13-1964-cv

U.S. v. Medical Grp. Research Assoc’s, Ltd.

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A

SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY

FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN

CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE

EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION

“SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY

PARTY NOT REPRESENTED BY COUNSEL. 

1 At a stated term of the United States Court of Appeals for the Second Circuit, held at

2 the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York,

on the 10th 3 day of December, two thousand fourteen.

4

5 PRESENT: ROBERT D. SACK, 

6 GERARD E. LYNCH,

7 DENNY CHIN,

8 Circuit Judges.

9 ———————————————————————

10 UNITED STATES OF AMERICA,

11 Plaintiff-Counter-Defendant-Appellee,

12

13 v. No. 13-1964-cv

14

15 MEDICAL GROUP RESEARCH ASSOCIATES, LTD.,

16 Claimant-Appellant,

17

18 ALL RIGHT, TITLE AND INTEREST IN REAL PROPERTY,

19 APPURTENANCES, AND IMPROVEMENTS KNOWN AS

20 479 TAMARIND DRIVE, HALLANDALE, FLORIDA, LISTED

21 AS LOT 30 IN BLOCK 7 OF GOLDEN ISLES SECTION “B”,

22 Defendant.

23 ——————————————————————— 24

25 FOR CLAIMANT APPELLANT: JOHN S. WALLENSTEIN, Garden City, NY.

26

27 FOR PLAINTIFF COUNTER ALEXANDER J. WILSON, Assistant United

28 DEFENDANT APPELLEE: States Attorney (Karl Metzner, Assistant United

29 States Attorney, on the brief) for Preet Bharara

30 United States Attorney for the Southern District

31 of New York, New York, NY.

32
1 Appeal from a judgment of the United States District Court for the Southern District

2 of New York (Denise L. Cote, J.).

3 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,

4 AND DECREED that the judgment is AFFIRMED. 

5 Claimant-appellant Medical Group Research Associates, Ltd. (“MGRA”) appeals

6 from a final order of forfeiture granting the government title to a residence in Hallandale,

7 Florida and dismissing MGRA’s claim to that property pursuant to Fed. R. Civ. P. 37(b). 

8 We assume the parties’ familiarity with the facts and procedural history of the case.

9 “We review a district court’s imposition of sanctions under Rule 37, including

10 dismissal, for abuse of discretion.” Agiwal v. Mid Island Mortg. Corp., 555 F.3d 298,

11 302 (2d Cir. 2009) (per curiam). Among the factors we consider in reviewing a district

12 court’s dismissal of an action under Rule 37 are: “(1) the willfulness of the non-compliant

13 party or the reason for noncompliance; (2) the efficacy of lesser sanctions; (3) the

14 duration of the period of noncompliance; and (4) whether the non-compliant party had

15 been warned of the consequences of noncompliance.” Id. (internal quotation marks

16 omitted). “This Court does not hesitate to affirm the dismissal of claims as a sanction for

17 ‘willfulness, bad faith, or any fault’ on the part of the sanctioned party.” Baba v. Japan

18 Travel Bureau Int’l., Inc., 111 F.3d 2, 5 (2d Cir. 1997). Whether the sanctioned party

19 “was at fault or acted willfully or in bad faith are questions of fact” which we review for

20 clear error. Agiwal, 555 F.3d at 302.

21

2
1 Here, the district court correctly found that MGRA willfully and repeatedly failed

2 to comply with its discovery obligations. Specifically, MGRA failed to produce

3 documents it claimed existed regarding the company’s ownership and failed to explain

4 internal inconsistencies in the documents that it produced on this issue. MGRA also

5 failed to make available for deposition an employee who had previously held herself out

6 as an officer and director of the company. MGRA contends that these failures were not

7 willful because the “documents that were sought, and the witness sought to be deposed,

8 were not within MGRA’s control.” Appellant’s Br. at 11. The company also asserts that

9 because the documents and witness at issue were in Canada, MGRA could not be

10 required to produce them without an order from a Canadian court. Whatever protections

11 may be afforded to witnesses and documents located abroad, however, cannot shield

12 MGRA from its obligation to produce evidence of its standing to pursue its claim in the

13 court where it filed suit. Moreover, MGRA’s claim that its own corporate records and its

14 own officer and director were not within its control is entirely unavailing. 

15 MGRA also argues that dismissal was an abuse of discretion because any failure to

16 comply with its discovery obligations resulted from the deficiencies of its counsel. As the

17 district court noted, in considering the suitability of lesser sanctions, “it can be important

18 for the district court to assess the relative roles of attorney and client in causing the delay,

19 as well as whether a tactical benefit was sought by the delay.” Dodson v. Runyon, 86

20 F.3d 37, 40 (2d Cir. 1996). Here, the district court concluded that the pattern of delay

21 “can be la[id] entirely at the feet of MGRA.” Joint App’x at 254. Even on appeal,

3
1 MGRA offers no reason to conclude that its attorneys had access to the documents

2 MGRA failed to produce, or were in a position to explain the produced documents’

3 inconsistencies. Rather, the record fully supports the district court’s finding that

4 MGRA’s noncompliance stemmed from the company itself.

5 Seeking to start the clock only once the government filed its Rule 37 motion to

6 compel in January 2013, MGRA argues that its delay of “a few months” was insignificant

7 and did not warrant dismissal. Appellant’s Br. at 18. But the district court reasonably

8 found that MGRA’s delay was “a course of conduct over years.” Joint App’x at 251. In a

9 2011 response to government interrogatories, MGRA claimed not to have a corporate

10 minute book and that documents reflecting its ownership were unavailable. Only after

11 being threatened with dismissal did MGRA finally produce these materials, which

12 contained unexplained inconsistencies. The record reveals that MGRA flouted its

13 discovery obligations at nearly every turn for almost two years.

14 MGRA’s contention that the district court erred by failing to consider adequately

15 the efficacy of lesser sanctions is also belied by the record. The district court explained

16 that “[n]o lesser sanctions are appropriate here since there is no way for us to litigate the

17 legitimacy of the claimant and the true identity of the interested party here without th[e]

18 cooperation” MGRA refused to provide. Joint App’x at 251. MGRA’s obstruction

19 prevented the district court from determining whether MGRA had standing to bring its

20 claim – a threshold legal issue. Thus, the alternative sanctions suggested by MGRA, such

21 as issue preclusion or an adverse inference instruction, would not have been appropriate

22 remedies.

4
1 Lastly, MGRA asserts that dismissal was inappropriate because the government

2 was not prejudiced by the delay. Prejudice, however, is not among the factors we have

3 enumerated for Rule 37 sanctions, and it particularly need not be shown where, as here,

4 the Agiwal factors uniformly support dismissal.

5 We have considered all of MGRA’s remaining arguments and find them to be

6 without merit. For the foregoing reasons the decision of the district court is

7 AFFIRMED. 

8

9 FOR THE COURT:

10 Catherine O’Hagan Wolfe, Clerk

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