United States District Court, D. Arizona
REPORT AND RECOMMENDATION
Honorable Lynnette C. Kimmins United States Magistrate Judge.
Pending
before the Court is Plaintiffs' Motion to Strike Answer
of Defendant Arceo and Enter Default. (Doc. 449.) Defendants
Impact Partnership, Will, Fine, Godinez, and Uretz objected
(Docs. 463, 464), and Plaintiffs replied (Doc. 473).
Defendant Arceo was served with the motion at his address of
record, submitted on March 5, 2019 (Docs. 401, 449 at 9), but
did not respond to the motion. Because Plaintiffs' motion
requests a sanction pursuant to Federal Rule of Civil
Procedure 37(b)(2)(A), the undersigned issues a report and
recommendation. See LRCiv 72.2(a)(1). The Magistrate
Judge recommends the District Court, after its independent
review of the record, grant Plaintiffs' motion.
DISCUSSION
When
Defendant Arceo failed to respond to Plaintiffs'
discovery requests, they moved to compel his response in July
2017. (Doc. 140.) After no response from Defendant Arceo, the
Court ordered him to respond to the discovery and warned him
that, if he failed to comply, Plaintiffs could move to strike
his answer and request the entry of default. (Doc. 158 at 4,
5.) Defendant Arceo has not complied with the Court's
Order or provided a response to Plaintiffs' discovery
requests.
Rule 37
permits sanctions when a party fails to comply with a
discovery order, including the striking of a party's
pleading. Fed.R.Civ.P. 37(b)(2)(A)(iii). Because Defendant
Arceo never responded to Plaintiffs' discovery requests,
after the Court ordered him to do so, sanctions are
warranted. Before striking a party's pleading and
entering default, the Court must consider: “(1) the
public's interest in expeditious resolution of
litigation; (2) the court's need to manage its docket;
(3) the risk of prejudice to the other party; (4) the public
policy favoring the disposition of cases on their merits; and
(5) the availability of less drastic sanctions.”
Hester v. Vision Airlines, Inc., 687 F.3d 1162, 1169
(9th Cir. 2012) (quoting Dreith v. Nu Image, Inc.,
648 F.3d 779, 786 (9th Cir. 2011)). “Where a court
order is violated, the first two factors support sanctions
and the fourth factor cuts against a default. Therefore, it
is the third and fifth factors that are decisive.”
Adriana Int'l Corp. v. Thoeren, 913 F.2d 1406,
1412 (9th Cir. 1990); see also Wanderer v. Johnston,
910 F.2d 652, 656 (9th Cir. 1990) (“[T]he key factors
are prejudice and availability of lesser sanctions.”).
Because
Defendant Arceo did not participate in any discovery, his
actions have prejudiced Plaintiffs ability to prosecute their
case against him. See Wanderer, 910 F.2d at 656
(finding prejudice “palpable” when the defendants
repeatedly failed to produce documents or appear at their
depositions). The Court previously ordered Defendant Arceo to
respond to Plaintiffs' discovery requests and awarded
fees against him for the motion to compel. Since that time,
Defendant Arceo has not participated in the litigation and
did not oppose Plaintiffs' requested sanction. Discovery
closed last year and reopening it now would cause substantial
delay to final resolution of this aging case. Further, there
is no reason to believe that, if given the opportunity,
Defendant Arceo would participate in discovery. Because
Defendant Arceo's actions indicate he does not wish to
defend against Plaintiff's complaint, the Court finds no
less drastic sanctions are feasible.
Four of
the five factors favor striking Defendant Arceo's Answer
and entering his default. While this sanction precludes
resolution of the claims against him on the merits, his
behavior offers no alternative. In the last two years,
Defendant Arceo has refused to participate in the litigation
despite the Court ordering him to do so. Even if the Court
allowed his Answer to stand, it appears he would not defend
the case on the merits. Therefore, application of the
five-part test indicates that striking Defendant Arceo's
Answer and entering default is an appropriate sanction.
Finally,
before entering default as a sanction, the Court must find
Defendant Arceo's violation was “due to
willfulness, bad faith, or fault of the party.”
Hester, 687 F.3d at 1169 (quoting Jorgensen v.
Cassiday, 320 F.3d 906, 912 (9th Cir. 2003)).
Plaintiffs' counsel made numerous attempts to confer with
Defendant Arceo about the requested discovery prior to moving
to compel. (Doc. 449-1 ¶ 2.) This included phone calls,
one of which was returned by Mr. Arceo. (Doc. 140-1 ¶
8.) The discovery requests, motion to compel, and the
Court's Order granting the motion to compel were all sent
(and not returned) to Defendant Arceo's address of record
at the time.[1] In February 2019, Plaintiffs' counsel
spoke to Defendant Arceo by telephone and discussed the
possible consequences for his failure to comply with the
Court's Order. (Id. ¶ 6.) Because Defendant
Arceo is aware of the requested discovery, as well as the
Court's order that he respond to Plaintiffs'
requests, the Court concludes his failure to respond to
discovery and comply with the Court's Order was willful
and that he is at fault for the violation.
Defendants
oppose Plaintiffs' motion, arguing that granting a
default judgment at this stage of the litigation risks
inconsistent judgments. (Doc. 463.) In their Reply,
Plaintiffs clarified that they are requesting only entry of
default and not a default judgment. (Doc. 473 at 3 n.4.) For
that reason, the Court does not address the arguments set
forth in Defendants' opposition.
RECOMMENDATION
Based
on the foregoing, the Magistrate Judge recommends that the
District Court enter an order granting Plaintiffs' motion
(Doc. 449). In turn, the Magistrate Judge recommends the
District Court direct the Clerk of Court to strike Defendant
Arceo's Answer (Doc. 81) and enter Defendant Arceo's
default.
Pursuant
to Federal Rule of Civil Procedure 72(b)(2), any party may
serve and file written objections within fourteen days of
being served with a copy of the Report and Recommendation. A
party may respond to the other party's objections within
fourteen days. No. reply brief shall be filed on objections
unless leave is granted by the District Court. If objections
are not timely filed, they may be deemed waived.
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