Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_12-cv-00930/USCOURTS-casd-3_12-cv-00930-7/pdf.json

Nature of Suit Code: 370
Nature of Suit: Other Fraud
Cause of Action: 28:1332fr Diversity-Fraud

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

ANDREW NILON, individually and

on behalf of all other similarly

situated, 

Plaintiff,

vs.

NATURAL-IMMUNOGENICS

CORP.; and DOES 1-25, Inclusive,

Defendant.

______________________________

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Case No: 3:12-cv-00930-LAB (BGS)

REPORT AND RECOMMENDATION

RE: DENIAL WITHOUT

PREJUDICE OF PLAINTIFF’S

MOTION FOR TERMINATING

SANCTIONS 

[ECF No. 74.]

I. INTRODUCTION

Pending before the Court is Plaintiff’s Motion for Imposition of Terminating

Sanctions. [ECF No. 74.] On December 16, 2014, the Honorable Larry A. Burns,

referred Plaintiff’s terminating sanctions motion for Report and Recommendation. 

[ECF No. 75 at 1:22-24.] The Court RECOMMENDS Defendant’s Motion for

Terminating Sanctions be DENIED without prejudice.

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II. PROCEDURAL AND FACTUAL BACKGROUND 

On October 27, 2014, the Court granted Plaintiff’s motion to compel California

sales figures from defendant Natural Immunogenics. [ECF No. 72.] As part of the

Court’s order, counsel for the parties were ordered to meet and confer about the

production of the sales figures pursuant to protective order on or before November 5,

2014. Defendant was also given until November 21, 2014, to produce the California

sales figures. Id.

Counsel met and conferred about the supplemental production, albeit two weeks

after the Court-ordered deadline to do so, on December 4, 2014. The following issue

arose in the meet-and-confer process: Defendant contended that it needed to establish a

class period for searching the Natural Immunogenics’ sales database and proposed

March 5, 2008 to September 14, 2012. Plaintiff’s counsel disagreed with that time

frame and suggested a class period of March 4, 2008 to September 24, 2014.

Despite the District Court’s order of April 15, 20141

, which clearly states the

parameters of the class period at issue in this case, and which this court referenced in

its own Order granting Plaintiff’s motion to compel, [ECF No. 72 at 5:25-6:2], counsel

could not come to an agreement as to the proper time period to be searched. 

Instead of jointly contacting the chambers of Judge Skomal regarding this

dispute, which clearly concerns discovery and Judge Skomal’s October 27, 2014 Order

requiring Defendant to produce California sales figures, Plaintiff filed a Motion for

Contempt and Imposition of Sanctions for the attention of the District Court on

December 8, 2014. [ECF No. 73.] This conduct violated Judge Skomal’s chambers

rules which require counsel to jointly contact the Court when they have not resolved a

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The District Court certified this case for class treatment on April 15, 2014. [ECF No.

41.] The certified class as defined in Judge Burns’ Order granting Plaintiff’s motion for class

certification is as follows: “All persons located within California who purchased any Sovereign

Silver Products either from a retail location or over the internet at any time during the four years

preceding the filing of this complaint through the date of trial in this action.” Id. at 5:16-18

(emphasis added).

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discovery dispute. In fact, neither party, either jointly or separately, contacted Judge

Skomal to report the class period discovery dispute. As a result and as noted in the

Introduction section above, Judge Burns referred Plaintiff’s improperly filed motion

for contempt and monetary sanctions to Judge Skomal for decision on December 16,

2014. [ECF No. 75 at 1:19-20.] 

On February 3, 2015,2

 the Court denied Plaintiff’s motion for contempt and

imposition of sanctions and ordered Defendant to produce Natural Immunogenics’

California sales figures from March 4, 2008 to September 24, 2014, no later than

February 17, 2015. [ECF No. 83.]

III. STANDARD OF REVIEW

Rule 37 of the Federal Rules of Civil Procedure gives the court discretion to

dismiss an action in whole or part if a party fails to comply with an order compelling

discovery. Fed.R.Civ.P. 37(b)(2)(v). 

In determining whether to impose terminating sanctions, the court weighs the

following five factors: (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. Considerations used to assess the fifth factor

include whether the court has suggested and used lesser sanctions and whether it

warned the non-compliant party that case-dispositive sanctions could result in response

to non-compliance. See Conn. Gen. Life Ins. Co. v. New Images of Beverly Hills, 482

F.3d 1091, 1096 (9th Cir.2007).

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 Judge Skomal ordered: “[N]o later than February 17, 2015, Defendant’s counsel shall

produce Natural Immunogenics’ California sales figures from March 4, 2008 to September 24,

2014, which is the time period suggested by Plaintiff’s counsel and is in accordance with Judge

Burns’ April 15, 2014 Order. See ECF No. 41 at 5:16-18 (defining the class as “All persons

located within California who purchased any Sovereign Silver Products either from a retail

location or over the internet at any time during the four years preceding the filing of this

complaint through the date of trial in this action.”) (emphasis added); see also ECF No. 41 at

14:16-19 (certifying the putative class in this case). 

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IV. DISCUSSION

Case law indicates that terminating sanctions are a severe remedy and suggests

that they should only be imposed when a party's noncompliance with a discovery order

is “due to willfulness, bad faith, and fault.” New Images of Beverly Hills, 482 F.3d at

1096; Computer Task Group v. Brotby, 364 F.3d 1112, 1115 (9th Ci r.2004) (quoting

Payne v. Exxon Corp., 121 F.3d 503, 507 (9th Cir.1997)). 

However, willfulness and bad faith on the part of Defendant’s counsel have not

been shown at this time. Plaintiff’s motion for terminating sanctions is based upon a

simple discovery dispute that was magnified by Plaintiff’s counsel when he did not

follow the Magistrate Judge’s procedures for bringing a discovery dispute to the

Court’s attention and instead filed a motion for contempt, monetary sanctions and

terminating sanctions. 

Plaintiff’s counsel did not seek the Court’s guidance and assistance in receiving

the discovery that had been ordered. Under these circumstances, the court cannot

recommend that dismissal of this action and entry of judgment on behalf of Plaintiff is

warranted at this time. This is especially true in light of the fact that less drastic

measures have recently been implemented that will likely solve Plaintiff’s concern that

he has not received the sales figures he needs to determine restitution for the California

class. Specifically, the court in its February 3, 2015 Order, issued guidance to the

parties that defined the time period for which California sales figures must be provided

and instructed defendant to produce the materials no later than February 17, 2015. 

Plaintiff will have the information he needs shortly, which supports the public policy

favoring disposition of cases on their merits 

In addition, the factors of expeditious resolution, docket management and

prejudice to plaintiff do not weigh in favor of terminating sanctions as discovery is still

underway and the opportunity for an extension of the deadlines set forth in the court’s

scheduling order is available upon a showing of good cause. Therefore, the Court

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RECOMMENDS Plaintiff’s motion for terminating sanctions be DENIED without

prejudice at this time. If Defendant fails to produce the ordered discovery in disregard

of the Court’s latest order, Defendant has been warned of the risk of case-dispositive

sanctions and Plaintiff is free to raise the issue of terminating sanctions again, provided

he follows the Court’s chambers and local rules.

V. CONCLUSION

As detailed above, the undersigned Magistrate Judge RECOMMENDS that

Plaintiff’s Motion for Imposition of Terminating Sanctions be DENIED without

prejudice. This Report and Recommendation is submitted to the United States District

Judge assigned to this case.

IT IS ORDERED that no later than February 19, 2015 any party to this action

may file written objections with the Court and serve a copy on all parties. The

document should be captioned “Objections to Report and Recommendation.” 

IT IS FURTHER ORDERED that any reply to the objections shall be filed

with the Court and served on all parties no later than March 5, 2015. The parties are

advised that failure to file objections within the specified time may waive the right to

raise those objections on appeal of the Court’s order. See Turner v. Duncan, 158 F.3d

449, 455 (9th Cir. 1998).

DATED: February 5, 2015

Hon. Bernard G. Skomal

U.S. Magistrate Judge

United States District Court

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