Haeger v. Goodyear Tire & Rubber Co., No. 12-17718 (9th Cir. 2015)
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Sanctionees Hancock, Musnuff, and Goodyear appealed from the district court's award of sanctions, arguing that the district court abused its discretion in relying upon its inherent power to impose sanctions, and in determining the amount and the nature of the sanctions
imposed. The court concluded that Sanctionees’ argument that the district court should
have relied on Federal Rule of Civil Produce 37 fails because the district court's inherent power is not limited by overlapping statutes or rules. The court held that it was not an abuse
of discretion for the district court to rely on its inherent power to sanction the conduct at issue in this case, and to determine that Rule 37 did not provide the appropriate remedy,
especially since the discovery fraud was not discovered until after the case had settled. In this case, it is clear the district court did not abuse its discretion in concluding that Hancock, Musnuff, and Goodyear acted in bad faith in this litigation; the district court acted well within its discretion in awarding all the attorneys’ fees and costs incurred by plaintiffs after Goodyear served its supplemental responses to plaintiffs’ First Request; and the court affirmed the monetary and non-monetary sanctions set forth in the district court’s Order.
Court Description: Sanctions. The panel affirmed the district court’s order imposing monetary sanctions against attorneys Basil Musnuff and Graeme Hancock and The Goodyear Tire & Rubber Company, and non-monetary sanctions against Goodyear. The panel held that it was not an abuse of discretion for the district court to rely on its inherent power to sanction the conduct at issue in this case, and to determine that Fed. R. Civ. P. 37 did not provide the appropriate remedy, especially since the discovery fraud was not discovered until after the cases had settled. The panel held that it was not abuse of discretion to find that the Sanctionees each acted in bad faith. The panel also held that the district court acted well within its discretion in awarding all the attorneys’ fees and costs incurred by the Plaintiffs after Goodyear served its supplemental responses to Plaintiffs’ First Request. The panel held that the district court did not abuse its discretion in imposing non-monetary sanctions on Goodyear. The panel held that the district court’s imposition of HAEGER V. GOODYEAR TIRE & RUBBER CO. 5 non-monetary sanctions against Goodyear was balanced, narrowly tailored, and imposed no sanctions beyond what was necessary to remedy what the district court perceived as an ongoing problem in Goodyear’s litigation. Judge Watford dissented. He agreed with the majority that the district court’s misconduct findings were supported by the record, but he would nonetheless conclude that the $2.7 million sanctions award must be vacated because Goodyear and its lawyers were not afforded heightened procedural protections before punitive sanctions were imposed.
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