Eleventh-Hour Contact of Deponent to Delay Deposition = $102,000 Inherent Power Sanction — Recidivism Relevant in Assessing Propriety of Sanctions

From E. & J. Gallo Winery, 2011 U.S. App. LEXIS 8844 (9th Cir. April 29, 2011):

Defendant's counsel *** after numerous discovery violations, directly contacted counsel for a key third-party witness in a successful attempt to delay a deposition. A magistrate judge found that [defense counsel] manipulated late-hour events to avoid the witness's appearance, raised issues of dubious merit regarding service, and that [defense counsel]'s actions vexed and burdened Gallo and the court. Citing the court's inherent authority, the magistrate judge awarded $92,078.97 payable to Gallo, and ordered an additional $10,000 payable to the court.***Rule 30(b)(1) requires "reasonable notice in writing" to parties for any deposition. Rule 5(b)(2)(D) allows for service of a notice by electronic means when the person being served has consented to electronic service in a writing. Local Rule 5-135(g)(1) explains that registration with the CM/ECF system, except where an attorney has opted out, constitutes "consent to receive service electronically and waiver of the right to receive service by first class mail pursuant to Fed. R. Civ. P. Rule 5(b)(2)(D)." Rule 32(d)(1) provides, "All errors and irregularities in the notice for taking a deposition are waived unless written objection is promptly served upon the party giving the notice."

Here, service of notice of the deposition of the third-party witness was proper under the local rules. It is undisputed that [defense counsel] also had actual notice of the deposition. [defense counsel] never sought a protective order, nor objected in writing to any notice. Objection to the notice was therefore waived.

A court may levy a sanction on the basis of its own inherent power "when a party has acted in bad faith, vexatiously, wantonly or, for oppressive reasons." Chambers, 501 U.S. at 45-46 (citations and internal quotation marks omitted). "Bad faith" is exhibited, for instance, by the act of delaying or disrupting litigation. Id. at 46. In this circuit, "[b]efore awarding sanctions under its inherent powers . . . the court must make an explicit finding that counsel's conduct constituted or was tantamount to bad faith." Mendez v. County of San Bernardino, 540 F.3d 1109, 1131 (9th Cir. 2008) (internal quotation marks and citation omitted).

The magistrate judge found that the result of Defendants' counsel's actions was "to vex and burden" Plaintiff and the court. This language tracks that used by the Chambers Court to make a bad faith finding. See 501 U.S. at 45-46. While the magistrate judge did not use language that made an explicit finding of bad faith, the "vex and burden" language is tantamount to such a finding. See Mendez, 540 F.3d at 1131. ***

Finally, all similar incidents of a party's past misconduct in a case are under review in determining the propriety of sanctions. Adriana Int'l Corp. v. Thoeren, 913 F.2d 1406, 1411-12 (9th Cir. 1990). This is true even when monetary sanctions for those past bad acts have already been levied. See id. at 1410-11. To be considered in a sanctions proceeding, past misconduct should be of a similar type, for example, all discovery violations. Id. at 1412.

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