Tenorio et al v. Gallardo et al

Filing 71

FINDINGS and RECOMMENDATIONS to Strike the Answer and Enter Default, signed by Magistrate Judge Jennifer L. Thurston on 8/3/2017. Referred to Judge Dale A. Drozd. Objections to F&R due within 14 days. (Hall, S)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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LUCARIA TENORIO, et al.,

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Plaintiffs,

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v.
GABRIEL GALLARDO SR., et al.,

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Defendants.

) Case No.: 1:16-cv-00283 DAD JLT
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) FINDINGS AND RECOMMENDATION TO
) STRIKE THE ANSWER AND ENTER DEFAULT
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On May 10, 2017, the Court granted the motion of counsel to withdraw from the representation

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of Kern County Cultivation, Inc. (Doc. 60) At that time, the Court required Kern County Cultivation,

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Inc. to retain a new attorney because a corporation may not appear without counsel. (Doc. 60 at 6)

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Kern County Cultivation, Inc. failed to respond or to appear through counsel.

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On June 22, 2017, the Court issued an order to Kern County Cultivation, Inc. to show cause

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why sanctions should not be imposed for its failure to comply with the Court’s order and to appear

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through counsel. (Doc. 65) The Court required that a response or an appearance by substitute counsel

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occur by July 14, 2017. Id. at 1. The Court warned that the failure to comply would result in

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sanctions, “up to and including the Court striking its answer and entering default against it.” Id. Once

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again, there was no response from Kern County Cultivation, Inc. Thus, the Court recommends that

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Kern County Cultivation, Inc.’s answer be stricken and default entered.

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I.

The Court has the inherent authority to strike the answer and entering default
The court has the inherent authority “to levy sanctions in response to abusive litigation

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practices.” Leon v. IDX Systems, 464 F.3d 951, 958 (9th Cir.2006). This power is not limited to

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statutory authority and may be invoked even where a statute grants the court the equivalent authority.

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Haeger v. Goodyear Tire & Rubber Co., 813 F.3d 1233, 1243 (9th Cir.2016). The Court’s inherent

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authority is to be exercised “with restraint and discretion.” Chambers v. NASCO, Inc., 501 U.S. 32, 44

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(1991). Imposing sanctions according to the Court’s inherent authority may occur where the party has

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acted “vexatiously, wantonly, or for oppressive reasons.” Id. at 45–46; see also Haeger, 813 F.3d at

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1244 (holding that “[b]efore awarding sanctions pursuant to its inherent power, the court must make

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an express finding that the sanctioned party's behavior constituted or was tantamount to bad faith.”)

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(internal quotations and citations omitted); Anheuser–Busch, Inc. v. Natural Beverage Distributors, 69

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F.3d 337, 348 (9th Cir.1995) (“For dismissal to be proper, the conduct to be sanctioned must be due to

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willfulness, fault, or bad faith.”) (internal quotations and citations omitted). In addition, “[d]ue process

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concerns further require that there exist a relationship between the sanctioned party's misconduct and

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the matters in controversy such that the transgression ‘threaten[s] to interfere with the rightful decision

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of the case.’ ” Anheuser–Busch, 69 F.3d at 348 (quoting Wyle v. R.J. Reynolds Indus., Inc., 709 F.2d

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585, 591 (9th Cir.1983)).
Part of the Court’s inherent authority allows it to impose non-monetary sanctions including

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striking the answer and entering default. Haeger, at 1251 (citing Thompson v. Housing Authortity of

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Los Angeles, 782 F.2d 829, 831 (9th Cir.1986)). In Employee Painters' Tr. v. Ethan Enterprises, Inc.,

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480 F.3d 993, 998 (9th Cir. 2007), the Court explicitly condoned striking the answer and entering

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default where the corporation failed to appear through counsel despite the local rule requiring

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II.

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Striking the answer and entering default is appropriate
As noted above, Kern County Cultivation, Inc. has failed to respond to the Court’s orders.

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Moreover, it is noteworthy that at the time its counsel sought to withdraw, this defendant refused to

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comply with discovery requests which necessitated the plaintiffs to file two motions to compel the

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discovery (Docs. 44, 61) This was part of the reason that its counsel sought to withdraw from the

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representation. (Docs. 39, 44)
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Also, back in April 2017, the entity acknowledged its obligation to appear in this action

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through counsel and understood its obligation to defend itself in this action. (Doc. 54) The entity

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acknowledged that if it failed to comply with these obligations “action will be taken against them.

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Defendants will lose their case” and that “[f]ailure to retain an attorney will lead to an order dismissing

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the action.” Id. at 2. Likewise, the Court’s Local Rule 183(a) explicitly requires that “[a] corporation

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or other entity may appear only by an attorney” and the failure to do so is “ground for dismissal,

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judgment by default, or any other sanction appropriate under these Rules.” Despite this, Kern County

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Cultivation, Inc. has failed to comply with the Court’s orders and appear through counsel in this

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action. Thus, the Court recommends that its answer be stricken.

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In addition, the Court finds that entering default is warranted. In so finding, the Court has

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considered five factors: “(1) the public's interest in expeditious resolution of litigation; (2) the court's

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need to manage its docket; (3) the risk of prejudice to the other party; (4) the public policy favoring the

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disposition of cases on the merits; and (5) the availability of less drastic sanctions.” Adriana

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International Corp. v. Thoeren, 913 F.2d 1406, 1412 (9th Cir.1990).
First, due to Kern County Cultivation, Inc.’s failure to cooperate with this case, the matter has

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languished since February 2017. See Docs. 38-44. This failure has deprived the plaintiffs and the

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public in expeditiously resolving this dispute. Second, the Court is obligated to manage its docket and

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to move case as quickly as possible to a just end. The failure of the entity to engage in the litigation

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process has thwarted this effort. Third, by allowing the matter to drag on despite the entity’s failure to

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cooperate and participate in it, places the plaintiffs in an untenable position in which they are unable to

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obtain the needed discovery to prove their case and unable to move forward. Fourth, though the public

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has a strong interest in resolving cases on their merits, this is not possible here where the entity refuses

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to provide even a minimal respond to the Court. Finally, the Court sees no lesser sanction is available.

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Repeatedly, the entity has been warned of what will occur if it fails to obtain counsel, to participate in

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this action and to comply with the Court’s orders. Despite this, it has refused to modify its posture.

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Therefore, the Court recommends that default be entered against Kern County Cultivation, Inc.

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VII.

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Findings and Recommendations
Based upon this analysis, the Court RECOMMENDS:
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Defendant, Kern County Cultivation, Inc.’s, answer (Doc. 52) be STRICKEN;

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Default be entered against Kern County Cultivation, Inc.

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These Findings and Recommendations are submitted to the United States District Judge

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assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(1)(B) and Rule 304 of the Local

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Rules of Practice for the United States District Court, Eastern District of California. Within fourteen

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days of the date of service of these Findings and Recommendations, any party may file written

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objections with the court. Such a document should be captioned “Objections to Magistrate Judge’s

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Findings and Recommendations.” Any reply to objections shall be filed within seven days of the date

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of service of the objections. The parties are advised that failure to file objections within the specified

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time may waive the right to appeal the District Court’s order. Martinez v. Ylst, 951 F.2d 1153 (9th Cir.

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1991); Wilkerson v. Wheeler, 772 F.3d 834, 834 (9th Cir. 2014).

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IT IS SO ORDERED.
Dated:

August 3, 2017

/s/ Jennifer L. Thurston
UNITED STATES MAGISTRATE JUDGE

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