Hathaway v. Idaho-Pacific Corporation
MEMORANDUM DECISION AND ORDER. Plaintiff Hathaways Motion for Terminating Sanctions (Dkt. 227 ) is GRANTED. Defendant IPCs Motion to File Excess Pages (Dkt. 236 ) is GRANTED. Defendant IPCs Motion to Strike Plaintiffs Motion for TerminatingSanction s (Dkt. 238 ) is GRANTED in PART and DENIED in PART. Defendant IPCs Motion for Leave to File a Sur-Reply (Dkt. 245 ) is DENIED. A jury trial shall be set at a later date to determine what damages Hathaway is owed. Signed by Judge David C. Nye. ((alw)
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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
Case No. 4:15-cv-00086-DCN
MEMORANDUM DECISION AND
IDAHO PACIFIC CORPORATION
Pending before the Court are Plaintiff Ross Hathaway’s Motion for Terminating
Sanctions (Dkt. 227), Defendant Idaho Pacific Corporation’s (“IPC”) Motion to File
Excess Pages (Dkt. 236), IPC’s Motion to Strike Plaintiff’s Motion for Terminating
Sanctions (Dkt. 238), and IPC’s Motion for Leave to File Sur-Reply (Dkt. 245). Having
reviewed the record and briefs, the Court finds that the facts and legal arguments are
adequately presented. Accordingly, in the interest of avoiding further delay, and because
the Court finds that the decisional process would not be significantly aided by oral
argument, the Court will decide the Motions without oral argument. Dist. Idaho Loc. Civ.
Upon review, and for the reasons set forth below, the Court grants Hathaway’s
Motion for Terminating Sanctions (Dkt. 227), grants IPC’s Motion to File Excess Pages
(Dkt. 236), grants in part and denies in part IPC’s Motion to Strike Plaintiff’s Motion for
Terminating Sanctions (Dkt. 238), and denies IPC’s Motion for Leave to File a Sur-Reply
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This employment discrimination case was originally filed on March 12, 2015, over
five years ago. A five-day jury trial was held in mid-December 2017. The Court submitted
three claims to the Jury via a special verdict form: (1) discrimination under the Americans
with Disabilities Act (“ADA”); (2) retaliation under the ADA; and (3) wrongful discharge
under Idaho state law. During deliberations, the Jury sent a note to the Court indicating that
its members had “reached a point of aggressive disagreement.” Dkt. 118, at 2. In response,
the Court gave the Jury an Allen instruction.2 The Jury then returned to its deliberations. A
few hours later, the Jury sent another note to the Court stating that it had reached a
“unanimous decision on only one claim” and that it was unable to agree on the other two
The Court permitted the Jury to return a verdict on the sole claim on which it was
able to reach a unanimous decision. The Jury found in favor of Hathaway on the Idaho
wrongful discharge claim and awarded him $34,302 in lost wages. The Jury did not answer
any of the questions on the verdict form regarding the ADA retaliation claim. As to the
ADA discrimination claim, the Jury determined that Hathaway had a disability and that he
The underlying facts of the case, which are well known to the parties, have been set out numerous times
in previous orders and will be discussed in greater detail as it relates to Hathaway’s motion for terminating
sanctions. The Court will present only a limited selection of facts here.
An Allen instruction or Allen charge is a supplemental jury instruction a court gives to encourage a jury
to reach a verdict after the jury has been unable to agree for some period of deliberation. Such an instruction
has long been sanctioned. See Allen v. United States, 164 U.S. 492, 501–02 (1896).
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was a qualified individual under the ADA. However, the Jury failed to answer any other
questions regarding the ADA discrimination claim.
After several post-trial motions, the Court ultimately declared a mistrial on June 11,
2018, and ordered retrial on all claims. Dkt. 118. On May 3, 2019, Hathaway moved for
leave to amend his complaint to add punitive damages on the grounds that IPC produced
new evidence at trial. Dkt. 145. Finding good cause, the Court granted Hathaway leave to
amend. Dkt. 204. The retrial was ultimately set for October 28, 2019.3
On October 24, 2019, IPC disclosed a relevant document to Hathaway for the first
time. The same day, the Court held a status conference on the late disclosure. During the
status call, Hathaway asked for the retrial to be vacated and for discovery to be reopened.
The Court granted Hathaway’s request and reopened discovery (“Second Discovery
Period”) for the limited purpose of Hathaway briefing the Court on the issues “specifically
including, but not limited to, potential terminating sanctions and the admissibility of the
late-disclosed document.” Dkt. 220, at 1–2.
Hathaway subsequently filed the pending motion for terminating sanctions on
January 10, 2020, based on both IPC’s previous late disclosures as well as newly disclosed
documents IPC had revealed during the Second Discovery Period. Dkt. 227. On January
31, 2020, IPC filed its motion to file excess pages in its response to Hathaway’s motion.
Dkt. 236. The same day, IPC also filed its motion to strike Plaintiff’s motion for
The retrial was originally set for set for March 18, 2019, but was then reset for June 3, 2019. Upon
Hathaway’s request, the June 3, 2019 trial was reset for October 28, 2019, due to Hathaway’s counsel’s
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terminating sanctions. Dkt. 238. On March 6, 2020, IPC filed a motion for leave to file a
sur-reply to Hathaway’s motion for terminating sanctions. Dkt. 245. The pending motions
are now ripe.
As the subsequent motions filed by IPC affect the facts and legal arguments the
Court will consider in ruling on Hathaway’s motion for terminating sanctions, the Court
shall review the pending motions in reverse order.
A. IPC’s Motion for Leave to File Sur-Reply (Dkt. 245)
District courts have the discretion to either permit or preclude a surreply. See U.S.
ex rel. Meyer v. Horizon Health Corp., 565 F.3d 1195, 1203 (9th Cir. 2009) (district court
did not abuse discretion in refusing to permit “inequitable surreply”) (overruled on other
grounds by U.S. ex rel. Hartpence v. Kinetic Concepts, Inc., 792 F.3d 1121, 1129 (9th Cir.
2015)); JG v. Douglas County School Dist., 552 F.3d 786, 803 n.14 (9th Cir. 2008) (district
court did not abuse discretion in denying leave to file surreply where it did not consider
new evidence in reply).
However, surreplies “are highly disfavored, as they usually are a strategic effort by
the nonmoving party to have the last word on a matter.” Sims v. Paramount Gold & Silver
Corp., No. CV 10-356-PHX-MHM, 2010 WL 5364783, at *8 (D. Ariz. Dec. 21, 2010)
(quoting In re Enron Corp. Sec., 465 F. Supp. 2d 687, 690 n.4 (S.D. Tex. 2006)); see also
Garcia v. Biter, 195 F. Supp. 3d 1131, 1133–34 (E.D. Cal. 2016) (“The court generally
views motions for leave to file a surreply with disfavor.”). District courts deny motions for
surreplies absent extraordinary circumstances. See Sims, 2010 WL 5364783, at *8 (stating
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it would not permit surreplies except “in the most extraordinary circumstances”) (quoting
Beckner v. Astrue, No. 06-1012-JTM, 2007 WL 2013608, at *1 (D. Kan. July 9, 2007));
Atlin v. Mendes, 2008 WL 5422871 *3 (N.D. Tex. 2008) (moving party must set forth
“exceptional or extraordinary circumstances warranting a surreply”); Starr v. Cox, 2008
WL 1914286 *2 (D.N.H. 2008) (denying “a motion for leave to file a surreply where the
party failed to demonstrate that the case presented extraordinary circumstances warranting
the relief sought”); Gen. Elec. Co. v. Latin Am. Imports, S.A., 187 F. Supp 2d 749, 752 n.1
(W.D. Ky. 2001) (“[M]otions for surreplies . . . will be summarily denied absent
extraordinary circumstances.”). Typically, extraordinary circumstances are when a party
raises new issues or evidence in its reply brief. See Provenz v. Miller, 102 F.3d 1478, 1483
(9th Cir. 1996) (new evidence in reply may not be considered without giving the nonmovant an opportunity to respond). In those cases, the district court may allow a surreply
by the non-moving party to ensure it has a full and fair opportunity to brief the issues in
Ultimately, the question is whether IPC had sufficient notice of the issues in
Hathaway’s motion for terminating sanctions to fully and fairly brief them without a
surreply brief. Here, IPC argues that Hathaway raised a new issue in his reply brief because
he specifically cited to subsection (c) of Federal Rule of Civil Procedure 37 for the first
time. IPC argues it had no notice under what legal authority Hathaway was seeking
sanctions. Yet IPC itself noted in its surreply briefing that Plaintiff “expressly state[d] that
Hathaway broadly seeks sanctions ‘pursuant to the court’s inherent power and Rule 37.’”
Dkt. 248, at 2 (quoting Dkt. 227-1) (emphasis added). Further, IPC knew, and Hathaway
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reminded it, the Court had vacated trial and reopened discovery due to IPC’s very late
disclosure of a relevant document. Dkt. 227-1, at 2 (citing Dkt. 220).4 Thus, IPC knew that
Hathaway was seeking sanctions pursuant to the Court’s inherent power and Rule 37 on
the grounds that IPC had repeatedly and seriously failed to produce relevant documents.
IPC had sufficient notice to know, or research, the possible sanctions available
under Rule 37 given the legal and factual facts Hathaway expressly described in his motion
for terminating sanctions. Such sanctions include those under Rule 37(c), which is titled
“Failure to Disclose, to Supplement an Earlier Response, or to Admit.” Fed. R. Civ. P.
37(c). Under Rule 37(c), sanctions for failing to disclose information as required under
Rule 26(a) or (e) include appropriate sanctions, such as those listed under Rule
37(b)(2)(A)(i)-(vi),5 the very sanctions the Court also notified IPC that it could be subject
IPC knew that Hathaway was bringing sanctions based on its failure to produce documents. First,
Hathaway stated in his memorandum supporting his motion for terminating sanctions that “[IPC’s]
complete failure to produce relevant and requested discovery violates Rule 37.” Dkt 227-1, at 19. IPC itself
stated in its opening sentence of its opposition to Hathaway’s motion for terminating sanctions, that
“[Hathaway] asks this Court to impose terminating sanctions against [IPC] for (1) allegedly failing to
produce documents and metadata, and (2) for allegedly deceptive representations based upon the same
failed disclosures.” Dkt. 237, at 1.
Sanctions listed under Rule 37(b)(2)(A)(i)–(vi) include:
(v) dismissing the action or proceeding in whole or in part;
(vi) rendering a default judgment against the disobedient party
Fed. R. Civ. P. 37.
In Dkt. 220, the Court clearly instructed Hathaway that he could submit briefing “on the issue of sanctions,
specifically including, but not limited to, potential terminating sanctions” such as described in Fed. R. Civ.
P. 37(b)(2)(A)(iii), (v), (vi). Dkt. 220, at 2, n. 2.
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IPC chose to argue in its response to Hathaway, despite knowing the above, that
“Rule 37 does not apply in this case, as IPC has not violated a court order . . . .” Dkt. 237,
at 17.7 To support this proposition, it cites Halaco Eng’g Co. v. Costle,8 843 F.2d 376, 380
(9th Cir. 1988). Yet the court in Halaco explicitly stated that a court order was required in
order for Rule 37(b)(2)(C) to apply; it did not broadly hold that a court order was always
required for Rule 37 to apply. Id. (“We hold that no order was issued under Federal Rule
of Civil Procedure 37(b)(2)(C).”).
Here, Hathaway’s failure to cite to the specific subsection of Rule 37 is not an
extraordinary circumstance warranting a surreply. IPC knew the factual and legal grounds
Hathaway was seeking sanctions under. Knowing this, if it failed to review Rule 37 prior
to submitting its response to the Court, that failure rests on it. IPC filed an overlength
response to Hathaway’s motion, so it had more than sufficient opportunity to respond to
Hathaway’s grounds for moving for sanctions under the Court’s inherent authority and
Rule 37. It chose to make the legal conclusion that “Rule 37 does not apply to this case.”
Hathaway raised no new issues in his reply that warrant a surreply. Rather, IPC’s motion
seems to be a strategic effort by it as the nonmoving party to have the last word on a matter.
The Court disagrees; IPC violated the Court’s discovery order (Dkts. 9, 16). Nevertheless, for the purposes
of ruling on the motion to file a surreply, the Court will proceed as if IPC is correct in its argument.
The parties dispute whether Halaco or Anheuser-Busch, Inc. v. Natural Beverage Distribs., 69 F.3d 337,
348 (9th Cir. 1995) is the appropriate framework to evaluate Hathaway’s motion for sanctions. For the
purposes of the motion to file a surreply, the Court assumes Halaco is applicable.
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The Court DENIES Hathaway’s motion to file a surreply.9
B. IPC’s Motion to Strike Plaintiff’s Motion for Terminating Sanction (Dkt.
IPC moves to strike certain statements in DeAnne Casperson’s declaration and a
statement from Todd Higgins on the grounds that the testimony is inadmissible, citing to
Federal Rule of Civil Procedure 56(e). While Hathaway’s motion is technically one for
terminating sanctions rather than summary judgment, IPC argues the same evidentiary
principles should apply here as Hathaway’s motion may lead to the termination of the entire
case. Hathaway implicitly accepts IPC’s framework when he argues that all of IPC’s
challenged statements are admissible and/or are supported by evidence in the record. The
Court agrees that IPC’s proposed evidentiary framework is appropriate here, where the
Court may render default judgment against IPC as the disobedient party.
1. Admissibility of Statements in Casperson Declaration
a. Paragraph 22
IPC objects to the language in paragraph 22 of Casperson’s Declaration that states:
“All of Mr. Gotch’s files were accessible to any of the administrative employees, including
Ms. Steele, Mr. McLean, etc.” Dkt. 227-2, ¶ 22. IPC objects to the admissibility of this
statement on the grounds that Casperson lacks personal knowledge of what access IPC
Hathaway also argues that IPC’s motion to file a surreply is untimely, as it was filed 21 days after he filed
his reply. As the Court agrees with Hathaway that no new issues were raised in his reply to merit IPC filing
a surreply, it will not comment on when a motion to file a surreply must be filed in order to be deemed
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employees had to each other’s files. Hathaway contends the statement simply summarizes
evidence for the purposes of explaining the attached exhibit.
A declarant must show personal knowledge and competency to testify to the facts
stated.10 F.R.E. 602. The Court agrees Casperson lacks personal knowledge to make this
statement and grants IPC’s motion to strike it from the record. The Court will determine
for itself, after reviewing the attached exhibit referenced in other parts of paragraph 22,
what the evidence shows.
b. Paragraph 24
IPC objects to the language in paragraph 24 of Casperson’s Declaration that states:
“The most egregious and prejudicial emails not previously produced are set forth separately
below.” Dkt. 227-2, ¶ 24. IPC objects to the admissibility of the statement on the grounds
that this statement is merely a legal conclusion. Hathaway argues the statement describes
and introduces emails into records (and “[r]egardless, the emails speak for themselves”).
Dkt. 243, at 2.
As a general rule, “testimony in the form of an opinion or inference otherwise
admissible is not objectionable because it embraces an ultimate issue to be decided by the
trier of fact.” Fed. R. Evid. 704(a). However, “[p]ure legal conclusions are not admissible
as factual findings.” Sullivan v. Dollar Tree Stores, Inc., 623 F.3d 770, 777 (9th Cir. 2010).
The Court reads Casperson’s statement as an opinion rather than a legal conclusion. The
“This rule does not apply to a witness’s expert testimony under Rule 703.” F.R.E. 602.
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Court denies IPC’s motion to strike this language.
c. Paragraph 28
IPC objects to the language in paragraph 28 of Casperson’s Declaration wherein she
states: “I cannot understand how the emails and attachment were not produced except as a
result of intentional exclusion by Lori Steele who is either included or was provided all of
the e-mails not produced.” Dkt. 227-2, ¶ 28. IPC objects to the admissibility of the
statement on the grounds Casperson lacks personal knowledge to the document collection
process and to the extent she has an opinion on it, it is speculation. Hathaway argues that
Casperson is testifying as to her own logical conclusion after reviewing the evidence.
Casperson is stating her opinion. Her opinion is based on her personal experience
reviewing the evidence in the record. The Court can weigh the credibility of her statement.
It denies IPC’s motion to strike this statement.
d. Paragraph 29
IPC objects to the language in paragraph 29 of Casperson’s Declaration that states:
“A simple search for Mr. Hathaway’s name in Ms. Steele’s email would have gathered
these documents.” Dkt. 227-2, ¶ 29. IPC objects to the admissibility of the statement on
the grounds Casperson lacks personal knowledge to the document collection process and
to the extent she has an opinion on it, it is speculation. Hathaway argues Casperson is
merely reiterating testimony of Terry Jacobs found in the record.
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The Court grants IPC’s objection and will strike Casperson’s statement. If relevant,
the Court will analyze Terry Jacobs’ statement directly in ruling on Hathaway’s motion for
e. Paragraph 30
IPC objects to the language in paragraph 30 of Casperson’s Declaration that states:
“I have been practicing for over 20 years and I have never seen so many failures to provide
discovery information in a case.” Dkt. 227-2, ¶ 30. IPC objects to the admissibility of the
statement on the grounds it is irrelevant. IPC argues that “[t]he Court may grant terminating
sanctions only where there has been a ‘level of contumaciousness’ from the sanctioned
party.” Dkt. 238, at 3 (quoting In re Rubin, 769 F.2d 611, 618 (9th Cir. 1985). As a result,
IPC argues Casperson’s insight into the egregiousness of IPC’s conduct is irrelevant to
whether its conduct did, in fact, meet this standard. Further, IPC contends Casperson’s
statement is inadmissible because she did not describe any of the other cases she has
participated in. In response, Hathaway asserts IPC’s reading of In re Rubin is incorrect.
However, to the extent In re Rubin may apply, Casperson’s lengthy litigation experience
provides her grounds to provide an opinion on the reasonableness, or level of
contumaciousness, of other parties’ and counsel’s conduct in discovery. Hathaway
analogizes Casperson’s experience similar to a judge’s ability to consider his own
experience when determining a reasonable attorney fee.
Casperson has considerable experience with discovery in litigation. Her statement
is relevant to determining the seriousness of the potential violations and what sanctions
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may be appropriate. The Court will give her statement the weight it deems appropriate.
2. Admissibly of Todd Higgins’ Statement
Todd Higgins was IPC’s environmental and safety manager from the end of 2013
through October 2018. IPC objects to Hathaway’s use of Higgins’ testimony with regards
to an email Lorinda Steele sent and moves to exclude Hathaway’s statement referencing it
in his memorandum supporting his motion for sanctions as well as the exhibit of Higgins’
Steele, IPC’s human resources administrator, originally sent the email at issue to
Higgins, Josh Rankin, and Wally Browning. In Steele’s email, she informed the recipients
that “Mr. Hathaway’s original injury (Feb. of 2013) was reported as ‘breaking down a
cardboard tote; [Ross Hathaway] slipped and tried to catch himself, but his thumb caught
(in the tote) and he fell, landing on his left side (this was later amended to include Mr.
Hathaway’s left arm was outstretched).’” Dkt. 227-9, at 16 (alterations in original).
Higgins is one of IPC’s two 30(b)(6) deponents. During his 30(b)(6) deposition,
Hathaway directed Higgins’ attention to the above language that Steele had put in quotes
in her email. Hathaway asked if Higgins knew where the quoted language came from, to
which Higgins responded in the negative. At that time, IPC objected to further questioning
based on speculation, foundation, and personal knowledge. Hathaway followed up with a
question as to where Higgins would have expected the quoted language to come from, to
which Higgins replied “[t]he incident report.” Dkt. 238-1, at 4 (quoting Dkt. 239-8, at 33).
Because IPC’s produced incident report does not include the quoted language, Hathaway
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relies on Higgins’ response to support Hathaway’s argument that the quoted language
comes from an earlier handwritten incident report, which has never been produced.
IPC renews its objections to Higgins’ statement as to where the language came from
on the grounds it was speculative given he lacked personal knowledge. Hathaway argues
Higgins’ testimony is based on his experience at IPC as the environmental and safety
manager, where he had knowledge of the policies and practices of IPC regarding safety
issues, such as the contents of injury reports. Further, Hathaway relied on other testimony
in arguing there was a handwritten incident report that IPC still has not yet produced.
Personal knowledge can include inductive conclusions resting on more generalized
understandings of the broader context and many experiences over a period of time. For
example, the Ninth Circuit has held that a manager of a restaurant had “ample personal
knowledge to testify about a restaurant’s normal procedures for issuing receipts to
customers because the witness was the manager of a customer.” Stuart v. UNUM Life Ins.
Co. of Am., 217 F.3d 1145, 1155 (9th Cir. 2000) (citing United States v. Thompson, 559
F.2d 552 (9th Cir. 1977). On the same grounds, a hospital’s vice president of corporate
services and former director of human resources had ample personal knowledge to testify
about the hospital’s practices relating to its employee insurance plan. Id. Higgins had
sufficient personal knowledge based on his experience as environmental and safety
manager to opine on where the quoted language regarding a safety incident may have come
from. The Court will give Higgins’ opinion the weight it deems appropriate.
The Court accordingly GRANTS in PART and DENIES in PART IPC’s motion to
strike as outlined above.
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C. IPC’s Motion to File Excess Pages (Dkt. 236)
IPC requests leave to file excess pages in its memorandum in opposition to
Hathaway’s motion for terminating sanctions. Dkt. 236. Hathaway filed no opposition. The
Court grants IPC’s motion to file excess pages.
D. Hathaway’s Motion for Terminating Sanctions (Dkt. 227)
1. Relevant Factual Background
This case turns on the existence and contents of a report. Hathaway claims to have
slipped on potato granules on February 19, 2013, causing him to fall and injure his left
thumb, hand, and shoulder. Hathaway reported the accident to Dwain Gotch, IPC’s Plant
Hathaway’s theory of the case is that Gotch prepared a handwritten report detailing
the accident, which Hathaway reviewed and signed (“Handwritten Report”). Hathaway
claims the Handwritten Report indicates that his thumb, hand, and shoulder were injured.
That Handwritten Report has never been produced by IPC and IPC denies its existence.
IPC contends that the only accident report that does exist is an unsigned, typed incident
investigation report generated by Gotch (“Typed Report”). That Typed Report critically
does not include any reference to Hathaway’s shoulder injury.
About a month after Hathaway’s fall, on March 21, 2013, he went to Community
Care (IPC’s workers’ compensation provider) for shoulder pain. This pain caused his arm
to seize up while he was at work. On March 22, 2013, Dr. Larry Curtis informed Hathaway
he had a shoulder strain from his fall on February 19, 2013.
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Steele, IPC’s human resources administrator, was provided the same information on
March 22, 2013. Steele believed Hathaway’s pain and arm-seizure were caused by
hyperglycemia. Because of this belief, she responded by telling Community Care that this
injury was not workers’ compensation related. On March 28, 2013, Dr. Curtis sent a letter
to Steele stating he “fe[lt] strongly that [Hathaway’s injury] is work comp related.” Dkt
145-8, at 3.
On March 23, 2013, a day after Dr. Curtis saw Hathaway, Steele prepared a workers’
compensation report (“First Report”) and sent it to Liberty Mutual, IPC’s insurer, along
with medical documentation she had received from Community Care. In the First Report,
Steele did not include any information regarding Hathaway’s shoulder injury. In an email
to Liberty Mutual, Steele stated she didn’t know how to complete a report for Hathaway
because she believed Hathaway’s arm seizure on March 21, 2013, was not related to his
prior work injury.
Around mid-April of 2013, a co-worker informed Hathaway that IPC omitted his
shoulder injury from its records. When Hathaway inquired about the omission, Gotch
provided him a copy of the Typed Report in place of the Handwritten Report. The unsigned
typed report included only his thumb injury and did not reference his shoulder. Gotch told
Hathaway to see Mike Willmore, another supervisor, about any concerns Hathaway had
regarding the contents of the Typed Report. On April 17, Hathaway met with Willmore to
discuss his concerns. On April 18, 2013, IPC fired Hathaway, claiming he told another
employee he would intentionally hurt himself at work to receive compensation.
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On July 22, 2015, Steele emailed Todd Higgins and two other IPC employees an
email with the subject header “Idaho Industrial Commission’s request for a job site eval,
Ross Hathaway case.” In the email, Steele wrote, “Should you need this information, Mr.
Hathaway’s original injury (Feb. of 2013) was reported as ‘breaking down a cardboard
tote; [Ross Hathaway] slipped and tried to catch himself, but his thumb caught (in the tote)
and he fell, landing on his left side (this was later amended to include Mr. Hathaway’s left
arm was outstretched).’” Dkt. 227-9, at 16. Hathaway has argued that Steele’s quoted
language was pulled directly from the Handwritten Report. IPC, on the other hand, has
argued the quoted language came from other sources, but has never produced documents
with language that matches Steele’s quote.
During Steele’s deposition, Hathaway’s counsel asked Steele to produce the original
native file11 of the Typed Report, as all documents, by mutual agreement, had been
produced in PDF format. IPC’s counsel acknowledged the request. Hathaway’s counsel
attests that later, during the multiple depositions taken during that timeframe, “IPC’s
counsel informed Hathaway’s counsel that an electronic copy of the [Typed] Report could
not be located.” Dkt. 227-1, at 5 (citing Dkt. 227-2, ¶ 12).12 IPC failed to provide a native
“Native File” or “native format” “means [Electronically Stored Information (“ESI”)] in the electronic
format of the application in which such ESI is normally created, viewed, and/or modified. Native Files are
a subset of ESI.” W Holding Co., Inc. v. Chartis Ins. Co., 2013 WL 1352562 at * 5 (D.P.R. Apr. 3, 2013);
see also F.D.I.C. v. Bowden, No. CV413-245, 2014 WL 2548137, at *5 (S.D. Ga. June 6, 2014)
(“Production in native format means that an electronic document [that] is a Word document, an Excel
spreadsheet, an e-mail, etc., will be produced in its original format.”).
IPC’s counsel disputes this characterization, claiming that IPC had already disclosed an electronic version
of the Report, so he (IPC’s counsel) would not have used that phrasing. Dkt. 237-1, Williams Decl. ¶ 8.
IPC’s counsel is silent on whether he conveyed to Hathaway that a copy of the Typed Report in native
format could not be located.
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version of the Typed Report to Hathaway prior to the first trial.
The first trial was held on December 11, 2017. Steele testified on the stand that she
“normally” received incident reports from Gotch via email and explicitly stated Gotch had
emailed her the April 2, 2013 incident report. Dkt. 127, Tr. at 413:5–414:14. Hathaway
states, “[A]t the time, and in the heat of trial, this testimony did not stick out as it does
now.” Dkt. 227-1, at 12. IPC had never produced to Hathaway any emails from Gotch to
Steele that included the Typed Report or the April 2, 2013 incident report relating to
Hathaway’s injuries. In other words, IPC had only produced the attached reports in nonnative format and had withheld the cover emails. Prior to Steele’s trial testimony,
Hathaway had no reason to suspect the cover emails existed and were withheld by IPC.
Steele also testified at trial, on direct examination, she did not have any medical
information before she prepared the First Report for the insurer. IPC then showed Steele
an exhibit of an email she received from a member of Mountain View, the parent company
of Community Care. Steele identified the email as one regarding the treatment Hathaway
sought. IPC moved to admit the exhibit. Hathaway objected on the grounds that IPC was
attempting to admit the cover email without its attachment: the medical records. Dkt. 127,
Tr. at 423:3–424:3. As the Court wrote in its post-trial Order granting Hathaway’s motion
to amend his Complaint to include punitive damages:
What is troubling to the Court is that when Steele gave this testimony, IPC
had not disclosed it had received Community Care’s medical reports prior to
the submission of the First Report. If Hathaway hadn’t made an objection,
the Court would have believed the medical reports came after the First Report
was submitted. Further, the Court is not as willing to attribute Steele’s
testimony to a lapse in memory, especially when such a mistake is easily
remedied by a quick review of a few documents before trial.
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Dkt. 204, at 9.
Additionally, IPC provided the following defenses during trial. First, no handwritten
reports could be found; therefore, Hathaway’s allegation that IPC had modified his signed
report was false: no such report ever existed so it could not have been modified. The only
incident report was the Typed Report, which IPC represented was a contemporaneous
business record, prepared by Gotch at or near the time of the accident on February 19,
2013. Second, Hathaway’s shoulder pain and arm-seizure were likely caused by
hyperglycemia, not a work injury. Third, there was no evidence that IPC terminated or
discriminated against Hathaway based on some alleged disability. In fact, during closing
argument, IPC’s counsel argued as follows: “And through this case, [IPC has] produced
boxes, everything that could be found except the handwritten note. And I’ll talk about that.
Every email, every document, everything. And there is not one single document that
suggests or even implies Idaho Pacific discriminated against Mr. Hathaway or terminated
him because of some alleged disability.” Dkt. 128, Tr. at 636:18–23 (emphasis added).
IPC’s closing statement was conclusively disproved—but only after the trial, nearly two
years after counsel’s statement was made.
While the Jury found in favor of Hathaway on the Idaho wrongful discharge claim,
it was unable to reach a unanimous decision with regard to the ADA discrimination and
ADA retaliation claims. On June 11, 2018, the Court declared a mistrial and ordered a
retrial on all claims. The retrial was ultimately set for set for October 28, 2019.
On October 24, 2019—four days before the retrial was set to commence—IPC
disclosed a critical email that included an attachment: a copy of the Typed Report of
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Hathaway’s injury on February 19, 2013, in native format—the electronic copy of the
Typed Report which IPC had failed to disclose, despite opposing counsel’s request, prior
to the first trial. This was the first time IPC produced the Typed Report to Hathaway in
native format. The cover letter was sent by Gotch to Steele at 8:30 a.m. on March 29, 2013.
The email said:
This is the accident report I filled out on Ross Hathoway [sic] on 2/19/13. He
said the only item that hurt was his thumb nothing about his shoulder or
numbness in his arm.
Dkt. 227-1, at 2 (quoting Dkt. 227-2, ¶ 14; 227-9). The metadata13 of the attached document
suggests the Typed Report was created on March 29, 2013, just minutes before Gotch sent
the report to Steele.14
Because Hathaway had never before seen the cover email and attached document
despite the fact that it was clearly relevant to his production requests, and because the
(i) information embedded in a Native File that is not ordinarily viewable or printable from
the application that generated, edited, or modified such Native File; and (ii) information
generated automatically by the operation of a computer or other information technology
system when a Native File is created, modified, transmitted, deleted, or otherwise
manipulated by a user of such system. Metadata is a subset of ESI.
W Holding II, 2013 WL 1352562 at * 1.
While the parties have not provided forensic experts to examine this email and its attachment, the Court
has seen the attachment in its native format and agrees that its metadata suggests to the layman’s eye it was
created on March 29, 2013.
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report’s metadata appeared to show that the Typed Report was created on March 29,
2013—over a month after Hathaway’s fall on February 19, 2013—Hathaway immediately
informed the Court that a telephonic conference was required. The same day, the Court
held a telephonic conference with counsel for all parties. Hathaway stated during the
conference that he was seeking terminating sanctions based on the late disclosure of the
document and that he wanted the Court to vacate the trial so he could brief the issue. The
Court granted Hathaway’s request to vacate the trial and reopen discovery for the limited
purposes of determining whether terminating sanctions were appropriate.
During the Second Discovery Period, conducted in late 2019, IPC disclosed even
more emails that it had failed to produce during the original discovery period and prior to
the first trial. On December 7, 2015, during the original discovery period (“First Discovery
Period”), IPC responded to one of Hathaway’s requests for production in the following
REQUEST FOR PRODUCTION NO. 37: Please produce any and all
documents, electronic records, emails, text messages, digital recordings,
word processing files, etc., from the period of February 1, 2013, through
present that in any way discuss, deal with, or relate to Plaintiff.
RESPONSE NO. 37: Defendant IPC objects to this Request for Production
on the grounds that it is vague, overbroad, and unduly burdensome. Without
waiving said objections, Defendant IPC responds as follows:
Defendant IPC has already produced all documents that in any way relate
to Plaintiff’s employment with IPC.
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Dkt. 227-1, at 3 (quoting Dkt. 227-2, ¶ 3; Dkt. 227-3)) (italic emphasis added).15 Based on
IPC’s answer, “Hathaway believed IPC produced everything.” Id.
IPC allowed Steele (a key fact witness in the case) to determine what emails were
responsive to Hathaway’s request.16 Steele determined when she would reach out to her IT
department (namely IPC’s Corporate IT Manager, Terry Jacobs), and when she would
conduct discovery independently. Dkt. 239-6, Jacobs Depo. at 32:13–16; 45:20–46:18;
49:22–25; 52:21–25. It was only in 2019, during the Second Discovery Period, that IPC
counsel first contacted Jacobs in relation to this case. Id. at 46:7–11. This time, IPC and its
counsel primarily used IPC’s IT department to conduct a search for responsive documents,
rather than relying on Steele. Dkt. 237, at 16. IPC counsel provided Jacobs “instructions
on searching for documents and uploading all documents” to a site where IPC counsel
could directly access them (id.), rather than its prior practice of allowing Steele to email
discovery to IPC counsel (Dkt. 239-6, Jacobs Depo. 43:21–44:19; 63:18–21; 64:12–65:11).
IPC’s new search resulted in numerous, previously unseen, relevant documents being
Of note, Hathaway worked for IPC for less than a year and did not have an email account, significantly
reducing IPC’s burden here relative to what it may have faced in a similar case where the plaintiff was a
long-standing employee with his own email account.
IPC does not dispute Hathaway’s claim that Steele managed the production of documents from IPC to
legal counsel. In IPC ’s response to Hathaway’s motion for terminating sanction, it quotes Hathaway’s
claim that “Steele managed the production of documents from IPC to legal counsel and chose not to provide
significant information.” Dkt. 237, at 24 (quoting Dkt. 227, at 19). IPC then states “there is no evidence
that Steele chose not to provide any information to legal counsel” Id. See also Dkt. 239-12, at 2 (Steele
emailing counsel at Moffat Thomas in November 2015, that she is “working on gathering [response]
material” and will email counsel “the handbook, time sheets, job description, and other items needed—I
am waiting for a summary of benefits from our worker’s compensation carrier; and with regards to the
Request for Production No 37—there is email communication, mostly in regards to Mr Hathaway’s WC
claim.”); Dkt. 239-6, Jacobs Depo.65:18-19 (“Lori was in charge of managing that information and
providing it to counsel.”)
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produced to Hathaway, as well as uncovering a hard drive of Steele’s emails that she
reportedly believed was unavailable to her during the First Discovery Period. Dkt. 237, at
17 (quoting Dkt. 239-6, Jacobs Depo. Dkt. 156:27).
In addition to Gotch’s March 29, 2013 email with native Typed Report attachment,
which was disclosed to Hathaway four days before the retrial, IPC newly disclosed other
documents during the Second Discovery Period. The Court will review some of the critical
documents that IPC failed to disclose during the First Discovery Period, prior to the first
a. Emails to Steele Regarding Hathaway’s Medical Visit
IPC, through Steele’s discovery replies, failed to produce a responsive March 28,
2013 email that goes to the heart of the case. On March 28, 2013, at 4:20 p.m., Mountain
View emailed Steele Hathaway’s medical visit information and Dr. Curtis’s letter
explaining Hathaway’s shoulder injury was related to his fall at work. Steele forward the
email to Gotch and other IPC employees minutes after she received it. The email stated:
Dwain, Steve, and Kelsey – we need to get together and discuss this ASAP
as Mr. Hathaway is attempting to relate his most recent events with his
previous fall at work.
Dwain, I found where his fall was listed on the incidents spread sheet for Feb.
19th, but could not find a copy of the report, could you send that to me right
Dkt. 227-1, at 16 (quoting Dkt. 227-13, at 1) (emphasis added). Steele stated in her second
deposition that she had access to the shared files. Dkt. 228-5, Tr. at 168:13-15. Steele had
looked for the incident investigation report for Hathaway’s February 18 injury on March
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28, 2013, but could not find it. The next day, Gotch emailed Steele the Typed Report at
8:30 a.m. The document’s metadata shows the Typed Report sent to Steele was created and
saved on March 29, 2013, at 8:27 a.m. Dkt. 227-9, at 14 (Dkt. 227-2, ¶ 24; Dkt. 228-3).
Neither Steele’s email asking for a copy of the incident report at the heart of this
case nor the email sending the requested incident report were disclosed to Hathaway during
the First Discovery Period. They were also not disclosed prior to the trial, even though IPC
relied on testimony during the trial which referenced the March 29, 2013 email. Steele’s
email stating she could not find a copy of the incident report (even though she had access
to IPC’s shared files), would not have even been disclosed before the second trial in this
case, but for the Court’s vacating the trial and reopening discovery.
b. Mike Willmore’s Forwarded Emails
During the First Discovery Period, Mike Willmore, an IPC supervisor, forwarded
Steele a cover email with the subject header “Ross Hathaway” on February 24, 2016. Dkt.
227-2, ¶ 24; Dkt. 227-16. The email itself had no body text but had multiple email
attachments. All of the attached emails had some variation of “Hathaway” or “Hathoway”
in their title. Steele only provided some of attached emails to IPC’s counsel. Among the
documents withheld was an email sent by Steve McLean, an IPC plant manager, on April
17, 2013. The email was part of a chain in which Gotch claimed that Hathaway had
approached him about changing the February 19, 2013 incident report to reflect that he had
hurt his shoulder. Steele forwarded Gotch’s account to McLean and claimed that Hathaway
had also come to her office on April 17, 2013, about the same issue. McLean responded,
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I think this should be the final nail in the coffin. To go and ask that the safety
manager modify the accident report to tailor his modified story is not right. I
talked to Lori but she said she still needed to do more research? I really don’t
want this guy on the property because with our luck he’ll end up with a real
work comp claim that we’ll be dealing with for a long time to come.
I guess we’ll see what Lori comes up with tomorrow and try to get him out
of here as soon as possible. Kelsey is going to have Carrie bird dog him while
he is here just to keep an eye on him and help prevent any “possible
accidents” from occurring before we get to talk to him. Todd, would you
want to be a part of the interview with Ross once Lori completes her
homework or just have Mike, Kelsey and I handle it again?
Dkt. 227-1, at 17 (quoting Dkt. 227-2, ¶ 24; Dkt. 227-15) (emphasis added). While Steele
testified that she had sent the emails Willmore had collected to IPC’s counsel, there is no
evidence beyond her testimony that she had done that. Regardless, the above email which
discusses possible reasons IPC may have had for terminating Hathaway’s employment was
never disclosed until after the retrial was vacated.
c. Steele Correspondence with Mountain View
On March 7, 2016, Mountain View emailed Steele the test results from Hathaway’s
March 21, 2013 visit for shoulder pain. The correspondence reflected that Hathaway’s
blood sugar and A1C results were within a normal range during his March 21, 2013 visit.
Steele, or IPC counsel, never produced this correspondence to Hathaway. Later, IPC
argued during trial that Hathaway’s pain was likely attributable to either hypo- or
hyperglycemia. Steele also failed to produce an email correspondence she had with
Mountain View on or about March 28, 2013, in which she inquired as to the time Hathaway
checked in for his visit.
Hathaway had a follow-up visit with Mountain View on April 15, 2013. Dr. Curtis
wrote a second letter. To this day, IPC has not produced any email or documentation related
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to that visit or Dr. Curtis’s second letter.17 Whether or not Mountain View emailed Steele
or another employee directly about Hathaway’s visit, as it did in response to his March 21,
2013 visit is unknown. Steele claims she never received correspondence from Mountain
View related to Hathaway’s second visit. IPC also never produced a copy of Dr. Curtis’s
second letter; it is unclear if it ever received one.
d. Missing Handwritten Report
Hathaway contends that IPC still has not produced the missing, signed handwritten
report that lies at the heart of this case. IPC contends that “Steele  particularly and
diligently” searched for the Handwritten Report but found no record of it, nor did Higgins,
Gotch’s successor. Dkt. 237, at 8. Hathaway has continually expressed doubts about IPC’s
failure to find or produce this critical record. Relatedly, Hathaway has continually asked
for the document from which Steele quoted from in her email. In her deposition, Steele
could not adequately explain where the quote originated from, though she has attempted to
state it came from another document that does not match her above quotation. Based on his
training and experience as a safety director at IPC, Higgins would have expected such
language to come from the incident report. IPC has never produced a document that
matches the language Steele quoted from.
Furthermore, Steele, as IPC’s 30(b)(6) designee, testified that IPC took no efforts to
preserve any documents. Dkt. 227-2, ¶ 9; Dkt. 227-5, at 3. It did not place in effect a
Hathaway was able to obtain his worker’s compensation file relating to IPC from Mountain View, which
included Dr. Curtis’ second letter and his April 15, 2013 information, via subpoena.
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litigation hold to notify its employees to not destroy any documents. Id. at 63. There may
be other missing relevant documents that have since been destroyed.
2. Legal Standard
“There are two sources of authority under which a district court can sanction a party
who has despoiled evidence: the inherent power of federal courts to levy sanctions in
response to abusive litigation practices, and the availability of sanctions under Rule 37
. . . .” Leon v. IDX Sys. Corp., 464 F.3d 951, 958 (9th Cir. 2006). Hathaway moves for
terminating sanctions under the Court’s inherent authority and under Rule 37.
The parties dispute what the appropriate legal standard is to apply in this case.
Hathaway argues that the Court should rely on the framework provided in Anheuser-Busch,
Inc., v. Natural Beverage Distribs., 69 F.3d 337, 348 (9th Cir. 1995). IPC argues the
Anheuser-Busch decision is appropriate when a court order has been violated. As IPC
contends that no court order was violated in this case, it proposes the Court should look to
Halaco Eng’g Co. v. Castle, 843 F.2d 376, 379 (9th Cir. 1988)), for the appropriate
standard. Both parties agree that the tests have significant overlap.
The Ninth Circuit has applied both Halaco and the Anheuser-Busch framework
when reviewing whether a district court abused its discretion in applying terminating
sanctions under its inherent authority. As shall be discussed below, and IPC acknowledges,
Halaco can be essentially merged into the Anheuser-Busch analysis.18
IPC stated that “[Anheuser-Busch] covers most of the same considerations as Halaco Eng’g Co.” Dkt.
237, at 19.
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District courts have inherent power to impose sanctions, including default or
dismissal, when a party has “willfully deceived the court and engaged in conduct utterly
inconsistent with the orderly administration of justice.” Fjelstad v. Am. Honda Motor Co.,
Inc., 762 F.2d 1334, 1338 (9th Cir. 1985); see also TeleVideo Sys., Inc. v. Heidenthal, 826
F.2d 915, 916 (9th Cir. 1987) (“Courts have inherent equitable powers to dismiss actions
or enter default judgments[.]”). Terminating sanctions are a severe remedy, and should be
imposed only in extreme circumstances, “where the violation is ‘due to willfulness, bad
faith, or fault of the party.’” In re Exxon Valdez, 102 F.3d 429, 432 (9th Cir. 1996)
(quotation omitted); see also Anheuser-Busch, Inc. v. Natural Beverage Distribs., 69 F.3d
337, 348 (9th Cir. 1995) (terminating sanctions are warranted where “a party has engaged
deliberately in deceptive practices that undermine the integrity of judicial proceedings”).
The Ninth Circuit has held that:
[T]he most critical criterion for the imposition of a dismissal sanction is that
the misconduct penalized must relate to matters in controversy in such a way
as to interfere with the rightful decision of the case. This rule is rooted in
general due process concerns. There must be a nexus between the party’s
actionable conduct and the merits of his case.
Tripati v. Corizon Inc., 713 F. App’x 710, 711 (9th Cir. 2018) (quoting Halaco Eng’g Co.,
843 F.2d at 381).
If a nexus exists, courts must weigh the following factors prior to imposing
terminating sanctions: “(1) the public’s interest in expeditious resolution of litigation; (2)
the court’s need to manage its dockets; (3) the risk of prejudice to the party seeking
sanctions; (4) the public policy favoring disposition of cases on their merits; and (5) the
availability of less drastic sanctions.” Leon, 464 F.3d at 958 (quoting Anheuser–Busch, 69
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F.3d at 348). In most cases, the first two factors weigh in favor of the imposition of
sanctions, and the fourth factor typically weighs against a default or dismissal sanction.
Stars’ Desert Inn Hotel & Country Club, Inc. v. Hwang, 105 F.3d 521, 524 (9th Cir. 1997).
“Thus the key factors are prejudice and availability of lesser sanctions.” Id. (internal
quotation marks and citation omitted); see also Valley Eng’rs Inc. v. Elec. Eng’g Co., 158
F.3d 1051, 1057 (9th Cir. 1998) (when considering evidentiary issues or terminating
sanctions, factors three and five “are decisive”).
While the district court need not make explicit findings regarding each of the five
factors, a finding of “willfulness, fault, or bad faith” is required for dismissal or default
judgment to be proper. See Leon, 464 F.3d at 958; Anheuser–Busch, 69 F.3d at 348. “Where
a party so damages the integrity of the discovery process that there can never be assurance
of proceeding on the true facts, a case dispositive sanction may be appropriate.” Conn.
Gen. Life Ins. Co. v. New Images of Beverly Hills, 482 F.3d 1091, 1096 (9th Cir. 2007)
(quoting Valley Eng’rs, 158 F.3d at 1058).
In comparison, Halaco lays out six factors a district court must consider prior to
dismissing a case:
(1) the existence of certain extraordinary circumstances, (2) the presence of
willfulness, bad faith, or fault by the offending party, (3) the efficacy of lesser
sanctions, (4) the relationship or nexus between the misconduct drawing the
dismissal sanction and the matters in controversy in the case, and finally, as
optional considerations where appropriate, (5) the prejudice to the party
victim of the misconduct, and (6) the government interests at stake.
Halaco Eng’g Co., 843 F.2d at 380. However, district courts seldom explicitly review the
first condition of extreme circumstances because they generally incorporate this inquiry
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into the second inquiry of bad faith. See Halaco Eng’g Co., 843 F.2d at 380–81; In re
Napster, Inc. Copyright Litig., 462 F. Supp. 2d 1060, 1071–74 (N.D. Cal. 2006); Sun
World, Inc. v. Olivarria, 144 F.R.D. 384, 389–91 (E.D. Cal. 1992). As seen from the
discussion, supra, each of Halaco’s factors are naturally analyzed in the Anheuser–Busch
framework in determining whether to terminate a case. For example, in applying
Anheuser–Busch, the district court determines whether there was willfulness, bad faith, or
fault, Halaco’s first two factors. The court also determines if due process—Halaco’s
“nexus” factor—would be satisfied by imposing the sanction. See Anheuser–Busch, 69
F.3d at 348. Halaco’s remaining three factors fall under Anheuser–Busch’s five factors.
Thus, while the Court will formally apply the Anheuser–Busch’s framework in
evaluating whether to terminate the case under its inherent authority, it will implicitly
analyze the Halcao factors as well.
Hathaway moves for terminating sanctions based on IPC’s failure to disclose
relevant documents throughout the pendency of this case. In particular, Hathaway points
to IPC’s failure to disclose (1) emails between Gotch and Steele regarding Hathaway’s
injury reports; (2) emails between Steele, McLean, and Gotch regarding Hathaway’s efforts
to relate his shoulder pain with his previous fall at work and Steele’s inability to find a
copy of Hathaway’s incident investigation report; (3) emails provided by Willmore to
Steele for production, including one in which the motivation for Hathaway’s termination
is discussed; and (4) emails between Steele and Mountain View regarding Hathaway’s
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a. Due Process
Due process concerns “require that there exist a relationship between the sanctioned
party’s misconduct and the matters in controversy such that the transgression threaten[s]
to interfere with the rightful decision of the case.” Anheuser–Busch, 69 F.3d at 348 (internal
quotation marks and citations omitted) (alteration in original). If no such relationship
exists, a court cannot impose terminating sanctions.
Hathaway has long claimed that he reported his work accident to Gotch and that
Gotch prepared a handwritten report that stated Hathaway injured his thumb, hand, and
shoulder. Hathaway reviewed and then signed the Handwritten Report. Hathaway later
suffered shoulder pain and sought worker’s compensation. Hathaway then discovered that
IPC’s incident report omitted his shoulder injury. Hathaway inquired about the omission
in mid-April 2013 and spoke with Mike Willmore, a supervisor, about his concerns about
the report’s accuracy on April 17, 2013. On April 18, 2013, IPC fired Hathaway, claiming
he told another employee he would intentionally hurt himself at work to receive
IPC argues there is no evidence the Handwritten Report ever existed but instead
disclosed the Typed Report, which was not signed and did not include the shoulder injury.
Both parties agree that Hathaway approached Gotch and asked Gotch to modify the Typed
Report to include the shoulder injury. The parties disagree as to what happened next.
Hathaway argues that Gotch told Hathaway that someone at IPC had instructed him to omit
the shoulder injury from the Typed Report and Hathaway would have to talk to the office
to get it changed. IPC argues there is no evidence that Gotch was instructed to lie because
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there is no evidence that Hathaway’s shoulder injury was ever reported at the time of the
IPC’s misconduct in this case goes directly to the heart of Hathaway’s claims of
whether IPC terminated him due to his worker’s compensation claim and his claim that the
Typed Report was inaccurate. There exists a relationship between IPC’s misconduct—
failure to disclose relevant documents—and the matters in controversy such that the
transgression threatens to interfere with the rightful decision of the case. Indeed, had those
documents been disclosed, it is possible the original trial would have been decided in
While IPC cites to In re Rubin for the proposition that even willful activity does not
justify terminating sanctions if the conduct does not reach a certain “level of
contumaciousness,” 796 F.2d at 618, the Ninth Circuit has not expressly applied that
framework since the 1980s. Instead, the Ninth Circuit has held that “disobedient conduct
not shown to be outside the control of the litigant is all that is required to demonstrate
willfulness, bad faith, or fault.” Phenylpropanolamine (PPA) Prods. Liab. Litig., 460 F.3d
1217, 1233 (9th Cir. 2006) (quoting Fair Hous. of Marin v. Combs, 285 F.3d 899, 905 (9th
Cir. 2002); Virtual Vision, Inc. v. Praegitzer Indus., Inc. (In re Virtual Vision, Inc.), 124
F.3d 1140, 1143 (9th Cir. 1997)); Henry v. Gill Indus., Inc., 983 F.2d 943, 948 (9th Cir.
1993) (same). Providing false or incomplete information during a deposition or in a
response to a discovery request constitutes the sort of willfulness, bad faith, or fault
required for dismissal. See Arnold v. Cnty. of El Dorado, No. 2:10–CV–3119 KJM GGH,
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2012 WL 3276979, at *4 (E.D. Cal. Aug. 9, 2012) (plaintiff acted in bad faith by lying at
her deposition); Lowry v. Heritage Sec., No. 09–CV–882–BTM WVG, 2011 WL 7769329,
at *10, *14 (S.D. Cal. July 7, 2011) report and recommendation adopted sub nom. Lowry
v. Metro. Transit Bd. MTBS, No. 09CV00882, 2012 WL 1439078 (S.D. Cal. Apr. 26, 2012)
(plaintiff acted with willful disobedience in refusing to answer an interrogatory requesting
his residence address, even though plaintiff refused to provide such information to protect
his privacy); see also Newman v. Brandon, No. 1:10–CV–00687 AWI JL, 2012 WL
4933478, at *5 (E.D. Cal. Oct. 16, 2012) (plaintiff acted willfully and in bad faith in
submitting falsified declarations in connection with a motion for summary judgment).
Hathaway has presented substantial and compelling evidence that demonstrates
serious misconduct by IPC in this case. IPC withheld relevant and discoverable evidence
by essentially cherry-picking which documents to produce in response to Hathaway’s
production request for documents that “in any way discuss, deal with, or relate” to
Hathaway and then by asserting all documents that “in any way relate to Plaintiff’s
employment with IPC” had been produced. Dkt. 227-1, at 3. IPC also represented to the
Jury that all documents had been produced, even though a least some of the documents IPC
testified about, even on the stand, were not produced to Hathaway. By doing so, IPC misled
Hathaway, the Court, and the Jury that it had complied with its Rule 26 obligations and
that all relevant evidence was submitted to the Jury. This prevented Hathaway, the Court,
and the Jury from learning the truth about the circumstances surrounding the termination
of Hathaway’s employment.
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It is particularly troubling to the Court that but for the hung jury in the original trial,
these documents would never had been disclosed. Further, IPC only voluntarily disclosed
one of the documents at issue prior to the second trial—the cover email from Gotch to
Steele that attached the Typed Report.19 The Typed Report itself was originally requested
in native format by Hathaway during a deposition prior to the first trial. Not only did IPC
fail to turn over the Typed Report in native format, IPC also never produced the cover
email prior to October 24, 2019, even though Steele testified that she normally received
such emails containing incident reports from Gotch during the first trial. All of the other
documents—the emails from Willmore to Steele, the correspondence between Steele and
Mountain View regarding Hathaway’s medical diagnosis, and the email in which Steele
stated she could not find a copy of the incident investigation report—were not disclosed
until the Court ordered the limited reopening of discovery for the purpose of determining
whether terminating sanctions should be imposed.
All of the newly disclosed documents include “Hathaway” or “Hathoway” (a known
misspelling of Hathaway’s name)20 in the document title, subject line, or body of text. All
are clearly relevant to the case. Further, Steele was primarily responsible for conducting
IPC’s discovery. She gathered and emailed to IPC’s counsel documents in response to
discovery requests. Dkt. 237, at 10. She conducted the searches and chose when to ask
Again, while IPC had disclosed the Typed Report in PDF format prior to the first trial, it had not produced
it in native format, as requested by Hathaway’s counsel during Steele’s first deposition.
IPC knew that Hathaway” was misspelled as “Hathoway” in relevant documents. Todd Higgins, Gotch’s
replacement as safety director, even testified in his deposition that he searched for both spellings during the
2015 discovery process. Dkt. 237, at 8.
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others at IPC for help discovering information to disclose. Employees emailed her relevant
documents to produce to Hathaway. Steele was a recipient or a sender of all the emails IPC
failed to disclose. All of the emails IPC failed to produce were directly related to
Hathaway’s employment and the case.
The Court cannot simply say that Steele’s, and thus IPC’s, failure to disclose such
important documents in this case by a person who played a crucial role, both during
discovery and as a fact witness, was merely a “mistake.”21 Dkt. 237, at 17. This is especially
true because at least one of the documents IPC failed to disclose was an email of an incident
report from Gotch—an email Steele testified on the stand was the kind she “normally”
received (and thus should have known to look for). Further, Steele produced some of the
emails Willmore forwarded her, but withheld others. This implies that she made a
conscious choice not to produce relevant information and to not disclose to Hathaway that
IPC would withhold them.22
Additionally, IPC has withheld or obfuscated information from Hathaway and the
Court on prior occasions. As previously stated, the Court allowed Hathaway to amend his
One of the excuses IPC provides is that Jacobs, the IT manager, located during the Second Discovery
Period an old hard drive from which he was able to extract and restore emails “which Steele believed had
been previously unavailable to her,” and thus not produced during the First Discovery Period. Dkt. 237, at
17. IPC said once it and its counsel learned of its mistake, they recreated the search. IPC does not explain
why it took until the Second Discovery Period for Jacobs to locate the hard drive. Nor do they contend that
Steele asked Jacobs for his help locating the hard drive or recovering Steele’s “unavailable” emails during
the First Discovery Period. Thus, IPC was not diligent during the First Discovery Period. Further, such an
excuse does not explain why the cover email to the Typed Report was not disclosed during the First
Discovery Period, particularly as Steele represented on the stand that Gotch typically emailed her such
IPC did not produce a privilege log or make claims of privilege over the withheld documents. IPC simply
failed to disclose the documents without notifying the Court or the opposing party it was doing so.
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Complaint to include punitive damages after Steele gave her testimony on the stand
implying that she submitted the First Report to the insurers before receiving medical
reports. When she gave that testimony, IPC had not disclosed it had received Community
Care’s medical reports prior to the submission of the First Report. Hathaway objected, and
a quick review of the documents made clear that Steele’s testimony was inaccurate. In
granting Hathaway’s motion to amend his Complaint, the Court was clear it was not willing
to attribute Steele’s testimony to a lapse in memory, especially when such a mistake was
easily remedied by a quick review of a few documents before trial. Dkt. 204, at 9.
Additionally, during discovery, Hathaway requested Margaret Johnson’s contact
information. Margaret Johnson was Hathaway’s co-worker at IPC and allegedly heard
Hathaway say that he should trip and fall so IPC would have to pay a worker’s
compensation claim. IPC indicated in its initial disclosures that it did not have the address
for Johnson. Later, in its supplemental disclosures, it gave Hathaway a P.O. Box number
for Johnson located in Ririe, Idaho. Finally, apparently after Hathaway made several
attempts to obtain information from IPC, IPC gave Hathaway a phone number for Johnson.
The number was no longer in service. Hathaway was never able to contact or depose
Johnson during discovery. A year after discovery closed, IPC asked to take a trial
deposition of Johnson and indicated it had obtained Johnson’s contact information via a
The Court denied IPC’s request. It held that:
“IPC was not diligent. During discovery, IPC made minimal efforts to locate
or contact Johnson. IPC has given no explanation as to why it did not hire an
investigator during discovery to locate Johnson or why it did not take other
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steps during discovery to locate her. And, as explained above, IPC failed to
even timely supply Johnson’s contact information to Hathaway.”
Dkt. 48 at 9. The Court ultimately concluded that “Hathaway has never had the opportunity
to cross-examine Johnson because of IPC’s dilatory conduct,” so—as a remedy for IPC’s
inadequate discovery—it was appropriate to exclude Johnson as a witness in order to cure
the prejudice to Hathaway. Dkt. 48, at 15.
IPC again has been dilatory in its discovery. Had IPC not been required to disclose
the recently produced documents, the evidence would not reflect that there was cause to
question whether IPC’s Typed Report of the incident was created contemporaneously to
the event, that Steele knew Hathaway’s blood sugar levels were normal when he visited
Mountain View (thus undermining IPC’s claims that he suffered from hypo- or
hyperglycemia), or that IPC considered Hathaway’s attempt to modify the Typed Report
in its decision to terminate his employment. As the evidence now shows, Hathaway’s case
is considerably stronger than what he was allowed to present to the Jury. Further, IPC’s
patterns of dilatory discovery, withholding documents, and misconstruing the record over
the many years of this case are deeply troublesome. Under these circumstances, it is
difficult for the Court to see how IPC’s conduct merits anything less than the imposition
of severe sanctions.
The Court finds that because IPC withheld evidence it knew was relevant to the
litigation through the entire first trial—and was prepared to do so through the second trial—
its actions were, at best, willful or, at worst, in bad faith. Because IPC’s repeated,
intentional actions of violating Rule 26—and the Court’s discovery order—establish the
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willful conduct necessary for the imposition of terminating sanctions, the Court proceeds
to consider the five factors of Anheuser–Busch below.
c. The Public’s Interest in Expeditious Resolution of Litigation, the
Court’s Need to Manage its Dockets, and Public Policy Favoring
Disposition of Cases on Their Merits
The first and second factor of the Anheuser–Busch analysis are typically reviewed
together. A desire for prompt resolution of cases weigh in favor of the imposition of
sanctions. “The public and this Court have an interest in securing the just, speedy and
inexpensive determination of all actions[.]” Bump Babies Inc. v. Baby The Bump, Inc.,
2011 WL 5037070, *6 (C.D. Cal.), report and recommendation adopted, 2011 WL
5036919 (2011) (internal quotation marks and citation omitted). “Orderly and expeditious
resolution of disputes is of great importance to the rule of law. By the same token, delay in
reaching the merits . . . is costly in money, memory, manageability, and confidence in the
process.” PPA Prod. Liab. Litig., 460 F.3d at 1227; see id. at 1234 (“Sound management
of the court’s docket also counsels in favor of sanctions as a deterrent to others[.]”).
The first and second factor support case termination when the destruction, or failure
to disclose, evidence “obscure[es] the factual predicate of the case and consum[es] months
of sanction-related litigation.” Leon, 464 F.3d at 958 n.5. As previously discussed, IPC’s
failure to disclose the newly produced documents obfuscates the very heart of the matter
in dispute. The Court has also already spent significant time investigating and resolving
IPC’s dilatory discovery and disclosures. The first two factors support case termination. Id.
The fourth factor, the public policy favoring disposition on the merits, “always
weighs against the sanction of dismissal.” BNSF Ry. Co. v. Quad City Testing Lab., 2009
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WL 1067824, at *4 (D. Mont. 2009). Because factors one and two support sanctions and
four “cuts against case-dispositive sanctions,” factors three and five—the prejudice
suffered by the party moving for sanctions and the availability of less drastic sanctions—
“are decisive.” Valley Eng’rs Inc. v. Electric Eng’g Co., 158 F.3d 1051, 1057 (9th Cir.
d. Risk of Prejudice to the Hathaway
A party “suffers prejudice if the [opposing party’s] actions impair the [party’s]
ability to go to trial or threaten to interfere with the rightful decision of the case.” Adriana
Internat’l Corp. v. Thoeren, 913 F.2d 1406, 1412 (9th Cir. 1990). Prejudice is evident, for
example, when there is a “pattern of deception and discovery abuse” that “make it
impossible for [a court] to be confident that the parties will ever have access to the true
facts.” Connecticut Gen. Life Ins. Co. v. New Images of Beverly Hill, 482 F.3d 1091, 1097
(9th Cir. 2007) (citing Valley Eng’rs Inc., 158 F.3d at 1058.
In Valley Engineers Inc., the Ninth Circuit affirmed an award of terminating
sanctions because there was evidence to establish the defendant knew about a damaging
and “exceedingly important” memorandum but intentionally withheld it, denied its
existence, and violated court orders to produce it for more than two years. 158 F.3d at
1053–1058. Under those circumstances, the Ninth Circuit concluded that a case dispositive
sanction was appropriate, because the defendant “so damage[d] the integrity of the
discovery process that there [could] never be assurance of proceeding on the true facts
. . . .” Id. at 1058–1059. The Ninth Circuit has also held that “[e]ven a single violation of a
discovery order can be justification for dismissing a case . . . if critical documents are being
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withheld, and the integrity of the entire process is called into question.” In re Hurt, 210
F.3d 383 (9th Cir. 2000). “Failure to produce documents as ordered . . . is considered
sufficient prejudice.” Adriana Internat’l Corp., 913 F.2d at 1412. “Late tender is no
excuse.” In re PPA Prods. Liab. Litig., 460 F.3d at 1227.
IPC insists over and over that it has never violated a court order, willfully or
otherwise. Instead, it argues that it has cooperated every time Hathaway requested more
documentation.23 To wit, IPC produced “well over 784 bates-stamped pages” after the first
trial was held in the case. Dkt. 237, at 4. IPC contends that most of the documents only
became relevant and responsive after trial, since they are related to the initial discovery
process, rather than to the claims or defenses of the lawsuit itself. It argues it “only
mistakenly failed to locate about 45 documents” during the First Discovery Period. Id. at
5. IPC further contends that only a few of those documents are arguably substantive and
“virtually zero are prejudicial to Hathaway.” Id.
The Court disagrees with IPC’s premise that it has complied with every court order
or the rules governing civil procedure. If every party could fail to disclose key documents
requested for production by the discovery order deadline; represent to the opposing party,
It appears as if IPC is blaming Hathaway for its own dilatory discovery. In essence, IPC implies that if
only Hathaway had explicitly requested that it produce the newly disclosed documents at an earlier time in
this case, then it would have had cause to disclose the documents. As IPC represented to Hathaway it had
produced all of the material Hathaway requested, the Court does not see how Hathaway could have known
to ask for the documents again. Hathaway relied on IPC’s representation that it had comported with Rule
26, followed the Court’s discovery order, and that its responses to Hathaway’s production requests were
truthful. Furthermore, Hathaway should not have had to keep requesting responsive documents from IPC
in order to get IPC to comply with its obligations. IPC’s avowed “compliance” in producing documents
when Hathaway asked is of marginal significance when it should have complied of its own accord years
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a jury, and the trial court that all requested documents had been produced; and then, after
trial ended, produce those key documents but argue it had not violated any rules in hiding
the information, no one would trust the judicial process. Indeed, those actions, by
definition, impair a party’s ability to go to trial and likewise interfere with the rightful
decision of the case. IPC failed to comply with the Court’s discovery order (Dkts. 9, 16),
and failed to comply with Federal Rule of Civil Procedure 26.
With each discovery violation, IPC prejudiced Hathaway’s ability to prepare for and
try this case. The Court’s deadline for fact discovery completion was September 30, 2016,
(Dkt. 16), yet IPC incompletely produced responses to document requests and hindered the
deposition of a key witness. As the Court has discussed in detail above, it finds the tardily
disclosed documents were both substantive and highly relevant to Hathaway’s claims and
IPC’s defenses. The Court finds that IPC’s conduct prejudiced Hathaway’s ability to pursue
his claims and hampered the search for truth, and that IPC’s actions were particularly
harmful given the fact that trial commenced without the necessary disclosures and the
retrial would have proceeded without the incredibly late disclosure of a critical document.
See N. Am. Watch Corp. v. Princess Ermine Jewels, 786 F.2d 1447, 1451 (9th Cir. 1986)
(endorsing district court’s finding that “willful violation of the discovery order had, given
the imminence of the trial date, prejudiced [the other party’s] ability to prepare for trial”).
e. Availability of Lesser Sanctions
A court “must, before dismissing an action under its inherent powers, consider less
drastic sanctions.” Halaco, 843 F.2d at 381. This requires “a reasonable explanation of
possible and meaningful alternatives,” id., though “[t]he district court need not exhaust
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every sanction short of dismissal before finally dismissing a case . . . .” Henderson v.
Duncan, 779 F.2d 1421, 1424 (9th Cir. 1986). In conducting the lesser sanctions inquiry,
the court examines the following factors: (1) the feasibility of less drastic sanctions and
why alternative sanctions would be inadequate; (2) whether alternative methods of
sanctioning or curing the malfeasance were implemented before ordering dismissal; and
(3) whether the party has been warned of the possibility of dismissal before actually
ordering dismissal. See Malone, 833 F.2d at 132; Anheuser–Busch, 69 F.3d at 352; Leon,
464 F.3d at 960.
What is most important for case-dispositive sanctions is whether the misconduct
“threaten[s] to interfere with the rightful decision of the case.” Valley Engr’s Inc., 158 F.3d
at 1057; see also Anheuser–Busch, 69 F.3d at 348 (holding that terminating sanctions are
available when “a party has engaged deliberately in deceptive practices that undermine the
integrity of judicial proceedings”). Where a court cannot conduct a trial with reasonable
assurance that the truth would be available, dismissal is appropriate. See Brown v. Oil
States Skagit Smatco, 664 F.3d 71, 79 (5th Cir. 2011) (affirming district court’s
determination that dismissal was the only appropriate sanction where a plaintiff lied at
deposition); Arnold, 2012 WL 3276979 at *15 (holding that lesser sanctions would not be
appropriate where a plaintiff repeatedly lied at deposition and refused to comply with
discovery obligations); Knapp v. Convergys Corp., 209 F.R.D. 439, 443 (E.D. Mo. 2002)
(finding that lesser sanctions, such as monetary sanctions or re-opening of discovery,
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would not repair the harm to defendants caused by plaintiff’s false responses to
The Court finds that less drastic sanctions would not be useful here because
defendants have “willfully deceived the court and engaged in conduct utterly inconsistent
with the orderly administration of justice.” Anheuser–Busch, 69 F.3d at 348. Lesser
sanctions will not address the harm caused by IPC’s repeated disclosure failures. IPC’s
misconduct interfered with the rightful decision of the case. A trial has already been held.
The trial was the culmination of almost three years of litigation and cost substantial
attorneys’ fees to complete. The preparations for the retrial have already taken over two
years so far. If the retrial were to actually occur, the Court would need to reopen discovery
beyond the limited purpose of determining whether there should be terminating sanctions.
It would have to reopen discovery entirely to ensure IPC fulfills all of its disclosure
obligations. This would push back the retrial date even further. After five years, the facts
are stale. Key witnesses are either in poor health or have not worked for IPC in years.
Hathaway was due the newly disclosed information during the First Discovery Period, well
before trial. Lesser sanctions will not compensate Hathaway for the significant time and
money that he has invested nor—given the age of this case—will it put him in the same
situation he would have been if he had been able to access to the newly disclosed material
Most motions concerning terminating sanctions involve misconduct by the plaintiff. In those situations,
dismissal is appropriate. Where, as here, misconduct involves the defendant, it is appropriate to find liability
in the plaintiff’s favor rather than dismissing the case in its entirety.
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IPC’s repeated and consistent dilatory and incomplete discovery in this case makes
it impossible for the Court to have confidence in IPC when it says it has disclosed
everything. Lesser sanctions will not restore the credibility of IPC with regard to its
compliance with Rule 26. There will always be a shadow over the trial about what other
documents IPC may have withheld or destroyed. This is particularly the case given that a
critical fact for both parties concerns the existence and contents of the Handwritten Report.
Case termination is the only meaningful sanction available to the Court at this late juncture.
Whether or not the district court warned a disobeying party of the possibility of
dismissal is relevant, but “an explicit warning is not always necessary” for a dismissal order
to be proper. Anheuser-Busch, Inc., 69 F.3d at 535 (citing Adriana Int’l Corp., 913 F.2d at
1413). As the Ninth Circuit explained in Valley Engineers Inc., “the central factor in
evaluating the district court order [of terminating sanctions] is justice, and everyone has
notice from the text of Rule 37(b)(2) that dismissal is a possible sanction for failure to obey
discovery orders.” 158 F.3d at 1056–57. The five-part Anheuser-Busch test is used “to
determine whether a dismissal sanction is ‘just,’” but notwithstanding the fifth factor, “it
is not always necessary for the court to impose less serious sanctions first, or to give any
explicit warning.” Id. at 1057 (characterizing the five-part test as “a way for a district judge
to think about what to do, not a series of conditions precedent before the judge can do
Here, IPC is wrong that it has never violated any court orders in failing to disclose
documents. It violated the Court’s discovery order, which mandated all discovery be
completed by September 30, 2016. Dkts. 9, 16. That said, the Court did not learn about
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IPC’s failure to withhold a critical document until October 24, 2019, a few days before
retrial. At that time, the Court explicitly warned IPC both verbally and in writing that IPC’s
discovery conduct could result in serious repercussions, including terminating sanctions.
The Court reopened discovery and invited briefing on the issue. The issue has now been
briefed, IPC has an opportunity to be heard, and the Court finds IPC had sufficient notice
under Anheuser-Busch that termination sanctions were possible.
f. Anheuser-Busch Conclusion
The Court has carefully evaluated of all the Anheuser-Busch factors and found IPC’s
discovery noncompliance—not only recently, but throughout the pendency of this
litigation—to be the result of willfulness, fault, and/or bad faith, and that the misconduct
relates to the merits of the case.25 Like the Anheuser-Busch court, the Court finds it has
grounds to impose terminating sanctions under its inherent power. Therefore, it need not
address whether dismissal is appropriate under the alternate authority of Rule 37.26
Anheuser-Busch, 69 F.3d at 348 (“We therefore need not address whether dismissal was
appropriate under the alternate authority of Rule 37.”)
The Court enters a default judgment against IPC.
The Court does not intend to implicate IPC counsel in wrongful conduct. Given the record and motions
in currently front of it, the Court faults IPC, not its counsel, for its discovery noncompliance.
Both parties either assume or argue that IPC has not violated a court order. The Court disagrees. However,
under the parties’ assumption that no court order was violated, the parties dispute whether the Court has the
authority to impose terminating sanctions under Rule 37(c). Here, the Court finds it has the power to impose
terminating sanctions under its inherent authority so it need not evaluate either party’s interpretation of
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A jury shall decide at a later time what damages Hathaway is owed. See
Hester v. Vision Airlines, Inc., 687 F.3d 1162, 1165 (9th Cir. 2012) (reversing and
remanding back to a jury trial the question of punitive damages where the district
court had entered default judgment and held a jury trial on non-punitive damages).
IT IS HEREBY ORDERED:
1) Plaintiff Hathaway’s Motion for Terminating Sanctions (Dkt. 227) is
2) Defendant IPC’s Motion to File Excess Pages (Dkt. 236) is GRANTED.
3) Defendant IPC’s Motion to Strike Plaintiff’s Motion for Terminating
Sanctions (Dkt. 238) is GRANTED in PART and DENIED in PART.
4) Defendant IPC’s Motion for Leave to File a Sur-Reply (Dkt. 245) is
5) A jury trial shall be set at a later date to determine what damages Hathaway
DATED: June 2, 2020
David C. Nye
Chief U.S. District Court Judge
MEMORANDUM DECISION AND ORDER - 45
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