On Command Video Corp.
v. Lodgenet Entertainment Co., 976 F. Supp. 917 (N.D.Cal. 08/7/1997)
Similarly, the decision of whether
to impose Rule 37 sanctions for discovery
violations is also considered a non-dispositive matter. See Ocelot
Oil Corp. v. Sparrow Indus., 847 F.2d 1458, 1465 (9th
Cir. 1988).
*fn2"
However, because only a district court may hold a party in contempt,
Grimes, 951 F.2d at 240, the Magistrate's findings on the issue
of civil contempt will be reviewed de novo.
*fn3"
[On Command Video Corp. v. Lodgenet
Entertainment Co., 976 F. Supp. 917 (N.D.Cal. 08/7/1997)]
Zornes v. Specialty Industries,
Inc., No. 97-2337 (4th Cir. 12/21/1998)
Rule 37(d) of the Federal Rules of
Civil Procedure gives the district court wide discretion to impose
sanctions for a party's failure to comply with its discovery orders.
Thus, it is only for an abuse of discretion that a reviewing court
may reverse the decision of the district court. See National Hockey
League v. Metropolitan Hockey Club, Inc., 427 U.S. 639, 642 (1976);
United States v. Shaffer Equip. Co., 11 F.3d 450, 462 (4th Cir.
1993). In fact, the Supreme Court has cautioned us not to allow
the "natural tendency on the part of reviewing courts, properly
employing the benefit of hindsight, to be heavily influenced by
the severity of outright dismissal as a sanction for failure to
comply with a discovery order." National Hockey League, 427 U.S.
at 642. "The question, of course, is not whether [we] would as an
original matter have dismissed the action; it is whether the District
Court abused its discretion in so doing." Id.
In an effort to balance the competing
interests of the due process rights of the litigants and the integrity
of the judicial process, the Supreme Court has held that a court
must consider four factors before imposing sanctions under Rule
37(d): (1) whether the non-complying party acted in bad faith; (2)
the amount of prejudice the party's noncompliance caused the opposing
party, which necessarily includes an inquiry into the materiality
of the evidence that the non-complying party failed to produce;
(3) the need for deterrence of the particular sort of noncompliance;
and (4) the effectiveness of less drastic sanctions. See Mutual
Fed. Sav. & Loan Ass'n v. Richards & Assocs., 872 F.2d 88, 92 (4th
Cir. 1989). The Fourth Circuit has stated further that before dismissing
a case with prejudice, the district court must give a party a "clear
and explicit" warning of the consequences of failing to satisfy
the court's conditions and orders. Choice Hotels Int'l, Inc. v.
Goodwin & Boone, 11 F.3d 469, 472 (4th Cir. 1993); see also Hathcock
v. Navistar Int'l Transp. Corp., 53 F.3d 36, 40-41 (4th Cir. 1995)
(noting that "this court has emphasized the significance of warning
a defendant about the possibility of default[under Rule 37] before
entering such a harsh sanction"); Lolatchy v. Arthur Murray, Inc.,
816 F.2d 951, 954 n.2 (4th Cir. 1987) (noting that warning to parties
was a "salient fact" that distinguished cases in which default judgment
was appropriate sanction for discovery abuse under Rule 37).
In this case, the magistrate Judge
expressly warned Appellants early in the parties' litigation that
further discovery abuse would result in the dismissal of their actions.
In his August 22 order, the magistrate Judge wrote that "[n]o party
should be allowed to thwart the purposes of the rule or to ignore
the time requirements imposed by the Rule." (J.A. at 66.) Again,
in his September 18 Show Cause Order, the magistrate Judge specifically
warned that failure to comply with the requirements of the discovery
rules could result in dismissal with prejudice of Appellants' claims.
Finally, the magistrate Judge verbally chastised Appellants during
the November 18 hearing and ordered their compliance with Appellee's
discovery requests.*fn7 In spite of these clear
warnings, Appellants nevertheless continued to violate the magistrate
Judge's orders, ignore the Rules of Civil Procedure, and unreasonably
reject Appellee's attempts to maintain an orderly discovery process.
As a result, we cannot say that the district court abused its discretion
when it ultimately resorted to the severest sanction of dismissing
Appellants' complaints with prejudice pursuant to Rule 37(d) of
the Federal Rules of Civil Procedure.
[Zornes v. Specialty Industries,
Inc., No. 97-2337 (4th Cir. 12/21/1998)]
Ocelot Oil Corp. v. Sparrow
Industries, 847 F.2d 1458 (10th Cir. 05/31/1988)
28 U.S.C. § 636(b) establishes that
magistrates may hear and determine any pretrial matters pending
before the court, save for eight excepted motions.*fn1
These eight motions are generally referred to as "dispositive" motions.
Magistrates may issue orders as to non-dispositive pretrial matters,
and district courts review such orders under a "clearly erroneous
or contrary to law" standard of review. 28 U.S.C. § 636(b)(1)(A).
While magistrates may hear dispositive motions, they may only make
proposed findings of fact and recommendations, and district courts
must make de novo determinations as to those matters if a party
objects to the magistrate's recommendations. Id. § 636(b)(1)(B),
(C).
In this case, the magistrate's
order struck plaintiff Ocelot's pleadings as to the Browns as a
Rule 37 sanction for abuse of the discovery process. Discovery is
clearly a pretrial matter, and magistrates thus have general authority
to order discovery sanctions. They may not do so, however, if those
sanctions fall within the eight dispositive motions excepted in
subsection (A). The eighth of those motions is "a motion . . . to
involuntarily dismiss an action." Id. § 636(b)(1)(A).
The striking of Ocelot's pleadings
with prejudice means that Ocelot can no longer sue the Browns. This
sanction has the effect of dismissing Ocelot's action, contrary
to Ocelot's wishes, and operates as res judicata. We conclude that
the order constitutes the involuntary dismissal of Ocelot's action
within section 636(b)(1)(A), and is thus beyond the power of a magistrate
to order. See Zises v. Department of Social Services, 112 F.R.D.
223, 226 (E.D.N.Y. 1986). The fact that the striking of the pleadings
was ordered as a discovery sanction does not change its effect.
See 7 J. Moore, Moore's Federal Practice para. 72.04 [2.-4] at 72-51
(1987) ("Sanctions may be either dispositive or non-dispositive,
and hence the treatment of them by the magistrate and the district
judge varies with the severity of the penalty being considered.").
We find support for our reading of
subsection (A) in Rule 72 of the Federal Rules of Civil Procedure.
Rule 72 specifies the procedures to be used by magistrates with
regard to pretrial matters.*fn2
The Rule reflects the division in section 636(b) between matters
as to which magistrates may issue orders and matters as to which
magistrates may make only proposed findings of fact and recommendations.
Significantly, the Rule does not list the specific motions which
fall into each category, but simply refers to matters as either
"dispositive" or "not dispositive" of a claim or defense. Fed. R.
Civ. P. 72. As to any dispositive matter, magistrate authority is
limited and the district court must use the de novo standard of
review. Id. 72(b). The notes to Rule 72 explicitly tie the two categories
used in Rule 72 to referrals under either subsection (A) or subsection
(B) of section 636. See Fed. R. Civ. P. 72 advisory committee note.
Because Rule 72 became law subsequent to the relevant amendment
to section 636, we read the notes as confirming our interpretation
of the section: motions not designated on their face as one of those
excepted in subsection (A) are nevertheless to be treated as such
a motion when they have an identical effect. See Zises, 112 F.R.D.
at 226.
This dispositive/non-dispositive
distinction is foreshadowed by the legislative history of the amendment
to section 636 that gave magistrates authority to hear the eight
motions listed in subsection (A). The House Report, for instance,
refers to the motions throughout as dispositive motions. H.R. Rep.
No. 94-1609, 94th Cong., 2d Sess., reprinted in 1976 U.S. Code Cong.
& Admin. News 6162.
Our interpretation is further confirmed
by the requirement that we read section 636 so as to avoid constitutional
problems, where such a reading is fairly possible. See Crowell v.
Benson, 285 U.S. 22, 62, 76 L. Ed. 598,52 S. Ct. 285 (1932) ("When
the validity of an act of the Congress is drawn in question, and
even if a serious doubt of constitutionality is raised, it is a
cardinal principle that this court will first ascertain whether
a construction of the statute is fairly possible by which the question
may be avoided."). The Constitution requires that Article III judges
exercise final decisionmaking authority. See United States v. Raddatz,
447 U.S. 667, 683, 65 L. Ed. 2d 424, 100 S. Ct. 2406 (1980); cf.
Northern Pipeline Constr. Co. v. Marathon Pipe Line Co., 458 U.S.
50, 62, 73 L. Ed. 2d 598, 102 S. Ct. 2858 (1982) (plurality opinion)
(judicial power of the United States must be vested in Article III
courts). Dismissal with prejudice is undoubtedly a final decision
with respect to the claims against the Browns. Section 636 may not
be read to confer more power on magistrates than the Constitution
permits.*fn3
Finally, other courts
have also recognized that motions other than those explicitly listed
in subsection (A) are dispositive within the context of section
636, and have consequently limited magistrate authority to decide
them. See 7 J. Moore, supra, paras. 72.04 [2.-4], [2.-6]
(citing categories of dispositive motions and citing cases).
In short, then, we hold that the
striking of pleadings with prejudice, whether as a discovery sanction
or for some other reason, constitutes the involuntary dismissal
of an action within the meaning of section 636(b)(1)(A). When Ocelot
objected to the magistrate's order, the district court was required
to make a de novo determination of the basis for the order.
[. . .]
We recognize, however, that it is
not always easy to determine whether a course of conduct is the
result of mere inattention by counsel or is a matter of strategy
on their part. Under the rule laid down in In re Sanction of
Baker, 744 F.2d 1438, which requires that the impact of the sanction
be lodged where the fault lies, id. at 1442, a number of factors
should be considered by the district courts in making their findings
on the issue of fault. Those factors include "(1) the degree of
actual prejudice to the defendant . . .; (2) the amount of interference
with the judicial process . . .; and (3) the culpability of the
litigant." Meade, F.2d at n.7, slip op. at 10 n.7; see also Hollis,
744 F.2d at 1433; Joplin v. Southwestern Bell Tel. Co., 671 F.2d
1274, 1276 (10th Cir. 1982) (per curiam); cf. Brinkmann v. Dallas
County Deputy Sheriff Abner, 813 F.2d 744, 749 (5th Cir. 1987) (listing
factors to be considered before ordering default or dismissal);
Shea v. Donohoe Constr. Co., 254 U.S. App. D.C. 175, 795 F.2d 1071,
1074-79 (D.C. Cir. 1986) (same); Poulis v. State Farm Fire & Cas.
Co., 747 F.2d 863, 868-70 (3d Cir. 1984) (same). "Only when the
aggravating factors outweigh the judicial system's strong predisposition
to resolve cases on the merits . . ., is dismissal an appropriate
sanction." Meade, F.2d at n.7, slip op. at 10-11 n.7.
[Ocelot Oil Corp. v. Sparrow Industries,
847 F.2d 1458 (10th Cir. 05/31/1988)]
Boston Safe Deposit and
Trust Co. v. Motor Yacht Dulcinea, 5 F.3d 535 (9th Cir. 09/10/1993)
Under the existing statutory structure,
the magistrate's jurisdiction to order sanctions, rather than recommend
sanctions to the district court, is dependent upon whether Rule
11 sanctions are characterized as dispositive or non-dispositive
of a claim or defense of a party. See 28 U.S.C. § 636(b)(1); and
Fed.R.Civ.P. 72. If Rule 11 sanctions are characterized as non-dispositive,
then under § 636(b)(1)(A) and Rule 72(a), the magistrate here properly
entered "a written order setting forth the disposition of the matter"
and the district court properly reviewed the matter for clear error.
Fed.R.Civ.P. 72(a); 28 U.S.C. § 636(b)(1)(A). Alternatively, if
Rule 11 sanctions are characterized as dispositive, then the magistrate
had authority only to "enter into the record a recommendation for
disposition of the matter" to be reviewed by the district court
de novo. See Fed.R.Civ.P. 72(b); see also 28 U.S.C. § 636(b)(1)(B).
For the reasons set forth below, we find that the Rule 11 sanctions
imposed here are non-dispositive matters properly ordered by the
magistrate and reviewed by the district court for clear error.
First, Rule 72(a) defines non-dispositive
matters as those "pretrial [matters] not dispositive of a claim
or defense of a party." Although Rule 11 expressly applies to "every
pleading, motion, and other paper of a party," the Rule 11 sanctions
imposed here were not dispositive of a claim or defense of a party.
In fact, the parties had already settled the case prior to Dombroski's
filing his motion for reconsideration. Thus, under Rule 72(a), the
Rule 11 sanctions imposed in this case are properly characterized
as non-dispositive.
Second, the Federal Magistrates Act,
codified at 28 U.S.C. §§ 604, 631-639 and 18 U.S.C. §§ 3060, 3401-3402
and implemented by Fed.R.Civ.P. 72-75, supports our conclusion that
Rule 11 sanctions are non-dispositive matters. Specifically, section
636(b)(1)(A) lists those motions which may not be determined by
a magistrate. Accordingly, any motion not listed, nor analogous
to a motion listed in this category, falls within the non-dispositive
group of matters which a magistrate may determine. See 7 J. Moore,
J. Lucas & K. Sinclair, Jr. Moore's Federal Practice, Par. 72.02[4.-8],
at 72-19 (2d ed. 1989). See also Ocelot Oil Corp. v. Sparrow Indus.,
847 F.2d 1458, 1461-62 (10th Cir. 1988). Rule 11 sanctions are not
listed in the group of dispositive matters, nor do the sanctions
imposed here have an effect similar to those motions considered
dispositive
Finally, although we have not previously
decided this issue, other courts have noted that discovery sanctions
not falling within the motions excepted in section 636(b)(1) are
non-dispositive matters. See, e.g., id. at 1462; Merritt v. International
Bro. of Boilermakers, 649 F.2d 1013, 1016-17 (5th Cir. 1981). In
this context, we see no material distinction between Rule 11 sanctions
and Rule 37 sanctions. In Rule 11, the word sanctions stresses a
deterrent orientation in dealing with improper pleadings, motions,
or other papers. "This corresponds to the approach in imposing sanctions
for discovery abuses." Fed.R.Civ.P. 11, advisory committee notes
(1983 amendment).
For these reasons, we find that the
Rule 11 sanctions imposed in this case are non-dispositive. Accordingly,
the magistrate had jurisdiction to order Rule 11 sanctions and the
district court properly reviewed the magistrate's order for clear
error.
Having decided that a magistrate
has jurisdiction to order Rule 11 sanctions, we next decide if jurisdiction
was properly referred to the magistrate in this case. See Fed.R.Civ.P.
72(a); 7 J. Moore, J. Lucas & K. Sinclair, Jr., Moore's Federal
Practice Par. 72.02[4.-1], at 72-14 (2d ed. 1989) ("Rule 72 provides
procedural instructions in matters before a magistrate 'to whom
a pretrial matter . . . is referred '.") (emphasis in original).
[Boston Safe Deposit and Trust Co.
v. Motor Yacht Dulcinea, 5 F.3d 535 (9th Cir. 09/10/1993)]
Bennett v. General Caster
Serv. of N. Gordon Co., No. 91-2225, slip op. at 5-6 (6th Cir. Sept.
23, 1992)
(magistrate
Judge lacked jurisdiction to enter postjudgment order imposing monetary
sanctions);
[Bennett v. General Caster Serv.
of N. Gordon Co., No. 91-2225, slip op. at 5-6 (6th Cir. Sept. 23,
1992)]
Grimes v. City and County of
San Francisco, 951 F.2d 236 (9th Cir. 12/16/1991)
The Tenth and Fifth Circuits have
held that sanctions are non-dispositive matters which may be imposed
directly by a magistrate. "Discovery is clearly a pretrial matter,
and magistrates thus have general authority to order discovery sanctions."
Ocelot Oil Corporation v. Sparrow Industries, 847 F.2d 1458, 1462
(10th Cir. 1988). "Despite appellants' contentions to the contrary,
the magistrate possessed the authority under 28 U.S.C. § 636(b)(1)(A)
to enter non-dispositive discovery orders," including reasonable
expenses and attorney's fees. Merritt v. International Bro. of Boilermakers,
649 F.2d 1013, 1016-17 (5th Cir. 1981).
We have cited both Ocelot and Merritt
with approval. Maisonville v. F2 America, Inc., 902 F.2d 746, 748
(9th Cir. 1990), cert. denied, 111 S. Ct. 674 (1991). In Maisonville,
we considered a magistrate's authority to order Rule 11 sanctions,
and concluded: "The Rule 11 sanctions . . . are non-dispositive.
Accordingly, the magistrate had jurisdiction to order Rule 11 sanctions."
Id. In doing so, we stressed that "we see no material distinctions
between Rule 11 sanctions and Rule 37 [discovery] sanctions." Id.
The City argues, however, that even
if magistrates have the authority to impose some sanctions, they
do not have the power to fashion proscriptive sanctions which are
designed to compel compliance with a discovery order. We disagree.
The very purpose of Rule 37 is to insure compliance with discovery
orders. "Without adequate sanctions the procedure for discovery
would be ineffectual." C. Wright & A. Miller, Federal Practice and
Procedure : Civil § 2281 (1970 & Supp. 1988). To that end, Rule
37 is flexible: "The sanctions enumerated in the rule are not exclusive
and arbitrary but flexible, selective, and plural. The court may,
within reason, use as many and as varied sanctions as are necessary
to hold the scales of justice even." Id., § 2284.
With the need for this flexibility
in mind, we reject the City's argument that prospective sanctions
can only be imposed through a finding of civil contempt. See, e.g.
United States v. Westinghouse Elec. Corp., 648 F.2d 642 (9th Cir.
1981). We have already noted that "as in civil contempt, discovery
sanctions may be imposed to compel compliance with an order or to
compensate the opposite party." Falstaff Brewing Corp. v. Miller
Brewing Corp., 702 F.2d 770, 783 n.10 (9th Cir. 1983). We hold that
magistrates may impose prospective sanctions pursuant to Rule 37
where such sanctions are necessary to enforce compliance with a
valid discovery order.
In this case, the City's obstruction
of the discovery process caused unnecessary delay and expense, and
its willful disobedience of the magistrate's orders threatened the
court's integrity. The magistrate had the authority to impose discovery
sanctions, and the district court did not err in affirming the magistrate's
$85,000 sanction of the City.
[Grimes v. City and County of San Francisco, 951 F.2d 236 (9th
Cir. 12/16/1991)]
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