United States of America v. $28,182,00 in United States Currency

Filing 40

ORDER granting in part and denying in part Gov's 36 Motion for Default Judgment, granting motion to extent it seeks imposition of sanctions and denying motion to extent it seeks entry of default judgment; Claimant Smit h ordered to pay a fine of $1000.00 into the registry of the Court by 6/1/13, and Claimant Smith to respond to each and every one of the Gov's discovery requests by 6/1/13; Court DENIES any motion contained in Claimant Smith's 38 Response to the Gov's Motion for Default Judgment. Signed by Magistrate Judge Dennis Howell on 5/7/13. (Pro se litigant served by US Mail.)(ejb)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
ASHEVILLE DIVISION
1:12cv8
UNITED STATES OF AMERICA,

)
)
Plaintiff,
)
)
v.
)
)
$28,182.00 in United States Currency,
)
)
Defendant.
)
___________________________________ )

ORDER

Pending before the Court is the Government’s Motion for Default Judgment
[# 36]. Previously, the Court granted the Government’s Motion to Compel and
ordered Claimant Artie Smith to respond to the Government’s discovery requests.
Claimant Smith failed to comply with the Court’s Order. The Government now
seeks an Order from this Court striking Claimant Smith’s Amended Answer and
entering default judgment in this case. Upon a review of the record, the parties’
briefs, and the relevant legal authority, the Court GRANTS in part and DENIES
in part the Government’s motion [# 36].
I.

Analysis

The Government served Claimant Smith with its First Interrogatories by the
United States and First Request for Production by the United States in November
2013. Claimant Smith did not respond to the interrogatories or document requests.
1

After Claimant Smith did not respond to the Government’s discovery requests
within the time required by the Federal Rules of Civil Procedure, the Government
sent Claimant Smith two letters requesting that he comply with his discovery
obligations under the Federal Rules. The Government also notified Claimant
Smith of its intention to move to compel the production of responsive documents
and answers to interrogatories. Claimant Smith still did not responded to the
Government’s discovery requests. Accordingly, the Court entered an Order
directing Claimant Smith to respond to the Government’s discovery request by
April 1, 2013. (Order, Mar. 14, 2013.)
Claimant Smith failed to comply with the Court’s Order. In fact, Claimant
Smith acknowledges that he did not respond to the discovery requests and states
that he “refuse[s] to answer the following questions, therefore [he] will answer
none of them.” (Resp. to Mot. Compel at p. 1.) The time for objecting to the
Government’s discovery requests, however, has long passed. Moreover, Claimant
Smith has now not only intentionally failed to respond to the Government’s
discovery requests, but has intentionally failed to comply with an Order of this
Court.
Where a party fails to comply with a Court Order regarding discovery, the
Court may impose sanctions, including striking a party’s answer and entering
default judgment. Wilson v. Volkswagen of Am., Inc., 561 F.2d 494, 503 (4th Cir.
2

1977). As the United States Court of Appeals for Fourth Circuit has explained,
however, the entry of default judgment for the failure to comply with a discovery
order should be limited to only the most severe cases of abuse. See id. at 504;
Mut. Fed. Sav. & Loan Ass’n v. Richards & Assocs., Inc., 872 F.2d. 88, 92 (4th
Cir. 1989). Accordingly, the Fourth Circuit has set out a four part test to aid the
lower courts in determining when the entry of default is warranted for discovery
abuses. Wilson, 561 F.2d at 503-6.
As we recognized in Wilson, those competing interests require the
application of a four-part test: (1) whether the noncomplying party
acted in bad faith; (2) the amount of prejudice his noncompliance
caused his adversary, which necessarily includes an inquiry into the
materiality of the evidence he failed to produce; (3) the need for
deterrence of the particular sort of noncompliance; and (4) the
effectiveness of less drastic sanctions.
Mut. Fed. Sav. & Loan, 872 F.2d at 92.
Although the Government moves this Court to enter default judgment
against Claimant Smith as a result of his failure to comply with the Court’s
discovery Order, an application of the four-part test set out by the Fourth Circuit
demonstrates that such a drastic sanction is not warranted at this time. In
particular, the Court has yet to impose any lesser sanction on Claimant Smith and
the Court cannot say that a less drastic sanction would not be effective in this case.
This is especially true considering the pro se status of Claimant Smith.
After a review of the record in this case, and upon considering the four
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factors set out by the Fourth Circuit, the Court finds that Claimant Smith has failed
to comply with a discovery Order of this Court. Moreover, the Court finds that
sanctions are warranted pursuant to Rule 37. Accordingly, the Court ORDERS
Claimant Smith to pay a fine of $1000.00 into the registry of the Court by June 1,
2013. In addition, the Court ORDERS Claimant Smith to respond to each and
every one of the Government’s discovery requests by June 1, 2013. The Court
WARNS Claimant Smith that the failure to comply with this Order will result in
the Court striking his Amended Answer and recommending to the District Court
that it enter default judgment in this case.
II.

Conclusion

The Court GRANTS in part and DENIES in part the Government’s
Motion for Default Judgment [# 36]. The Court GRANTS the motion to the extent
it seeks the imposition of sanctions and DENIES the motion to the extent it seeks
the entry of default judgment. The Court ORDERS Claimant Smith to pay a fine
of $1000.00 into the registry of the Court by June 1, 2013. In addition, the Court
ORDERS Claimant Smith to respond to each and every one of the Government’s
discovery requests by June 1, 2013. The Court WARNS Claimant Smith that the
failure to comply with this Order will result in the Court striking his Amended
Answer and recommending to the District Court that it enter default judgment in
this case. Finally, the Court DENIES any motion contained in Claimant Smith’s
4

Response [#38] to the Government’s Motion for Default Judgment as a party may
not include a motion in a response brief. LCvR7.1(C)(2).1

Signed: May 7, 2013

1
The Court also notes that at a previous hearing the Court advised Claimant Smith that he could seek to stay
this action while the criminal case was pending. Claimant Smith, however, was adamant that he did not want to stay
this case and wanted to proceed with this forfeiture action.

5