Court Opinion

ID: 3038880
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:59:35.361339+00
Date Added: 2024-06-11T11:48:51.218779
License: Public Domain

FOR PUBLICATION
 UNITED STATES COURT OF APPEALS
      FOR THE NINTH CIRCUIT

MAURICIO A. LEON, M.D.,               
              Plaintiff-Appellant,        No. 04-35983
               v.
                                           D.C. No.
                                          03-01158 MJP
IDX SYSTEMS CORPORATION, a
Vermont Corporation,
             Defendant-Appellee.
                                      

MAURICIO A. LEON, M.D.,               
                Plaintiff-Appellee,       No. 05-35426
               v.
                                           D.C. No.
                                          03-01158 MJP
IDX SYSTEMS CORPORATION, a
Vermont Corporation,                        OPINION
             Defendant-Appellant.
                                      
       Appeal from the United States District Court
         for the Western District of Washington
       Marsha J. Pechman, District Judge, Presiding

                  Argued and Submitted
            June 9, 2006—Seattle, Washington

                 Filed September 20, 2006

   Before: David R. Thompson, A. Wallace Tashima, and
           Consuelo M. Callahan, Circuit Judges.

                Opinion by Judge Tashima

                           11689
                  LEON v. IDX SYSTEMS CORP.                11693

                          COUNSEL

Kenneth G. Kieffer, Gordon, Thomas, Honeywell, Malanca,
Peterson & Daheim LLP, Tacoma, Washington, for the
plaintiff-appellant/appellee.

Angelo J. Calfo, Yarmuth Wilsdon Calfo PLLC, Seattle,
Washington, for the defendant-appellee/appellant.

                          OPINION

TASHIMA, Circuit Judge:

   Dr. Mauricio Leon (“Leon”) worked as the director of med-
ical informatics at IDX Systems Corporation (“IDX”). After
he was placed on unpaid leave, Leon sued IDX, alleging vio-
lations of the anti-retaliation provision of the False Claims
Act, Title VII, the Americans with Disabilities Act (“ADA”),
and Washington state law. He also filed a complaint with the
United States Department of Labor (“DOL”), claiming that
IDX violated the whistleblower-protection provision of the
Sarbanes-Oxley Act (“SOX”). The district court dismissed all
of Leon’s claims with prejudice after determining that Leon
despoiled evidence by deleting 2,200 files from his IDX-
issued laptop computer during the pendency of the litigation.
The court also imposed a $65,000 monetary spoliation sanc-
tion. Leon appeals the sanctions and IDX cross-appeals the
district court’s decision not to enjoin, on res judicata grounds,
the DOL’s proceedings against IDX. We affirm the district
court’s spoliation sanctions, reverse its res judicata determina-
11694             LEON v. IDX SYSTEMS CORP.
tion, and remand the case to the district court to reassess
whether it should enjoin the DOL proceedings.

  The district court’s jurisdiction arose under 28 U.S.C.
§§ 1331 and 1367. We have jurisdiction over Leon’s appeal
and IDX’s cross-appeal under 28 U.S.C. § 1291.

                      BACKGROUND

   Leon was hired by IDX in 2001. In mid-2002, Leon began
complaining of mismanagement of the “Standards-Based
Interoperable Guideline System” (“SAGE”) project, claiming
there were irregularities in the financing and reporting of the
federally-funded project. On April 25, 2003, after putting
Leon on unpaid leave, IDX brought an action for declaratory
relief, seeking to establish that it could terminate Leon’s
employment without violating the anti-retaliation provisions
of the False Claims Act, SOX, and the ADA. On May 20,
2003, Leon filed his own action, which included claims for
retaliation under the False Claims Act, violations of Title VII,
the ADA, and state law claims. Leon’s complaint alleged that
IDX fired him in retaliation for his whistle-blowing activities.

   On April 30 and May 7, 2003, IDX’s attorneys sent letters
to Leon’s attorney, requesting that Leon return the IDX-
issued laptop to IDX. On May 8, 2003, Leon’s attorney
responded in writing by asking if Leon could keep his laptop
for the duration of an audit of the SAGE project. On May 9,
IDX’s counsel stated that Leon could keep the laptop for the
specific purpose of responding to the auditors. The April 30
and May 9 letters cautioned that Leon should take care to pre-
serve all data; one letter specifically warned that Leon should
“ensure no data on the laptop is lost or corrupted so as to
avoid any possible despoliation of evidence.” The audit was
completed in July, and by October, counsel for both sides
were negotiating the return of the laptop. IDX’s computer
forensics expert received the laptop on February 5, 2004.
                     LEON v. IDX SYSTEMS CORP.                      11695
   After conducting a forensic analysis, IDX’s expert reported
that all data in the hard drive’s unallocated space had been
intentionally wiped, and also reported that the computer had
been used to view and download pornography. The expert
concluded that more than 2,200 files had been deleted. After
receiving this information, IDX moved for dismissal of
Leon’s action based on Leon’s intentional spoliation of evi-
dence.

   In his deposition, Leon admitted deleting entire directories
of personal files after he was placed on leave by IDX in April
2003. He also stated that the week before he shipped the com-
puter back to IDX he wrote a program to “wipe” any deleted
files from the unallocated space in the hard drive. He also
admitted that some of these files included pornographic con-
tent.

   The district court held an evidentiary hearing on September
8, 2004, at which Leon did not appear. The court commented
at the hearing that Leon’s behavior was “very egregious” and,
from the written documents, “appears to be without remorse.”
The court found Leon’s written testimony “to be extremely
evasive” and that Leon “can’t answer a straight question
that’s being posed.”

   After considering the parties’ additional video submission
of Leon’s deposition, the court granted IDX’s motion to dis-
miss on September 30, 2004. The district court relied on its
“wide range of inherent powers” in issuing the sanction. It
first discussed Leon’s duty to preserve the data on the laptop,
holding that Leon “knew or should have known that he was
in possession of evidence relevant to pending litigation by
April 30, 2004.”1 It then discussed the extent of prejudice to
  1
   The district court’s reference here to “April 30, 2004” appears to be a
typographical error. The quoted sentence clearly is referring to the letter
of April 30, 2003, to Leon’s counsel, which is mentioned in the sentence
immediately preceding the quoted sentence.
11696                LEON v. IDX SYSTEMS CORP.
IDX as a result of the spoliation, observing that “a wealth of
‘personal’ material . . . could be relevant to Dr. Leon’s ADA
and employment-related claims,” such as communications
with health care providers or with realtors regarding his relo-
cation from Seattle. “[B]ecause of Dr. Leon’s actions there is
no way of knowing what might have been stored on the lap-
top’s hard-drive and no reliable way of recreating what might
have been there.” Accordingly, the court concluded that the
deletion and wiping of the files “severely prejudice[s]” IDX.

   The court also found that Leon acted in bad faith. While
Leon claimed that his wiping of relevant evidence was merely
negligent because he meant to wipe only “personal” informa-
tion, “Dr. Leon did not have the authority to make unilateral
decisions about what evidence was relevant in this case.” The
court concluded “that the extraordinary measures to which Dr.
Leon resorted to destroy evidence relevant to this litigation
merit a finding of bad-faith.”

   Turning to the choice of sanction, the court found that dis-
missal was the appropriate sanction because a ruling exclud-
ing evidence would be “futile, as the most salient evidence
has been destroyed,” a jury presumption in favor of the
defense would be ineffectual, and a fine would not “arm the
Defense with evidence to counter Plaintiff’s claim.” Regard-
ing the monetary sanction of $65,000, which was IDX’s sub-
mitted cost of investigating and litigating the spoliation issue,
the court “reviewed this information and [found] the charges
and costs listed therein to be reasonable.”

   On October 14, 2004, IDX filed its motion to enjoin, under
the All Writs Act, the DOL’s administrative proceeding. At
that time the DOL2 was still conducting its investigation of
IDX. The district court denied this motion, finding a lack of
  2
   While the parties refer to the agency as the “DOL,” the specific agency
within the DOL responsible for the SOX investigation is the Occupational
Safety and Health Administration (“OSHA”).
                     LEON v. IDX SYSTEMS CORP.                     11697
identity or privity between Leon and the DOL; consequently,
it held that res judicata did not bar the agency proceedings
against IDX. The court subsequently denied IDX’s motion for
reconsideration of this decision, adhering to its view that priv-
ity was not satisfied and observing that SOX gives OSHA the
right to petition for review of a settlement agreement, thus
showing that OSHA is not a “mere proxy” for the complain-
ing party. The court noted that the agency proceedings were
still investigative, and that res judicata principles apply only
to adjudicative proceedings.

   On June 20, 2005, the DOL issued its findings and order,
in which it concluded that “[t]here is reasonable cause to
believe that [IDX] has violated the [SOX] Act.” The DOL did
not refer to the district court’s dismissal of Leon’s claims, but
seemed to incorporate the spoliation findings when it limited
the amount of Leon’s back wages because there was “reason-
able cause to believe that [IDX] would have fired [Leon] on
June 11, 2004, regardless of his protected activities, based on
its discovery that [Leon] had downloaded pornography on a
company computer.” The DOL ordered IDX to pay Leon back
wages, compensatory damages, and reasonable attorneys’
fees; provide a neutral employment reference for Leon and
expunge negative employment records; post the “enclosed
Notice to Employees in a conspicuous place;” “[c]omply with
all the terms and provisions of the Notice;” and refrain from
future retaliation against Leon. The enclosed Notice stated,
inter alia, that IDX “agrees it will not discharge or in any
manner discriminate against any employee” who files a com-
plaint under SOX.3
   3
     Presumably because of the DOL’s findings and order, summarized
above, the parties do not pursue the investigative/adjudicative nature of
the DOL proceeding on appeal. Because the parties have not raised it, we
do not address it. See Arpin v. Santa Clara Valley Transp. Agency, 261
F.3d 912, 919 (9th Cir. 2001) (stating that “issues which are not specifi-
cally and distinctly argued and raised in a party’s opening brief are
waived”) (citation omitted).
11698             LEON v. IDX SYSTEMS CORP.
  Leon timely appealed the dismissal of his action and the
monetary sanction. IDX timely appealed the district court’s
denials of the injunction and the motion for reconsideration.

                 STANDARD OF REVIEW

   We review the district court’s imposition of spoliation
sanctions for an abuse of discretion. Anheuser-Busch, Inc. v.
Natural Beverage Distribs., 69 F.3d 337, 348 (9th Cir. 1995)
(applying the abuse of discretion standard to sanctions levied
pursuant to Fed. R. Civ. P. 37 as well as to sanctions issued
pursuant to the court’s “inherent power”). The district court’s
factual findings, including findings of bad faith and prejudice,
are reviewed for clear error. Id.; see also Fjelstad v. Am.
Honda Motor Co., 762 F.2d 1334, 1337 (9th Cir. 1985).
“[T]he district court’s credibility determinations are entitled
to special deference.” Anheuser-Busch, 69 F.3d at 348 (cita-
tion omitted). Issues of law underlying the district court’s
denial of injunctive relief, including the determination that a
party’s claims are not barred by res judicata, are reviewed de
novo. Milberg Weiss Bershad Hynes & Lerach v. Lexicon Inc.
(In re Am. Cont’l Corp./Lincoln Sav. & Loan Sec. Litig.), 102
F.3d 1524, 1535 (9th Cir. 1996), rev’d on other grounds, 523
U.S. 26 (1998).

                        DISCUSSION

I.   The Dismissal Sanction

   There are two sources of authority under which a district
court can sanction a party who has despoiled evidence: the
inherent power of federal courts to levy sanctions in response
to abusive litigation practices, and the availability of sanctions
under Rule 37 against a party who “fails to obey an order to
provide or permit discovery.” Fjelstad, 762 F.2d at 1337-38;
FED. R. CIV. P. 37(b)(2)(C). In this case, the district court
relied on its “inherent authority” in sanctioning Leon because
                      LEON v. IDX SYSTEMS CORP.                       11699
Leon’s conduct was not in violation of any discovery order
governed by Rule 37.

   [1] Dismissal is an available sanction when “a party has
engaged deliberately in deceptive practices that undermine the
integrity of judicial proceedings” because “courts have inher-
ent power to dismiss an action when a party has willfully
deceived the court and engaged in conduct utterly inconsistent
with the orderly administration of justice.” Anheuser-Busch,
69 F.3d at 348 (internal quotation marks and citations omit-
ted). Before imposing the “harsh sanction” of dismissal, how-
ever, the district court should consider the following factors:
“(1) the public’s interest in expeditious resolution of litiga-
tion; (2) the court’s need to manage its dockets; (3) the risk
of prejudice to the party seeking sanctions; (4) the public pol-
icy favoring disposition of cases on their merits; and (5) the
availability of less drastic sanctions.”4 Id.

   [2] While the district court need not make explicit findings
regarding each of these factors, United States ex rel. Wiltec
Guam, Inc. v. Kahaluu Constr. Co., 857 F.2d 600, 603 (9th
Cir. 1988), a finding of “willfulness, fault, or bad faith” is
required for dismissal to be proper. Anheuser-Busch, 69 F.3d
at 348 (citation omitted). Additionally, the district court must
consider “less severe alternatives” than outright dismissal.
Wiltec-Guam, 857 F.2d at 604. The district court here did not
explicitly refer to the five-factor test articulated in Anheuser-
Busch, but did specifically consider Leon’s “level of culpabil-
ity,” the prejudice suffered by IDX, and the availability of
lesser sanctions.5
  4
     Although this five-factor test is usually used to review the propriety of
Rule 37 sanctions, this same test was applied in Anheuser-Busch to review
sanctions granted under a court’s “inherent power.” See 69 F.3d at 348.
Accordingly, we also apply the five-factor test.
   5
     The first two Anheuser-Busch factors, although not discussed by the
district court, support the district court’s decision to dismiss Leon’s case.
Leon’s destruction of 2,200 files on his employer-issued computer
11700                LEON v. IDX SYSTEMS CORP.
  A.    Bad Faith

   A party’s destruction of evidence qualifies as willful spolia-
tion if the party has “some notice that the documents were
potentially relevant to the litigation before they were
destroyed.” United States v. Kitsap Physicians Serv., 314 F.3d
995, 1001 (9th Cir. 2002) (emphasis added) (internal quota-
tion marks and citation omitted). Moreover, because “the rele-
vance of . . . [destroyed] documents cannot be clearly
ascertained because the documents no longer exist,” a party
“can hardly assert any presumption of irrelevance as to the
destroyed documents.” Alexander v. Nat’l Farmers Org., 687
F.2d 1173, 1205 (8th Cir. 1982).

   The district court concluded that Leon’s behavior amounted
to willful spoliation because he knew he was under a duty to
preserve all data on the laptop, but intentionally deleted many
files and then wrote a program to write over deleted docu-
ments. The court rejected Leon’s explanation that the deleted
documents were “personal,” observing that “personal” docu-
ments are highly relevant to an employment discrimination
claim and noting the IDX-proffered evidence that work-
related documents were also deleted and written over. The
district court’s finding that Leon acted in bad faith is not
clearly erroneous.

   Leon admits that he intended to destroy information,
including evidence of pornographic files, but he contends that
his intent was merely to protect his privacy. Leon had ample

“greatly impeded resolution of the case” by obscuring the factual predicate
of the case and consuming months of sanction-related litigation. See
Malone v. U.S. Postal Serv., 833 F.2d 128, 131 (9th Cir. 1987) (holding,
in a brief but “independent” review of the five factors, that the first two
factors supported the dismissal sanction because the district court was pre-
vented from adhering to its trial schedule). Here, there was ample evi-
dence of the time and resources spent in investigating and resolving the
spoliation issues.
                   LEON v. IDX SYSTEMS CORP.               11701
notice, however, that the files he destroyed were not merely
“private” and were potentially relevant to the litigation at
hand. Leon ran the wiping program, eliminating over 2,200
files, including pornographic files, well after IDX had filed its
action for declaratory judgment and he had filed his own
employment discrimination action. IDX’s declaratory judg-
ment action sought to establish whether IDX could legally fire
Leon for his “failure to satisfactorily perform his job duties.”
Therefore, Leon was on notice that files created on his
employer-issued computer were relevant to a lawsuit center-
ing on the existence of legitimate grounds for firing Leon. For
example, IDX’s employee guide specifically forbids “access
or sending of sexually oriented messages or images of any
kind.” Leon was on notice that files created in violation of this
IDX company policy would be relevant to IDX’s lawsuit
against him. His deletion and “wiping” of 2,200 files, acts that
were indisputably intentional, amounted to willful spoliation
of relevant evidence. Accordingly, the district court’s finding
was not clearly erroneous.

  B.   Prejudice

   The prejudice inquiry “looks to whether the [spoiling
party’s] actions impaired [the non-spoiling party’s] ability to
go to trial or threatened to interfere with the rightful decision
of the case.” Wiltec Guam, 857 F.2d at 604 (citation omitted).
In Anheuser-Busch, we found prejudice when a party’s refusal
to provide certain documents “forced Anheuser to rely on
incomplete and spotty evidence” at trial. 69 F.3d at 354.

   The district court found that IDX would be prejudiced by
Leon’s deletion of the files. The district court discussed types
of “personal” files that could have helped IDX with its case,
including Leon’s correspondence with realtors and financial
institutions (relevant to the timing of his decision to resign
from IDX); communications with health care providers
regarding work-related illness (relevant to his ADA claim);
and the timing of and efforts to find other employment. The
11702                LEON v. IDX SYSTEMS CORP.
court noted that there was no way of recreating the contents
of these files, and discounted Leon’s contention that IDX
should have examined the laptop’s contents earlier or should
examine the IDX network for files relevant to Leon and the
litigation.

   We conclude that the district court’s finding is not clearly
erroneous. As the district court observed, the types of files
Leon would have deleted out of privacy concerns would
“likely be at the heart of IDX’s defense were [the files] avail-
able.” Leon’s spoliation “threatened to distort the resolution”
of the case, see Wiltec Guam, 857 F.2d at 604, because any
number of the 2,200 files could have been relevant to IDX’s
claims or defenses, although it is impossible to identify which
files and how they might have been used.6 Because of the
obvious relevance of Leon’s “personal” files to the litigation
and the harm to IDX caused by Leon’s destruction of these
files, the district court did not clearly err in its finding of prej-
udice.

  C.    Lesser Sanctions

   In reviewing whether the district court properly considered
lesser sanctions prior to dismissing Leon’s case, we examine:
“(1) whether the district court explicitly discussed the feasibil-
ity of less drastic sanctions and explained why such alternate
sanctions would be inappropriate; (2) whether the district
court implemented alternative sanctions before ordering dis-
missal; and (3) whether the district court warned the party of
the possibility of dismissal before ordering dismissal.”
Anheuser-Busch, 69 F.3d at 352 (citation omitted).

   The district court found that “less drastic sanctions are not
useful” because a ruling excluding evidence would be “fu-
tile,” and fashioning a jury instruction that creates a presump-
  6
   For example, one of the wiped files identified in the computer forensics
report was named “SAGE_assesment_Key strategic issues.doc.”
                  LEON v. IDX SYSTEMS CORP.               11703
tion in favor of IDX “would leave Defendants equally
helpless to rebut any material that Plaintiff might use to over-
come the presumption.” The district court therefore satisfied
the first criterion. The second criterion is inapplicable here
because Leon erased the files and ran the wiping program
before the district court had an opportunity to compel discov-
ery or otherwise order “lesser sanctions.” Likewise, the third
criterion, which examines whether the district court warned
the party, is inapplicable here because the destruction of the
evidence occurred before the court had any opportunity to
warn Leon. See Malone, 833 F.2d at 133 (observing that
“[f]ailure to warn has frequently been a contributing factor in
our decisions to reverse orders of dismissal,” but also holding
that an explicit warning was “unnecessary” in certain circum-
stances).

   [3] In sum, four of the five Anheuser-Busch factors support
the district court’s decision to dismiss. The prejudice to IDX,
and the unavailability of lesser sanctions weigh heavily in
favor of dismissal. Also, the need to manage the court’s
docket, as well as the public interest in expeditious resolution
of litigation, weigh in favor of dismissal. The only factor
weighing against dismissal is “the public policy favoring dis-
position of cases on their merits,” which, standing alone, “is
not sufficient to outweigh the other four factors.” See Malone,
833 F.2d at 133 n.2. Additionally, the bad-faith determina-
tion, which is a prerequisite to dismissing a case pursuant to
a court’s inherent power, see Anheuser-Busch, 69 F.3d at 348,
was not clearly erroneous. “Although dismissal was harsh,”
Yourish v. Cal. Amplifier, 191 F.3d 983, 992 (9th Cir. 1999),
we do not disturb the district court’s choice of sanction unless
we have a “definite and firm conviction that the district court
committed a clear error of judgment in the conclusion it
reached upon a weighing of the relevant factors,” id. (internal
quotation marks and citation omitted). In this case, we do not
have such a conviction. We therefore affirm the dismissal
sanction.
11704            LEON v. IDX SYSTEMS CORP.
II.   The Monetary Sanction

   [4] Under its “inherent powers,” a district court may also
award sanctions in the form of attorneys’ fees against a party
or counsel who acts “in bad faith, vexatiously, wantonly, or
for oppressive reasons.” Primus Auto. Fin. Servs., Inc. v.
Batarse, 115 F.3d 644, 648 (9th Cir. 1997) (discussing a sanc-
tion against an attorney) (citation omitted). Before awarding
such sanctions, the court must make an express finding that
the sanctioned party’s behavior “constituted or was tanta-
mount to bad faith.” Id. (citation omitted). A party “demon-
strates bad faith by delaying or disrupting the litigation or
hampering enforcement of a court order.” Id. at 649 (internal
quotation marks and citation omitted). The bad faith require-
ment ensures that the district court’s exercise of its broad
power is properly restrained, and “preserves a balance
between protecting the court’s integrity and encouraging mer-
itorious arguments.” Id. Additionally, the amount of monetary
sanctions must be “reasonable.” Brown v. Baden (In re Yag-
man), 796 F.2d 1165, 1184 (9th Cir.), as amended by 803
F.2d 1085 (1986) (reviewing a Rule 11 sanction but announc-
ing a standard applicable to other sanctions as well).

   [5] The district court made an explicit finding that Leon
acted in bad faith, as discussed in Section I-A, supra, which
is the primary prerequisite for sanctions issued pursuant to a
court’s inherent power. Leon’s only argument on appeal is
that the sanction was “excessive” because not all the attor-
neys’ fees requested by IDX were attributable to the spolia-
tion issue. The district court, however, found that IDX’s
accounting of fees was reasonable. Upon reviewing the record
on this issue, we find no clear error in the district court’s
determination that the fees were related to the spoliation
motion and were reasonable. We thus affirm the monetary
sanction as within the district court’s broad discretion.
                    LEON v. IDX SYSTEMS CORP.                     11705
III.   The Injunction

   The district court denied IDX’s motion to enjoin the DOL’s
investigation and adjudication of Leon’s SOX complaint, and
subsequently denied IDX’s motion for reconsideration of that
decision.7 The court’s decision turned on its determination
that there was no privity between Leon and the DOL. IDX
appeals, arguing that the requirements for res judicata were
satisfied because the DOL was in privity with Leon.

   [6] The All Writs Act “empowers a district court to issue
injunctions to enforce judgments and to reinforce the effects
of the doctrines of res judicata and collateral estoppel.” Charl-
ton v. Estate of Charlton, 841 F.2d 988, 989 (9th Cir. 1988)
(citation omitted); see also 28 U.S.C. § 1651(a). Res judicata
applies when the earlier suit: (1) reached a final judgment on
the merits; (2) involved the same cause of action or claim; and
(3) involved identical parties or privies. Sidhu v. Flecto Co.,
279 F.3d 896, 900 (9th Cir. 2002).

   [7] The first requirement is satisfied, because a dismissal
with prejudice is a determination on the merits. See Beard v.
Sheet Metal Workers Union, Local 150, 908 F.2d 474, 477 n.3
(9th Cir. 1990) (“Federal law dictates that a dismissal with
prejudice bars a later suit under res judicata.”). The second
requirement, identity of the cause of action, is also satisfied,
because the SOX claim involves largely the same nucleus of
facts — the time, cause, and circumstances of Leon’s termina-
tion vis-a-vis his whistle-blowing activities — as Leon’s
claim under the False Claims Act and his other whistle-
blower claims. See Burlington N. Santa Fe R.R. v. Assiniboine
& Sioux Tribes of Fort Peck Reservation, 323 F.3d 767, 770
  7
   Because we conclude that the district court erred in denying IDX’s
motion for an injunction, we need not address the appeal from the court’s
denial of reconsideration.
11706                 LEON v. IDX SYSTEMS CORP.
(9th Cir. 2003) (“Identity of claims exists when two suits arise
from the same transactional nucleus of facts.”).8

   [8] Finally, we must decide whether the third requirement,
which examines the identity of the parties, has also been satis-
fied in this case. The district court concluded that Leon and
the DOL were not privies because their interests differed —
the DOL represents a “broad public interest,” whereas Leon
was seeking only money damages. We disagree. When “[t]he
Secretary [of Labor] is suing for employee-specific rights of
precisely the sort [plaintiff] already pursued” then the “requi-
site closeness of interests for privity is present.” Chao v. A-
One Med. Servs., Inc., 346 F.3d 908, 923 (9th Cir. 2003)
(applying the remedial scheme of the Fair Labor Standards
Act) (internal quotation marks omitted). The Chao court
found determinative the fact that the Secretary sought to
recoup the plaintiff’s personal economic loss, “not to vindi-
cate broader governmental interests by, for example, seeking
an injunction.” Id. Similarly, the remedies available under
SOX include only individual compensatory remedies, includ-
ing reinstatement, back pay, litigation costs, expert witness
fees, and reasonable attorneys’ fees. See 18 U.S.C. § 1514A.
Injunctive and other broad remedial relief is not available
under the statute.9 See id.; see also 29 C.F.R. §§ 1980.105,
  8
     The fact that Leon did not actually bring a SOX claim does not pre-
clude the satisfaction of the identity of claims requirement, because he
could have amended his complaint to add the SOX claim after 180 days
had passed without any action by the DOL. See 18 U.S.C. § 1514A
(b)(1)(B) (“[I]f the Secretary has not issued a final decision within 180
days of the filing of the complaint” a litigant can “bring[ ] an action at law
or equity for de novo review in the appropriate district court of the United
States, which shall have jurisdiction over such an action.”).
   9
     Leon contends that the DOL seeks broader, non-private remedies
because the DOL ordered that IDX, in addition to providing back wages,
compensatory damages, and attorneys’ fees, was also required to “post the
enclosed Notice to Employees in a conspicuous place” for 60 days. The
Notice to Employees states, inter alia, that the employer agrees not to dis-
charge or discriminate against any employee who files a complaint under
                     LEON v. IDX SYSTEMS CORP.                       11707
.109 (listing the remedies that can be awarded by the agency,
all of which are compensatory). We conclude that, under
Chao, the private nature of the remedy sought by the DOL
demonstrates that the agency is in privity with Leon. See also
EEOC v. U.S. Steel Corp., 921 F.2d 489, 496 (3d Cir. 1990)
(determining that privity is satisfied when the agency “seeks
individualized benefits under the ADEA for particular griev-
ants”).

   [9] Because all of the requirements of res judicata are satis-
fied, the district court erred in denying the injunction based on
lack of privity. We therefore reverse the order denying the
injunction and remand for the district court to consider
whether it should, in the exercise of its discretion, enjoin the
DOL’s proceedings under the All Writs Act. See Clark v.
Busey, 959 F.2d 808, 813 (9th Cir. 1992) (discussing applica-
tion of the All Writs Act to injunctions of administrative pro-
ceedings); DeNardo v. Murphy, 781 F.2d 1345, 1348 (9th Cir.
1986) (discussing application of the All Writs Act to injunc-
tions of adjudicative proceedings).

                           CONCLUSION

   The district court did not abuse its discretion when it
imposed a terminating sanction dismissing with prejudice
Leon’s action and imposed a monetary sanction. Because,
however, the court erred in concluding that the privity ele-
ment of res judicata was not satisfied, we reverse and remand
the case to the district court to determine whether an injunc-

the whistle-blower provisions of SOX. SOX and its implementing regula-
tions, however, do not appear to authorize this type of remedy. See 18
U.S.C. § 1514A; 29 C.F.R. § 1980.105. It is therefore, at the least, unclear
what authority supports the issuance of such an order. In any event, we are
not persuaded that the mere additional requirement of posting a notice
alone is sufficient to alter the private nature of the remedy sought by the
DOL. We note further that, although it filed a brief in the district court,
the DOL has not participated in these proceedings on appeal.
11708            LEON v. IDX SYSTEMS CORP.
tion should be issued pursuant to the All Writs Act. IDX shall
recover of Leon its costs on appeal.

  In No. 04-35938, the judgment is AFFIRMED.

   In No. 05-35426, the order denying the injunction is
REVERSED and REMANDED for further proceedings con-
sistent with this opinion.