Shepherd et al v. S3 Partners, LLC et al

Filing 119

ORDER RECOMMENDING SANCTIONS re 109 Order to Show Cause, Set Hearings. Signed by Judge Paul S. Grewal on 1/9/2012. (psglc2, COURT STAFF) (Filed on 1/9/2012)

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United States District Court
For the Northern District of California

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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MARK SHEPHERD and DELIA SHEPHERD,

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Plaintiffs,
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v.
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S3 PARTNERS, LLC; ALARIS
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DEVELOPMENT; THE SHIELDS
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FOUNDATION; NORTHWEST CONSULTING )
GROUP, LLC; CORINTHIAN WEALTH
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MANAGEMENT; GOLDEN CREST WEALTH )
MANAGEMENT; PIERCE ARROW
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INVESTORS, LLC; LIVINGSTONE CAPITAL; )
STAGECOACH RETAIL, LLC; MICHAEL
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SIMS; SAM STAFFORD; MELVIN RUSSEL )
SHIELDS; DAVID VAUGHN; DAVID
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SAMUELS; CHASTAN SHIELDS; DOUG
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BURKE,
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Defendants.
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(RE: Docket No. 109)

judge settlement conference.1 None of the defendant parties appeared at the settlement conference,

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REPORT AND RECOMMENDATION
FOR SANCTIONS

On October 20, 2011, Judge Whyte referred this matter to the undersigned for magistrate

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Case No.: C 09-1405-RMW

See Docket No. 96.
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Case No.: 09-1405
ORDER

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scheduled for December 29, 2011.2 The same parties also failed to appear on January 6, 2012, as

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ordered, to show cause why they should not be sanctioned for their December 29 failure to appear.3

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At the January 6 show cause hearing, Plaintiffs requested the court consider entering a dispositive

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sanction by striking Defendants’ pleadings and entering default.

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In light of Defendants’ repeated failures to appear or otherwise respond to court orders, the
undersigned agrees that the requested sanctions are warranted. Under the civil local rules, the court
may refer the case to a judicially hosted settlement conference.4 The undersigned construes Judge
Whyte’s October 20, 2011 settlement conference referral order to be part of the pretrial scheduling

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United States District Court
For the Northern District of California

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and management orders in this case.5 Failure to adhere to the court-ordered ADR procedure, as set

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forth in the court’s pretrial scheduling order, may subject the disobedient party to sanctions.6 Such

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sanctions may include striking pleadings in whole or in part and rendering a default judgment

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against the subject party.7

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See Docket No. 108.

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See Docket No. 116. Defendants Livingstone Capital, Michael Sims, and Sam Stafford were
erroneously included in the court’s December 29 order to show cause. Livingstone Capital
prevailed on summary judgment on all counts. See Docket No. 95. Based on Plaintiff’s
representations to the court at the January 6, 2012 show cause hearing, Michael Sims and Sam
Stafford have filed for bankruptcy.

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See, e.g., Fed. R. Civ. P. 16(a)(5) (“In any action, the court may order the attorneys and any
unrepresented parties to appear for one or more pretrial conferences for such purposes as …
facilitating settlement.”); Civ. L.R. 16-10(b)(1) (providing that the court may use a subsequent case
management order to establish deadlines for commencement and completion of any ADR
proceedings).

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See Fed. R. Civ. P. 16(f)(C) (“[T]he court may issue any just orders, including those authorized
by Rule 37(b)(2)(A)(ii)-(vii), if a party or its attorney … fails to obey a scheduling or other pretrial
order.”). See also Nick v. Morgan’s Foods, Inc., 270 F.3d 590, 594-595 (8th Cir. 2001) (affirming
district court’s authority to issue sanctions for failure to comply with pretrial order referring parties
to mediation).
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See Civ. L.R. 16-8(a).

See Fed. R. Civ. P. 37(b)(2)(A)(iii), (vi).
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Case No.: 09-1405
ORDER

Issuance of such dispositive sanctions is the proper domain of the presiding judge.8 IT IS

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HEREBY RECOMMENDED that the presiding judge issue an order granting Plaintiffs’ request

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that the answer of the non-appearing defendants be stricken, default entered, and a default

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judgment issued against them.

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Dated: January 9, 2012

_________________________________
PAUL S. GREWAL
United States Magistrate Judge

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United States District Court
For the Northern District of California

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Absent consent of all parties, a magistrate judge does not have authority to make case-dispositive
rulings. See, e.g., Tripati v. Rison, 847 F.2d 548, 548-49 (9th Cir. 1988).
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Case No.: 09-1405
ORDER