Opinion ID: 547645
Heading Depth: 3
Heading Rank: 2

Heading: Legal Basis for the Default Sanction4

Text: 28 We have identified five factors that a district court must consider before dismissing a case or declaring a default: 29 (1) the public's interest in expeditious resolution of litigation; (2) the court's need to manage its docket; (3) the risk of prejudice to the other party; (4) the public policy favoring the disposition of cases on their merits; and (5) the availability of less drastic sanctions. 30 Malone v. United States Postal Service, 833 F.2d 128, 130 (9th Cir.1987), cert. denied sub nom Malone v. Frank, 488 U.S. 819, 109 S.Ct. 59, 102 L.Ed.2d 37 (1988) (quoting Thompson v. Housing Authority, 782 F.2d 829, 831 (9th Cir.), cert. denied, 479 U.S. 829, 107 S.Ct. 112, 93 L.Ed.2d 60 (1986)). See also Wanderer v. Johnston, 910 F.2d 652, 655-56 (9th Cir.1990). 5 If the district court fails to make explicit findings regarding each of these factors, the appellate court must review the record independently to determine whether the dismissal was an abuse of discretion. Malone, 833 F.2d at 130. 31 Where a court order is violated, the first two factors support sanctions and the fourth factor cuts against a default. Therefore, it is the third and fifth factors that are decisive. 32 A defendant suffers prejudice if the plaintiff's actions impair the defendant's ability to go to trial or threaten to interfere with the rightful decision of the case. Id. at 131. Delay alone has been held to be insufficient prejudice. See Kahaluu, 857 F.2d at 604. Failure to produce documents as ordered, however, is considered sufficient prejudice. Securities and Exchange Comm'n v. Seaboard Corp., 666 F.2d 414, 417 (9th Cir.1982). 33 Here, the repeated failure of Adriana to appear at scheduled dispositions compounded by their continuing refusal to comply with court-ordered production of documents constitutes an interference with the rightful decision of the case. Therefore, prejudice has been established under Malone. 34 The fifth factor of the Malone test is violated if dismissal is imposed without first considering the impact of the sanction and the adequacy of less drastic sanctions. Malone, 833 F.2d at 131. This court conducts a three-part analysis when determining whether a district court has properly considered the adequacy of less drastic sanctions: (1) did the court explicitly discuss the feasibility of less drastic sanctions and explain why alternative sanctions would be inappropriate, (2) did the court implement alternative sanctions before ordering dismissal, and (3) did the court warn the party of the possibility of dismissal before actually ordering dismissal? Malone, 833 F.2d at 132. 35 In this case, the district court did not explicitly discuss the feasibility of alternative sanctions. Generally, a court must consider less alternative sanctions and discuss them before actually dismissing the case. Kahaluu, 857 F.2d at 604. However, in egregious cases where the court actually imposes alternative sanctions before default, such an inquiry is not necessary. Malone, 833 F.2d at 132. 36 Here, the court imposed the following sanctions prior to dismissal: monetary sanctions for filing a frivolous motion, for failure to comply with Local Rule 6, for failure to produce documents, and for failure to pay earlier sanctions. Additionally, the court also found Lewis in contempt for failing to pay the sanctions. Adriana continually disobeyed court orders and acted in wilful disruption of the discovery process. Adriana had not complied with past sanctions, and the court had no reason to believe they would in the future. Therefore, the court satisfied the consideration of alternatives requirement here by imposing various other sanctions before dismissal. See id. 37 As set out above, the district court did impose alternative sanctions before dismissing the case, thus satisfying the second prong of the test to determine whether a district court has imposed alternatives to dismissal. 38 The last part of the test looks to whether the district court warned of the possibility of dismissal. Malone, 833 F.2d at 132. Adriana claims that, in order for a warning to be adequate under Malone, the warning must identify the specific conduct which will trigger the sanction and must identify the specific sanction the court is contemplating. In this case, the court did identify the specific conduct by the plaintiffs that would trigger the sanction. The court stated that if Zade and Kunz failed to appear for the scheduled deposition in December of 1987, the complaint will be dismissed. This satisfies the requirement that the court identify the party's action that will lead to the sanction. See In re Rubin, 769 F.2d 611, 618 n. 7 (9th Cir.1985). 39 Adriana also argues that the district court was required to give notice of the specific sanction it was contemplating. Here, the judge warned only of a dismissal, not a default. We have held that an explicit warning is not always necessary. Kahaluu, 857 F.2d at 605. See Malone, 833 F.2d at 133 (no explicit warning necessary where harsh sanction of dismissal should not have surprised plaintiff who willfully violated court's order). 40 As in Malone, Adriana should not have been surprised that Zade's and Kunz' repeated failure to appear for a deposition would result not only in the dismissal of Adriana's complaint but also in the entry of a default judgment in the case to which Zade and Kunz were parties. Further, Adriana was warned twice by the judge that their discovery conduct was improper. Finally, the court's order on October 28, 1986 warned that a failure to comply with the local rules may result in dismissal. In light of these various warnings, the court provided sufficient notice under Malone. 41 The five-part test announced in Malone is viewed as a balancing test. See, e.g., Kahaluu, 857 F.2d at 603. In this case, the first three factors weigh in favor of sanctions, dismissal and default. See Wanderer, at 656. The fifth factor, consideration of alternatives, also weighs in favor of dismissal or default in light of the district court's repeated use of alternative sanctions, even though the court gave no explicit warning of the default. Consequently, the district court did not abuse its discretion in entering the default. 6 42 Finally, Adriana argues that even if the default was proper, it could only be entered against those individuals who themselves engaged in misconduct. Even assuming Adriana's theory is correct, Zade, Kunz, and Midgen participated in misconduct in this case through their involvement with Adriana Corporation. Zade and Kunz failed to appear at depositions in July and December. Adriana Corp. failed to produce documents throughout the litigation. Further, Lewis failed to comply with Local Rule 6 in this case as well as various court orders to compel discovery relating to the cross-claims against Midgen, Zade, Kunz and Adriana Corp. Lewis' misconduct can be imputed to all his clients. See Hamilton Copper & Steel Corp. v. Primary Steel, Inc., 898 F.2d 1428, 1431, n. 2 (9th Cir.1990). Adriana's argument that misconduct by one party cannot be grounds for sanctioning an innocent party fails because none of the parties in this case are innocent.