United States of America v. Eleven Million Seventy-One Thousand One Hundred and Eighty-Eight Dollars and Sixty-Four Cents ($11,071,188.64) In United States Currency
MEMORANDUM AND ORDER - IT IS HEREBY ORDERED that the governments motion to strike the claims and answers filed by LaOstriches & Sons, Ltd., Paulina Ojeda-Avila, Humberto Ojeda-Avila, and Valentino Ojeda-Avila [Doc. # 129 ] is granted. Signed by District Judge Carol E. Jackson on 2/13/14. (KJS)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
UNITED STATES OF AMERICA,
ELEVEN MILLION SEVENTY-ONE
THOUSAND ONE HUNDRED AND
EIGHTY-EIGHT DOLLAR AND SIXTYFOUR CENTS ($11,071,188.64) IN
U.S. CURRENCY, MORE OR LESS,
SEIZED FROM LAOSTRICHES &
No. 4:12-CV-1559 (CEJ)
MEMORANDUM AND ORDER
This matter is before the Court on the government’s motion to strike the claims
and answers filed by LaOstriches & Sons, Ltd., Paulina Ojeda-Avila, Humberto OjedaAvila, and Valentino Ojeda-Avila, for failure to participate in discovery. Paulina OjedaAvila, Humberto Ojeda-Avila, and Valentino Ojeda-Avila have conceded this motion.
LaOstriches has filed a response in opposition and the issues are fully briefed.
On August 29, 2012, the government filed a verified complaint for forfeiture in
rem against $11,071.188.64 in U.S. Currency.
On March 19, 2013, Laura Avila
Barraza, Paulina Ojeda-Avila, Humberto Ojeda-Avila, and Valentino Ojeda-Avila, and
LaOstriches filed notices claiming interests in the defendant currency [Doc. ##31-35],
followed by answers to the forfeiture complaint. [Doc. ##36, 37].
On July 12, 2013, the government noticed the depositions of Laura Avila
Barraza, Paulina Ojeda-Avila, Humberto Ojeda-Avila, and Valentino Ojeda-Avila, as
well as two corporate officers of LaOstriches, Griselda Avila Barraza and Jose Sergio
Avila Amezquita. The depositions were scheduled for the week of August 12, 2013, but
at claimants’ request, were rescheduled to begin on September 16, 2013.
On September 5, 2013, claimants filed a motion for a protective order,
requesting that the Court cancel the depositions. [Doc. #71]. On September 12, 2013,
the Court denied claimants’ motion. [Doc. #77]. The following day, claimants filed
motions for emergency protective orders, requesting that the Court prevent the
government from taking the depositions of all individuals, except Laura Avila Barraza.
[Doc. ## 78-79, 82-84]. In response, the government filed a motion to compel
appearances. [Doc. #85]. On September 16, 2013, the Court denied claimants’
motions and granted the government’s motion to compel. [Doc. #88]. However, none
of the claimants or officers appeared for the scheduled depositions.
On October 15, 2013, the government filed a motion requesting the Court to
issue an order directing claimants to show cause why their claims and answers should
not be stricken for failure to obey the discovery orders and appear for their scheduled
depositions. [Doc. #96]. On November 21, 2013, the Court denied the government’s
motion, stating that “despite its broad discretion to issue sanctions upon noncompliant
parties, the Court is mindful that dismissal is an extreme sanction that should be used
prudently.” The Court then permitted “the claimants one final opportunity to comply
with the discovery orders and appear for depositions,” making clear that it would “not
accept any further excuses or explanations for failure to attend depositions.” [Doc.
The parties agreed to reschedule the depositions for December 13, 2013 through
December 18, 2013. Laura Avila Barraza was the only individual who appeared. In the
instant motion, the government renews its request for the dismissal of the claims and
answers filed by LaOstriches, Paulina Ojeda-Avila, Humberto Ojeda-Avila, and
Valentino Ojeda-Avila. LaOstriches is the only claimant that does not concede the
Rule 37(b)(2) of the Federal Rules of Civil Procedure provides that a court may
issue sanctions for failure to obey an order to provide discovery. Included within these
sanctions is the ability of a court “to strike Claimants’ pleadings and render default
judgment against them for failure to comply with their discovery obligations and
appear for their depositions.” U.S. v. $61,000.00 in U.S. Currency, 2013 WL 1867536,
*1 (C.D. Cal. May 3, 2013) (citing Fed.R.Civ.P. 37(b)(2)(A)(iii), (vi); 37(d)(1)(A)); see
also Hale v. Burton, 4:09-CV-1939 (E.D. Mo. May 3, 2011) (dismissed without
prejudice for plaintiff’s failure to appear for deposition). “The extensive sanctions
available to courts under Rule 37 for failure to comply with discovery orders are
necessary to compensate the court and parties, facilitate discovery and deter abuse
of the discovery process.” U.S. v. One 1999 Forty Seven Foot Fountain Motor Vessel,
240 F.R.D. 695, 698 (S.D. Fla. Feb. 21, 2007) (Courts have broad discretion to issue
“By entering an appearance and contesting forfeiture in this action,
Claimants were aware that they would be required to provide discovery to the
government.” $61,000.00 in U.S. Currency, 2013 WL 1867536, at *2.
The government argues that LaOstriches’ claim should be stricken for failure to
comply with the Court’s discovery orders in refusing to produce corporate officers,
Griselda Avila Barraza and Jose Sergio Avila Amezquita, for depositions. Griselda Avila
Barraza is listed as the Secretary in the corporate documents of LaOstriches and Jose
Sergio Avila Amezquita is listed as the Treasurer. The government asserts that it has
been prejudiced by its inability to question these individuals about LaOstriches’
acquisition of the defendant currency.
In response, LaOstriches argues that its claim should not be stricken because
it has and continues to participate in discovery. While acknowledging that the two
corporate officers did not appear for their scheduled depositions, LaOstriches explains
that they responded to the government’s first set of interrogatories stating that they
do not possess personal knowledge of any of the affairs of LaOstriches, did not
participate in its management or operation, and were only listed as officers in order to
“protect and safeguard the interest of the children, should anything happen to Laura
Avila.” [Doc. #130, at pp. 5-6]. Additionally, LaOstriches points to the fact that Laura
Avila Barraza, the president, sole shareholder, and “only individual exercising
management responsibility for LaOstriches,” has answered the government’s
interrogatories and appeared for her deposition. Finally, LaOstriches argues that it has
produced “volumes of documents” and that due to new legal representation “it is
anticipated that all discovery requests directed to Barraza and/or LaOstriches will be
provided prior to the discovery deadline.” [Doc. #130, at pp. 4].
There is no merit to any of the arguments LaOstriches makes. LaOstriches
wilfully ignored the orders issued by this Court on September 12, 2013, September 16,
2013, and November 21, 2013 directing Griselda Avila Barraza and Jose Sergio Avila
Amezquita to appear for their scheduled depositions. [Doc. ## 77, 78, 116]. In the
September 16, 2013 order, the Court addressed and rejected the claim of lack of
personal knowledge as an excuse for not producing the corporate officers, yet
LaOstriches, undeterred, raises it again here. Not only are the depositions of these
corporate officers relevant to this case, “[a] claimed lack of knowledge, by itself is
insufficient to preclude a deposition.” Powertech Technology, Inc. v. Tessera, Inc.,
2013 WL 3884254, *1 (N.D. Cal. July 26, 2013). The failure of Griselda Avila Barraza
and Jose Sergio Avila Amezquita to appear for their depositions represents the refusal
of LaOstriches to participate in discovery. See Roots Contracting and Trading Co. v.
Creighton Ltd., 170 F.R.D. 155, 160 (M.D. Tenn. Aug. 9, 1996) (“By its very nature,
a corporation can only act through its agents. The act of an authorized administrative
officer of a corporation on behalf of the corporation is an act of the corporation.”)
Furthermore, the Court made it unquestionably clear in its November 21st order
that Griselda Avila Barraza and Jose Sergio Avila Amezquita had “one final opportunity
to comply with the discovery orders and appear for depositions.” [Doc. #116, at 1].
The Court emphasized: “Claimants are warned that failure to appear for
depositions will result in the dismissal of their individual claims along with
any additional sanctions the Court deems appropriate.” [Doc. 116, at 2].
Whether LaOstriches has previously submitted “volumes of documents” to the
government, obtained new counsel, or “anticipates” to produce all documents prior to
the extended discovery cut-off date is not an adequate excuse for disobeying the
orders of this Court. Additionally, the fact that the government had the opportunity
to depose Laura Avila Barraza is of no consequence. Despite LaOstriches’ assertion
that she is the only officer capable of answering questions on behalf of LaOstriches, her
responses to the government’s questions seem to reflect the contrary as she
consistently stated that she did not know, could not remember, did not ask questions,
never made decisions, and often signed documents without reading them or
understanding what they represented. See Laura Avila Barraza Dec, 18, 2013 Dep.,
Doc. #132-1. Consequently, this provides further support for the government’s need
to depose other named officers of LaOstriches.
Because the claimants have wilfully disobeyed court orders and have obstructed
discovery in this case, the Court believes that the extreme sanction of striking their
claims and answers is warranted.
IT IS HEREBY ORDERED that the government’s motion to strike the claims
and answers filed by LaOstriches & Sons, Ltd., Paulina Ojeda-Avila, Humberto OjedaAvila, and Valentino Ojeda-Avila [Doc. #129] is granted.
CAROL E. JACKSON
UNITED STATES DISTRICT JUDGE
Dated this 13th day of February, 2014.
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