Court Opinion

ID: 4308829
Source: CourtListenerOpinion
Date Created: 2018-08-30 20:00:54.307376+00
Date Added: 2024-06-11T14:43:11.848411
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                              AUG 30 2018
                    UNITED STATES COURT OF APPEALS                        MOLLY C. DWYER, CLERK
                                                                            U.S. COURT OF APPEALS

                           FOR THE NINTH CIRCUIT

TOYRRIFIC, LLC,                                  No.   16-56580

              Plaintiff-Appellant,               DC No. CV 12-4499 ODW

 v.

EDVIN KARAPETIAN; EDWARD                         MEMORANDUM*
MINASYAN; LENA AMERKHANIAN;
EDO TRADING, INC., a California
Corporation,

              Defendants-Appellees.

                   Appeal from the United States District Court
                      for the Central District of California
                   Otis D. Wright II, District Judge, Presiding

                       Argued and Submitted March 6, 2018
                              Pasadena, California

Before:       TASHIMA, BEA,** and NGUYEN, Circuit Judges.

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
            Judge Bea was randomly drawn to replace Judge Reinhardt, who
passed away after this case was submitted for decision. The record, briefs, and
video recording of the oral argument were made available for Judge Bea’s review.
      Plaintiff-Appellant Toyrrific, LLC (“Toyrriffic”) appeals the district court’s

order excluding damages evidence as a sanction pursuant to Federal Rule of Civil

Procedure 37(c)(1) and granting summary judgment in favor of Defendants-

Appellees Edvin Karapetian, Edward Minasyan, Lena Amerkhanian, and Edo

Trading, Inc. (“Defendants”). This court previously reversed and remanded

because the district court imposed the same sanction against Toyrrific and granted

judgment to the Defendants “without finding that Toyrrific’s ‘noncompliance

involved willfulness, fault, or bad faith,’ and without considering the ‘availability

of lesser sanctions.’” Toyrrific, LLC v. Karapetian, 606 F. App’x 365, 365–66 (9th

Cir. 2015) (quoting R & R Sails, Inc. v. Ins. Co. of Penn., 673 F.3d 1240, 1245,

1247 (9th Cir. 2012)). We have jurisdiction pursuant to 28 U.S.C. § 1291, and we

again reverse and remand.

      1.     The district court should have interpreted Toyrrific’s counsel’s

declaration as a request to extend the time for filing an opposition under Federal

Rule of Civil Procedure 6(b) and determined whether Toyrrific had shown

“excusable neglect.” See Ahanchian v. Xenon Pictures, Inc., 624 F.3d 1253, 1261

(9th Cir. 2010) (citing Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship,

507 U.S. 380, 395 (1993)). Taking Defendants’ motion as unopposed without

doing so was an abuse of discretion. See Ahanchian, 624 F.3d at 1261–62.

                                           2
      2.     Regardless, the district court again erred in excluding damages

evidence as a sanction and granting summary judgment to the Defendants. As on

the previous appeal, the sanction amounted to dismissal of Toyrrific’s breach of

contract claim, meaning the court had to find that Toyrrific’s conduct was the

result of willfulness, fault, or bad faith, and also consider the availability of lesser

sanctions. See R & R Sails, 673 F.3d at 1245, 1247. The only disputed issue on

this appeal is whether the district court considered lesser sanctions. See Malone v.

U.S. Postal Serv., 833 F.2d 128, 132 (9th Cir. 1987).

      The district court listed Toyrrific’s misconduct and stated only that lesser

sanctions would be an ineffective deterrent. This “does not satisfy the type of

explicit discussion of alternative sanctions our precedent demands.” Estrada v.

Speno & Cohen, 244 F.3d 1050, 1056 (9th Cir. 2001) (citing Malone, 833 F.2d at

132; see also Hamilton Copper & Steel Corp. v. Primary Steel, Inc., 898 F.2d
1428, 1430 (9th Cir. 1990).

      We have upheld dismissals where an explicit discussion of alternatives is

lacking. However, in those cases, explicit discussion was unnecessary because the

court tried lesser sanctions, the court warned that failure to obey orders in the

future would result in dismissal, or the case involved other egregious

                                            3
circumstances. See Estrada, 244 F.3d at 1057. None of these “exceptions” exists

here. Id.

      The district court did not implement lesser sanctions. The district court

issued an order permitting Toyrrific to brief the R & R Sails factors on remand

pursuant to this court’s prior mandate; we do not read that order as affording

Toyrrific a “second chance” to submit evidence of damages.

      Nor was the district court’s order a warning. Permitting Toyrrific to defend

its 2013 conduct under the correct test in 2016 was not a warning that committing

that conduct in 2013 might result in dismissal. See id. (citing Valley Eng’rs Inc. v.

Elec. Eng’g Co., 158 F.3d 1051, 1057 (9th Cir. 1998)). The district court’s order

was also not a warning that a different kind of violation – a late-filed opposition –

would result in dismissal. See United States v. Nat’l Med. Enters., Inc., 792 F.2d
906, 913 (9th Cir. 1986).

      This is also not an egregious case where it is “clear that no other alternative

would have been reasonable.” U.S. ex rel. Wiltec Guam, Inc. v. Kahaluu Const.

Co., 857 F.2d 600, 604 (9th Cir. 1988). The numerous discovery violations listed

by the district court might suggest otherwise. However, the district court relied on

misconduct from other cases. “There must be a nexus between the party’s

actionable conduct and the merits of his case.” Halaco Eng’g Co v. Costle 843

                                          4
F.2d 376, 381 (9th Cir. 1988). Because the district court relied on such misconduct

without examining whether it affected resolution of this case, and we discern no

such nexus on this record, reversal is warranted for this reason, as well.

      On remand, the district court retains the discretion to impose sanctions. In

doing so, however, it must first expressly consider lesser alternatives as this court’s

case law requires, and ensure that “the misconduct penalized . . . relate[s] to

matters in controversy in such a way as to interfere with the rightful decision of the

case.” Id.1

REVERSED and REMANDED.

      1
           We need not and do not decide whether the district court erred in
denying Toyrrific’s Rule 60(b) motion.
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