Unpublished Disposition, 855 F.2d 862 (9th Cir. 1987)

MEMORANDUM^* 

OVERVIEW

Rita A. Toth and her attorney, Sondra J. Thornally, appeal from an order of the U.S. District Court for the Northern District of California, Samuel Conti, District Judge, dismissing their action with prejudice pursuant to Fed. R. Civ. P. 37(b) (2) (C), 41(b), and Local Rules 100-3 and 235-10, and holding appellants jointly liable to pay TWA $15,288.25 in costs and attorney's fees incurred as a result of their disobedience to the District Court's orders, pursuant to Fed. R. Civ. P. 11, 37(b) (2), and Local Rules 100-3 and 235-2. Appellants raise several issues on appeal, only one of which has merit.

DISCUSSION

Appellants allege that the district court erred in basing the dismissal and imposition of monetary sanctions on Local Rule violations and Fed. R. Civ. P. 11, 37, and 41(b). Because we find that the basis for the sanctions was appropriate pursuant to Fed. R. Civ. P. 37, we need not address the other alleged violations.

The district court's dismissal of a case with prejudice is reviewed for abuse of discretion. Malone v. United States Postal Service, 833 F.2d 128, 130 (9th Cir. 1987). " [W]e will overturn a dismissal sanction only if we have a definite and firm conviction that it was clearly outside the acceptable range of sanctions." Id. The issue is "not whether this court would have, as an original matter, imposed the sanctions chosen by the trial court, but whether the trial court exceeded the limits of its discretion." Halaco Engineering Co. v. Costle, 843 F.2d 376, 379 (9th Cir. 1988). A determination that court orders were disobeyed is entitled to considerable weight since a district judge is best equipped to assess the circumstances of the noncompliance. Id.

Five factors must be considered before imposing the sanction of dismissal:¹  "(1) the public's interest in expeditious resolution of litigation; (2) the court's need to manage its docket; (3) the risk of prejudice to the defendants; (4) the public policy favoring disposition of cases on their merits; and (5) the availability of less drastic sanctions." Thompson v. Housing Authority of City of Los Angeles, 782 F.2d 829, 831 (9th Cir.), cert. denied, 107 S. Ct. 112 (1986). When the district court does not explicitly consider the five factors, as was the case here, we must review the record independently to determine whether the dismissal was an abuse of discretion. Malone, 833 F.2d at 130.

Dismissal of this action had been based on appellants' continued refusal to respond to requests to produce; they had continued to refuse even after the court had ordered their responses. The record contains substantial evidence of long and unjustified delays in responding to discovery requests and noncompliance with judicial orders. We find this evidence relevant to the considerations of expeditious resolution of litigation, docket management, and prejudice, and support the district court's order. The district court considered, and indeed instigated, less drastic sanctions, but to no avail. While the public policy favoring disposition on the merits weighs against dismissal, it is not enough to preclude a dismissal order when the other four factors weigh as heavily in favor of dismissal as they do in this case. See Malone, 833 F.2d at 133 n. 2.

Appellants contend that the district court's award of costs and attorney's fees in the amount of $15,288.25 is an abuse of discretion. They challenge both the entitlement to, and the reasonableness of this award.

Fed. R. Civ. P. 37(b) (2) provides for the award of reasonable expenses and attorney's fees "caused by the failure" to obey a court order to provide or permit discovery. Expenses incurred outside of this particular context are not provided for in Rule 37(b) (2).² 

Here, while the district court cited to Fed. R. Civ. P. 11, 37(b) (2), and Local Rules 100-3 and 235-2, it specifically alluded to the language of 37(b) (2) when it ordered "plaintiff and plaintiff's counsel, jointly and severally liable, to pay to TWA its reasonable expenses, including attorney's fees, incurred as a result of plaintiff's and plaintiff's counsel's disobedience of this Court's orders." ER 138 at 19 (emphasis added).

Counsel for TWA submitted a declaration itemizing attorney's fees and costs incurred in connection with this action. CR 126. The fees and costs included time traceable to "the preparation and filing of TWA's Motion for Discovery Plan and (Proposed) Plan and Schedule of Discovery," id. at 4, as well as time traceable to efforts in opposing an Ex Parte Application for Protective Order filed by appellants on February 6, 1987. Id. at 6. The itemization of costs and fees also included numerous other expenditures incurred prior to the attainment of the first court order directed against appellants on February 23, 1987. See ER 86, 87.

To the extent that such expenses were not "incurred as a result of plaintiff's and plaintiff's counsel's disobedience of ... Court [ ] orders," we find that the amount of the award was an abuse of the district court's discretion.³ 

Furthermore, there is no evidence in the record to indicate that the rates claimed were reasonable or that they were comparable with prevailing rates in the community. The district court simply recited the total sanction award, stating that " [t]he amount of these sanctions ... [is] established by TWA to the satisfaction of this Court." ER 138 at 19.

As we explained in Southerland v. Intern. Longshoreman's, Local 8, 834 F.2d 790 (9th Cir. 1987):

The district judge is in the best position to determine the reasonableness of a fee award, but in order for this appeal to be meaningful, the record must inform us of the basis for this conclusion ... Failure to provide evidence of prevailing legal rates in the community leaves a court with an insufficient basis from which to conclude that the rates requested are "reasonable."

Id. at 795 (citations and footnote omitted).

Because the costs and fees awarded were not properly segregated to those expenses caused by the failure to obey court orders, as circumscribed by 37(b) (2) and the district court's sanction order, we remand to the district court with directions to adjust the award of monetary sanctions accordingly. On remand, the district court is instructed to set forth facts explaining its ultimate award.

Appellants contend that they were denied due process when the district court dismissed the action and imposed joint and several monetary sanctions. This contention lacks any semblance of merit. Appellants had actual notice that they would be faced with sanctions, including dismissal, for failing to abide by court orders. This notice derived not only from the hearings on April 10th and April 24th, but also from TWA's dismissal and sanction motion filed on March 4, 1987. CR 91-93.

That appellants were denied an opportunity to be heard is clearly contradicted by the record. Despite having had the opportunity for two months to oppose TWA's motion of dismissal and sanctions, appellants never filed any opposition to that motion. The record clearly indicates that Judge Conti heard appellants' explanations during the April 10, 1987 hearing, granting them two additional weeks to comply with the outstanding orders. Similarly, Judge Conti heard further explanations during the April 24, 1987 hearing, granting appellants a second extension of time within which to comply with the court's orders. Finally, appellants offered the same inadequate explanations for failure to comply with the discovery orders during the hearing on May 1, 1987. Judge Conti had simply heard them all when he ultimately ordered the case dismissed and assessed sanctions.

With respect to appellants' claim that sanctions should have been imposed solely on counsel rather than the client, this argument would require us to ignore established law. In Link v. Wabash Railroad Co., 370 U.S. 626 (1962), the Supreme Court expressly stated:

There is certainly no merit to the contention that dismissal of petitioner's claim because of his counsel's unexcused conduct imposes an unjust penalty on the client. Petitioner voluntarily chose this attorney as his representative in the action, and he cannot now avoid the consequence of the acts or omissions of this freely selected agent.

Id. at 633-34. See also Chism v. Nat'l Heritage Life Ins. Co., 637 F.2d 1328, 1332 (9th Cir. 1981).

On June 8, 1987, motions were filed requesting, inter alia, leave to file a late response to TWA's motion to dismiss. A declaration of counsel accompanied the motion. Judge Conti denied the motion stating that " [a]t this late date, plaintiff cannot seriously contend she lacked an opportunity to respond to defendant's motion." ER 149 at 4. We review denials of motions under Fed. R. Civ. P. 60 for abuse of discretion. Thompson v. Housing Authority of the City of Los Angeles, 782 F.2d 829, 832 (9th Cir.), cert. denied, 107 S. Ct. 112 (1986).

Appellants' claim that Judge Conti abused his discretion is without merit. No aspect of appellants' explanation for their neglect constitutes a valid reason or an adequate showing of excusable neglect for relief under Rule 60(b). Moreover, under Local Rule 220-1, the district court was under no obligation to hold a hearing on the motion. We find no abuse of discretion in the court's denial of the 60(b) motion.

In addition to appellants' motion for relief from judgment and for leave to file a late response, they also moved to disqualify Judge Conti pursuant to 28 U.S.C. §§ 144 and 455(b) (1). In accordance with Sec. 144, an affidavit of prejudice was submitted asserting that Judge Conti had formed a "personal bias or prejudice" against plaintiff. ER 145.

Judge Conti denied the motion for disqualification, finding that the motion lacked a legal basis in that the "alleged bias or prejudice did not arise from an extrajudicial source." ER 149 at 3. Alternatively, the court found that "bias against plaintiff's counsel may not qualify as prejudice against plaintiff for purposes of disqualification." Id.

Notwithstanding the alternative basis, we find that the district judge correctly rejected the motion and affidavit as legally insufficient. As with Sec. 144, the provisions of Sec. 455(a) & (b) (1) require recusal only if the bias or prejudice stems from an extrajudicial source and not from conduct or rulings made during the course of the proceeding. Hasbrouck v. Texaco, Inc., 830 F.2d 1513, 1524 (9th Cir. 1987); United States v. Sibla, 624 F.2d 864, 869 (9th Cir. 1980).⁴ 

Appellants point to no extrajudicial basis for the alleged bias or prejudice. In her affidavit, appellant Toth stated that

[a]ffiant's counsel has informed her that on two occasions Judge Conti stated in open court that he does not believe one of my counsel's explanations of the events in this case and that her credibility with the judge is "about zero." I am also informed that Judge Conti stated this counsel has been violating every court order of the magistrate and his court orders.

ER 145 at 2. The bias or prejudice alleged arose from conduct during the judicial proceeding, and the motion and affidavit, thus, were legally insufficient.

Appellants' argument that Judge Conti erred in failing to assign the motions to another judge for a hearing is equally unavailing. Only after the legal sufficiency of the affidavit is determined does it become the duty of the judge to "proceed no further" in the case. United States v. Azhocar, 581 F.2d 735, 738 (9th Cir. 1978), cert. denied, 440 U.S. 907 (1979). "Moreover, since the inquiry is addressed to the facial sufficiency of the affidavit--not to the truth or falsity of the facts stated therein, ... [a] 'hearing' is unnecessary." Id. (citation omitted).

We have carefully considered appellants' other claims as to alleged errors and conclude that these arguments have no merit and do not, in this case, warrant further consideration.

CONCLUSION

Based on the foregoing, we affirm the district court's order of dismissal and imposition of sanctions. The basis of these sanctions was clearly warranted by the record. However, with respect to the actual amount of monetary sanctions imposed, we remand to the district court with directions to conduct such additional fact-finding as may be required and to adjust the award of monetary sanctions accordingly. The parties shall bear their own costs of this appeal.

AFFIRMED in part, and REMANDED to recalculate monetary sanction.