Federal Trade Commission v. Adept Management, Inc. et al

Filing 229

OPINION AND ORDER: Denying Motion for Imposition of Sanctions Motion for Protective Order 221 . (See attached PDF for complete details). Signed on 2/7/2018 by Magistrate Judge Mark D. Clarke. (jkm)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
MEDFORD DIVISION

Civ. No. 1: l 6-cv-00720-CL

FEDERAL TRADE COMMISSION,
Plaintiff.

OPINION AND ORDER
v.

ADEPT MANAGEMENT INC., et al,
Defendants.

CLARKE, Magistrate Judge.
This case comes before the Court on a motion (#221) by the Hoyal defendants to impose
sanctions on the Simpson defendants and counsel for improper discovery abuses.

For the

reasons below, the motion is denied.

DISCUSSION
"The district court has great latitude in imposing sanctions for discovery abuse." Dahl v.

City of Huntington Beach, 84 F.3d 363, 367 (9th Cir.1996). "Courts of justice are universally
acknowledged to be vested, by their very creation, with power to impose silence, respect, and
decorum. in their presence, and submission to their lawful mandates." Chambers v. NASCO, Inc ..
501 U.S. 32, 43 (1991) (citations omitted). "These powers are governed not by rule or statute but
by the control necessarily vested in courts to manage their own affairs so as to achieve the
orderly and expeditious disposition of cases." Id. (citing Link v. Wabash R. Co., 370 U.S. 626,

Page I ~ORDER

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630-31 ( 1962)). A federal court has the power to discipline attorneys who appear before it;
however, this power "ought to be exercised with great caution." Id.
The Hoyal defendants request that the Court exercise its inherent power to impose
sanctions on the Simpson defendants and their counsel for "improper discovery abuses."
Specifically, the Hoyal defendants claim that Dennis Simpson and his attorney Tyler King
created "inappropriate outbursts" and "attempted to use the depositions of the Hoyals to elicit
information for use in a different case." During the deposition Mr. King asked Jeff Hoyal
questions regarding his role as the former trustee of the Scenic Trust, but, according to the
Hoyals, could not articulate the relevancy to the case at hand. The Hoyal defendants claim that
during this exchange, Mr. Simpson repeatedly accused Mr. Hoyal of being a .. forger." Finally,
Mr. King asked Mr. Hoyal questions about a confidential settlement communication from a
previous lawsuit.
In response, the Simpson defendants claim that the "outbursts" were more mild than
claimed by the Hoyals, that Mr. Simpson did in fact discover evidence to support his claim of
forgery by Mr. Hoyal, and that Mr. Hoyal created outbursts of his own, blurting out claims that
Mr. Simpson is a criminal, and that certain matters during testimony were "a lie." The Simpson
defendants further claim that the questions posed to Mr. Hoyal at his deposition were relevant
because the issues had already been raised by the FTC during their questioning. According to
the Simpson defendants, the issues dealt with the ownership of certain databases that may have
been used for determining what addresses were used in certain mailers. Rather than a relevance
question, then, the Simpson defendants claim that Mr. Hoyal refused to answer based on an
invocation of his Fifth Amendment rights against self-incrimination.

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The parties each have a plethora of further complaints about each other. However, while
the Court is not impressed with the behavior of both parties and their counsel, and finds the
bickering in this motion and response to be unprofessional and a waste of the Court's time and
resources, the Court does not find any of the conduct alleged to be so abusive as to warrant
sanctions. See Logan v. W Coast Benson Hotel, 981 F. Supp. 1301, 1308 (D. Or. 1997). The
Court is confident that, moving forward, counsel will work cooperatively and professionally in
this case despite clear animosity between their clients.
ORDER
The motion for sanctions (#221) is denied.
It is SO ORDERED and DATED)!l.
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/_·_·/_/---~~--6-c__~_,,....~---MARK D. CLARKE
United States Magistrate Judge