Voice v. Stormans Inc.

• Decision Date: 31 December 2013
• Docket Number: No. 12–35224.,12–35224.
• Citation: 738 F.3d 1178
• Parties: LEGAL VOICE, FKA Northwest Women's Law Center, Non–Party–Appellant, v. STORMANS INC., DBA Ralph's Thriftway; Rhonda Mesler; Margo Thelen, Plaintiffs–Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

738 F.3d 1178

LEGAL VOICE, FKA Northwest Women's Law Center, Non–Party–Appellant,

v.STORMANS INC., DBA Ralph's Thriftway; Rhonda Mesler; Margo Thelen, Plaintiffs–Appellees.

No. 12–35224.

United States Court of Appeals,

Ninth Circuit.

Argued and Submitted Oct. 10, 2013.

Decided Dec. 31, 2013.

Scott A. Smith (argued) and Daniel J. Gunter, Riddell Williams P. S., Seattle, WA, for Non–Party–Appellant.

Steven T. O'Ban (argued) and Kristen K. Waggoner, Ellis, Li & McKinstry, PLLC, Seattle, WA, for Plaintiffs–Appellees.

Appeal from the United States District Court for the Western District of Washington, Ronald B. Leighton, District Judge, Presiding. D.C. No. 3:07–cv–05374–RBL.

Before: A. WALLACE TASHIMA, SUSAN P. GRABER, and MARY H. MURGUIA, Circuit Judges.

OPINION

TASHIMA, Circuit Judge:

Legal Voice, f/k/a Northwest Women's Law Center (“Law Center”), appeals the district court's denial of sanctions and costs under Federal Rule of Civil Procedure 45(d) (“Rule 45(d)”).¹ We must determine first whether we have jurisdiction over this appeal and, if so, whether the district court abused its discretion in denying the Law Center's requests for costs and sanctions. As to the first question, we conclude that we have jurisdiction. As to the merits, we affirm the district court's denial of sanctions, but reverse the district court's denial of costs.

I.

This appeal relates to a discovery dispute that arose in this action challenging Washington's rules that require pharmacies to maintain a representative assortment of drugs for which there is patient demand and to dispense prescription drugs and drugs approved by the Food and Drug Administration for “restricted distribution,” unless one of several enumerated exceptions applies. The Washington State Board of Pharmacy (“Board”) promulgated the rules in April 2007 in response to its concern that there was a lack of clear authority regarding the destruction or confiscation of lawful prescriptions. The Board became concerned with this problem in early 2006 when it received reports of incidents across the country in which pharmacists had refused to dispense emergency contraception, including one instance in which a pharmacist ripped up a patient's prescription. The Law Center was among the organizations bringing these reports to the Board's attention. The Law Center was also a member of a task force that participated in the rule-making process. The task force held a series of meetings and developed the draft text of the rules that were ultimately approved by the Board and that are the subject of the underlying action.

Stormans, Inc., doing business as Ralph's Thriftway, Rhonda Mesler, and Margo Thelen (“Plaintiffs”) filed suit challenging the rules. In this action, Plaintiffs served a subpoena duces tecum on the Law Center seeking production of fourteen categories of documents. Among the requested documents were any communications concerning the challenged regulations between the Law Center and the Board, the Washington State Human Rights Commission, the Governor's Office, and other advocacy groups. The subpoena also sought internal Law Center communications pertaining to the regulations, as well as general information concerning the Law Center's membership and employees. The Law Center objected to the subpoena on various grounds, including that the requested documents were irrelevant, protected by the First Amendment, and protected by the attorney-client privilege. When Plaintiffs filed a motion to compel, the Law Center raised these objections and requested in the alternative that, if it were compelled to produce any documents, Plaintiffs be required to reimburse the costs of compliance pursuant to Rule 45(d)(2)(B)(ii). On October 28, 2008, the district court granted the motion to compel as to six of the fourteen categories of documents and denied the motion as to the remaining requests. The district court further ordered that “[e]ach party will bear its own costs incurred in connection with these motions.”

Plaintiffs and the Law Center thereafter disputed the scope of the district court's order. The Law Center asserted that the compelled production was limited to actual communications with government decision-makers, while Plaintiffs asserted that the Law Center was required to produce any documents, including internal documents, “related to” such communications. The Law Center (and other advocacy groups) then filed a motion for clarification. In that motion, the Law Center sought additional clarification on the issue of costs. The district court issued a second order, explaining that it had previously sought “to draw a distinction between (A) actual communications between Non–Parties and those persons or entities responsible for promulgating the regulations that are the subject of this dispute and (B) internal communications among Non–Parties, their members, allies and affiliates related to why or how they communicated to government decision-makers.” The district court stated that it had intended to compel production of the former, but not the latter. As to the issue of costs, in its order of November 24, 2008, the district court held that “[t]he scope of production has been sufficiently limited by the Court such that the cost of producing said documents should not be overly burdensome.”

The district court's efforts at providing clarification proved futile; Plaintiffs and the Law Center continued to dispute the scope of the required production. Plaintiffs filed another motion to compel, seeking, inter alia, “information related to mental impressions or internal communications concerning actual communications ... with governmental agencies involved with rulemaking,” and “information related to internal communications ... related to ‘why or how to communicate to governmental agencies.’ ” In opposing this motion, the Law Center renewed its request for costs and fees. In support of its opposition to the motion, the Law Center filed the declaration of Lisa Stone, its Executive Director, claiming that the Law Center had by then incurred roughly $20,000 in expenses in complying with the subpoena. That this amount was expended in the Law Center's compliance efforts is unchallenged.

On March 3, 2009, the district court denied Plaintiffs' second motion to compel. It referred to the previous distinction it had drawn between external and internal communications. The district court rejected the Law Center's renewed request for costs and fees without explanation, stating only that it was denying “all motions or requests for fees or sanctions.”

The Law Center did not immediately appeal any of the three orders related to the discovery dispute. On March 22, 2012, thirty days after final judgment was entered in this action, the Law Center filed a notice of appeal. The Law Center appeals only the district court's denial of costs and sanctions under Rule 45(d).

II.

Plaintiffs contend that this court lacks jurisdiction over the Law Center's appeal because the Law Center, as a nonparty, was required to appeal within thirty days of the entry of the respective orders denying costs and sanctions, making the appeal filed after entry of final judgment untimely. We disagree.

We have not addressed whether a non-party may appeal a collateral order after final judgment, rather than only within thirty days of the entry of the order. Although we have previously considered our jurisdiction over non-party appeals of interlocutory orders, none of these cases addressed whether a non-party may await final judgment to appeal such an order. In United States v. Columbia Broadcasting System, Inc., 666 F.2d 364 (9th Cir.1982), for example, we addressed whether the collateral order doctrine permitted non-party witnesses to appeal an order denying their motion for reimbursement before entry of final judgment. Id. at 365. We concluded that such an immediate appeal was permissible. Id.Columbia Broadcasting, however, did not address whether a non-party may also appeal an interlocutory discovery order after entry of final judgment.

SEC v. Capital Consultants LLC, 453 F.3d 1166 (9th Cir.2006) (per curiam), similarly did not address the precise question presented here. In Capital Consultants, we considered whether we had jurisdiction over an appeal of an interlocutory order, filed before entry of final judgment, that was neither rendered final pursuant to Federal Rule of Civil Procedure 54(b) nor appealable under the collateral order doctrine.Id. at 1170–75. We concluded that we did not. Like Columbia Broadcasting, Capital Consultants said nothing about whether a non-party may appeal a collateral or interlocutory order after entry of final judgment. See also David v. Hooker, 560 F.2d 412, 416–17 (9th Cir.1977) (holding that an order directing a non-party to pay attorney's fees as a sanction was immediately appealable, but not addressing whether a non-party can appeal a collateral discovery order after the entry of final judgment).

Whether a non-party may appeal an interlocutory order after entry of final judgment is therefore an open question in this circuit. We now hold that a non-party may appeal an interlocutory order within thirty days after entry of final judgment to the same extent that a party may appeal such an order.

Several circumstances persuade us that a non-party may appeal an interlocutory order after entry of final judgment. First, appeal after final judgment is the default rule under 28 U.S.C. § 1291 and Federal Rule of Appellate Procedure 4. Thus, our decision today merely applies the general rule to non-parties. Moreover, our prior cases have generally held that even when parties may immediately appeal an interlocutory order, they are not required to do so. Hook v. Ariz. Dep't of Corr., 107 F.3d 1397, 1401 (9th Cir.1997) (“A party does not lose the right to appeal an interlocutory order by not immediately appealing and waiting for the final judgment.”). In other words, had Plaintiffs wanted to...