United States of America v. $2,164,341.00 in US Currency

Filing 41

ORDER denying 34 Motion for Sanctions. Signed by Judge David G Campbell on 1/28/2013.(NVO)

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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 United States of America Plaintiff, 10 11 ORDER v. 12 No. CV12-0105-PHX-DGC $2,164,341 in US Currency Defendant. 13 14 Before the Court is the motion for discovery sanctions and entry of judgment by 15 Plaintiff United States of America. Doc. 34. Before ruling on the fully briefed motion, 16 the Court requested additional briefing on the issue of discovery sanctions. Doc. 37. 17 Both Plaintiff and Claimant Leonardo Cornejo–Reynoso (“Claimant”) submitted 18 additional memoranda. Docs. 39, 40. For the reasons set forth below, the Court will 19 grant in part Plaintiff’s motion.1 20 I. Background. 21 Plaintiff’s complaint seeking forfeiture of $2,164,341 in United States currency 22 was filed on January 17, 2012. Doc. 1. Claimant’s answer claiming an interest in the 23 money was filed on February 8, 2012. Doc. 7. 24 25 Plaintiff served a notice of Claimant’s deposition on February 14, 2012. Doc. 9. The attorneys agreed that the deposition would occur on March 15, 2012. When 26 1 27 28 Claimant’s request for oral argument is denied. The parties’ briefings and other submissions have amply addressed the issues raised by the motion, and the Court concludes that oral argument will not aid its decision. See Fed. R. Civ. P. 78(b); Partridge v. Reich, 141 F.3d 920, 926 (9th Cir. 1998). 1 Claimant had difficulty obtaining a visa to enter the United States, the deposition was 2 rescheduled to April 4, 2012. Doc. 18. Plaintiff arranged for Claimant, who lives in 3 Mexico and is not a U.S. citizen, to be paroled into the United States for purposes of the 4 deposition, but Claimant asserted that the parole documentation was received too late and 5 that he could not appear for the deposition. 6 deposition for May 4, 2012. Id. The parties agreed to reschedule the 7 Subsequent efforts to secure parole documents on a schedule that would work for 8 the parties were largely unsuccessful, and the parties ultimately agreed to seek an 9 extension of the discovery schedule in this case, which the Court approved. Doc. 16. 10 Counsel for Plaintiff was able to obtain parole documents for the month of August 2012, 11 and the parties agreed Claimant’s deposition would occur on August 30, 2012. But when 12 Claimant subsequently took the position that he needed assurances that he would not be 13 arrested upon entering the United States (presumably for criminal charges related to 14 seizure of the currency) and Plaintiff stated that no such assurances could be given, the 15 parties were unable to agree that the deposition would go forward. Plaintiff filed an 16 emergency motion to compel the deposition and Claimant filed an emergency motion for 17 a protective order. Docs. 18, 19. 18 The Court held a telephone conference with the parties on August 27, 2012. 19 Doc. 21. As a result of that conference, the Court declined to require Plaintiff to depose 20 Claimant by videoconference in Mexico as requested by Claimant’s counsel. The Court 21 also held that Claimant, having invoked the jurisdiction of the Court to assert his claim, 22 could not refuse to appear in this District for his deposition. Because the date of the 23 deposition was imminent and Claimant’s counsel sought additional time for Claimant to 24 consider carefully whether he would enter this country to give the deposition, the Court 25 put in place a schedule for the parties to complete the deposition. Doc. 22. The Court’s 26 order required Claimant, by September 19, 2012, to advise Plaintiff whether Claimant 27 was able to obtain a visa to enter the United States and, if so, how soon he could enter the 28 country for purposes of a deposition. Doc. 22 at 2. If Claimant was not able to obtain a -2- 1 visa, the Court’s order stated that Plaintiff should make arrangements for Claimant to be 2 paroled into the country to complete his deposition no later than November 30, 2012. Id. 3 The Court ordered that Claimant “shall appear for his deposition in this District on or 4 before November 30, 2012.” Id. 5 Claimant did not comply with the Court’s order. He did not notify Plaintiff by 6 September 19, 2012 whether he could obtain a visa to enter the country. Plaintiff’s 7 counsel nonetheless took steps to obtain parole documents and schedule the deposition. 8 On September 11, 2012, Plaintiff’s counsel wrote to Claimant’s counsel and proposed 9 several deposition dates between mid-September and early November 2012. Doc. 27-1 at 10 2. Claimant’s counsel did not respond to the proposed dates until October 5, 2012, when 11 Claimant’s Counsel wrote a letter requesting that the deposition occur in the second half 12 of November, and stating that Claimant had recently discovered that a criminal case was 13 pending against him in Coconino County Superior Court. Doc. 26-1 at 1. Plaintiff 14 scheduled Claimant’s deposition for October 23, 2012 (Doc. 25), and in response 15 Claimant filed an emergency motion for a protective order (Doc. 26). 16 The Court held a telephone conference with the parties on October 19, 2012. 17 Doc. 28. As a result of that conference, the Court denied Claimant’s motion for a 18 protective order and ordered Claimant to appear for his deposition on October 24, 2012. 19 Docs. 29, 32. Claimant failed to appear. Doc. 33. 20 II. Discussion. 21 A. Fugitive Disentitlement Doctrine. 22 Plaintiff submits that the Court may enter judgment in its favor under the fugitive 23 disentitlement provision of the Civil Asset Forfeiture Reform Act of 2000, 28 U.S.C. 24 § 2466(a) (“CAFRA”). Doc. 24 at 9-13. The Ninth Circuit has adopted the following 25 five-part test for determining whether a fugitive may be disentitled: “(1) a warrant or 26 similar process must have been issued in a criminal case for the claimant’s apprehension; 27 (2) the claimant must have had notice or knowledge of the warrant or process; (3) the 28 criminal case must be related to the forfeiture action; (4) the claimant must not be -3- 1 confined or otherwise held in custody in another jurisdiction; and (5) the claimant must 2 have deliberately avoided criminal prosecution by leaving the United States, declining to 3 enter or reenter the country, or otherwise evading the criminal court’s jurisdiction.” 4 United States. v. $6,190.00 in U.S. Currency, 581 F.3d 881, 886 (9th Cir. 2009) (citations 5 omitted). “Section 2466 does not mandate disentitlement once these five elements have 6 been satisfied. Rather, it provides that “[a] judicial officer may disallow a person from 7 using the resources of the courts of the United States.’” 8 § 2466 (emphasis added)). 9 Id. (quoting 28 U.S.C. Plaintiff has failed to satisfy the five elements of § 2466. Plaintiff has not 10 presented clear evidence that a warrant has been issued for Claimant’s arrest or that the 11 action pending in Coconino County Superior Court is related to this action. The Court 12 therefore will deny Plaintiff’s motion for judgment under the fugitive disentitlement 13 doctrine. 14 B. 15 Plaintiff has been seeking diligently to take Claimant’s deposition since February 16 of 2012. Three times Plaintiff has completed the difficult process of arranging for 17 Claimant to be paroled into the United States for his deposition, and three times Claimant 18 has declined to appear. Claimant has twice failed to comply with orders of this Court: 19 Claimant failed to advise Plaintiff on or before September 19, 2012, whether Plaintiff 20 was able to obtain a visa to enter the United States (as ordered in Doc. 22), and Claimant 21 failed to appear for his deposition on October 24, 2012 (as ordered in Doc. 32). 22 Sanctions are warranted. Discovery Sanctions. 23 Plaintiff asks the Court to strike Claimant’s answer and enter judgment in its 24 favor. Before case-terminating sanctions can be imposed, however, the Court must 25 consider five factors: “(1) the public’s interest in expeditious resolution of litigation; 26 (2) the court’s need to manage its dockets; (3) the risk of prejudice to the party seeking 27 sanctions; (4) the public policy favoring disposition of cases on their merits; and (5) the 28 availability of less drastic sanctions.” Hester v. Vision Airlines, 687 F.3d 1162, 1169 (9th -4- 1 Cir. 2012) (citations omitted). “[W]here a court order is violated, factors 1 and 2 support 2 sanctions and 4 cuts against case dispositive sanctions, so 3 and 5 . . . are decisive.” 3 Valley Eng’rs, Inc. v. Electric Eng’g Co., 158 F.3d 1051, 1057 (9th Cir. 1998). 4 The third factor looks to whether Claimant’s behavior “impaired [Plaintiff’s] 5 ability to go to trial or threatened to interfere with the rightful decision of the case.” 6 Hyde & Drath v. Baker, 24 F.3d 1162, 1166 (9th Cir. 1994) (quoting United States ex. 7 Rel. Wiltec Guam, Inc. v. Kahaluu Constr. Co., 857 F.2d 600, 604 (9th Cir. 1988)). 8 Although Claimant has responded to some written discovery, his deposition is clearly the 9 most important discovery step in this case. Claimant professes to own the more than $2 10 million seized from his truck, and it is his assertion of ownership that Plaintiff must 11 overcome to obtain forfeiture. Claimant’s steadfast refusal to appear for his deposition in 12 the District clearly has impaired Plaintiff’s ability to go to trial. Claimant’s deposition 13 avoidance also caused the Court to extend the discovery schedule by almost six months, 14 an extension that ultimately failed in securing his deposition. The Court and Plaintiff are 15 now faced with a closed discovery period and the prospect of trial on an incomplete 16 record. Without question, Claimant’s actions have impaired Plaintiff’s ability to go to 17 trial and the Court’s ability to reach a rightful decision in this case. 18 Factor 5 “involves consideration of three subparts: whether the court explicitly 19 discussed alternative sanctions, whether it tried them, and whether it warned the 20 recalcitrant party about the possibility of dismissal.” Valley Eng’rs, 158 F.3d at 1057. 21 Although the Court did address alternative sanctions at some stages of this case, it did not 22 warn Claimant that failure to appear at his deposition could result in judgment against 23 him. The Court did extend the time for Claimant to appear, and made efforts to enter a 24 schedule and procedure that would make his appearance as effective as possible. These 25 steps did not succeed in securing Claimant’s attendance at his deposition. 26 Although the Court concludes that the entry of judgment against Claimant is not 27 warranted at this stage, another Rule 37 sanction clearly is warranted. Rule 37 provides 28 that a court may impose the following sanction for failure to obey an order to provide -5- 1 discovery: “prohibiting the disobedient party from supporting or opposing designated 2 claims or defenses, or from introducing designated matters in evidence.” Fed. R. Civ. P. 3 37(b)(2)(A)(ii). The Court imposes the following sanction: Claimant is prohibited from 4 presenting his own oral or written testimony, in any form, related to the issues in this 5 case. Claimant cannot submit an affidavit in response to a motion for summary judgment 6 and cannot testify at trial, remotely or in person. The Court concludes that this sanction 7 is warranted in light of Claimant’s repeated refusals to appear and submit to a deposition 8 in this case. 9 Discovery is closed. The discovery period ended on January 22, 2013. Doc. 16. 10 Dispositive motions are due on February 22, 2013. Id. The Court will adhere to this 11 schedule. Plaintiff may file a motion for summary judgment in support of its claim in 12 this case, and Claimant cannot oppose the motion with his own testimony, in any form. 13 IT IS ORDERED that Plaintiff’s motion for entry of judgment and/or issuance of 14 terminating sanctions (Doc. 34) is denied. As a sanction for failing to comply with the 15 Court’s orders, Claimant is precluded from testifying, from introducing affidavits 16 containing his testimony, or from in any way presenting his own testimony in this matter. 17 Dated this 28th day of January, 2013. 18 19 20 21 22 23 24 25 26 27 28 -6-

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