case-dispositive sanctions.

4 Conn. Gen. Life Ins. Co., 482 F.3d at 1096 (internal citations omitted); see also Malone 5 v. U.S. Postal Serv., 833 F.2d 128, 130 (9th Cir. 1987). These factors are “not a series of 6 conditions precedent before the judge can do anything,” but rather a “way for a district 7 judge to think about what to do.” Valley Eng’rs Inc. v. Elec. Eng’g Co., 158 F.3d 1051, 8 1057 (9th Cir. 1998). “The most critical factor to be considered in case-dispositive 9 sanctions is whether a party’s discovery violations make it impossible for a court to be 10 confident that the parties will ever have access to the true facts.” Conn. Gen. Life Ins. 11 Co., 482 F.3d at 1097 (internal quotations and citations omitted). 12 III. DISCUSSION 13 Defendant requests that the Court dismiss Plaintiff’s case for repeated 14 noncompliance with court orders and his failure to appear at his deposition. (See Mot. 15 for Sanctions at 4.) Additionally, Defendant asks the Court to order Plaintiff to pay the 16 expenses that it incurred because of these failures during the discovery process. (See id. 17 at 7.) The Court addresses each of these parts of Defendant’s motion in turn below. 18 A. Willfulness, Bad Faith, or Fault 19 Plaintiff has not demonstrated that his repeated failures to comply with the Court’s 20 orders to appear for his deposition were “outside his control.” Hyde & Drath, 24 F.3d at 21 1167. Through its previous discovery orders summarized above, the Court has already 22 granted Plaintiff three continuances of the deadline by which he was required to appear 23 for his deposition. See Section I, supra. Plaintiff has not made any attempt to appear for 24 his noticed remote depositions, (see Desiderio Decl., Exs. F & G), and his counsel 25 apparently stopped attempting to meet and confer with opposing counsel about alternate 26 arrangements in response to multiple court orders requiring him to appear. (See id., Exs. 27 B-D.) As such, the Court concludes that the “willfulness, bad faith, and fault” 28 1 prerequisite to terminating sanctions is satisfied. See, e.g., Ramirez v. Select Portfolio 2 Servs., Inc., Case No. ED CV 19-145-GW (SPx), 2019 WL 6448951, at *3 (C.D. Cal. 3 Aug. 12, 2019) (concluding that the plaintiff’s conduct was not outside of his control 4 when he stopped communicating with opposing counsel and the Court and did not 5 attempt to show that his failure to comply with discovery orders was outside of his 6 control). 7 B. The Ninth Circuit’s Five-Factor Test 8 In addition to the “willfulness, bad faith, and fault” prerequisite, the Court 9 concludes that dismissal of this case is warranted under the five-factor test set out by the 10 Ninth Circuit. See In re Phenylpropanolamine (PPA) Prods. Liab. Litig., 460 F.3d 1217, 11 1226 (9th Cir. 2006) (citing Malone, 833 F.3d at 130). The Court addresses each factor 12 in turn below. 13 1. The public’s interest in expeditious resolution of litigation 14 The public has an “overriding interest in securing ‘the just, speedy, and 15 inexpensive determination of every action.’” In re Phenylpropanolamine, 460, F.3d at 16 1227 (quoting Fed. R. Civ. P. 1). Plaintiff’s failure to comply with both of the Court’s 17 orders setting a deadline by which his deposition was to be completed (see ECF Nos. 29 18 & 37) has hindered the expeditious resolution of this matter by stalling the litigation in 19 the fact discovery phase. Though cases should generally be disposed of on their merits, 20 Plaintiff here was ultimately responsible for prosecuting his case so that it could reach 21 such a disposition. Accordingly, this factor favors dismissal. 22 2. The Court’s need to manage its docket 23 This factor weighs in favor of dismissal when the Court is forced to address or 24 correct a party’s failure to comply with discovery orders. See, e.g., Hill v. Alpine Sheriff 25 Dep’t, Case No.: 18cv2470-CAB-MDD, 2021 WL 222763, at *4 (S.D. Cal. Jan. 21, 26 2021) (citing Pagtalunan v. Galaza, 291 F.3d 639, 642 (9th Cir. 2002)) (noting that the 27 defendants had filed two motions for sanctions regarding the plaintiff’s failure to comply 28 with discovery orders), report and recommendation adopted, 2021 WL 662284 (S.D. Cal. 1 Feb. 18, 2021). Plaintiff’s failure to comply with the Court’s previous orders requiring 2 him to appear for his deposition has caused delay in this case and prevented Defendant 3 from obtaining discovery to which it is entitled, resulting in Plaintiff and his counsel 4 controlling the pace of the docket, rather than the Court. Without any explanation for 5 these failures from Plaintiff, this factor also weighs in favor of dismissal. 6 3. Risk of prejudice to Defendant 7 Although the Ninth Circuit has noted that the mere pendency of a lawsuit on its 8 own is insufficient prejudice to warrant dismissal, see In re Phenylpropanolamine, 460 9 F.3d at 1228, “[a] defendant suffers prejudice if the plaintiff’s actions impair the 10 defendant’s ability to go to trial or threaten to interfere with the rightful decision of the 11 case.” Id. at 1227 (internal citations omitted). Defendant correctly points out that 12 Plaintiff’s failure to appear for his properly noticed depositions prevented it from 13 properly defending against the claims in his complaint, spending valuable time preparing 14 sanctions motions rather than properly preparing to file dispositive motions or for trial. 15 (See Mot. for Sanctions at 6.) Furthermore, without the ability to obtain testimony that it 16 is entitled to through the course of discovery, Plaintiff could conceivably appear for the 17 remaining hearings in the Court’s scheduling order without Defendant’s ability to first 18 examine him on any testimony that he may provide. This factor accordingly weighs in 19 favor of dismissal. See, e.g., Thurston v. Kokor, No. 1:22-cv-00636-SAB (PC), 2023 20 WL 7418330, at *4 (E.D. Cal. Nov. 9, 2023) (“Defendants suffered undue prejudice 21 because he could not defend against Plaintiff's claims when Plaintiff deliberately refused 22 to participate in his depositions.”). 23 4. Public policy favoring disposition of cases on the merits 24 As noted above, although public policy strongly favors disposition of cases on their 25 merits, a case that is unreasonably delayed by a party’s failure to comply with deadlines 26 and basic discovery requirements may never be able to reach that type of disposition. See 27 In re Phenylpropanolamine, 460 F.3d at 1128 (noting that the fourth factor “lends little 28 support to a party whose responsibility it is to move a case toward disposition on the 1 merits but whose conduct impedes progress in that direction.”) (internal quotations 2 omitted). Plaintiff’s failures to comply with multiple discovery orders have placed this 3 litigation in precisely such a predicament—Defendant has been unable to obtain critical 4 discovery that it may need in forming its defenses to Plaintiff’s claims. Accordingly, the 5 strong preference for disposition on the merits does not outweigh Plaintiff’s failure to 6 move this case forward. 7 5. The availability of less drastic sanctions 8 The fifth factor, the availability of less drastic sanctions, counsels against dismissal 9 in most cases. See Malone, 833 F.2d at 132. Courts must consider the utility of 10 alternative sanctions before concluding that dismissal is appropriate. See In re 11 Phenylpropanolamine, 460 F.3d at 1128-29. A “judge’s warning to a party that a future 12 failure to obey a court order will result in default judgment can itself suffice to meet the 13 ‘consideration of alternatives’ requirement.” Estrada v. Speno & Cohen, 244 F.3d 1050, 14 1057 (9th Cir. 2001) (quoting Malone, 833 F.2d at 132). “Furthermore, explicit 15 discussion of alternatives is unnecessary if the district court actually tries alternatives 16 before employing the ultimate sanction of dismissal.” Id. (internal quotations omitted). 17 The Court has already attempted to use less drastic alternatives to terminating 18 sanctions in the instant matter. After Plaintiff failed to appear for his deposition through 19 an extension of the discovery deadline in the scheduling order, the Court issued monetary 20 sanctions and ordered Plaintiff to appear for his deposition by December 15, 2023. (See 21 ECF No. 37 at 5-6.) Plaintiff did not comply with either of these orders, demonstrating 22 that monetary sanctions are not a sufficient deterrent to the discovery violations at issue 23 in this case. Furthermore, the Court warned Plaintiff in bold font that “any further 24 failures to appear at his deposition will subject him to additional sanctions as provided for 25 in Fed. R. Civ. P. 37(b)(2), which may include an order to dismiss this action in whole or 26 in part.” (Id. at 5) (emphasis added). The Court accordingly finds that there are no lesser 27 sanctions at this juncture that would be satisfactory or effective. This factor also weighs 28 in favor of dismissal. 1 6. Conclusion 2 Under these circumstances, Plaintiff’s repeated failure to attend and participate in 3 his properly noticed deposition constitutes willful discovery misconduct sufficient to 4 justify the imposition of terminating sanctions. See, e.g., Hill, 2021 WL 222763, at *3-5 5 (recommending dismissal when plaintiff did not appear for deposition or pay previously 6 ordered monetary sanctions). This Court accordingly RECOMMENDS that Defendant’s 7 motion for terminating sanctions be GRANTED, and that this matter be DISMISSED 8 WITH PREJUDICE. 9 C. Monetary Sanctions 10 Defendant requests that the Court impose monetary sanctions in addition to 11 terminating sanctions. (See Mot. for Sanctions at 7.) Defense counsel notes that he spent 12 over four hours preparing the instant motion, including compiling notices of Plaintiff’s 13 failure to appear at his noticed depositions, and incurred costs of $747 in arranging for 14 Plaintiff’s remote deposition. (See Desidero Decl., ¶ 20.) These costs total $3,399— 15 which Defendant requests that the Court impose against Plaintiff only, rather than his 16 counsel. (See id.) 17 The Federal Rules of Civil Procedure require that the Court award Defendant 18 “reasonable expenses, including attorney’s fees” “[i]nstead of or in addition to” 19 terminating sanctions. Fed. R. Civ. P. 37(b)(2)(c). The award of expenses under this rule 20 is mandatory unless Plaintiff can show that his conduct was “substantially justified” or if 21 “other circumstances make an award of expenses unjust.” Id. 22 Based on the Court’s discussion of the factors above, Plaintiff cannot show that his 23 conduct was justified, let alone that it was substantially justified under the requirements 24 of Rule 37. Based on the balance of equities in this case, however, the undersigned will 25 not recommend additional monetary sanctions in this instance. Plaintiff has not paid the 26 first set of monetary sanctions related to Defendant’s previous motion to compel, 27 demonstrating the futility of these sanctions. Additionally, given that the Court is already 28 recommending the harsh penalty of dismissal with prejudice, it would be unjust to impose 1 || additional monetary sanctions in this instance. Accordingly, the undersigned 2 ||, RECOMMENDS that Defendant’s motion be DENIED insofar as it seeks the 3 ||imposition of additional attorney’s fees against Plaintiff. 4 IV. CONCLUSION 5 For the reasons set forth above, the Court RECOMMENDS that: (1) Defendant’s 6 || motion be GRANTED in part, (2) this case be DISMISSED WITH PREJUDICE, and 7 that District Judge Whelan decline to impose monetary sanctions against Plaintiff. 8 IT IS ORDERED that no later than March 21, 2024, any party to this action may 9 || file written objections with the Court and serve a copy on all parties. The document 10 should be captioned “Objections to Report and Recommendation.” 11 IT IS FURTHER ORDERED that any reply to the objections shall be filed with 12 || the Court and served on all parties no later than March 28, 2024. The parties are advised 13 || that failure to file objections within the specified time may waive the right to raise those 14 || objections on appeal of the Court’s order. See Turner v. Duncan, 158 F.3d 449, 455 (9th 15 Cir. 1988). 16 IT IS SO ORDERED. 17 ||Dated: March 7, 2024 18 19 / L 20 Honorable Lupe Rodriguez, Jr. 7] United States Magistrate Judge 22 23 24 25 26 27 28