Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_03-cv-06246/USCOURTS-caed-1_03-cv-06246-2/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: Civil Miscellaneous Case

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

DIRECTV, INC., a California

corporation, 

 Plaintiff

v. 

SCOTT PAHNKE,

 Defendant.

1:03-CV-6246 OWW SMS

ORDER ON PLAINTIFF’S MOTION

FOR SANCTIONS (DOC. 46). 

I. INTRODUCTION

This is one of many civil anti-piracy cases brought by

DIRECTV, Inc., (“Plaintiff”) in this district. Scott Pahnke

(“Defendant”), appearing pro se, answered the complaint and filed

several other motions during the early stages of this litigation,

including a successful motion to dismiss one of the counts. 

However, for the past several months, Pahnke has failed to

respond to any communications from plaintiff’s counsel, failed to

appear for several scheduling conferences, and apparently failed

to make initial disclosures or respond to any discovery requests. 

Before the court for decision is Plaintiff’s motion for sanctions

pursuant to Federal Rule of Civil Procedure 37. Doc. 46, filed

Mar 28, 2005. Defendant has filed no opposition or statement of

non-opposition, nor has he filed any other responsive documents.

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II. FACTUAL BACKGROUND

On September 12, 2003, DIRECTV filed a complaint against

Defendant Pahnke and three other individuals, alleging that each

of the defendants purchased “Pirate Access Devices” capable of

decrypting DIRECTV’s encrypted satellite television programming

and used the devices to receive DIRECTV’s programming without

authorization, in violation of several federal anti-piracy

statutes. Doc. 1. 

Pahnke answered on February 24, 2004, Doc. 13, and appeared

for a scheduling conference on March 19, 2004. See Doc. 19. At

that conference, the district court noted that DIRECTV may have

misjoined Defendants “who have no relation to each other

factually or legally.” The district court then issued an order

to show cause why “DIRECTV, Inc., and its [prior] attorneys

should not be sanctioned for misjoining parties, after having

been ordered not to do so in other districts of the United

States.” Id. at 2. DIRECTV responded to the order, Docs. 20 &

21, filed Apr. 2, 2004. Pahnke also filed a reply concerning the

order to show cause. Doc. 22, filed Apr. 13, 2004. On May 7,

2004, the district court dismissed the claims against Defendants

Santos and Vasquez, subject to re-filing, on the grounds that

they had been misjoined. Doc. 25. The district court also

ordered prior counsel for DIRECTV to show cause why she should

not be sanctioned for lack of candor and misciting legal

authority to the court. Id.

DIRECTV responded to this second order to show cause on June

18, 2004. On August 18, 2004, the district court found there had

been no violation and declined to impose sanctions against

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DIRECTV or its prior counsel. 

Defendant Pahnke then moved to dismiss Count III of the

complaint on the grounds that no private cause of action is

available for a violation of 18 U.S.C. § 2512, a criminal

statute. Doc. 31, filed Aug. 31, 2004. DIRECTV filed a notice

of non-opposition, Doc. 33, filed Sept. 8, 2004, and Count III

was dismissed against Defendant Pahnke. Doc. 36, filed Sept.,

22. 

Then, Defendant Pahnke stopped participating in this

litigation. Plaintiff’s new counsel attempted to contact

Defendant on November 22, 2004 “to request Defendant’s input and

cooperation to prepare and file a Joint Scheduling Report.” See

Shah Decl., Ex. A. Pahnke did not respond to the letter, and

failed to appear at the December 3, 2004 scheduling conference. 

See Doc. 41 and Shah Decl. at ¶4. Defendant Pahnke again failed

to appear at the rescheduled conference date. See Doc. 42, filed

Jan. 5, 2005. The district court again continued the scheduling

conference, on the condition that Defendant first serve initial

disclosures as required by Federal Rule of Civil Procedure 26(a),

on or before February 5, 2005. Doc. 43, filed Jan. 7, 2005. 

DIRECTV mailed the Scheduling Conference Order to Defendant at

his work and residential addresses. Shah Decl. ¶6, Exh. D. 

In the event that Defendant did not file his initial

disclosures, the district court authorized DIRECTV to “take such

steps as it deems necessary and appropriate.” Doc. 43 at 2. 

Defendant still has not served his initial disclosures or

responded in any way to the scheduling orders in this case. 

Accordingly, Plaintiff filed the instant motion, Doc. 46, filed

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Mar. 28, 2005, requesting the imposition of Rule 37 sanctions for

Defendant Pahnke’s “unjustified and continuous failure to comply

with his discovery and case management obligations.” 

Specifically, Plaintiff requests the entry of an order striking

Defendant’s answer and entering judgment in favor of DIRECTTV. 

In the alternative, DIRECTV requests an evidentiary sanction

prohibiting Defendant from introducing evidence in any proceeding

in this case, regarding witnesses, documents, or information that

Defendant should have included in his initial disclosures. In

addition to either of the above sanctions, Plaintiff requests

monetary sanctions against Defendant in the amount of $4,438.00

for attorney’s fees incurred by DIRECTV to prepare the current

motion and present it to the court. Id. at 2. 

III. LEGAL ANALYSIS

The issuance of sanctions for noncompliance with discovery

rules is governed by Federal Rule of Civil Procedure 37. Rule

37(c)(1) provides:

A party that without substantial justification fails to

disclose information required by Rule 26(a) or

26(e)(1)...is not, unless such failure is harmless,

permitted to use as evidence at a trial, at a hearing,

or on a motion any witness or information not so

disclosed. In addition to or in lieu of this sanction,

the court, on motion and after affording an opportunity

to be heard, may impose other appropriate sanctions. In

addition to requiring payment of reasonable expenses,

including attorney's fees, caused by the failure, these

sanctions may include any of the actions authorized

under Rule 37(b)(2)(A), (B), and (C) and may include

informing the jury of the failure to make the

disclosure.

Rule 37(b)(2) enumerates the types of sanctions that may be

issued by a court in which an action is pending. 

If a party...fails to obey an order to provide or

permit discovery...or if a party fails to obey an order

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entered under Rule 26(f), the court in which the action

is pending may make such orders in regard to the

failure as are just, [including] the following:

(A) An order that the matters regarding which the

order was made or any other designated facts shall

be taken to be established for the purposes of the

action in accordance with the claim of the party

obtaining the order;

(B) An order refusing to allow the disobedient

party to support or oppose designated claims or

defenses, or prohibiting that party from

introducing designated matters in evidence;

(C) An order striking out pleadings or parts

thereof, or staying further proceedings until the

order is obeyed, or dismissing the action or

proceeding or any part thereof, or rendering a

judgment by default against the disobedient party;

***

In lieu of any of the foregoing orders or in

addition thereto, the court shall require the

party failing to obey the order or the attorney

advising that party or both to pay the reasonable

expenses, including attorney's fees, caused by the

failure, unless the court finds that the failure

was substantially justified or that other

circumstances make an award of expenses unjust.

Before Rule 37 sanctions may be imposed, a party ordinarily

must disobey a court order regarding discovery. Unigard Security

Ins. Co. v. Lakewood Eng. & Mfg. Corp., 982 F.2d 363, 368 (9th

Cir. 1992). Nevertheless, even if no prior discovery order had

been issued or violated, pursuant to a court’s “inherent powers”

to manage its affairs, a district court may still exclude

evidence not properly handed over in discovery. Id. 

DIRECTV requests that Defendant’s answer be stricken and

that judgment by default be entered against him. Rule

37(b)(2)(A) permits a district court to strike the answer of a

disobedient defendant and/or enter a judgment of default. See

also Sigliano v. Mendoza et al., 642 F.2d 309, 310 (9th Cir.

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1981)(even absent a previous order, “dismissal is a proper

sanction under Rule 37(d) for a serious or total failure to

respond to discovery even without a prior order.”). It is

appropriate to strike an answer and enter judgment where the

failure to propound discovery was willful or made in bad faith. 

“Willful” noncompliance can be demonstrated by “disobedient

conduct [that] is not...outside the control of the litigant.” 

Henry v. Gill Indus., Inc., 983 F.2d 943, 948 (9th Cir. 1993).

In Sigliano, the defendants propounded interrogatories to

plaintiff and requested the production of documents, but

plaintiff failed to respond. 642 F.2d at 310. Defendants then

filed a motion to compel the requested discovery, followed by a

motion to dismiss, under Rule 37(d), on the ground that plaintiff

failed to respond to the motion to compel or to provide the

requested discovery. A few weeks later, Plaintiff filed a motion

for an extension of time to respond to the discovery request. 

Defendants then noticed a hearing on their motion to dismiss, but

plaintiff failed to appear. The court continued the hearing for

several weeks with the proviso that if plaintiff failed to

respond to the motion a certain date, the case would be

dismissed. On the day of the hearing, plaintiff filed a motion

to continue the hearing on the ground that work on the

interrogatories, although burdensome, was proceeding. The

district court dismissed the action pursuant to Rule 37 on the

ground that plaintiff failed to comply with its orders. The

Ninth Circuit upheld this dismissal on the grounds that

plaintiff’s “repeated failure to comply with the discovery

request and the court's orders manifested the requisite fault and

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fully justified the sanction imposed.” Id. The Ninth Circuit

Reasoned: 

Due process requires that neither dismissal nor

preclusion of evidence that is tantamount to dismissal

may be imposed when failure to comply is due to

circumstances beyond the recalcitrant's control. This

court has specifically encouraged dismissal, however,

where the district court determines that counsel or a

party has acted willfully or in bad faith in failing to

comply with rules of discovery or with court orders

enforcing the rules or in flagrant disregard of those

rules or orders.

Id. Although Sigliano involved the dismissal of claims because

of a plaintiff’s misconduct, the Ninth Circuit recognizes that it

is equally appropriate to grant default judgment against a

defendant for failure to comply with a court order. See Rio

Properties, Inc. v. Rio Intern. Interlink, 284 f.3d 1007, 1021-22

(9th Cir. 2002); Henry v. Sneiders, 490 F.2d 315 (9th Cir. 1974)

(holding reaffirmed and extended to Rule 41 in Yourish v.

California Amplifier, 191 F.3d 983, 978 (1999)). 

Here, Defendant has completely failed to engage in discovery

(or to contact the court to provide an explanation for his

failure) for at least four months. Defendant has been informed

of his discovery obligations. DIRECTV sent him letters

concerning his obligation to produce initial disclosures and the

court issued a scheduling conference order directing Defendant to

provide initial disclosures. Defendant has also failed to appear

at or participate in two court-ordered scheduling conferences. 

Defendant has offered no justification for his noncompliance with

a court order and with his discovery obligations. It is

reasonable to conclude that he acted willfully and in bad faith. 

Having found willful misconduct, a district court must then

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weigh 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.

Henry, 983 F.2d at 948.

In this case, the public interest in the expeditious

resolution of this matter is served by a terminating sanction,

minimizing further delay and wasted resources, where defendant

has refused to respond to a court order concerning discovery. 

Although Defendant’s failure to produce discoverable information

has clearly prejudiced DIRECTV in its ability to fully prosecute

its claims, this prejudice can be cured by the lesser sanction of

evidentiary exclusion. Plaintiff argues that “Defendant’s

failure to serve Initial Disclosures and participate in case

management indicates that lesser sanctions would be ineffective

against him.” But Plaintiff has not been threatened with

sanctions of any form to date. At this stage, a sanction less

drastic than termination is appropriate. Defendant shall be

precluded from using any evidence to respond to any dispositive

motion or at trial that he should have provided as part of his

initial disclosures.

A. Monetary Sanctions for Attorney’s Fees Incurred by

DIRECTV.

Finally, DIRECTV argues that Defendant Pahnke should be

sanctioned for the attorney’s fees incurred by DIRECTV to

attend the Scheduling Conference and to prepare the current

Motion. See Marquis v. Chrysler Corp., 577 F.2d 624, 641 (9th

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Cir. 1978) (holding that trial court did not abuse its discretion

by ordering defendants to pay plaintiff's attorney $2,000 as

compensation for expenses and fees incurred as result of

defendants' failure to produce documents required by discovery).

The firm currently representing DIRECTV, Buchalter, Nemer,

Fields & Younger of Irvine, California, has utilized the services

of three attorneys to perform various tasks related to discovery

and the preparation of this motion for hearing: (1) Mr. Sandeep

J. Shah, whose current hourly billing rate is $255.00; Ms. Keli

N. Osaki, whose current hourly billing rate is $300.00; and Mr.

Gurjit S. Pandher, whose current hourly billing rate is $275.00. 

Mr. Shah attests that the firm “sets its rates to be competitive

with the other major law firms in Southern California and

[believes] that the rates charged by [the] firm are comparable to

the prevailing hourly rates charged for legal services provided

by persons of the same or similar skill and experience level in

other firms.” Shah Decl., at ¶10. 

The following expenses were incurred in preparing the

instant motion:

(1) Mr. Pandher spent approximately five (5) hours

preparing the motion and accompanying documents, for a

total cost of $1375.00 ($275.00 x 5). 

(2) Mr Shah spent 1 hour reviewing and revising the

motion and attachments, for a total cost of $255.00

($255.00 x 1). 

(3) Ms. Osaki spent one-third (0.3) of an hour

reviewing and revising the motion, for a total cost of

$100.00 ($300.00 x 0.3).

(3) In addition, Mr. Shah estimates that either himself

or an attorney who bills at approximately the same

hourly rate will spend approximately three hours

preparing for and attending the hearing on this motion,

for a total cost of $765.00 ($255.00 x 3).

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The total of these expenses, $4,438.00, is documented as part of

Exhibit F to the Shah declaration. This figure is only a small

fraction of the overall legal costs billed to DIRECTV by

Buchalter, Nemer, Fields & Younger for work on this case. The

requested sanction is appropriate under Rule 37 and the amount

billed is reasonable under the circumstances. The request for a

sanction of $4,438.00 is GRANTED. 

IV.CONCLUSION

For the reasons stated above, Plaintiff’s motion for

sanctions is GRANTED IN PART AND DENIED IN PART. 

(1) Plaintiff’s request that Defendant Pahnke’s answer be

stricken and default judgment be entered against him is

DENIED. 

(2) Plaintiff’s request that Defendant Pahnke be precluded from

offering any evidence to respond to any dispositive motion

or at trial is GRANTED.

(3) Plaintiff is also ordered to pay the reasonable expenses,

including attorney’s fees, incurred by DIRECTV in preparing

this motion for sanctions, in the amount of $4,438.000. 

SO ORDERED.

5/24/05 /s/ OLIVER W. WANGER

 

 Oliver W. Wanger

UNITED STATES DISTRICT JUDGE

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