Commercial Litigation and Arbitration

Dismissal as a Sanction — Factors — Sixth Circuit

From Fharmacy Records v. Nassar, 2010 U.S. App. LEXIS 11626 (6th Cir. June 7, 2010):

We have identified four factors — the "Regional Refuse factors" — that guide our review of a district court's decision to dismiss a party's lawsuit as a sanction:

(1) whether the party's [conduct] [was] due to willfulness, bad faith, or fault;

(2) whether the adversary was prejudiced by the dismissed party's conduct;

(3) whether the dismissed party was warned that failure to cooperate could lead to dismissal; and

(4) whether less drastic sanctions were imposed or considered before dismissal was ordered.

[Citations omitted.] We have also explained that, although "none of the factors is outcome dispositive, a case is properly dismissed by the district court where there is a clear record of delay or contumacious 1 conduct." ***

[Footnote 1] "Contumacious is defined as perverse in resisting authority and stubbornly disobedient." ***

We have held, as to the first factor, that "the imposition of inherent power sanctions requires a finding of bad faith," First Bank, 307 F.3d at 517 (citing Chambers, 501 U.S. at 50), "or conduct that is 'tantamount to bad faith,'" id. (quoting Roadway Express, Inc. v. Piper, 447 U.S. 752, 767, 100 S. Ct. 2455, 65 L. Ed. 2d 488 (1980)). We have held, for purposes of the second factor, that a defendant is prejudiced by a plaintiff's failure to cooperate in discovery when the defendant "waste[d] time, money, and effort in pursuit of cooperation which [the plaintiff] was legally obligated to provide." Harmon v. CSX Transp., Inc., 110 F.3d 364, 368 (6th Cir. 1997). As for the third factor, we have reversed the dismissal of certain cases where the district court failed to "put the derelict parties on notice that further noncompliance would result in dismissal," Wu, 420 F.3d at 644; Freeland v. Amigo, 103 F.3d 1271, 1279-80 (6th Cir. 1997); Harris v. Callwood, 844 F.2d 1254, 1256 (6th Cir. 1988), but as this is just one factor, we have also held that prior warning is not indispensable, see United States v. Reyes, 307 F.3d 451, 458 (6th Cir. 2002); see also Link v. Wabash R.R., 370 U.S. 626, 633, 82 S. Ct. 1386, 8 L. Ed. 2d 734 (1962) (noting that a district court can, in some circumstances, "dismiss a complaint . . . even without affording notice of its intention to do so"). Finally, we have instructed courts to look first to an "alternative sanction [that] would protect the integrity of the [judicial] process," but we have "never held that a district court is without power to dismiss a complaint, as the first and only sanction,. . . and [we are] loath[] to require the district court to incant a litany of [] available lesser sanctions." Schafer, 529 F.3d at 738 (quoting Harmon, 110 F.3d at 368) (quotation marks omitted). Although we "understand this factor to require particular caution in the absence of contumacious conduct," a district court's failure to articulate lesser sanctions "is not necessarily fatal." Id. (quoting Harmon, 110 F.3d at 368 ("[W]e do not assume that lesser sanctions were not considered simply because their consideration is not articulated.")).

In the present case, the district court documented the plaintiffs' and their counsel's various discovery abuses. *** Based on our careful review of the district court's opinion and the record as a whole, we find that the district court identified and properly applied the correct legal standard, and made a reasoned conclusion upon its weighing of the relevant factors. [Dismissal affirmed.]

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