Avionic Co. v. General Dynamics Corp., 91-1095
| Decision Date | 21 February 1992 |
| Docket Number | No. 91-1095,91-1095 |
| Citation | 957 F.2d 555 |
| Parties | AVIONIC COMPANY, Appellant, v. GENERAL DYNAMICS CORPORATION, Appellee. |
| Court | U.S. Court of Appeals — Eighth Circuit |
David Mitchell Harris, St. Louis, Mo., argued, for appellant.
Thomas Edward Douglas, St. Louis, Mo., argued, for appellee.
Before McMILLIAN and JOHN R. GIBSON, Circuit Judges, and HUNTER, * Senior District Judge.
Avionic Company appeals from the district court's 1 dismissal pursuant to Fed.R.Civ.P. 37(b)(2) of Count I of Avionic's suit against General Dynamics Corporation. The district court dismissed Avionic's claim as a sanction for its president's failure to answer deposition questions. Avionic claims this was error because: (1) there was no prior order compelling Avionic's president to answer the deposition questions; (2) the failure was not willful; (3) there was not the requisite prejudice to General Dynamics from the failure to answer the questions; (4) the sanction was disproportionate to the gravity of the failure; and (5) the district court failed to consider whether a lesser sanction would be adequate. We affirm the district court's judgment.
In Count I of its suit, Avionic sought damages pursuant to a consulting agreement under which it assisted General Dynamics in doing business in Greece, particularly in obtaining a contract to sell F-16 fighter aircraft to the Greek government. The consulting agreement contained a clause that would automatically extend the contract's term (and hence, Avionic's right to periodic payments) for three years if, before the term of the consulting agreement ended, General Dynamics had obtained a contract to sell the F-16s. After various extensions, General Dynamics terminated the consulting agreement, effective December 21, 1983.
Though General Dynamics and the Greek government did not enter a written contract for the F-16s until long after December 21, 1983, Avionic argues that in the arena of foreign military equipment sales, the word "contract" includes the "selection" of a manufacturer's product by the foreign government. Avionic argues that the Greek government's "selection" of the F-16 occurred before December 21, 1983, and that Avionic is therefore entitled to payment for the three-year extended term. General Dynamics argues that a "selection" is not the same as a "contract" and that, at any rate, "selection" of the F-16 did not occur before December 21, 1983. Thus, a key factual issue in the case is whether the Greek government "selected" the F-16 before December 21, 1983.
Avionic's president, retired Greek Air Force General Dimitri Countouris, testified at his initial deposition that the Greek "New Fighter Aircraft" Committee reported in May 1983 that General Dynamics' F-16 was the committee's first choice as the new fighter plane for the Hellenic Air Force. However, Countouris refused to say who on the committee told him of the decision because: "[F]irst of all, that is confidential, according to the Greek laws it is not permitted, if I mention a name, this member of the committee, officer, I don't know, will be in trouble, so I cannot and nobody can force me to mention name."
General Dynamics moved to compel Countouris to answer the question. There is some dispute about what occurred in the discovery conference at which the magistrate judge 2 considered the motion, but Avionic does not dispute the magistrate judge's report that she Avionic Co. v. General Dynamics Corp., No. 88-2030-C, slip op. at 2 (E.D.Mo. June 5, 1990) (). The magistrate judge entered an order compelling Countouris to appear in St. Louis to be deposed on April 23, 24, or 25, 1990, Avionic Co., slip op. at 1 (April 16, 1990). Accordingly, he gave his deposition in St. Louis on April 24 and 25, 1990. On April 24, 1990, the magistrate judge entered a written order compelling Countouris to answer the questions, but Avionic's counsel contends that counsel did not receive the order or have notice of it until after the deposition was over on April 25.
At the April 24-25 deposition, Countouris again refused to say who told him about the May 1983 committee report. He did answer that he had discussed the report with General Marinakis. He also stated that he had information from "various members of the Committee," but he refused to identify the others Counsel for General Dynamics reminded Countouris:
Countouris mentioned names of people on the committee, but as to what any individual told him Countouris said: After a conference with his attorney, he testified that he could not recall any particular discussion with any of the specific individuals on the committee about the May report.
General Dynamics moved for sanctions. The magistrate judge found that, "[b]ased on a thorough review of the transcript excerpts submitted by the parties, it is ... evident that Countouris willfully refused to answer questions about his sources despite being ordered by the Court to do so." Avionic Co., slip op. at 4 (June 5, 1990). The magistrate judge found that in light of Countouris' repeated refusals to reveal the identities of his informants, his "subsequent lapse of memory" was not credible. Id. Based on what she found to be a willful refusal to obey a court order, the magistrate judge recommended that Count I of Avionic's complaint be dismissed and that Avionic be prohibited from introducing evidence concerning "the May 1983 selection of the F-16 aircraft by the government of Greece," slip op. at 5-6, at the trial of its remaining claim, for quasi-contract damages.
The district court adopted the magistrate's report and recommendation, holding that the recommended sanctions were not unduly severe: "Avionic cannot bring this action and then refuse to supply defendant with information known only to plaintiff's witness which impacts crucially upon plaintiff's ability to prove its case." Avionic Co. v. General Dynamic Corp., No. 88-2030C(6), slip op. at 5 (E.D.Mo. June 14, 1990). Accordingly, the court entered its order dismissing Count I and prohibiting Avionic from introducing at trial any evidence regarding the Greek government's alleged May 1983 selection of the F-16. Slip op. at 5.
Avionic first argues that the district court was not authorized under Fed.R.Civ.P. 37(b)(2) 3 to dismiss its claim because Avionic had no notice of the order compelling Countouris to answer the question until after Countouris' deposition had ended on April 25. We need not decide whether the written order formed a proper basis for Rule 37(b)(2) sanctions, for Avionic does not dispute the magistrate judge's assertion that she indicated orally at the discovery conference that she would grant the motion to compel and that Avionic's counsel said Countouris would answer the question. Oral proceedings compelling discovery that "unequivocally give a litigant notice" of the discovery required are a sufficient basis for Rule 37(b)(2) sanctions. Henry v. Sneiders, 490 F.2d 315, 318 (9th Cir.), cert. denied, 419 U.S. 832, 95 S.Ct. 55, 42 L.Ed.2d 57 (1974); Bhan v. NME Hospitals, Inc., 929 F.2d 1404, 1415 (9th Cir.), cert. denied, --- U.S. ----, 112 S.Ct. 617, 116 L.Ed.2d 639 (1991). See generally Tamari v. Bache & Co. (Lebanon) S.A.L., 729 F.2d 469, 472 (7th Cir.1984) (collecting cases). The oral order in this case satisfied the purpose of the prior order requirement, which is to give the party failing to comply with discovery adequate notice of what is required and "an opportunity to contest the discovery sought prior to the imposition of sanctions." Dependahl v. Falstaff Brewing Corp., 653 F.2d 1208, 1213 (8th Cir.), cert. denied, 454 U.S. 968, 102 S.Ct. 512, 70 L.Ed.2d 384 (1981).
Our conclusion that the oral order was sufficient also answers Avionic's argument that Countouris' refusal...
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