Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_11-cv-00602/USCOURTS-cand-3_11-cv-00602-9/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

CONQUISTA CONSULTORIA E 

ASSESSORIA EMPRESARIAL LTDA,

Plaintiff,

v.

IGUACU, INC., et al.,

Defendants.

Case No. 11-cv-00602-RS (EDL)

ORDER AND REPORT AND 

RECOMMENDATION ON ORDER TO 

SHOW CAUSE

Re: Dkt. No. 66

On September 26, 2014, this Court set a further settlement conference in this case for 

December 18, 2014. On November 15, 2014, approximately seven weeks after the settlement 

conference was scheduled, Defendants filed a motion to excuse Defendant Shobha Seturam from 

personal attendance at the settlement conference, claiming that Defendant Seturam cannot afford 

to travel from India and citing issues with obtaining a visa. On November 20, 2014, the Court 

denied Defendants’ request. On December 15, 2014, the Court held a telephone conference at 

which it learned that Defendant Seturam would not be attending the settlement conference. 

Thereafter, the Court vacated the settlement conference and issued an order to show cause as to 

why sanctions, including any expenses incurred by Plaintiff in arranging for personal attendance 

and fees incurred by Plaintiff in preparing the required settlement conference statements, should 

not issue. On January 5, 2015, Defendants responded to the order. On January 12, 2015, Plaintiff 

filed its response, requesting that the Court award terminating sanctions.1 On January 20, 2015, 

Defendants filed a sur-reply.

 

1

The Court addresses Plaintiff’s request for terminating sanctions separately in the below report 

and recommendation. 

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A. Defendant Seturam is ordered to pay sanctions of reasonable travel expenses, 

attorneys’ fees and costs to Plaintiff

In order for “‘a sanction to be validly imposed, the conduct in question must be 

sanctionable under the authority relied on.’” Zambrano v. City of Tustin, 885 F.2d 1473, 1476-77 

(9th Cir. 1989) (quoting Cunningham v. County of Los Angeles, 869 F.2d 427, 436 (9th Cir. 

1989) (quoting McCabe v. Arave, 827 F.2d 634, 639 (9th Cir. 1987))). Here, Federal Rule of 

Civil Procedure 16(f) provides that “the court may issue any just orders, including those 

authorized by Rule 37(b)(2)(A)(ii)-(vii), if a party or its attorney . . . fails to appear at a scheduling 

or other pretrial conference . . . [or] fails to obey a scheduling or other pretrial order.” Fed R. Civ. 

P. 16(f)(1)(A) & (C). The rule further specifies that “[i]nstead of or in addition to any other 

sanction, the court must order the party, its attorney, or both to pay the reasonable expenses –

including attorney's fees – incurred because of any noncompliance with this rule, unless the 

noncompliance was substantially justified or other circumstances make an award of expenses 

unjust.” Fed. R. Civ. P. 16(f)(2) (emphasis added). This rule applies to settlement conferences. 

Ayers v. City of Richmond, 895 F.2d 1267, 1270 (9th Cir. 1990) (“the district court acted within 

its authority under Rule 16(f) in sanctioning [plaintiff’s counsel] for his failure to appear at the 

settlement conference”); Segal v. Brachfeld, 2012 U.S. Dist. LEXIS 138554, at *5-7 (N.D. Cal. 

Sept. 26, 2012) (Westmore, J.) (issuing sanctions pursuant to Rule 16(f) for violation of settlement 

conference standing order).

Defendants do not dispute that Defendant Seturam violated this Court’s settlement 

conference order requiring personal attendance, and they acknowledge that reasonable expenses 

for Plaintiff’s representative to fly from New York to San Francisco “should be included in any 

final judgment obtained by [Plaintiff].” (Response at 1-2.) Defendants argue against any award of 

attorney’s fees in the absence of a finding of “bad faith . . . or willful disobedience of court orders 

or rules.” (Id. at 5 (citing Zambrano v. City of Tustin, 885 F.2d. 1473 (9th Cir. 1989)).) However, 

Zambrano involved sanctions for violation of a local rule. 885 F.2d. at 1481. Here, Defendants

contest an award of attorney’s fees pursuant to Federal Rule of Civil Procedure 16(f), which does 

not require a finding of bad faith or willful disobedience. See id.; Lucas Auto. Eng’g, Inc. v. 

Bridgestone/Firestone, Inc., 275 F.3d 762, 769 (9th Cir. 2001) (affirming award of attorney’s fees 

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and costs pursuant to Rule 16 where an attorney “failed to attend a mediation session . . . . [and] 

claim[ed] that [he] missed the session because he was suffering from an incapacitating headache, 

and that his failure to appear was not intentional.”).

Furthermore, Defendant Seturam’s failure to attend the settlement conference was not 

substantially justified, nor would the circumstances render an award of expenses unjust. Even 

assuming the truth of Defendants’ doubtful claims regarding poverty and difficulty in obtaining a 

visa, these were all facts of which Defendants were aware as of September 26, 2014 when this 

Court set the further settlement conference. Nevertheless, Defendants inexplicably waited seven 

weeks to first raise the issue of Defendant Seturam’s personal appearance at the settlement 

conference. (See Dkt. 61 (order setting further settlement conference and requiring the Parties to 

notify the Court “within one week of the date of this order” if “the parties and counsel are not 

available on that date”).) Similarly, the Court denied Defendant Seturam’s telephonic appearance 

request on November 20, 2015 and Defendants provide no rationale for why they waited until 

December 15, 2014 to inform the Court that Defendant Seturam would not attend.

Therefore, pursuant to Federal Rule of Civil Procedure 16(f)(2), Defendant Seturam is

ordered to pay Plaintiff its reasonable expenses incurred in preparing for the December 18, 2014 

settlement conference, including expenses incurred by Plaintiff in arranging for personal 

attendance and fees incurred by Plaintiff in preparing the required settlement conference 

statements. Plaintiff’s representative states that he spent $3,505 on a non-refundable flight to 

attend the settlement conference. (Arons Decl. ¶ 3.) Additionally, Plaintiff’s counsel states that 

he billed 11 hours at a rate of $350 per hour in preparation for the settlement conference, 

including: (1) 2 hours communicating with the client about, and drafting, the settlement demand; 

(2) 3 hours communicating with the client about, and drafting, the settlement conference 

statements; (3) 1 hour meeting and conferring with opposing counsel; and (4) 5 hours opposing the 

motion to be excused from personal appearance. (Prows Decl. ¶ 8.) Plaintiff’s counsel also states

that he incurred $160 in courier costs for lodging the settlement conference statements. Plaintiff’s 

counsel’s hours spent in preparation for the settlement conference are largely reasonable. 

However, the Court reduces by 2 hours the time counsel spent on opposing the motion for 

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personal appearance, resulting in a total of 9 hours. Defendant Seturam is thus ordered to pay 

sanctions of $6,815 to Plaintiff within two weeks of this order becoming final.

2

B. The Court, considering only Defendant Seturam’s failure to attend the 

settlement conference, recommends denying Plaintiff’s request for terminating 

sanctions

Plaintiff, citing a host of issues unrelated to Defendants’ noncompliance with this Court’s 

settlement conference order, asks that this Court issue terminating sanctions. Terminating 

sanctions require a consideration of: “(1) the public's interest in expeditious resolution of 

litigation; (2) the court's need to manage its dockets; (3) the risk of prejudice to the [party seeking 

sanctions]; (4) the public policy favoring disposition of cases on their merits; and (5) the 

availability of less drastic sanctions.” Valley Engineers Inc. v. Elec. Eng'g Co., 158 F.3d 1051, 

1057 (9th Cir. 1998). On balance, these factors do not weigh in favor of terminating sanctions 

based on Defendant Seturam’s noncompliance with the settlement conference order in isolation,

especially in light of the availability of less drastic sanctions. Furthermore, it is not the case, as 

Plaintiff argues, that Defendant has stated that she will not comply with a lesser sanction. 

However, Defendant’s conduct was in blatant disregard of this Court’s orders and wasted the

Court’s and Plaintiff’s time and resources. Therefore, that conduct should be considered by the 

District Judge in combination with any other misconduct before or since and might well tip the 

balance toward terminating sanctions.

Any party may serve and file specific written objections to this recommendation within 

fourteen (14) days after being served with a copy. See 28 U.S.C. § 636(b)(1)(C); Fed. R. Civ. P. 

72(b); Civil Local Rule 72-3. Failure to file objections within the specified time may waive the 

right to appeal the District Court's order.

IT IS SO ORDERED.

Dated: March 19, 2015

______________________________________

Elizabeth D. Laporte

United States Magistrate Judge

 

2

This amount comprises $3,505 for the non-refundable plane ticket, 9 hours of attorney’s fees at a 

rate of $350 per hour, and $160 in costs.

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