OWEN v F A BUTTREY CO
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No. 80-141 I N THE SUPREME COURT OF THE STATE O F MONTANA 1981 FRANCES L. OWEN, P l a i n t i f f and R e s p o n d e n t , F . A . BUTTREY C O . , a M o n t . C o r p . , and CHARLES REVSON, I N C . , a Foreign C o r p . , D e f e n d a n t s and A p p e l l a n t s . A p p e a l from: D i s t r i c t C o u r t of t h e F o u r t h J u d i c i a l D i s t r i c t , I n and f o r t h e C o u n t y of M i s s o u l a , T h e H o n o r a b l e James B. Wheelis, Judge p r e s i d i n g . C o u n s e l of R e c o r d : For A p p e l l a n t : Corette, Smith, Pohlman & A l l e n , B u t t e , Montana For Respondent : T i p p , H o v e n & S k j e l s e t , P.O. Montana Box 3778, M i s s o u l a ; . - S u b m i t t e d on B r i e f s : Filed: MAY 11 19.81 M a r c h 11, 1 - 9 8 1 Mr. J u s t i c e J o h n Conway H a r r i s o n d e l i v e r e d the Court. t h e Opinion of D e f e n d a n t Revson a p p e a l s a j u r y v e r d i c t and j u d g m e n t o f t h e M i s s o u l a County D i s t r i c t C o u r t , c h a l l e n g i n g t h e t r i a l c o u r t ' s discovery procedures. F r a n c e s Owen f i l e d s u i t i n A u g u s t 1976 a l l e g i n g t h a t s h e had s u f f e r e d s e v e r e a l l e r g i c r e a c t i o n t o t h e a p p l i c a t i o n o f c e r t a i n Revson c o s m e t i c s w h i c h a r e d i s t r i b u t e d i n Montana by d e f e n d a n t B u t t r e y . for plaintiff Owen, The j u r y and returned a $2,300 v e r d i c t j u d g m e n t was e n t e r e d accordingly. D e f e n d a n t Revson m a i n t a i n s on a p p e a l t h a t t h e t r i a l c o u r t committed reversible error in the imposition of sanctions u n d e r R u l e 3 7 , M.R.Civ.P. The D i s t r i c t C o u r t f o u n d t h a t Revson had r e p e a t e d l y failed to sufficiently Discovery requests. comply this in with discovery proceeded case Owen's primarily through w r i t t e n i n t e r r o g a t o r i e s . Among t h e i n t e r r o g a t o r i e s originally in submitted to Revson December r e q u e s t t h a t Revson s u b m i t a l i s t o f 1976 was a a l l p e r s o n s known t o t h e company who c l a i m e d t o h a v e s u f f e r e d i n j u r y a s a r e s u l t of using the cosmetics in issue. Owen also sought i n f o r m a t i o n from Revson r e g a r d i n g a n y knowledge on t h e p a r t o f t h e company t h a t t h e p r o d u c t s were i n d e e d d e f e c t i v e . Due plaintiff's to Revson's incalcitrance interrogatories, the in District responding Court issued to a s e r i e s o f o r d e r s t o compel d i s c o v e r y and impose s a n c t i o n s . In an A p r i l 30, 1979, order t h e D i s t r i c t C o u r t commanded Revson t o show c a u s e why a d e f a u l t j u d g m e n t entered requests. against The it for court failure further to comply ordered s h o u l d n o t be with discovery t h a t Revson present witnesses t o persuade t h e court t h a t t h e records regarding other allegedly injured claimants did not e x i s t and c o u l d n o t be made a v a i l a b l e b y r e c o n s t r u c t i o n . On J u n e 1 5 , 1 9 7 9 , t h e D i s t r i c t C o u r t deemed a d m i t t e d the fact been that a injured s u b s t a n t i a l number a as of the result of using from introducing f a c t s now a d m i t t e d . a company Missoula, any indeed cosmetic products Revson was s p e c i f i c a l l y w h i c h had a l l e g e d l y i n j u r e d Owen. precluded p e r s o n s had evidence contrary to the The o r d e r a l s o d i r e c t e d Revson t o make executive, Montana, Dr. for the Earle Brauer, purpose of available deposition. in The company was t o b e a r a l l e x p e n s e s o f p r e s e n t i n g Dr. B r a u e r i n Missoula. On S e p t e m b e r 2 7 , and order setting hearing granting schedule . The sanction, for order records requested 1979, t h e c o u r t i s s u e d its o p i n i o n denying p r o t e c t i v e order, discovery, provided and showing that for information the cause and 40 through 48 were i n I n t e r r o g a t o r y Nos. n o t d e s t r o y e d and c o u l d i n some way b e r e c o n s t r u c t e d . The D i s t r i c t C o u r t f o u n d t h a t Revson had y e t t o comply w i t h t h e court's orders compelling discovery; that it caused an e a r l i e r t r i a l d a t e t o be c o n t i n u e d ; and t h a t i t s f a i l u r e t o comply w i t h d i s c o v e r y and o r d e r s o f t h e c o u r t was w i l l f u l disobedience. I n l i g h t of t h e f o r e g o i n g , t h e c o u r t d e n i e d R e v s o n ' s motion for a deposition. was entitled court ordered protective Further, to order the court reasonable that certain regarding ruled Dr. Brauer t h a t Owen's counsel attorney fees. paragraphs of the Finally, Revson's the answer were s t r i c k e n w h i c h , i n e s s e n c e , r e q u i r e d t h e a d m i s s i o n t h a t the products involved were defectively designed so that a l l e r g i c r e a c t i o n s and i n j u r i e s would b e c a u s e d t o c o n s u m e r s and t h a t Revson had p r i o r knowledge o f t h e d e f e c t i v e n a t u r e of t h e p r o d u c t . On a p p e a l Revson r e q u e s t s t h i s C o u r t t o d e t e r m i n e i f the District M.R.Civ.P., Court its discretion abused under i n i s s u i n g t h e s e d i s c o v e r y o r d e r s and Rule 37, imposing s a n c t i o n s a g a i n s t t h e company. Identical to 3 7 ( d ) , M.R.Civ.P., the corresponding federal rule, Rule provides i n applicable part: " F a i l u r e o f p a r t y t o a t t e n d a t own d e p o s i t i o n o r s e r v e a n s w e r s t o i n t e r r o g ---------atories or ........................... respond t o r e q u e s t f o r inspection. If a p a r t y o r a n o f f i c e r , d i r e c t o r , o r managing a g e n t of a p a r t y o r a p e r s o n d e s i g n a t e d u n d e r R u l e 3 0 ( b ) ( 6 ) o r 3 1 ( a ) t o t e s t i f y on b e h a l f o f a p a r t y f a i l s (1) t o a p p e a r b e f o r e t h e o f f i c e r who is t o t a k e h i s d e p o s i t i o n , a f t e r being served with a proper notice, o r ( 2 ) t o s e r v e answers o r o b j e c t i o n s t o i n t e r r o g a t o r i e s submitted under Rule 33, a f t e r p r o p e r s e r v i c e of t h e i n t e r r o g a t o r i e s , o r ( 3 ) t o serve a w r i t t e n response t o a request f o r i n s p e c t i o n s u b m i t t e d under Rule 3 4 , a f t e r proper s e r v i c e of t h e r e q u e s t , t h e c o u r t i n which t h e a c t i o n is p e n d i n g o n m o t i o n may make s u c h o r d e r s i n r e g a r d t o t h e f a i l u r e a s a r e j u s t , and among o t h e r s i t may t a k e a n y a c t i o n a u t h o r i z e d under p a r a g r a p h s ( A ) , ( B ) , and ( C ) o f s u b d i v i s i o n ( b ) ( 2 ) o f t h i s r u l e (Emphasis added.) . . ." W p r e f a c e our r u l i n g i n t h i s m a t t e r w i t h a g e n e r a l e d i s c u s s i o n o f R u l e 37 s o t h a t t h e f u l l and s o b e r l e s s o n o f t h i s d e c i s i o n i s n o t l o s t on t h e p r a c t i t i o n e r s a t whom i t is directed. I n r e c e n t y e a r s , j u d i c i a l indulgence i n abuses of t h e discovery process tougher, less has been tolerant increasingly attitude toward f r u s t r a t e , rather than f a c i l i t a t e , discovery. replaced parties by a who Trial courts, e x a s p e r a t e d by t h e s e a b u s e s , h a v e h e r a l d e d a new d i r e c t i o n i n t h e i r discovery policies. Federal D i s t r i c t Court Judge P o r t e r , i n SCM S o c i e t a C o m m e r c i a l e S.P.A. Commercial R e s e a r c h C o r p . (N.D. Tex. v. I n d u s t r i a l and 1 9 7 6 ) , 72 F.R.D. 110, 112, writes: " T h i s c a s e makes i t a b u n d a n t l y c l e a r t h a t t h e supposedly self-executing f e d e r a l discovery r u l e s a r e being abused. A p p a r e n t l y my p r i o r p o l i c y , which i n c l u d e d a r e l u c t a n c e t o u s e R u l e 37 s a n c t i o n s , h a s n o t w o r k e d . Hencef o r t h I w i l l embark on a d i f f e r e n t c o u r s e l i b e r a l l y u s i n g t h e f u l l r a n g e o f Rule 37 sanctions i n appropriate circumstances." I n d e e d , it h a s been a r g u e d t h a t j u d i c i a l l e n i e n c y i n a p p l y i n g s a n c t i o n s is o n e o f t h e p r i m a r y s h o r t c o m i n g s o f t h e discovery process. See D i s c o v e r y S a n c t i o n s Under t h e Federal Rules of C i v i l Procedure: f o r Rule 37, (1979). 29 Case Western A Goal-Oriented Reserve Law Rev. Mission 603, 622 H e s i t a n c y t o impose s a n c t i o n s h a s b e e n a t t r i b u t e d t o a c o n c e r n f o r a d i s p o s i t i o n o f c a s e s on t h e i r m e r i t s and a reluctance t o punish p a r t i e s without absolute t h a t n o n c o m p l i a n c e i s n o t somehow j u s t i f i a b l e . assurance W. Glaser, P r e t r i a l D i s c o v e r y a n d t h e A d v e r s a r y S y s t e m , 154-156 (1968). Crowded overcome that responsibility dockets have reluctance to the led and public. more and more reemphasize Note, Rule courts the to judicial 1, M.R.Civ.P., p r o v i d i n g t h a t t h e R u l e s o f C i v i l P r o c e d u r e be i n t e r p r e t e d t o " s e c u r e t h e j u s t , s p e e d y and i n e x p e n s i v e d e t e r m i n a t i o n o f every action." This Court recognizes t h a t a predisposition t o w a r d d i s c o v e r y s a n c t i o n s , w h e r e i n w e would r e s o l v e d o u b t s about constitutional limitations and the purpose of our p r o c e d u r a l r u l e s i n f a v o r o f r e s t r a i n t , may b e i n c r e a s i n g l y inappropriate given the compelling need to maintain e f f i c i e n t and f a i r j u d i c i a l a d m i n i s t r a t i o n . In adopting a position that dilatory discovery a c t i o n s a r e no l o n g e r t o be d e a l t w i t h l e n i e n t l y , w e a r e i n a c c o r d w i t h t h e r e c e n t t r e n d o f c a s e s i n t e n t upon p u n i s h i n g transgressors rather than patiently trying to encourage t h e i r cooperation. W e are judicial guided by what has become a hallmark activism i n discovery proceedings--the of United S t a t e s Supreme C o u r t d e c i s i o n i n N a t i o n a l Hockey L e a g u e v. Metropolitan S.Ct. Hockey 2778, Inc. L.Ed.2d 49 Club, (1976), 747 (per 427 U.S. 639, curiam). 96 There, respondents, p l a i n t i f f s i n a m u l t i d i s t r i c t a n t i t r u s t action, f a i l e d f o r s e v e n t e e n months t o r e s p o n d t o t h e s a t i s f a c t i o n of the other rogatories. (E.D. Pa. parties or the court to hundreds of inter- I n Re P r o f e s s i o n a l Hockey A n t i t r u s t L i t i g a t i o n 1974), 63 admonishment by t h e 641. F.R.D. trial court, In the further face of stern delays occurred; y e t , t h e t r i a l c o u r t r e f r a i n e d from imposing s a n c t i o n s s i n c e all parties Moreover, changed were attempting respondents, counsel and to reach a settlement. a t whom t h e d i s c o v e r y was d i r e c t e d , claimed that the transition hindered t h e i r a b i l i t y t o comply. Finally, a frustrated trial judge dismissed their a c t i o n f i n d i n g " f l a g r a n t bad f a i t h " and " c a l l o u s d i s r e g a r d " of the their responsibilities. trial court's dismissal, extenuating circumstances, the trial The C o u r t o f A p p e a l s r e v e r s e d court's concluding that i n view of t h e r e was i n s u f f i c i e n t b a s i s f o r action. In Re Professional A n t i t r u s t L i t i g a t i o n ( 3 r d C i r . 1 9 7 6 ) , 5 3 1 F.2d Hockey 1188. The U n i t e d S t a t e s Supreme C o u r t r e v e r s e d t h e C i r c u i t Court of Appeals, ruling that was a d i s c r e t i o n a r y d e c i s i o n o f be l e f t u n d i s t u r b e d the imposition of sanctions t h e t r i a l judge which must i n t h e absence of a f l a g r a n t abuse of discretion. The Court criticized the traditional leniency of the judiciary as improperly founded on the principle that parties will, if given one more chance, comply with requests long ignored. In a major change of direction, the Court insisted that unconditional impositions of these sanctions are crucial in deterring "other parties to other lawsuits" from willfully flouting the district courts." "discovery orders 427 U.S. at 643. of other Except for emphasizing the deterrence function of Rule 37, the Supreme Court did not delete the requirement materially lower Internationale v. 1087, 2 L.Ed.2d of willfulness, the willfulness Rogers standard. (1958), 357 U.S. nor did it See Societe 197, 78 S.Ct. 1255. National Hockey League constitutes a pivotal case in the development of Rule mechanism. 37 as a punitive and deterrent It signifies a subordination of leniency in favor of the theory that noncompliance can be deterred by the unhesitant use of harsh sanctions. establishes that deterrence is not only permissible but perhaps mandatory as an objective of Rule 37. no longer envisioned as The decision a merely Deterrence is incidental effect of remedial sanctions but as an affirmative instrument in the judicial arsenal to be used in providing the "just, speedy and inexpensive determination of every action. " Fed.R.Civ.P., Rule 1, and also Rule 1, M.R.Civ.P. In spite of what is, in our view, the dispositive teaching of National Hockey League, that the imposition of sanctions for dilatory abuse of discovery is to be regarded with favor, the willfulness standard has been problematic for some courts. Some trial judges continue to be reluctant t o impose s a n c t i o n s . willfulness Circuit. have emerged The t r i a l willing to League. No r e a d i l y d i s c e r n i b l e s t a n d a r d s f o r pursue except courts the in courts in t h i s circuit new direction of of the Ninth a r e r e a d y and N a t i o n a l Hockey e v e n n e g l i g e n t f a i l u r e t o comply h a s m e t Indeed, with punitive sanction. M a r q u i s v . C h r y s l e r Corp. The N i n t h C i r c u i t h a s gone (9th Cir. t o such a l e n g t h a s t o f i n d t h a t even subsequent compliance w i t h a compelling o r d e r will not serve P r o p e r t i e s v. to cure a breach of that R e d e v e l o p m e n t Agency o f order. I n G-K t h e C i t y of San J o s e ( 9 t h C i r . 1 9 7 8 ) , 577 F.2d 6 4 5 , J u d g e Kennedy w r i t e s : "Here t h e C o u r t d i s m i s s e d t h e p l a i n t i f f s ' action with prejudice. I t a c t e d p r o- e r l y i n p so doing. W e encourage such orders. L i t i g a n t s who a r e w i l l f u l i n h a l t i n g t h e discovery process a c t in opposition t o the a u t h o r i t y o f t h e c o u r t and c a u s e impermiss i b l e p r e j u d i c e t o t h e i r opponents. I t is e v e n more i m p o r t a n t t o n o t e , i n t h i s e r a o f crowded d o c k e t s , t h a t t h e y a l s o d e p r i v e o t h e r l i t i g a n t s of an o p p o r t u n i t y t o u s e t h e c o u r t s a s a s e r i o u s d i s p u t e - s e t t l e m e n t mechanism. Here t h e a p p e l l a n t s ' last-minute tender of r e l e v a n t documents c o u l d n o t c u r e t h e problem t h e y had p r e v i o u s l y c r e a t e d . " 577 F.2d a t 647. (Emphasis added. ) The c o u r t s of t h e N i n t h C i r c u i t h a v e s e t a t e n o r t h a t s i g n a l s t h e u n a c c e p t a b i l i t y of discovery abuses. adopts a similar position. When litigants This Court use willful d e l a y , e v a s i v e r e s p o n s e , and d i s r e g a r d o f c o u r t d i r e c t i o n a s p a r t and p a r c e l of their t r i a l strategy, t h e y must s u f f e r t h e consequences. The c a s e b e f o r e u s e x e m p l i f i e s t h e p r i n c i p l e s we h a v e discussed. Owen awarded h e r $ 2 , 3 0 0 . action seeking a sought a $25,000 judgment. The jury T h i s was a r e l a t i v e l y s t r a i g h t f o r w a r d reasonable compensation. Yet, largely beaause of Revson's c o n t i n u a l f r u s t r a t i o n o f the discovery process, Owen's of pretrial litigation. cause involved The three record years before protracted us casts only a s p e r s i o n s on R e v s o n ' s " p u r i t y o f h e a r t . " We are persuaded, based upon Revson's obvious r e l u c t a n c e t o f a c i l i t a t e d i s c o v e r y and i t s f a i l u r e t o come f o r w a r d and j u s t i f y i t s d i l a t o r y a c t i o n s , t h a t n o t o n l y w e r e the orders of the District its have been c a l l e d f o r . I n a n y e v e n t , when i t is n o t p o s s i b l e determination to of a ready, make a party's good severe within but t h i s Court more wholly d i s c r e t i o n a r y powers, for that Court s a n c t i o n s may confident, faith in and the accurate discovery p r o c e s s , w e presume t h e c o r r e c t n e s s o f t h e D i s t r i c t C o u r t ' s a c t i o n u n d e r R u l e 37. a l s o Lumby v . Doetch 202, 36 S t . R e p . N a t i o n a l Hockey L e a g u e , (1979), Mont. -, supra. See 600 P.2d 200, 1684, 1687. F i n a l l y , w e n o t e t h a t t h e s a n c t i o n s imposed w e r e n o t t h e most s e v e r e s a n c t i o n s a t t h e c o u r t ' s d i s p o s a l under Rule 37, and t h a t most o f t h e s a n c t i o n s imposed w e r e o f which would aid in the discovery process. a kind The D i s t r i c t Court acted wbll w i t h i n t h e c o n f i n e s of i t s d i s c r e t i o n . W e affirm the judgment of the District Court and remand t h e c a u s e f o r a d e t e r m i n a t i o n and award t o r e s p o n d e n t o f a t t o r n e y f e e s and c o s t s on a p p e a l i n a c c o r d a n c e w i t h t h i s opinion. W e concur: Chief J u s t i c e
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