Opinion ID: 659420
Heading Depth: 3
Heading Rank: 2

Heading: Willfulness or bad faith

Text: 16 Pursuant to Federal Rules of Civil Procedure 37, the district court imposed monetary sanctions against Paine Webber and Ruden Barnett for failure to comply with the court's July 25, 1988, discovery order. Rule 37 provides, pertinent part, 17 If a party ... fails to obey an order to provide or permit discovery ... the court in which the action is pending may make such orders in regard to the failure as are just, and among others are the following: 18 . . . . . 19 (C) An order striking out pleadings or parts thereof ... or dismissing the action or proceeding or any part thereof, or rendering a judgment by default against the disobedient party.... 20 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. 21 In this case, the district court considered entering a default, but did not do so in light of the severity of such a measure. BankAtlantic, 127 F.R.D. at 235 (a twenty-nine million dollar default would be a disproportionate sanction). 22 Ruden Barnett argues that rule 37 sanctions are permissible only upon a showing of willfulness, bad faith, or fault in failure to comply with discovery. Ruden Barnett relies upon precedent reviewing a district court's default judgment or dismissal of the complaint as the sanction for noncompliance. Our caselaw is clear that only in a case where the court imposes the most severe sanction--default or dismissal--is a finding of willfulness or bad faith failure to comply necessary. Violation of a discovery order caused by simple negligence, misunderstanding, or inability to comply will not justify a Rule 37 default judgment or dismissal. E.g., Malautea v. Suzuki Motor Co., Ltd., 987 F.2d 1536, 1542 (11th Cir.1993), cert. denied, --- U.S. ----, 114 S.Ct. 181, 126 L.Ed.2d 140 (Oct. 4, 1993); See also Marshall v. Segona, 621 F.2d 763, 769 (5th Cir.1980) (monetary sanctions permissible where noncompliance with order not in bad faith nor callous disregard). A court may impose lesser sanctions without a showing of willfulness or bad faith on the part of the disobedient party. 23 In the case of Societe Internationale Pour Participations Industrielles et Commerciales, S.A. v. Rogers, 357 U.S. 197, 78 S.Ct. 1087, 2 L.Ed.2d 1255 (1958), the Supreme Court, in dicta, discussed the relevance of 'willfulness' and 'good faith.' The Court obliterated the lower court's apparent distinction between 'failure' and 'refusal' to comply with its discovery order, thus reversing and remanding the case. The Court observed, at 207-208, 78 S.Ct. at 1093: 24 .... Petitioner has urged that the word 'refuses' implies willfulness and that it simply failed and did not refuse to obey since it was not in willful disobedience. But this argument turns on too fine a literalism and unduly accents certain distinctions found in the language of the various subsections of Rule 37. Indeed subsection (b), as noted above, is itself entitled Failure to Comply with Order. (Italics added.) For purposes of subdivision (b)(2) of Rule 37, we think that a party 'refuses to obey' simply by failing to comply with an order. So construed the Rule allows a court all the flexibility it might need in framing an order appropriate to a particular situation. Whatever its reasons, petitioner did not comply with the production order. Such reasons, and the willfulness or good faith of petitioner, can hardly affect the fact of noncompliance and are relevant only to the path which the District Court might follow in dealing with petitioner's failure to comply. [Emphasis supplied.] 25 In reconciling two seemingly contradictory landmark decisions, the Court further explained its rationale: 26 ... But the Court took care to emphasize that the defendant had not been penalized '... for a failure to do that which it may not have been in its power to do.' All the State had required 'was a bona fide effort to comply with an order ..., and therefore any reasonable showing of an inability to comply would have satisfied the requirements ...' of the order. [Emphasis added.] [Hammond Packing Co. v. Arkansas ] 212 U.S. at page 347, 29 S.Ct. at page 378 [53 L.Ed. 530 (1909) ]. 27 Familias Unidas v. Briscoe, 544 F.2d 182, 191-92 (5th Cir.1976) (footnote omitted) (quoting Societe Internationale Pour Participations Industrielles et Commerciales, S.A. v. Rogers, 357 U.S. 197, 207-08, 78 S.Ct. 1087, 1093-94; Hammond Packing Co. v. Arkansas, 212 U.S. 322, 347, 29 S.Ct. 370, 378, 53 L.Ed. 530 (1908)). See also Fed.R.Civ.P. 37, Notes of Advisory Comm., 1970 Amendment (revision in language of rule, changing refusal to failure so as to eliminate the court-made requirement of willfulness and bring the rule into harmony with the Societe Internationale decision). 28 Ruden Barnett asserts that it did not know of the Homestead II and Firemen's Fund cases. The district court found, at a minimum, counsel failed to meet its obligation to search [Paine Webber's] corporate and attorney files for responsive documentation and acted in complete disregard of its responsibilities. BankAtlantic, 127 F.R.D. at 233. Although Ruden Barnett suggests that the evidence shows that it reasonably relied upon its client and client's in-house counsel's representations, Ruden Barnett fails to show that the district court's findings are clearly erroneous regarding Ruden Barnett's failure to comply with the discovery order. We conclude that sufficient evidence supports the district court's findings concerning Ruden Barnett's culpability in failing to comply with the discovery order. The district court made numerous credibility determinations which we give due regard, with deference to the lower court. Amadeo v. Zant, 486 U.S. 214, 223, 108 S.Ct. 1771, 1777, 100 L.Ed.2d 249 (1988). 29 Ruden Barnett did not make all reasonable efforts to comply with the court's order. See In re Chase & Sanborn Corp., 872 F.2d 397, 400 (11th Cir.1989) (pursuant to rule 37, defendants must show, to avoid sanctions for noncompliance, that they made all reasonable efforts to comply). Ruden Barnett failed to search the Homestead I files for documents responsive to the discovery order when Ruden Barnett had full access to the files. Ruden Barnett has not shown substantial justification for noncompliance. E.g., Fed.R.Civ.P. 37(b)(2).