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New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
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Sanctions — Rule 37(b)(2) and Inherent Power — Default Judgment Requires Willfulness, Bad Faith or Fault, Not Inability to Comply

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Klein v. Harper, 2015 U.S. App. LEXIS 1839 (10th Cir. Feb. 4, 2015):

Under Rule 37(b)(2), "a district court may issue sanctions, including default judgment against the disobedient party when a party disobeys a discovery order." Klein-Becker USA, LLC v. Englert, 711 F.3d 1153, 1159 (10th Cir. 2013) (internal quotation marks omitted). Moreover, courts have broad inherent power to sanction misconduct and abuse of the judicial process, Chambers v. NASCO, Inc., 501 U.S. 32, 43-45 (1991), which "includes the power to enter a default judgment," Shepherd v. American Broadcasting Companies, Inc., 62 F.3d 1469, 1475 (D.C. Cir. 1995) (citing cases). Default judgment is "a harsh sanction that should be used only" if the failure to comply with court orders is the result of "willfulness, bad faith, or any fault of the disobedient party" rather than inability to comply. Klein-Becker, 711 F.3d at 1159 (brackets and internal quotation marks omitted). We review the district court's decision to enter default judgment as a sanction for abuse of discretion. Id.

The district court found that Mr. Harper's failure to comply with court orders or to participate in any discovery had materially impeded the litigation and the Receiver had to use valuable time and money responding to Mr. Harper's many frivolous filings. It found Mr. Harper had repeatedly and willfully refused to follow court orders and had deliberately ignored court orders while simultaneously filing frivolous motions. It listed the many times the magistrate judge and court had warned Mr. Harper that his continued submission of frivolous motions and his failure to comply with court orders could result in sanctions, including entry of default judgment. Id. (listing factors to be considered to determine if sanction of default or dismissal is warranted, identified in Ehrenhaus v. Reynolds, 965 F.2d 916, 921 (10th Cir. 1992)).

We have reviewed the record and find no abuse of the district court's discretion. Mr. Harper failed to attend the scheduled pretrial conference, repeatedly refused to comply with discovery requests, including the court's order compelling him to file his discovery responses by January 2014. In addition, Mr. Harper filed dozens of frivolous motions, as well as a frivolous interlocutory appeal. Further, he [*10]  repeatedly and routinely ignored the district court's orders. There is no merit to his arguments that he needed to continually reassert his jurisdictional and standing arguments in order to preserve these issues for appeal or that the default could not be entered until the court first ruled on his summary judgment motion.

It is clear from Mr. Harper's filings and submissions in the district court that his non-compliance was willful and deliberate and that he had no intention of complying with any discovery or other court orders. The district court repeatedly warned Mr. Harper and attempted lesser sanctions, including payment of the Receiver's attorneys' fees, which Mr. Harper also ignored. The district court did not abuse its discretion in entering default judgment against Mr. Harper for his egregious failure to comply with discovery rules and court orders.

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New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.

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