Banks v. Whambo! Enter., LLC, 2022 U.S. App. LEXIS 31400, 2022 WL 16918023 (9th Cir. Nov. 14, 2022) (unpublished)

Key Takeaways:

1.  “Taibi’s reliance on Goodyear Tire & Rubber Co. v. Haeger, 137 S. Ct. 1178 (2017), is misplaced. That case explained that a court may use its inherent authority to impose punitive sanctions only by following the procedures applicable to criminal cases. Id. at 1186. Although the $500 sanction was payable to the court, the court did not sanction Taibi under its inherent authority, but instead did so under Rule 16(f)(1). Rule 16(f)(1) sanctions, unlike sanctions imposed under a court’s inherent authority, require only “notice and an opportunity to be heard.” Ayers v. Richmond, 895 F.2d 1267, 1270 (9th Cir. 1990). The sanction therefore did not require the full panoply of procedural protections applicable to a criminal contempt proceeding”
2. “We vacate the $1,000 sanction.² An OSC notified Taibi of possible sanctions for failing to produce Banks at a scheduled ENE. But, the court’s sanctions order instead focused heavily on Taibi’s alleged misstatements made to explain Banks’s nonappearance. If the sanction was for Banks’s nonappearance, the court did not explain why uncontested evidence that Banks was in a rehabilitation facility on the date of the scheduled ENE was not an adequate excuse for Taibi’s failure to produce him. And, the OSC did not put Taibi on notice before the hearing that the court was considering sanctions for any alleged misrepresentations.”
3. “Rule 16(f) does not authorize sanctions for lack of candor, but Rule 11, for example, would.”

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MEMORANDUM^*

*1 Attorney Michael Taibi appeals the district court’s imposition of two Federal Rule of Civil Procedure 16(f) monetary sanctions payable to the court: one for $500 and one for $1,000. We review the imposition of sanctions for abuse of discretion, Pac. Harbor Cap., Inc. v. Carnival Air Lines, Inc., 210 F.3d 1112, 1117 (9th Cir. 2000), but review due process claims de novo, Lasar v. Ford Motor Co., 399 F.3d 1101, 1109 (9th Cir. 2005). We have jurisdiction under 28 U.S.C. § 1291, and affirm in part, vacate in part, and remand.

1. We affirm the $500 sanction imposed for Taibi’s failure to meet and confer before an Early Neutral Evaluation Conference (“ENE”). Rule 16(f) permits sanctions against attorneys who fail “to obey a ... pretrial order.” Taibi does not contest that he failed to comply with the district court’s orders to meet and confer before the ENE. His claim that COVID-19 prevented him from doing so was properly rejected by the district court, as the orders expressly provided that if COVID-19 precluded an in-person meeting, counsel should “jointly call Chambers,” which Taibi did not do.

Taibi’s reliance on Goodyear Tire & Rubber Co. v. Haeger, 137 S. Ct. 1178 (2017), is misplaced. That case explained that a court may use its inherent authority to impose punitive sanctions only by following the procedures applicable to criminal cases. Id. at 1186. Although the $500 sanction was payable to the court, the court did not sanction Taibi under its inherent authority, but instead did so under Rule 16(f)(1). Rule 16(f)(1) sanctions, unlike sanctions imposed under a court’s inherent authority, require only “notice and an opportunity to be heard.” Ayers v. Richmond, 895 F.2d 1267, 1270 (9th Cir. 1990). The sanction therefore did not require the full panoply of procedural protections applicable to a criminal contempt proceeding.

Taibi received ample notice and an opportunity to be heard. The district court issued an Order to Show Cause (“OSC”) that put Taibi on notice that it was considering sanctions for his failure “to timely participate” in the court-ordered meet and confers. Taibi also knew that the court was considering monetary sanctions because it had requested a summary of opposing counsel’s costs, which exceeded $500. Taibi had the opportunity to be heard and to present evidence at the later OSC hearing.¹

2. We vacate the $1,000 sanction.² An OSC notified Taibi of possible sanctions for failing to produce Banks at a scheduled ENE. But, the court’s sanctions order instead focused heavily on Taibi’s alleged misstatements made to explain Banks’s nonappearance. If the sanction was for Banks’s nonappearance, the court did not explain why uncontested evidence that Banks was in a rehabilitation facility on the date of the scheduled ENE was not an adequate excuse for Taibi’s failure to produce him. And, the OSC did not put Taibi on notice before the hearing that the court was considering sanctions for any alleged misrepresentations. We thus vacate the $1,000 sanction and remand for the district court either to (1) explain why Banks being in a rehabilitation facility does not excuse Taibi’s failure to produce him; or (2) provide Taibi with notice and an opportunity to be heard on whether sanctions should be imposed for the alleged misrepresentations.

*2 After notice and an opportunity to be heard, if the district court still wishes to sanction Taibi for his purported lack of candor, the court should indicate under what authority it is proceeding. Rule 16(f) does not authorize sanctions for lack of candor, but Rule 11, for example, would.

AFFIRMED IN PART, VACATED IN PART, AND REMANDED.

All Citations

Not Reported in Fed. Rptr., 2022 WL 16918023