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 motion filed by LaOstriches & Sons, Ltd. for reconsideration of the Courts order striking its claim to the defendant currency [Doc. # 135 ] is denied. Signed by District Judge Carol E. Jackson on 4/2/14. (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 motion filed by LaOstriches & Sons, Ltd.
for reconsideration of the order striking its claim to the defendant currency. The United
States has filed a response in opposition and the issues are fully briefed.
On August 29, 2012, the United States 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, 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 sought to take the depositions of the
individual claimants and 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, they were rescheduled to begin on
September 16, 2013.
On September 5, 2013, claimants filed a motion for a protective order,
requesting that the depositions be cancelled. [Doc. #71]. On September 12, 2013, the
motion was denied. [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]. These motions were also denied. [Doc. #88]. None of the individual claimants
or the corporate officers appeared for the scheduled depositions.
On October 15, 2013, the government filed a motion for 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].
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 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. #116].
The parties agreed to reschedule the depositions for December 13, 2013 through
December 18, 2013. Laura Avila Barraza was the only individual who appeared. On
January 17, 2014, the government filed a second motion requesting the Court to strike
the claims and answers of LaOstriches, Paulina Ojeda-Avila, Humberto Ojeda-Avila, and
Valentino Ojeda-Avila, for failure to participate in discovery.
February 13, 2014, the Court granted the government’s motion. [Doc. #133]. On
February 21, 2014, LaOstriches filed the instant motion for reconsideration, pursuant
to Federal Rule of Civil Procedure 59(e), requesting that it be reinstated as a claimant.
Federal Rule of Civil Procedure 59(e) was adopted to clarify a district court’s
power to correct its own mistakes in the time period immediately following entry of
judgment. Norman v. Arkansas Dep’t of Educ., 79 F.3d 748, 750 (8th Cir. 1996)
(citing White v. New Hampshire Dep’t of Employment Sec., 455 U.S. 445 (1982)). A
Rule 59(e) motion serves the limited function of correcting “manifest errors of law or
fact or to present newly discovered evidence.” Innovative Home Health Care, Inc. v.
P.T.O.T. Associates of the Black Hills, 141 F.3d 1284, 1286 (8th Cir. 1998) (internal
quotation and citations omitted). The motion cannot be used to introduce new
evidence, tender new legal theories, or raise arguments which could have been offered
or raised prior to entry of judgment. Id.
LaOstriches asks that the order dismissing its claim be reconsidered and
reversed. In support, LaOstriches argues that the Court failed to consider the following
facts: (1) Griselda Avila Barraza and Jose Sergio Avila Amezquita did not play an active
role in LaOstriches and do not possess personal knowledge regarding its operations;
and (2) the government’s inability to depose of Griselda Avila Barraza and Jose Sergio
Avila Amezquita is not prejudicial because LaOstriches
documents” and produced Laura Avila Barraza, the president of LaOstriches, for
These arguments concern the same factual theories already addressed by this
Court on two prior occasions. First, on September 16, 2013, the Court explicitly stated
that Griselda Avila Barraza, the secretary of LaOstriches, and Jose Sergio Avila
Amezquita, the treasurer of LaOstriches, were “undoubtedly relevant to this case” and
that “a protective order prohibiting the Government from taking their depositions would
be inappropriate.” [Doc. #88, at 2]. The Court addressed and rejected the claim of lack
of personal knowledge as an excuse for not producing the corporate officers.
Subsequently, on February 13, 2014, the Court repeated that “a claimed lack of
knowledge is insufficient to preclude a deposition” and that 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.” [Doc. #133, at 5].
The deposition of Laura Avila Barraza along with LaOstriches’ production of
documents does not relieve the two corporate officers of their duty to appear for their
depositions. While the government and the claimants disagree as to whether Laura
Avila Barraza provided sufficient testimony regarding the operations of LaOstriches,
such a determination is irrelevant.
Griselda Avila Barraza and Jose Sergio Avila
Amezquita were noticed for depositions and the Court warned that a failure to appear
would result in either the dismissal of individual claims or any other sanction that the
Court deemed appropriate. [Doc. #116, at 2]. Because Griselda Avila Barraza and Jose
Sergio Avila Amezquita are named officers of LaOstriches, their flagrant disregard of
discovery orders is sufficient to dismiss LaOstriches as a claimant in this action.
LaOstriches additionally argues that its former counsel failed to inform Griselda
Avila Barraza and Jose Sergio Avila Amezquita of the scheduled depositions and, thus,
LaOstriches did not wilfully disobey the Court’s orders. This argument fails for two
reasons. First, clients are ultimately responsible for the conduct of their counsel and
“dismissal or default may be entered against a party as a result of counsel’s actions.”
McAfee v. Allstate Property & Casualty Ins. Co., 4:12-CV-1667-CAS (E.D. Mo. Aug. 7,
2013) (quoting Boogaerts v. Bank of Bradley, 961 F.2d 765, 768 (8th Cir. 1992)).
Second, LaOstriches’ current attorney admits in the instant motion that Griselda Avila
Barraza and Jose Sergio Avila Amezquita did not have any intention of appearing for
their depositions, regardless of notice, and further admits that they did, at minimum,
have notice of the December deposition dates. See Doc. #135, at 3 (“Mr. Sarasua
knew prior to scheduling and prior to making many representations to the contrary,
that neither the corporate secretary nor treasurer would appear for depositions.”); Id.
at 4 (“They were completely unaware that the depositions scheduled (prior to the final
ones set in December) were ever noticed and agreed to by their counsel at the time.”)
Lastly, LaOstriches’ argues that the Court should impose a less severe sanction
than dismissal. The Court disagrees. Beginning on September 5, 2013, when
LaOstriches filed its motion for protective order to cancel the scheduled depositions,
LaOstriches has been diligently working to prevent the depositions of Griselda Avila
Barraza and Jose Sergio Avila Amezquita. On November 21, 2013, the government
first requested the Court to strike LaOstriches’ claim. Despite its broad discretion to
issue sanctions at that time, the Court provided LaOstriches one final opportunity to
comply with their discovery obligations. LaOstriches failed to comply. The continued
failure of LaOstriches to produce their corporate officers that were properly noticed for
deposition by the government is sufficient to show that any other sanction would be
ineffective. The history of this litigation strongly suggests that LaOstriches will continue
to submit to the Court the same factual arguments it has been presenting for over six
months, which the Court continues to reject, in order to avoid its discovery obligations.
Accordingly, LaOstriches “has failed to set forth any intervening change in case
law or new evidence that would allow for a modification of the Court’s prior Order.
Further, [claimant] has failed to convince the Court that it has made a clear error of
law in its prior Order. As such, the instant motion for reconsideration must be denied.”
Young v. United States, 4:12-CV-1983-CAS (E.D. Mo. July 18, 2013).
For the above stated reasons,
IT IS HEREBY ORDERED that the motion filed by LaOstriches & Sons, Ltd. for
reconsideration of the Court’s order striking its claim to the defendant currency [Doc.
#135] is denied.
CAROL E. JACKSON
UNITED STATES DISTRICT JUDGE
Dated this 2nd day of April, 2014.
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