Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_04-cv-00305/USCOURTS-caed-2_04-cv-00305-6/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 42:1983 Civil Rights Act

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1 This amount represents the jury costs incurred by the

Court and may properly be imposed as a sanction. See Lasar v. Ford

Motor Company, 399 F.3d 1101, 1111 (9th Cir. 2005).

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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

RODNEY WARD, )

) 02:04-cv-0305-GEB-DAD

Plaintiff, )

)

v. ) ORDER IMPOSING SANCTIONS

)

CITY OF SOUTH LAKE TAHOE, a )

Political Division of the )

State of California; SOUTH )

LAKE TAHOE POLICE DEPARTMENT; )

POLICE OFFICER D. BAKER; )

POLICE OFFICER SILVA; and )

POLICE OFFICER RAMIREZ, )

) 

Defendants. )

)

An Order to Show Cause (“OSC”) was filed on

November 9, 2005, directing Plaintiff’s counsel of record

(“Counsel”) to show cause why sanctions in the amount of $2,368.14

should not be imposed against him for his failure to inform

chambers before 4:30 p.m. on November 7, 2005, that Plaintiff’s

action had been stayed.1 On the first day of trial,

November 8, 2005, when the parties were supposed to exercise their

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peremptory challenges against prospective jurors, Counsel informed

the Court he had learned on November 7, 2005, that Plaintiff had

filed a bankruptcy petition “on the 28th of October.” 

(November 8, 2005, Jury Trial Record.) Counsel then stated “it is

my understanding that there is an automatic stay.” (Id.) As a

result, the individuals called to jury service were excused and a

mistrial was declared. Before Court adjourned, an oral OSC issued.

Following the oral OSC, Counsel indicated that he learned

of Plaintiff’s bankruptcy petition at approximately 3:30 p.m. on

November 7, 2005. (Id.) Counsel explained that he understood the

petition imposed an automatic stay on the action, that the trustee

would have to give approval before Plaintiff could proceed with

litigation, and that the trustee would have to decide whether

Counsel would represent Plaintiff in the lawsuit even if the stay

was lifted. (Id.) Counsel stated that, approximately thirty

minutes after learning the action was stayed, he sent a fax to

opposing counsel indicating that he desired to make a conference

call to the undersigned Judge about the stay that afternoon. (Id.) 

Counsel conceded that no call was made, even though he could have

notified chambers about Plaintiff’s bankruptcy petition and the

automatic stay in time to vacate the trial date and notify

prospective jurors that they need not appear in court on

November 8, 2005. (Id.)

In response to the written OSC, Counsel filed a

declaration on November 10, 2005. Counsel declares he became aware

of Plaintiff’s bankruptcy petition around 3:30 p.m. on

November 7, 2005, and that he then sent a fax to opposing counsel

about the stay at 3:56 p.m. that same day. (Kharazi Decl.

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2 Counsel states in his declaration that after the

November 8 hearing he received information indicating the action

was not subject to a Bankruptcy Code automatic stay. (Kharazi

Decl. ¶¶ 29-30.) However, Counsel clearly stated at the November

8 hearing that on that day and on November 7 he believed

Plaintiff’s lawsuit was automatically stayed. Counsel’s original

understanding was correct. “[Plaintiff’s lawsuit] falls squarely

within [11 U.S.C.] § 541, and is property of the bankruptcy

estate.” In re Pace, 159 B.R. 890, 898 (9th Cir. BAP 1993) aff’d

in relevant part, rev’d in part on other grounds, 67 F.3d 187

(1995)(citation and quotation marks omitted). Even if the lawsuit

was not listed in Plaintiff’s bankruptcy petition as Counsel

declares, In Re Pace holds that the lawsuit is still part of the

bankruptcy estate and automatically stayed. Id.; and see 11 U.S.C.

§ 362(a)(3). 

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¶¶ 12, 14.) Counsel also declares that he could have notified the

Court of Plaintiff’s petition on November 7, 2005, but did not. 

(Id. ¶ 24.) 

After a review of Counsel’s declaration, Counsel’s

statements made in court on November 8, 2005, and statements

Counsel made at the OSC hearing held on November 21, 2005, the

facts are found to be as follows. Counsel was aware, at

approximately 3:30 p.m. on November 7, 2005, that Plaintiff had

filed a bankruptcy petition that automatically stayed this action.2

Counsel was aware that the stay could not be lifted by a

stipulation between the parties in this action because Plaintiff’s

action is part of the bankruptcy estate. Counsel had the

opportunity to contact the Court about the automatic stay

before 4:30 p.m. on November 7, 2005, but did not. Instead,

Counsel elected to wait until the morning of trial on

November 8, 2005, and after all prospective jurors had been

questioned to inform the Court of the automatic stay.

Local Rule 40-280(a) requires that “[t]he action be ready

for trial on the date set by the court.” Counsel violated this

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3 Counsel contends that he decided not to contact the Court

on November 7, 2005, because it would have been an inappropriate

“ex parte” communication. This argument does not excuse or make

any more reasonable Counsel’s violation of Local Rule 40-280(a).

First, it is hard to imagine how notifying the Court about

Plaintiff’s bankruptcy petition and Counsel’s opinion that the

lawsuit was automatically stayed would be an ex parte

communication, since opposing counsel’s office had been notified

about the matter. Second, Counsel’s assertion that he had

reservations about contacting chambers regarding the stay “ex

parte” taxes credulity, since Counsel had contacted the Judge’s

Courtroom Deputy “ex parte” the previous week about jury trial

documents. Lastly, Counsel indicated a desire to have a conference

call with the undersigned Judge on the afternoon of

November 7, 2005, but chose not to even though the communication

clearly would not have been “ex parte.”

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Local Rule because he did not inform the Court that the action was

stayed and could not be tried on the day set by the Court. Local

Rule 11-110 authorizes the Court to impose sanctions for Counsel’s

violation of Local Rule 40-280. Sanctions, however, may only be

imposed against Counsel if his violation was “grossly negligent,

reckless, or willful.” Zambrano v. Tafolla, 885 F.2d 1473, 1479

(9th Cir. 1989). By not informing the Court of the automatic stay

before 4:30 p.m. on November 7, 2005, Counsel demonstrated

indifference to a substantial risk, indeed the virtual certainty,

that the action could not be tried on the day set by the Court and

that numerous prospective jurors would appear for no purpose

whatsoever. Counsel’s indifference makes his failure to inform the

Court of the automatic stay before 4:30 p.m. on November 7, 2005,

at a minimum, grossly negligent.3

Further, the Court finds that sanctions in the amount of

$2,368.14 are appropriate under the factors set forth in Zambrano. 

First, the sanction is not inconsistent with any Federal Rule or

statute. Second, the conduct for which Counsel is being sanctioned

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4 Counsel indicated at the OSC hearing held

November 21, 2005, that sanctions were inappropriate because he did

not anticipate that waiting until the day of trial to inform the

Court of the stay would cause the Court to incur unnecessary jury

expenses. Counsel represented that all his practice has been in

state court and that there jurors are called in large groups

regardless of the number of matters being tried that day. This

bare argument presupposes, without proof, that state jury selection

occurs as Counsel argued. It is extremely doubtful that state

court is unmindful of the number of jurors needed before it incurs

the expense involved with summoning prospective jurors to court.

See Cal. Civ. Proc. Code § 613 (2002)(“Each party demanding a jury

trial shall deposit advance jury fees with the clerk or judge.”)

and Cal. Civ. Proc. Code § 613.3 (2002)(“[W]hen a party to the

litigation has deposited jury fees with the judge or clerk and that

party waives a jury or obtains a continuance of the trial, or the

case is settled, none of the deposit shall be refunded if the court

finds there has been insufficient time to notify the jurors that

the trial would not proceed at the time set.”) 

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is directly related to this Court’s ability to preserve the

integrity of its docket by ensuring that matters set for trial

proceed as scheduled. Third, imposition of sanctions against

Counsel under the circumstances is “consistent with principles of

right and justice” because Counsel’s grossly negligent conduct

resulted in the Court paying the expenses of jurors unnecessarily

summoned to appear for the November 8, 2005, trial; and most likely

cast a poor light on the operations of the Court in the eyes of

prospective jurors, who were informed that they had been summoned

to appear in court needlessly. Zambrano, 885 F.2d at 1480

(internal quotation marks omitted). Finally, the amount of the

sanction imposed is proportionate to Counsel’s offense given his

knowledge of the stay and his grossly negligent decision to not

inform the Court of it until the first day of trial.4 

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Therefore, Counsel is ordered to pay sanctions in the

amount of $2,368.14. The sanctions shall be paid to the Clerk of

the Court of this District no later than December 29, 2005. 

IT IS SO ORDERED.

Dated: November 22, 2005

/s/ Garland E. Burrell, Jr.

GARLAND E. BURRELL, JR.

United States District Judge

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