Opinion ID: 452995
Heading Depth: 2
Heading Rank: 3

Heading: Severity of the Sanction

Text: 26 Embodying the general due process restriction upon a court's discretion, Rule 37(b)(2) requires that any sanction [imposed pursuant to it] must be 'just.'  Insurance Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 707, 102 S.Ct. 2099, 2106, 72 L.Ed.2d 492 (1982). Fairness demands that the severe sanction of default may not be imposed under Rule 37(b)(2) in the absence of willfulness, bad faith, or fault. Munoz-Santana v. I.N.S., 742 F.2d 561, 564 (9th Cir.1984). The district court found that American Honda consciously and willfully refused to comply with the July 29 order. 27 American Honda asserts that the court applied an erroneous definition of willfulness that translated into a strict liability standard. It argues that the definition of willfulness adopted by the district court--disobedient conduct not shown to be outside the control of the litigant--runs counter to the Supreme Court's decision in Societe Internationale, 357 U.S. 197, 78 S.Ct. 1087, 2 L.Ed.2d 1255. American Honda emphasizes that although the plaintiff in that case made a conscious decision not to produce documents that were within its control within the meaning of Rule 34 of the Federal Rules of Civil Procedure, the Supreme Court held that dismissal of the complaint under Rule 37(b)(2) was improper. But the Court also held that the plaintiff's inability to produce the documents was fostered neither by its own conduct nor by circumstances within its control but rather resulted from the operation of Swiss banking laws. Id. at 211, 78 S.Ct. at 1095. Thus, the plaintiff's inability to produce documents that were within its control within the meaning of Rule 34 was created by circumstances beyond its control for the purposes of Rule 37, preventing a finding of willfulness, bad faith, or fault on the plaintiff's part. The willfulness standard applied by the district court in the instant case, which requires the punished conduct to be within the litigant's control, is consistent with Societe Internationale. Its requirement of disobedient conduct, which connotes deliberate malfeasance, comports with traditional notions of willful action. The standard applied by the district court was not erroneous. 28 American Honda further contends that under any appropriate standard, its failure to supplement its answers to the plaintiffs' interrogatories was not willful. Under the discovery schedule established by the court in its order of September 16, 1983, the parties were not required to exchange expert witness lists, experts' opinions, and other information described in Rule 26(b)(4)(A)(i) of the Federal Rules of Civil Procedure until April 2, 1984, the day that the court imposed the sanction of partial default judgment. That section of the order further provided that it supercede[d] discovery directed to expert witnesses. American Honda argues that because of that provision, it believed that the July 29 order no longer required it to supplement its answers to most of the interrogatories cited by the district court because those answers had to be based upon experts' opinions and other information described in Rule 26(b)(4)(A)(i). 29 The district court found that explanation invalid for three reasons: 1) its September 7, 1983 opinion held that American Honda had waived its right to object to the form or content of the interrogatories; 2) American Honda did not seek a protective order clarifying the effect of the expert witness discovery schedule upon the July 29 order; 3) the answers in question were not within the sole province of experts. 30 Because the September 16 order stated that its schedule superceded discovery directed to experts, American Honda could have interpreted it to mean that it governed the disclosure of all information relating to experts regardless of American Honda's waiver of its right to object to the interrogatories. Nothing in the record suggests that American Honda did not sincerely believe that the September 16 order modified its obligations under the July 29 order. 4 American Honda's waiver of its right to object to the interrogatories and its failure to seek a protective order therefore did not make its violation of the July 29 order willful. 31 With respect to most of the interrogatories cited by the district court as the basis for the partial default judgment sanction, American Honda could have believed that the matters under inquiry were within the sole province of experts. The absence of an eyewitness to the accident required American Honda to rely upon accident reconstruction experts to answer the interrogatories concerning how the collision occurred and what happened to the motorcycle during the collision. The findings, observations, conclusions, and recommendations of experts who investigated the accident scene and analyzed the motorcycle fall within the scope of Rule 26(b)(4)(A)(i). Finally, the interrogatory addressing the possible defense of change of condition did not ask, as the district court appears to have assumed, whether or not American Honda intended to rely upon such a defense but rather asked American Honda to provide the technical basis for the defense if it intended to rely upon it. American Honda had to consult experts to secure that technical information. 32 Two of the interrogatories cited by the district court could have been answered by American Honda without the aid of experts. One inquired about other lawsuits involving the conspicuity theory of liability. In its response, American Honda listed four suits but failed to identify a case in which it was the defendant that involved a conspicuity claim as a secondary theory of liability. The district court found that American Honda's explanation that it had filed that case in its records only under the primary theory of liability may be believable. Likewise, we find no evidence in the record indicating that American Honda deliberately concealed the case. We conclude that its failure to identify the case was not willful. 33 The other interrogatory cited by the court that was not directed to experts asked American Honda to identify people it believed might have knowledge about the accident, the motorcycle, or the issues presented by the instant case. On March 1, 1984, when the parties exchanged lay witness lists, American Honda had not supplemented the response it filed on August 8, 1983, which identified only twelve people. But American Honda named 240 people on its lay witness list. Its only explanation for its failure to identify the additional potential witnesses earlier by supplementing its answer to the interrogatory is that some of them were disclosed to the plaintiffs during depositions and other proceedings. Even accepting that explanation, we must conclude from the record presented that American Honda deliberately failed to supplement its answer to the interrogatory concerning potential witnesses. 34 Sanctions imposed under Rule 37(b)(2) must be specifically related to the particular 'claim' which was at issue in the order to provide discovery. Insurance Corp. of Ireland, 456 U.S. at 707, 102 S.Ct. at 2106. This requirement reflects the rule of Hammond Packing Co. v. Arkansas, 212 U.S. 322, 29 S.Ct. 370, 53 L.Ed. 530 (1909), which held that striking the answer and entering default judgment against a corporate defendant that refused to produce any documents or to permit its officers to be deposed did not deny the defendant due process because its refusal to produce material evidence created a presumption that its asserted defense was meritless. 35 Unlike the defendant's refusal to disclose any material information in Hammond Packing, American Honda's failure to supplement its response to the interrogatory concerning potential witnesses does not give rise to a presumption that the denials in its answer to the complaint are untrue or that its defenses are meritless. When the district court imposed the sanction of partial default judgment, American Honda had made available to the plaintiffs, among other materials, a number of witness statements, numerous photographs of the accident scene taken on the date of the accident, photographs of American Honda's investigation of the accident scene and inspection of the motorcycle, videotapes of the investigation, the report of the highway patrolman who investigated the accident, a wiring diagram of the motorcycle, and an exhaustive list of studies and reports on the causes of motorcycle accidents, including a number of reports on motorcycle conspicuity and headlight use. In its responses to the interrogatories, it identified, among other people, the original purchaser of the motorcycle and the driver of the tractor ditcher, who later was deposed. It also set forth the factual basis upon which it contended that the plaintiffs (both the minor plaintiff and her parents) were negligent. Finally, nothing in the record suggests that American Honda's failure to identify any potential witness in a timely manner adversely affected the plaintiffs' ability to establish that the motorcycle's lack of conspicuity caused or contributed to the accident, or that the delay helped to conceal information tending to show the invalidity of one or more of American Honda's possible defenses. In these circumstances, allowing American Honda to suffer partial default judgment because of its single willful violation of the July 29 order would be unjust. 36 Nothing in this opinion should be read as absolving American Honda or as suggesting that on remand, the district court may not impose severe sanctions against it. In the face of the court's previous imposition of discovery sanctions, its unqualified command to answer all interrogatories fully and completely, its holding that American Honda had waived its right to object to the interrogatories, and its stern warning that further discovery problems would be met with increasingly severe sanctions, the reasonable, prudent course of action for American Honda would have been to seek a protective order clarifying the effect of the September 16 order upon the July 29 order. We consistently have held that sanctions may be imposed even for negligent failures to provide discovery. See Lew v. Kona Hospital, 754 F.2d 1420, 1427 (9th Cir.1985); Marquis v. Chrysler Corp., 577 F.2d 624, 642 (9th Cir.1978). American Honda's willful delay in identifying individuals having knowledge about the accident or the issues involved in this case likewise is sanctionable. We leave it to the district court to determine the appropriate sanctions. We hold only that in the circumstances presented by this record, the district court did not have authority under either its inherent powers or Rule 37(d) to impose sanctions against Honda Limited and exceeded the limits placed upon its discretion by due process in granting partial default judgment against American Honda. 37 REVERSED and REMANDED.