Sali v. Corona Reg'l Med. Ctr.

• Decision Date: 19 March 2018
• Docket Number: No. 15-56389,15-56389
• Citation: 884 F.3d 1218
• Parties: Marlyn SALI, on behalf of themselves, all others situated and the general public ; Deborah Spriggs, on behalf of themselves, all others situated and the general public ; Bisnar Chase, LLP, Plaintiffs-Appellants, v. CORONA REGIONAL MEDICAL CENTER; UHS of Delaware Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

884 F.3d 1218

Marlyn SALI, on behalf of themselves, all others situated and the general public ; Deborah Spriggs, on behalf of themselves, all others situated and the general public ; Bisnar Chase, LLP, Plaintiffs-Appellants,

v.CORONA REGIONAL MEDICAL CENTER; UHS of Delaware Inc., Defendants-Appellees.

No. 15-56389

United States Court of Appeals, Ninth Circuit.

Argued and Submitted February 6, 2017 Pasadena, California

Filed March 19, 2018

Jerusalem F. Beligan (argued) and Brian D. Chase, Bisnar Chase LLP Newport Beach, California, for Plaintiffs-Appellants.

Christina H. Hayes (argued), Khatereh Sage Fahimi, and Stacey E. James, Littler Mendelson P.C., San Diego, California, for Defendants-Appellees.

Before: Andrew J. Kleinfeld, Sandra S. Ikuta, and Jacqueline H. Nguyen, Circuit Judges.

NGUYEN, Circuit Judge:

The discovery process in theory should be cooperative and largely unsupervised by the district court. But when required disclosures aren't made or cooperation breaks down, Federal Rule of Civil Procedure 37 allows a party to move for an order compelling disclosures or discovery.

If the order is disobeyed, the court can impose contempt and other sanctions. Federal Rule of Civil Procedure 45, which governs the issuance of subpoenas, also provides for contempt sanctions when a subpoena is disobeyed.

The question here is whether Rule 45 is the exclusive mechanism for compelling a nonparty to appear at a deposition and obtaining sanctions for noncompliance. We hold that under Rule 37's general discovery enforcement provisions, a court can order a party to produce its nonparty expert witness at a deposition and, if the party makes no effort to ensure that its witness attends the deposition, sanction the party's counsel when the witness fails to appear unless the failure to produce the expert "was substantially justified or other circumstances make an award of expenses unjust." Fed. R. Civ. P. 37(b)(2)(C). Because the Rule 37 sanctions were reasonable in this case, we affirm the district court's judgment.

I.

Marlyn Sali and Deborah Spriggs are registered nurses who instituted a class action against their former employer, Corona Regional Medical Center, and its corporate parent, UHS of Delaware Inc., for alleged violations of wage and hour laws. Plaintiffs moved for class certification with supporting declarations from their expert economist, Mark Falkenhagen, and expert statistician, Dr. Richard Drogin. As defendants were preparing their opposition, the parties became embroiled in a discovery dispute.

Defendants sought to depose Falkenhagen and Drogin in advance of the April 16, 2015 deadline for filing the opposition to class certification. After an unproductive email exchange, in which the parties' counsel dickered over fees, defendants subpoenaed Falkenhagen to be deposed on March 30, 2015. Plaintiffs interposed various objections, which defendants dismissed as "insufficient to prevent a subpoenaed deposition from moving forward." On the scheduled day of the deposition, neither Falkenhagen nor plaintiffs' counsel showed up.

The next day, on April 1, defendants informed plaintiffs that they would be applying ex parte for sanctions and to compel Falkenhagen's deposition. Counsel then met and conferred regarding the expert depositions as required under the local rules. See C.D. Cal. L.R. 37-1. Defendants agreed to pay Falkenhagen's fee prior to his deposition. They sought to depose him on April 9, but plaintiffs' counsel was taking a vacation that week and told defendants' counsel that Falkenhagen would be unavailable then. Plaintiffs offered to produce Falkenhagen for deposition on April 13,¹ but defendants didn't accept because they felt "it was imperative the depositions occur prior to April 10."

Defendants then applied ex parte to compel Falkenhagen's and Drogin's depositions on April 9 and 10, respectively. In an order dated April 7, 2015, the magistrate judge denied the request, finding that defendants were "not without fault in creating the circumstances" because they inexcusably waited to arrange the depositions. The magistrate judge acknowledged that plaintiffs' counsel "exacerbated this situation by apparently failing to respond to inquiries from Defendants, having extremely limited availability, and failing to seek a protective order concerning the noticed depositions." However, given plaintiffs' offer to make Falkenhagen available for deposition immediately after their attorney's vacation, the magistrate judge found that defendants would have sufficient time to incorporate his testimony into their opposition to class certification. The order concluded: "Plaintiffs are, however, instructed to produce Falkenhagen for deposition on April 13." Defendants subpoenaed him for that date.

Once again, Falkenhagen and plaintiffs' counsel failed to appear at the deposition.² Defendants moved for sanctions under Rule 37. The magistrate judge found that plaintiffs weren't substantially justified in disobeying the order to produce Falkenhagen for deposition and sanctioned counsel $15,112 for defendants' costs associated with the deposition and motion for sanctions. When counsel didn't pay, the district court entered a contempt judgment, from which plaintiffs and their counsel appeal.³

II.

We have jurisdiction pursuant to 28 U.S.C. § 1291. We review de novo whether the magistrate judge had the power under Rule 37 to order the plaintiffs' counsel to produce their expert at a deposition and sanction them for noncompliance. See Unigard Sec. Ins. Co. v. Lakewood Eng'g & Mfg. Corp. , 982 F.2d 363, 367 (9th Cir. 1992) (per curiam) (citing Halaco Eng'g Co. v. Costle , 843 F.2d 376, 379 (9th Cir. 1988) ). The sanctions order is reviewed for abuse of discretion, and the underlying factual findings for clear error. Valley Eng'rs Inc. v. Elec. Eng'g Co. , 158 F.3d 1051, 1052 (9th Cir. 1998) (citing Anheuser-Busch, Inc. v. Nat. Beverage Distribs. , 69 F.3d 337, 348 (9th Cir. 1995) ).

III.

Plaintiffs and their counsel contend that the district court lacked authority to compel Falkenhagen's deposition under Rule 37(a) and impose sanctions under Rule 37(b). They also contend that their actions were substantially justified and the sanctions unjust.

A.

When interpreting the scope of a Federal Rule of Civil Procedure, we begin with the text. See Krupski v. Costa Crociere S. p. A. , 560 U.S. 538, 547, 130 S.Ct. 2485, 177 L.Ed.2d 48 (2010). Rule 30 authorizes a party to take the deposition of "any person," generally without the court's permission. Fed. R. Civ. P. 30(a)(1). "The deponent's attendance may be compelled by subpoena under Rule 45." Id. If the deponent disobeys the subpoena, the district court can hold the deponent in contempt. Fed. R. Civ. P. 45(g). While a subpoena's judicial imprimatur and the threat of sanctions for noncompliance is one way to ensure that a deponent shows up for a deposition, it isn't the only way.

The magistrate judge issued sanctions under Rule 37(b), which empowers the court to take remedial action if a party "fails to obey an order to provide or permit discovery, including an order under Rule ... 37(a)." Fed. R. Civ. P. 37(b)(2)(A). Rule 37(a) provides generally that "a party may move for an order compelling disclosure or discovery." Fed. R. Civ. P. 37(a)(1). In particular, Rule 37(a) permits a party to seek to compel "an answer, designation, production, or inspection" under certain circumstances, Fed. R. Civ. P. 37(a)(3)(B), including when "a deponent fails to answer a question asked under Rule 30 or 31," Fed. R. Civ. P. 37(a)(3)(B)(i). Plaintiffs were ordered to produce their expert, Falkenhagen, for deposition, where he would be required to respond to questions and disclose his expert views, see Fed. R. Civ. P. 30. As we have recognized, Rule 37(a) encompasses an order to attend a deposition. See SEC v. Seaboard Corp. , 666 F.2d 414, 416 (9th Cir. 1982) ("Since the [ Rule 37(a) ] order required [the cross-defendant] not only to pay money, but also to give his deposition, it was clearly also ‘an order to provide or permit discovery.’ " (quoting Fed. R. Civ. P. 37(b)(2) ) ).

In the context of Rule 37(b) sanctions, we "read broadly" the term "order" under Rule 37(a). Unigard , 982 F.2d at 368 (citing Henry v. Sneiders , 490 F.2d 315, 318 (9th Cir. 1974) ). Both the advisory committee notes and case law suggest that Rule 37's "requirement for an ‘order’ should ... include any order relating to discovery." Halaco Eng'g , 843 F.2d at 379 ; see Fed. R. Civ. P. 37(b) advisory committee's note to 1970 amendment ("The scope of Rule 37(b)(2) is broadened by extending it to include any order ‘to provide or permit discovery’.... Various rules authorize orders for discovery.... Rule 37(b)(2) should provide comprehensively for enforcement of all these orders.").

Rule 37 explicitly authorizes the court to sanction parties for failing to attend their own depositions. See Fed. R. Civ. P. 37(d)(1)(A)(i). No subpoena is needed. The only requirement is that the party be "served with proper notice" of the deposition beforehand. Id. ; see 7 James Wm. Moore et al., Moore's Federal Practice § 30.21 (3d ed. 2017); see also Jules Jordan Video, Inc. v. 144942 Can. Inc. , 617 F.3d 1146, 1158 (9th Cir. 2010) (observing that "a simple notice of deposition is sufficient to compel [a party's] attendance").

Although a nonparty's attendance generally can be compelled only by subpoena,⁴ Jules Jordan Video , 617 F.3d at 1158, here the court's discovery order and sanctions were directed not at the retained expert but rather at the parties themselves and their counsel. Rule 37 is largely silent as to whether the court can compel a party to produce its general employees or persons over whom the party might reasonably be expected to exert influence or control. However, the rule isn't entirely silent. Rule 37(b)(2)(B) provides for sanctions "[i]f a party fails to comply with an order under Rule 35(a) requiring it to produce another person for ...