Court Opinion

ID: 215797
Source: CourtListenerOpinion
Date Created: 2011-04-30 00:01:33+00
Date Added: 2024-06-11T17:28:25.868503
License: Public Domain

FILED
                           NOT FOR PUBLICATION                              APR 29 2011

                                                                        MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U .S. C O U R T OF APPE ALS

                            FOR THE NINTH CIRCUIT

E. & J. GALLO WINERY, a California               No. 09-17550
corporation,
                                                 D.C. No. 1:03-cv-05412-LJO-DLB
             Plaintiff - Appellee,

  v.                                             MEMORANDUM *

GIBSON, DUNN & CRUTCHER LLP,

             Petitioner - Appellant,

ENCANA ENERGY SERVICES, INC.;
ENCANA CORPORATION,

             Defendants.

                   Appeal from the United States District Court
                       for the Eastern District of California
                   Lawrence J. O’Neill, District Judge, Presiding

                       Argued and Submitted April 14, 2011
                            San Francisco, California

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Before: GOODWIN and N.R. SMITH, Circuit Judges, and BLOCK, Senior
District Judge.**

      In an underlying action Plaintiff/Appellee E. & J. Gallo Winery sued

EnCana Corporation and WD Energy Services, Inc. for their roles in a natural gas

price fixing scheme. Defendant’s counsel, Gibson, Dunn & Crutcher, LLP, after

numerous discovery violations, directly contacted counsel for a key third-party

witness in a successful attempt to delay a deposition. A magistrate judge found that

Gibson Dunn manipulated late-hour events to avoid the witness’s appearance,

raised issues of dubious merit regarding service, and that Gibson Dunn’s actions

vexed and burdened Gallo and the court. Citing the court’s inherent authority, the

magistrate judge awarded $92,078.97 payable to Gallo, and ordered an additional

$10,000 payable to the court.1

      This court reviews for abuse of discretion an award of sanctions granted

under a court’s inherent power. Chambers v. NASCO, Inc., 501 U.S. 32, 55 (1991);

and Weissman v. Quail Lodge, Inc., 179 F.3d 1194, 1198 (9th Cir. 1999).

          **
             The Honorable Frederic Block, Senior U.S. District Judge for the
Eastern District Court of New York, sitting by designation.
      1
       Strictly speaking, our review is of the district court’s order denying Gibson
Dunn’s motion to reconsider the magistrate judge’s order. For the sake of
simplicity, however, we address the magistrate judge’s order.

                                          2
      Rule 30(b)(1)2 requires “reasonable notice in writing” to parties for any

deposition. Rule 5(b)(2)(D) allows for service of a notice by electronic means

when the person being served has consented to electronic service in a writing.

Local Rule 5-135(g)(1) explains that registration with the CM/ECF system, except

where an attorney has opted out, constitutes “consent to receive service

electronically and waiver of the right to receive service by first class mail pursuant

to Fed. R. Civ. P. Rule 5(b)(2)(D).” Rule 32(d)(1) provides, “All errors and

irregularities in the notice for taking a deposition are waived unless written

objection is promptly served upon the party giving the notice.”

      Here, service of notice of the deposition of the third-party witness was

proper under the local rules. It is undisputed that Gibson Dunn also had actual

notice of the deposition. Gibson Dunn never sought a protective order, nor

objected in writing to any notice. Objection to the notice was therefore waived.

      A court may levy a sanction on the basis of its own inherent power “when a

party has acted in bad faith, vexatiously, wantonly or, for oppressive reasons.”

Chambers, 501 U.S. at 45-46 (citations and internal quotation marks omitted).

      2
        All references to “Rules” refer to the Federal Rules of Civil Procedure 2005
Edition, as amended to January 21, 2005. “Local Rules” refer to the Local Rules of
Practice for the United States District Court, Eastern District of California,
effective April 15, 1997, including amendments received through December 1,
2004.

                                           3
“Bad faith” is exhibited, for instance, by the act of delaying or disrupting litigation.

Id. at 46. In this circuit, “[b]efore awarding sanctions under its inherent powers . . .

the court must make an explicit finding that counsel's conduct constituted or was

tantamount to bad faith.” Mendez v. County of San Bernardino, 540 F.3d 1109,

1131 (9th Cir. 2008) (internal quotation marks and citation omitted).

      The magistrate judge found that the result of Defendants’ counsel’s actions

was “to vex and burden” Plaintiff and the court. This language tracks that used by

the Chambers Court to make a bad faith finding. See 501 U.S. at 45-46. While the

magistrate judge did not use language that made an explicit finding of bad faith,

the “vex and burden” language is tantamount to such a finding. See Mendez, 540

F.3d at 1131. There is no abuse of discretion.

      Finally, all similar incidents of a party’s past misconduct in a case are under

review in determining the propriety of sanctions. Adriana Int’l Corp. v. Thoeren,

913 F.2d 1406, 1411-12 (9th Cir. 1990). This is true even when monetary sanctions

for those past bad acts have already been levied. See id. at 1410-11. To be

considered in a sanctions proceeding, past misconduct should be of a similar type,

for example, all discovery violations. Id. at 1412.

                                            4
      Here, the magistrate judge reviewed Gibson Dunn’s past misconduct during

the litigation. All of the misconduct described by the magistrate judge concerned

discovery violations. No error was committed in reviewing this past misconduct.

      AFFIRMED.

                                         5