Bartholomew; et al. vs. Burger King Corporation; et al.
ORDER (1) OVERRULING OBJECTIONS TO MAGISTRATE JUDGE'S OCTOBER 27, 2014 AMENDED FINDINGS AND RECOMMENDATION; AND (2) ADOPTING OCTOBER 27, 2014 AMENDED FINDINGS AND RECOMMENDATION TO GRANT DEFENDANTS' JOINT MOTION FOR SANCTIONS. Signed by JUDGE J. MICHAEL SEABRIGHT on 12/30/2014. Findings and Recommendation: doc no. 246 Amended Findings and Recommendation: doc no. 250 Objections to the Amended Findings and Recommendation: doc. no. 251 Defendant B urger King Corporation and CTI Foods Holding LLC's JOINT MOTION for Sanctions: doc no. 237 Defendant United States of America and Air Force Exchange Service's JOINDER to JOINT MOTION for Sanctions: doc no. 240 . (afc)CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications will be served by first class mail on December 31, 2014.
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
CLARK BARTHOLOMEW; TANYA
BARTHOLOMEW; and A.B., a Minor,
By His Next Friend CLARK
BURGER KING CORPORATION; CTI )
FOODS HOLDING CO., LLC.;
UNITED STATES ARMY AND AIR )
FORCE EXCHANGE SERVI76CES; )
CIVIL NO. 11-00613 JMS-BMK
ORDER (1) OVERRULING
OBJECTIONS TO MAGISTRATE
JUDGE’S OCTOBER 27, 2014
AMENDED FINDINGS AND
(2) ADOPTING OCTOBER 27, 2014
AMENDED FINDINGS AND
RECOMMENDATION TO GRANT
DEFENDANTS’ JOINT MOTION
ORDER (1) OVERRULING OBJECTIONS TO MAGISTRATE JUDGE’S
OCTOBER 27, 2014 AMENDED FINDINGS AND RECOMMENDATION;
AND (2) ADOPTING OCTOBER 27, 2014 AMENDED FINDINGS AND
RECOMMENDATION TO GRANT DEFENDANTS’ JOINT MOTION FOR
Before the court are Plaintiffs Clark Bartholomew (“Clark”), his wife
Tanya Bartholomew (“Tanya”), and their minor son A.B.’s (collectively,
“Plaintiffs”) Objections to Findings and Recommendations issued by Magistrate
Judge Richard L. Puglisi to grant Defendants’ Joint Motion for Sanctions
stemming from Plaintiffs’ failure to comply with court orders requiring in-person
attendance at a September 10, 2014 settlement conference. Doc. No. 251. An
October 16, 2014 Findings and Recommendation (“F&R”) recommended a
compensatory sanction of an award of attorneys’ fees and costs incurred by
Defendants Burger King Corporation (“BKC”), CTI Foods Holding Co., Ltd.
(“CTI”), and the United States of America and Army and Air Force Exchange
Service (“AAFES”) (collectively, “Defendants”). Doc. No. 246, F&R at 8. An
October 27, 2014 Amended Findings and Recommendation (“Amended F&R”)
incorporated the F&R, and recommended awards of $3,560.34, $3,668.00, and
$1,231.76 to BKC, CTI, and AAFES respectively. Doc. No. 250, Amended F&R
at 9. (Because the Amended F&R reiterates the conclusions in the F&R, the court
construes Plaintiffs’ Objections as directed towards the Amended F&R.)
Plaintiffs argue that the sanctions are punitive and violate the Fifth
Amendment to the United States Constitution, contending that (1) Plaintiffs did
not disobey the Court’s Orders of July 3 and 15, 2014, (2) Plaintiffs took all
reasonable steps to comply with the court’s orders, and (3) Defendants did not
sustain actual losses of attorneys’ fees and costs because of Plaintiffs’ absence.
Based on the following, the court OVERRULES Plaintiffs’ Objections, ADOPTS
the Amended F&R, and GRANTS Defendants’ Joint Motion for Sanctions.
On one level, this proceeding is simple -- the court ordered at least
one Plaintiff (as well as each Defendant) to personally appear at the September 10,
2014 settlement conference. No Plaintiff appeared. No prior notice was given to
the court or the Defendants. Plaintiffs thus violated a court order, and the court
has authority to sanction them.
Although the settlement conference was held, the dynamics of a
settlement conference are much different when the parties themselves attend. The
case did not settle, and Defendants sought costs or dismissal as a sanction.
Magistrate Judge Puglisi examined the circumstances, and recommended an award
of fees and costs, but not dismissal. His decision was correct. The court explains
these circumstances in more detail below.
During a July 3, 2014 status conference, this court directed that “[a]
further settlement conference, with at least one person with authority to settle from
each party, shall be scheduled by Friday, July 17, 2014.” Doc. No. 231. The case,
which was filed in 2011, had reached a critical juncture -- it was nearing trial
(then-set for August 19, 2014), see id., and prior settlement conferences had not
resolved the case. See, e.g., Doc. No. 223.1 On July 15, 2014, Magistrate Judge
Puglisi issued an Order Setting Settlement Conference (the “July 15 Order”)
specifically ordering “all parties and their lead counsel” to appear on September
10, 2014. Doc. No. 233, July 15 Order at 1 (emphasis added). The July 15 Order
further directed that “[e]ach party or a designated representative with final
settlement authority, other than an attorney of record, must personally attend the
settlement conference.” Id. (emphasis added). The July 15 Order noted that:
“Final settlement authority” means that the insurance
representatives at the settlement conference must be
authorized to explore settlement options fully and to
agree at that time to any settlement terms acceptable to
the parties. The person should have “unfettered
discretion and authority” to change the settlement
position of a party. The purpose of requiring a person
with unlimited settlement authority to attend the
conference contemplates that the person’s view of the
case may be altered during the face-to-face conference.
A limited or sum certain of authority is not adequate.
This fact distinguishes Plaintiffs’ reliance on United States v. U.S. Dist. Ct. for N.
Mariana Islands, 694 F.3d 1051, 1061 (9th Cir. 2012) (indicating that a court should consider
whether a representative may be “effectively available as needed during a settlement conference
without physical attendance. . . . Participation in a settlement conference by telephone or
teleconference may be a practical alternative”) in arguing that personal appearance was not
necessary. U.S. District Ct. specifically contemplated circumstances where a litigant’s personal
attendance might be important. See id. at 1060 (“That the settlement conference that is the
subject of the challenged orders is the first settlement conference to be held by the court in this
case is another important factor behind our conclusion [vacating sanctions]. There may be a time
in the course of settlement negotiations when a settlement judge may determine that the personal
participation of the person able to make a final decision is vital[.]”).
Id. at 1 n.1. The July 15 Order reiterated the need for the parties’ attendance
explaining that “[t]he order for parties’ personal appearance is intended to increase
the efficiency and effectiveness of the settlement conference, by reducing the time
for communication of offers and expanding the ability to explore options for
settlement.” Id. at 3.
At the September 10, 2014 settlement conference, two counsel of
record appeared in person for Plaintiffs, and one representative, along with
counsel, for each Defendant. Doc. No. 236. But no Plaintiff appeared in person.
Id. Neither Plaintiffs nor their counsel had given any prior notification that they
would not appear. Nor had they previously sought permission to appear, or to be
available, only by telephone. According to Clark, he was unable to attend in
person because he recently obtained employment in Virginia, had not accrued
sufficient leave to fly to Hawaii, and needed to be present to answer questions in
connection with his employer’s investigation into his background; however, both
he and Tanya were available by telephone. Doc. No. 243-1, Bartholomew Decl.
¶¶ 1-3, 5. Despite Plaintiffs’ failure to attend in person, a settlement conference
was held, but the case did not settle. Id.
On September 15, 2014, BKC and CTI filed a Joint Motion for
Sanctions, to which AAFES joined, Doc. No. 240, for “Clark[’s] failure to attend
said settlement conference, in violation of this Court’s orders.” Doc. No. 237,
Mot. at 3, 5. Plaintiffs filed their Opposition on September 29, 2014, alleging in
part that BKC violated four pretrial orders requiring the parties to exchange
written settlement offers. Doc. No. 243, Pls.’ Opp’n at 1-4. Defendants BKC and
CTI filed Replies on October 3 and 6, 2014, Doc. Nos. 244, 245, noting that
Plaintiffs failed to seek relief from the July 15 Order prior to the settlement
conference, and stating specific dates on which written correspondence regarding
settlement negotiations was sent to Plaintiffs via email. Doc. No. 245-1, Kidani
Decl. ¶ 6.
On October 16, 2014, Magistrate Judge Puglisi issued an F&R to
grant the Joint Motion, finding Plaintiffs in contempt for having violated a court
order, and directing Defendants to “file declarations regarding the attorneys’ fees
and costs incurred related to the September 10, 2014 Settlement Conference and in
making the present Motion.” Doc. No. 246, F&R at 8. On October 27, 2014, the
Amended F&R recommended awarding Defendants’ attorneys fees and costs in
the amounts of $3,560.34, $3,668.00, and $1,231.76 to BKC, CTI, and AAFES
respectively as a compensatory sanction. Doc. No. 250, Amended F&R at 9.
Plaintiffs filed Objections on October 30, 2014. Doc. No. 251.
AAFES filed a Position Statement on November 6, 2014, Doc. No. 252, and BKC
and CTI filed a Joint Response on November 13, 2014, Doc. No. 253. On
December 3, 2014, the court requested supplemental briefing from Plaintiffs. Doc.
No. 257. Accordingly, on December 17, 2014, Plaintiffs filed a Supplemental
Memorandum in Support of their Objections. Doc. No. 258. Pursuant to Local
Rule 7.2(d), the court finds this matter suitable for disposition without a hearing.
III. STANDARD OF REVIEW
When a party objects to a magistrate judge’s findings or
recommendations, the district court must review de novo those portions to which
the objections are made and “may accept, reject, or modify, in whole or in part, the
findings or recommendations made by the magistrate judge.” 28 U.S.C.
§ 636(b)(1); see also United States v. Raddatz, 447 U.S. 667, 673 (1980); United
States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en banc) (“[T]he
district judge must review the magistrate judge’s findings and recommendations
de novo if objection is made, but not otherwise.”).
Under a de novo standard, this court reviews “the matter anew, the
same as if it had not been heard before, and as if no decision previously had been
rendered.” Freeman v. DirecTV, Inc., 457 F.3d 1001, 1004 (9th Cir. 2006); United
States v. Silverman, 861 F.2d 571, 576 (9th Cir. 1988). The district court need not
hold a de novo hearing; however, it is the court’s obligation to arrive at its own
independent conclusion about those portions of the magistrate judge’s findings or
recommendation to which a party objects. United States v. Remsing, 874 F.2d
614, 618 (9th Cir. 1989).
The Amended F&R found Plaintiffs in contempt of a court order, or
orders. Applying a de novo review, the court sets forth the legal standard for civil
contempt sanctions, addresses Plaintiffs’ specific objections, and explains why the
standards are met here.2
The Amended F&R recommends a compensatory sanction of attorneys’ fees and costs
in accordance with the law of civil contempt. And Plaintiffs’ Objections are based on specific
provisions or elements of civil contempt case law. But even if Plaintiffs were not in contempt,
Plaintiffs’ unexcused disobeyance of a court order is also sanctionable under Federal Rule of
Civil Procedure 16(f), or under the court’s inherent power.
Rule 16(f) authorizes a court to “issue any just orders, including those authorized by Rule
37(b)(2)(A)(ii)-(vii), if a party or its attorney . . . fails to appear at a . . . pretrial conference . . . or
. . . obey a pretrial order.” Fed. R. Civ. P. 16(f)(1)(A), (C). Rule 16(f) further provides that
“[i]nstead of or in addition to any other sanction, the court must order the party . . . to pay the
reasonable expenses -- including attorney’s fees and costs -- incurred because of any
noncompliance with this rule, unless the noncompliance was substantially justified or other
circumstances make an award of expenses unjust.” Fed. R. Civ. P. 16(f)(2). See also Aloe Vera
of Am. v. United States, 376 F.3d 960, 964-65 (9th Cir. 2004) (“All federal courts are vested with
inherent powers enabling them to manage their cases and courtrooms effectively and to ensure
obedience to their orders. . . . As a function of this power, courts can dismiss cases in their
entirety, bar witnesses, award attorney’s fees and assess fines.”) (quoting F.J. Hanshaw Enters.,
Civil contempt “consists of a party’s disobedience to a specific and
definite court order by failure to take all reasonable steps within the party’s power
to comply.” Reno Air Racing Ass’n v. McCord, 452 F.3d 1126, 1130 (9th Cir.
2006) (quoting In re Dual-Deck Video Cassette Recorder Antitrust Litig., 10 F.3d
693, 695 (9th Cir. 1993)). Although the contempt “need not be willful, [ ] a
person should not be held in contempt if his action appears to be based on a good
faith and reasonable interpretation of the court’s order.” Id. (quoting In re Dual-
Inc. v. Emerald River Dev., Inc., 244 F.3d 1128, 1136 (9th Cir. 2001)).
Ample authority directly on point -- which the court follows here as an alternative -supports that Rule 16 sanctions may be imposed for a party’s failure to comply with pretrial
orders regarding settlement conferences. See Lucas Auto. Eng’g, Inc. v. Bridgestone/Firestone,
Inc., 275 F.3d 762, 769 (9th Cir. 2001) (affirming Rule 16 sanctions for party’s unintentional
failure to appear for mediation in violation of pretrial order due to party’s “incapacitating
headache”); Official Airline Guides, Inc. v. Goss, 6 F.3d 1385, 1396 (9th Cir. 1993) (affirming
Rule 16(f) sanctions for failure to comply with settlement conference order requiring presence or
availability by telephone of person with settlement authority); Ayers v. City of Richmond, 895
F.2d 1267, 1270 (9th Cir. 1990) (affirming sanctions where counsel inadvertently violated
settlement conference order by failing to appear because “the date slipped by him”). Even more
specifically, courts may certainly sanction parties for violating a specific court order to appear in
person at a settlement conference. See, e.g., Tahilan v. Friendly Care Home Health Servs., 2010
WL 3767155, at *1 (D. Haw. Sept. 20, 2010) (sanctioning Defendant under Rule 16(f) for failure
to appear at a settlement conference); CLM Partners LLC v. Fiesta Palms, LLC, 2013 WL
6388760, at *2 (D. Nev. Dec. 5, 2013) (imposing Rule 16 sanctions of attorneys’ fees and costs
incurred because party failed to attend settlement conference in violation of court order);
Painters Joint Comm. v. J.L. Wallco, 2013 WL 3930485, at *4 (D. Nev. July 26, 2013) (imposing
Rule 16 sanctions of attorneys’ fees and costs incurred as a result of party’s failure to attend
In supplemental briefing, Plaintiffs continue to argue that a Rule 16 order requiring
attendance at a settlement conference is meant to apply to pro se parties only -- a position the
court rejects for the same reasons as discussed below.
Deck Video Cassette Recorder Antitrust Litig., 10 F.3d at 695); see also Boink
Sys., Inc. v. Las Vegas Sands Corp., 2011 WL 3419438, at *3 (D. Nev. Aug. 3,
2011) (“A few technical violations do not vitiate substantial compliance if a party
has made reasonable efforts to comply.” (citations omitted)). Further, substantial
compliance with the court order is a defense to civil contempt. In re Dual-Deck
Video Cassette Recorder Antitrust Litig., 10 F.3d at 695.
The party claiming civil contempt must demonstrate a violation of the
court’s order by clear and convincing evidence. Id. Accordingly, the moving
party must establish that “(1) that [the alleged contemnor] violated the court order,
(2) beyond substantial compliance, (3) not based on a good faith and reasonable
interpretation of the order, (4) by clear and convincing evidence.” United States v.
Bright, 596 F.3d 683, 694 (9th Cir. 2010) (quoting Labor/Cmty. Strategy Ctr. v.
L.A. Cnty. Metro. Trans. Auth., 564 F.3d 1115, 1123 (9th Cir. 2009)); see also
F.T.C. v. Affordable Media, 179 F.3d 1228, 1239 (9th Cir. 1999) (“The standard
for finding a party in civil contempt is well settled: The moving party has the
burden of showing by clear and convincing evidence that the contemnors violated
a specific and definite order of the court.”).
If the moving party meets this initial four-part test, the burden then
shifts to the alleged contemnor to demonstrate why it was unable to comply.
Affordable Media, LLC, 179 F.3d at 1239; Stone v. City & Cnty. of San Francisco,
968 F.2d 850, 856 n.9 (9th Cir. 1992). In other words, the accused party must
“show [that it] took every reasonable step to comply.” Stone, 968 F.2d at 856 n.9
(citation omitted). To assess whether an alleged contemnor has taken “every
reasonable step” to comply with the terms of a court order, the court can consider
a variety of factors, including, for example, whether the contemnor has a history of
noncompliance, and whether the contemnor failed to comply despite the pendency
of a contempt motion. See Stone, 968 F.2d at 857.
“A court has wide latitude in determining whether there has been
contemptuous defiance of its order,” Gifford v. Heckler, 741 F.2d 263, 266 (9th
Cir. 1984) (citations omitted); see also Stone, 968 F.2d at 856, and “retains
discretion to establish appropriate sanctions.” Bright, 596 F.3d at 696. Sanctions
for civil contempt may be imposed to coerce compliance with a court order and/or
to compensate the injured party for losses sustained. Koninklijke Philips Elecs.,
N.V. v. KXD Tech., Inc., 539 F.3d 1039, 1044 (9th Cir. 2008); Whittaker Corp. v.
Execuair Corp., 953 F.2d 510, 517 (9th Cir. 1992) (citing United States v. United
Mine Workers of Am., 330 U.S. 258, 303-04 (1947)). “Unlike the punitive nature
of criminal sanctions, civil sanctions are wholly remedial.” Whittaker Corp., 953
F.2d at 517 (citation omitted).
Application of Contempt Standards
Plaintiffs Violated a Court Order
The essential facts are not in dispute. In accordance with the court’s
directive at the July 3, 2014 status conference, the July 15 Order specifically
provides that “[e]ach party or a designated representative with final settlement
authority, other than an attorney of record, must personally attend the [September
10, 2014] settlement conference.” Doc. No. 233, July 15 Order at 1 (emphasis
added). At the September 10, 2014 settlement conference before Magistrate Judge
Puglisi, Plaintiffs did not appear in person, nor did they send a representative with
final settlement authority other than counsel of record. Based on these undisputed
facts, the court finds that Plaintiffs violated the July 15 Order.3
During the July 3, 2014 status conference (which was called because of a trial date then
set for August 19, 2014), the court directed Plaintiffs’ counsel to have at least one of his clients
appear in person at the to-be-scheduled settlement conference. See Doc. No. 237-1, Kidani Decl.
¶ 6 (“Judge Seabright specifically ordered Plaintiffs’ counsel that his client was required to
appear in person at the settlement conference.”); Doc. No. 237-1, Lezy Decl. ¶ 6 (same). The
court specifically recalls instructing Plaintiffs’ counsel to have a client personally appear at the
settlement conference, given the posture of the case. The minutes, however, are less clear. They
state that “[a] further settlement conference, with at least one person with authority to settle from
each party, shall be scheduled[.]” Doc. No. 231. Plaintiffs assert that they complied with the
minute order because they had “at least one person with authority to settle,” i.e., counsel.
Regardless, the court focuses on the July 15 Order, which specifically and unambiguously
requires personal attendance from a party other than an attorney of record.
Plaintiffs Failed to Substantially Comply with an Order
Plaintiffs argue that they substantially complied with court directives
or orders through the personal appearance of two counsel on their behalf “with full
authority to negotiate and settle the cases,” and Plaintiffs’ “availability by
telephone throughout the entire 3-hour settlement conference.” Doc. No. 251,
Pls.’ Objs. at 5. The court disagrees. The July 15 Order specifically requires
Plaintiffs’ in-person attendance at the settlement conference. Doc. No. 233, July
15 Order at 1. The July 15 Order emphasizes the importance of this requirement
explaining that (1) “[t]he purpose of requiring a person with unlimited settlement
authority to attend the conference contemplates that the person’s view of the case
may be altered during the face-to-face conference. A limited or sum certain of
authority is not adequate[,]” id. at 1 n.1, and (2) “[t]he order for parties’ personal
appearance is intended to increase the efficiency and effectiveness of the
settlement conference[.]” Id. at 3.
Given the importance of in-person attendance and the emphasis
placed on this requirement in the July 15 Order, the court finds (by clear and
convincing evidence) that merely being available by telephone and sending
counsel of record with authority to settle is not substantial compliance.
Plaintiffs’ Absence Is Not Based on a Good Faith and Reasonable
Interpretation of the July 15 Order
Plaintiffs argue that neither the court orders nor LR 16.5(b)(2),4
“the local rule subsection cited and relied on in the [July 15 Order],” required their
personal appearance “so long as they were represented by counsel at the
conference who had authority to negotiate.” Doc. No. 251, Pls.’ Opp’n at 12.
Plaintiffs engage in a lengthy argument examining the specific language of the
minutes from the July 3, 2014 status conference, as well as of LR 16.5(a),5 and
Local Rule 16.5(b)(2) provides, in part:
Required Attendance At The Settlement Conference. Unless
otherwise permitted in advance by the court, lead trial counsel and
all parties appearing pro se shall appear at the settlement
conference with full authority to negotiate and to settle the case on
any terms at the conference. Unless otherwise ordered by the
court, parties may be present at the settlement conference. If not
physically present, a party shall be available by telephone to its
counsel during the settlement conference.
Local Rule 16.5(a) provides:
In each civil action, a mandatory settlement conference shall be
scheduled before the assigned magistrate judge or such other
judicial officer as the court may direct. Such conference may be
held before the assigned judge, except that, in a non-jury case, the
written stipulation of counsel shall be necessary if the judge trying
the case conducts the settlement conference. The judge conducting
the settlement conference may require the parties or representatives
of a party other than counsel who have authority to negotiate and
enter into a binding settlement to be present at the settlement
(b)(3),6 arguing that they reasonably interpreted them only to apply to pro se
parties. Id. at 13-18. They contend that, under these Rules, they were not required
to appear in person, as long as counsel had authority to settle. Id. Plaintiffs,
however, ignore the specific language of the July 15 Order, which required their
in-person attendance at the settlement conference. Ultimately, Plaintiffs’
argument that they did not violate a specific local rule is not relevant -- they
violated a court order.7
Plaintiffs Failed to Take Every Reasonable Step to Comply
Plaintiffs contend that they took “all reasonable steps within their
power to insure compliance with the Court’s Orders.” Doc. No. 251, Pls.’ Opp’n
at 5. But they have not demonstrated any effort to comply, other than the
attendance of counsel with settlement authority and being personally available by
Local Rule 16.5(b)(3) provides, in part:
If any trial attorney, party, or person with authority fails to attend
the [settlement] conference or to be available by telephone,
sanctions, including the fees and costs expended by the other
parties in preparing for and attending the conference, may be
assessed by the court.
And, as noted above, this violation of the court order to appear may justify sanctions
under Rule 16. See, e.g., Lucas Auto. Eng’g, Inc., 275 F.3d at 769; Official Airline Guides, Inc.,
6 F.3d at 1396; Ayers, 895 F.2d at 1270; Tahilan, 2010 WL 3767155 at *1.
telephone.8 As the Amended F&R found, prior to the scheduled settlement
conference, Plaintiffs did not seek relief from the personal appearance
requirement, such as asking for a continuance to a date when at least one Plaintiff
could attend in person, or seeking leave to appear via telephone. Plaintiffs
provided no declaration from Tanya explaining why she could not attend the
settlement conference in person. Nor did Plaintiffs notify the court or Defendants
in advance that Plaintiffs would not attend the settlement conference.
In short, there is no evidence that Plaintiffs took any reasonable steps
to obtain relief from the July 15 Order, much less to reschedule the settlement
conference to a time when Plaintiffs could comply. The record is clear and
convincing -- the court adopts the Amended F&R’s findings that Plaintiffs failed
to show that they took every reasonable step to comply with the July 15 Order.
See Stone, 968 F.2d at 856 n.9.
An Award of Defendants’ Reasonable Attorneys’ Fees and Costs Is
an Appropriate Compensatory Sanction
Plaintiffs contend that Defendants did not suffer any losses as a result
of Plaintiffs’ personal absence from the settlement conference, and therefore the
recommended sanctions of attorneys’ fees and costs are punitive and contrary to
That Clark flew to Honolulu for a previous settlement conference is irrelevant to a
determination of whether Plaintiffs took any reasonable steps to comply with the July 15 Order.
law. Plaintiffs argue that because the settlement conference proceeded for three
hours and the parties moved their positions during that conference, Defendants
cannot establish that the attorneys’ fees and costs in connection with the
settlement conference and bringing the Joint Motion were incurred unnecessarily.
See Doc. No. 251, Pls.’ Opp’n at 7. The court disagrees.
The court specifically required Plaintiffs to attend the settlement
conference in person in order to maximize the potential for settlement. There is no
dispute that a representative from each Defendant, along with counsel, appeared in
person at the settlement conference, that Defendants incurred attorneys’ fees and
costs for such appearance, that a settlement conference was held despite Plaintiffs’
absence, and that the case did not settle. “A settlement conference without all of
the necessary parties present is not productive.” Painters Joint Comm. v. Wallco,
2013 WL 3930485, at *3 (D. Nev. July 26, 2013) (citing Pitman v. Brinker Int’l,
Inc., 216 F.R.D. 481, 486 (D. Ariz. 2003)). Thus, courts have awarded sanctions
of attorneys’ fees and costs incurred as a result of a party’s failure to appear at a
settlement conference in violation of a court order. See, e.g., CLM Partners LLC
v. Fiesta Palms, LLC, 2013 WL 6388760, at *2 (D. Nev. Dec. 5, 2013) (imposing
sanctions of attorneys’ fees and costs incurred because party failed to attend
settlement conference in violation of court order); Painters Joint Comm., 2013
WL 3930485, at *4 (imposing sanctions of attorneys’ fees and costs incurred as a
result of party’s failure to attend settlement conference).
As the Amended F&R found, Defendants incurred attorneys’ fees and
costs in connection with the unsuccessful settlement conference -- they suffered
actual loss as a result of Plaintiffs’ violation of the July 15 Order. Magistrate
Judge Puglisi -- who conducted the settlement conference -- specifically described
the conference as “fruitless,” and did so “[a]s a result of Plaintiffs’ failure
to comply with the court’s orders.” Doc. No. 250, Amended F&R at 7.
Accordingly, a compensatory award of attorneys’ fees and costs is not punitive.
Nor were Plaintiffs deprived of their due process rights to notice and
an opportunity to be heard.9 The Joint Motion provided Plaintiffs with adequate
notice that compensatory sanctions might be imposed and Plaintiffs were afforded
an opportunity to present their position through these proceedings -- and their
Opposition to the Joint Motion, Objections to the Amended F&R, as well as
Absent specification from Plaintiffs, the court assumes that any possible Fifth
Amendment violation is based on a claim that Plaintiffs were deprived of general due process
rights to notice and an opportunity to be heard.
The Recommended Awards of Attorneys’ Fees and Costs Are
The Amended F&R details the hours expended by Defense counsel in
attending the settlement conference. It applies a “lodestar” calculation with the
hours expended and appropriate hourly rates of counsel. Doc. No. 250, Amended
F&R at 7-8. These amounts are reasonable and appropriate. Plaintiffs, however,
argue that the requested hourly rate of $340 for BKC’s counsel is excessive due to
BKC’s failure to include specifics in counsel’s alleged certifications, including a
list of the more than fifty cases counsel tried. Doc. No. 251, Pls.’ Opp’n at 21.
The court disagrees.
In determining whether an hourly rate is reasonable, courts consider
the experience, skill, and reputation of the attorney requesting fees. See Webb v.
Ada Cnty., 285 F.3d 829, 840 & n.6 (9th Cir. 2002). A reasonable hourly rate will
reflect the prevailing market rates in the community for attorneys “of reasonably
comparable skill, experience, and reputation” doing similar work. Prison Legal
News v. Schwarzenegger, 608 F.3d 446, 455 (9th Cir. 2010).
Counsel declared that he is “the managing partner” of his law firm,
“licensed to practice law” in Hawaii “since 1978, specializing in civil trial and jury
practice.” Doc. No. 247, Kidani Decl. ¶ 3. Counsel further states that he “has
tried over fifty cases to verdict or judgment . . . and [has] been certified by two
organizations approved by the American Bar Association for certification in civil
trial litigation, including the National Trial Board Association and the American
Board of Professional Trial Attorneys.” Id. ¶ 4.
Such statements are sufficient to establish both the number of years
counsel has practiced in this district and his reputation and level of competence in
civil litigation. Furthermore, the court is familiar with the prevailing rates in the
community for federal litigation of a similarly complex nature. Based on the
court’s knowledge of the rates and experience of local counsel and the declaration
of BKC’s counsel, the court finds a reasonable hourly rate for BKC’s counsel to be
Based on the foregoing, the court ADOPTS the Amended Findings
and Recommendation to Grant Defendant Burger King Corporation and CTI
Foods Holding LLC’s Joint Motion for Sanctions (joined by AAFES). Upon de
novo review, the court concludes (by clear and convincing evidence) that
Plaintiffs violated a July 15, 2014 court Order. Their violation was not based on a
good faith and reasonable interpretation of the Order, and they failed to take every
reasonable step to comply with that Order. The court also concludes that
Magistrate Judge Puglisi’s recommended awards of Defendants’ attorneys’ fees
and costs are reasonable and sufficiently-supported compensatory sanctions.
Accordingly, the court OVERRULES Plaintiffs’ Objections, ADOPTS the
Amended F&R, and GRANTS Defendants’ Joint Motion for Sanctions.
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, December 30, 2014.
/s/ J. Michael Seabright
J. Michael Seabright
United States District Judge
Bartholomew v. Burger King Corp., Civ. No. 11-00613 JMS/BMK, Order (1) Overruling
Objections to Magistrate Judge’s October 27, 2014 Amended Findings and Recommendation;
and (2) Adopting October 27, 2014 Amended Findings and Recommendation to Grant
Defendants’ Joint Motion for Sanctions
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