United States of America v. $7,877.61 United States Currency

Filing 80

DECISION & ORDER Plaintiff's motion for an order striking the claim and answer of claimant 57 is denied without prejudice. (See Decision & Order for further instructions.) Signed by Hon. Marian W. Payson on 3/20/2015. (KAH)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
_______________________________________
UNITED STATES OF AMERICA,
DECISION & ORDER
Plaintiff,
09-CV-6306P
v.
$7,877.61 UNITED STATES CURRENCY,
Defendant.
_______________________________________

Currently pending before the Court is a motion filed by the United States
(hereinafter, “plaintiff”) for an order striking the answer and claim filed by claimant Harvey
Bailey (hereinafter, “claimant”) on the grounds that claimant failed to appear for his deposition
and “refused to complete the settlement of the case” despite extensive negotiations. (Docket
# 57). Claimant has not specifically opposed the motion, although he has opposed a subsequent
show cause order issued by this Court and motion for summary judgment filed by plaintiff. (See
Docket ## 64, 66, 78).
Plaintiff filed this action on June 12, 2009, seeking the forfeiture of $7,877.61 in
United States currency seized from claimant on June 30, 2008. (Docket # 1). Throughout the
litigation, claimant has represented himself pro se. The original scheduling order has been
extended twice, most recently on April 4, 2014. (Docket ## 22, 44, 56). Pursuant to the latest
order, the deadline for completion of fact discovery was May 30, 2014, and the deadline for
filing dispositive motions was September 5, 2014. (Docket # 56).

I.

Settlement Negotiations in 2011 and 2012
In a conference with this Court on November 6, 2012, the parties advised that

they had begun to engage in settlement negotiations. In a further conference on December 13,
2012, the parties advised that claimant had child support debts in excess of the amount at issue in
this case. Plaintiff’s counsel also indicated her intent to depose claimant, and claimant informed
the Court that he could come to Rochester from Elmira for his deposition.
On December 18, 2012, plaintiff served claimant with a Notice of Deposition for
January 18, 2013. (Docket # 57-1, Exhibit (“Ex.”) A). On January 14, 2013, plaintiff’s counsel
sent a letter to claimant cancelling the scheduled deposition “[s]ince we have reached an
agreement for the resolution of his case.” (Id. at Ex. B). A Stipulation for Settlement was
enclosed with the letter. (Id.).1 Despite apparent assurances from claimant that he would sign
the documents, he returned a bank account document necessary to effectuate the settlement, but
counsel never received an executed Stipulation, despite having provided numerous copies to
claimant. (Id. at Exs. C, D, E, G). Eventually, by letter dated November 26, 2013, claimant
advised plaintiff’s counsel that he did not wish to settle unless he could “get a sum of money in
my own pocket mailed directly to me” without being applied towards his child support
obligations. (Id. at Ex. J).
By letter to this Court dated April 4, 2014, plaintiff’s counsel submitted a
proposed Second Amended Scheduling Order that was agreeable to both parties. (Id. at Ex. L).
The letter confirmed plaintiff’s intention to depose claimant. (Id.). The Court accepted the

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Indeed, on January 29, 2013, this Court denied without prejudice to renewal a motion to compel filed by
plaintiff based upon its understanding that the parties had reached a resolution and were in the process of finalizing a
stipulation. (Docket # 46). When counsel did not receive the executed Stipulation from claimant, plaintiff renewed
its motion on April 12, 2013. (Docket # 47). The motion was ultimately denied on the grounds that plaintiff had not
identified any deficiencies in claimant’s discovery responses. (Docket # 55).

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parties’ proposal, and issued an amended scheduling order. (Docket # 56). The scheduling order
has not been amended since.

II.

Reinitiation of Settlement Negotiations and Claimant’s Non-Appearance for May
23, 2014 Noticed Deposition
In compliance with that scheduling order, plaintiff noticed claimant’s deposition

for May 2, 2014, in the United States Attorney’s Office in Rochester, New York. (Docket
# 57-1, Ex. M). On April 24, 2014, claimant telephoned this Court’s chambers to advise that he
could not come to Rochester for the deposition. This Court’s Law Clerk advised claimant to
discuss the matter with opposing counsel to determine whether a solution could be devised.
Claimant was further directed that if his discussions with counsel were unsuccessful in resolving
the problem and he wanted relief from the Court, he should seek such relief expeditiously
because the deposition was scheduled for the following week.
According to plaintiff’s counsel, claimant left a telephone message for her on
April 24, 2014, stating that he did not have the funds to travel to Rochester for the deposition.
(Docket # 57 at ¶ 20). By letter and voicemail message the next day, counsel told claimant that
he needed to appear for the scheduled deposition, noting that a court reporter had been hired and
that “[f]ees will be incurred whether or not you appear.” (Docket # 57-1 at Ex. N). The letter
further acknowledged that claimant had indicated in his voicemail message that he would like to
resolve the case and noted that “[a]ny money returned to [claimant] . . . will be paid first toward
[his] child support debts and [he] will receive a credit.” (Id.). Counsel invited claimant to call
her if he “wish[ed] to further discuss this matter.” (Id.).
On May 1, 2014, claimant contacted plaintiff’s counsel and informed her that he
would not appear for his deposition the next day. (Id. at ¶ 21). According to counsel, claimant
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further stated that he would settle the case if certain language were removed from the proposed
Stipulation for Settlement. (Id.). Counsel agreed to remove the language, and later that day
wrote this Court to advise that claimant had indicated that he would not be able to appear for his
deposition, but was willing to settle the case on terms acceptable to plaintiff. (Id., Ex. O).
Counsel requested that the Court conduct a recorded telephone conference with the parties later
that day so that claimant could confirm his intent to settle the case and explained that the reason
for the request was that claimant had a history of failing to execute settlement agreements despite
verbal agreements to do so. (Id.).
The Court agreed to conduct a recorded telephone conference as requested on
May 1, 2014, but counsel for plaintiff cancelled the call. As she explained in a letter to the Court
the following day, with a copy to claimant:
Th[e] settlement was in essence to return the monies to
[claimant] provided he knew that they would be applied to an
outstanding child support debt owed by him to Chemung County
Department of Social Services.
Later in the afternoon [of May 1, 2014], I became aware of
some conflicting information about the debts owed by [claimant]
and therefore my office was not willing to settle in light of certain
clarification we need from the Chemung County Department of
Social Services. However, today we have confirmed the debt and
will continue to endeavor to settle the case.
[Claimant] had called my office a number of times in the
past few weeks asking to postpone the May 2nd deposition
indicating that he was having difficulty traveling to Rochester. We
have now postponed the deposition to May 23, 2014 at 1:00 p.m.
in the U.S. Attorney’s Office, Rochester, New York. If [claimant]
signs and returns the settlement documents by May 19, 2014, we
will cancel the deposition.
(Letter from Assistant United States Attorney Mary Clare Kane to Hon. Marian W. Payson,
dated May 2, 2014). Plaintiff’s counsel also wrote claimant directly enclosing the revised

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Stipulation for Settlement and a Notice of Deposition for May 23, 2014. (Letter from Assistant
United States Attorney Mary Clare Kane to Claimant, dated May 2, 2014).
Claimant neither returned the executed Stipulation, nor appeared for his
deposition. According to counsel, she left messages for claimant each day of the week of May
23rd informing him that he needed to appear for his deposition and asking him to contact her, but
claimant never contacted her. (Docket # 57 at ¶ 23). Plaintiff’s counsel and the court reporter
were present for the scheduled deposition on May 23, 2014. (Id.).
Approximately ten days later, plaintiff filed the instant sanctions motion. (Id.).
Claimant still had not contacted her. (Id. at ¶ 24). The Court issued a motion scheduling order
requiring claimant to respond to the motion by June 27, 2014. (Docket # 59). The Order
explicitly warned claimant that if he failed to respond on or before June 27, 2014, “appropriate
sanctions may be imposed, including an order dismissing the action and awarding judgment in
favor of plaintiff.” (Id.). Claimant filed no response to the pending motion by the June 27, 2014
deadline.

III.

Order to Show Cause
Following claimant’s non-appearance at his noticed deposition and failure to

respond to the pending motion, this Court issued an order requiring claimant to show cause why
his claim should not be dismissed. (Docket # 60). In a letter received by this Court on July 10,
2014, claimant advised that he was currently incarcerated, was “unable to get the fare to get to
Rochester” and was “willing to settle only if [he] ha[d] to.” (Docket # 62). In response,
plaintiff’s counsel advised the Court that she learned that claimant had been arrested on June 1,

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2014, but had been at liberty prior to that date, including on May 23, 2014, the date of his
noticed deposition. (Docket # 63).
Claimant has not disputed that he was at liberty on the date of his scheduled
deposition, but urges the Court not to dismiss his claim “just because [he] can’t afford to pay the
bus fare to Rochester New York” and could not arrange transportation through family or friends.
(See Docket ## 64, 66). With respect to the issue of settlement, claimant stated:
We did speak about me settling this last time and I did agree,
mainly because [counsel] told me that I will not win this case. And
that she was going to use her smoking guns upon me, but also if I
did not have to say or agree to that stipulation that all those people
had “probable cause” I would si[gn]. But she did not do that.
(Docket # 64). Contrary to claimant’s account, the record shows that the language to which he
objected was removed from the proposed Stipulation sent to him for execution. (Docket # 57-1,
Ex. P). Claimant nonetheless did not execute the Stipulation.

IV.

Discussion
The specific relief that plaintiff seeks – an order under Rule 37 of the Federal

Rules of Civil Procedure striking claimant’s answer and claim and entering judgment in favor of
plaintiff – is foreclosed by controlling Second Circuit law. The Second Circuit has repeatedly
affirmed that the most extreme Rule 37 sanction of dismissal may not be imposed against a pro
se litigant without a showing that he or she has been warned of the consequences of
non-compliance with discovery obligations, including the possibility of dismissal. See, e.g.,
S.E.C. v. Setteducate, 419 F. App’x 23, 24 (2d Cir. 2011) (“[e]ven the most severe Rule 37
sanctions may be imposed even against a plaintiff who is proceeding pro se, so long as a warning
has been given that noncompliance can result in a sanction) (internal quotation omitted and

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emphasis added); Agiwal v. Mid Island Mortg. Corp., 555 F.3d 298, 302 (2d Cir. 2009)
(“[d]ismissal of a pro se litigant’s action may be appropriate so long as a warning has been given
that non-compliance can result in dismissal”) (internal quotation omitted); Valentine v. Museum
of Modern Art, 29 F.3d 47, 50 (2d Cir. 1994) (“[t]he severe sanction of dismissal with prejudice
may be imposed even against a plaintiff who is proceeding pro se, so long as a warning has been
given that noncompliance can result in dismissal”) (citing Bobal v. Rensselaer Polytechnic Inst.,
916 F.2d 759, 766 (2d Cir. 1990), cert. denied, 499 U.S. (1991)). Consistent with this settled
authority, motions seeking a sanctions order of dismissal on the grounds that the pro se litigant
did not appear for a noticed deposition are routinely denied where the litigant had not been
warned in advance that non-appearance could result in dismissal. See, e.g., Velazquez v.
Vermont Dep’t of Corr., 2009 WL 819445, *2 (D. Vt. 2009) (declining to order dismissal where
pro se plaintiff failed to appear for deposition or respond to written discovery requests but “ha[d]
not yet been warned that his failure to participate in discovery might result in the dismissal of his
case”); Burke v. Miron, 2009 WL 952097, *1 (D. Conn. 2009) (“defendants note, correctly, that
[pro se] plaintiff is a prolific and experienced litigator in this district[;] [n]onetheless, in light of
Second Circuit precedent requiring a clear warning to pro se litigants in such circumstances, the
court recommends that the defendants’ motion to dismiss be denied”).
Plaintiff’s motion papers inexplicably ignore this clear and controlling law in
favor of non-binding authority from the Ninth Circuit. In addition, plaintiff’s motion papers do
not address the fact that there is no record evidence that claimant was ever warned about the
possible consequences of non-appearance for his deposition.2 Indeed, had this Court ignored the

2

Claimant did not appear for a status conference with the Court on June 12, 2012; the conference was
rescheduled and claimant was warned about the consequences of failing to appear for that rescheduled conference.
(Docket # 34). He did appear telephonically for the rescheduled appearance and has appeared for all other
conferences with the Court. (See Docket ## 20, 37, 43, 45).

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four-factor test generally employed by the Second Circuit3 and granted plaintiff the requested
relief, the dismissal likely would have been reversed on appeal. In sum, plaintiff’s failure to cite
controlling, dispositive caselaw, as well as its decision to request an order of dismissal in the face
of such authority, is troubling.
That said, claimant has clearly and willfully violated his discovery obligations.
He was required to comply with plaintiff’s properly-issued Notice by appearing in Rochester for
his scheduled deposition. He was told by this Court’s Law Clerk that he needed to seek relief
from the Court if he could not resolve with plaintiff’s counsel his problems in traveling to
Rochester. He did not do so. Rather, he simply did not appear for the re-noticed deposition on
May 23, 2014. He did not contact plaintiff’s counsel in advance or following the deposition to
address the issue, and did not return counsel’s repeated calls during the week before the
deposition. In addition, claimant’s frequent refusals to return settlement agreements despite his
purported assent thereto strongly suggests that his negotiation strategy was designed more to
delay the litigation than to resolve it. Although claimant claimed not to have the funds to
purchase the modestly-priced bus fare from Elmira to Rochester, he had earlier represented to the
Court that he could travel to Rochester and he has not explained why he was unable to arrange
transportation with a friend or family member despite having three weeks’ advance notice. Nor

In addition, this Court’s June 9, 2014 motion scheduling order did warn claimant that failure to respond
could result in sanctions, including dismissal. (Docket # 59). That warning was several weeks after his failure to
appear for his noticed deposition. Moreover, it is unclear whether claimant received the motion scheduling order
prior to the deadline for responding since claimant was evidently arrested on June 1, 2014 and incarcerated
thereafter. He has since responded to this Court’s Order to Show Cause and plaintiff’s motion for summary
judgment.
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As the Second Circuit recently reaffirmed, “in ‘evaluating a district court’s exercise of discretion’ to
impose sanctions pursuant to Rule 37, we have relied on factors including: (1) the willfulness of the non-compliant
party or the reason for the non-compliance; (2) the efficacy of lesser sanctions; (3) the duration of the period of
noncompliance; and (4) whether the non-compliant party had been warned of the consequences of noncompliance.”
S.E.C. v. Setteducate, 419 F. App’x at 24 (citing Agiwal v. Mid Island Mortg. Corp., 555 F.3d at 302).

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has he explained why, despite his purported transportation obstacles, he failed to seek relief from
this Court excusing him from appearing in Rochester.
In sum, the Court is constrained by controlling authority to deny plaintiff’s
request at this time for an order striking claimant’s answer and claim. See Velazquez v. Vermont
Dep’t of Corr., 2009 WL 819445 at *2 (“[a]bsent a specific request for alternative sanctions, the
[c]ourt declines to impose such sanctions at this time”). However, claimant is directed to appear
at the United States Attorney’s Office in Rochester, New York, on a date and time to be set by
plaintiff’s counsel by written Notice to be served by no later than March 31, 2015, which shall
warn claimant of the consequences of non-compliance.4 Claimant is further warned that any
failure to appear for the noticed deposition without permission of this Court will result in
an order striking claimant’s answer and claim and entering judgment in favor of plaintiff,
and any other appropriate sanctions.

CONCLUSION
For the reasons stated above, plaintiff’s motion for an order striking the claim and
answer of claimant (Docket # 57) is DENIED without prejudice. The parties are directed to
comply with the instructions set forth in the preceding paragraph.
IT IS SO ORDERED.
s/Marian W. Payson
MARIAN W. PAYSON
United States Magistrate Judge
Dated: Rochester, New York
March 20, 2015
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Plaintiff may choose not to depose claimant and to request the Court to decide the pending motion for
summary judgment. Counsel shall advise this Court by no later than March 31, 2015 if plaintiff would like the
Court to make a determination on that motion without considering any deposition testimony by claimant. However,
plaintiff will not be permitted to depose claimant following determination of the motion, in the event that such
determination is adverse to plaintiff.

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