Court Opinion

ID: 9489947
Source: CourtListenerOpinion
Date Created: 2023-08-05 13:28:49.505409+00
Date Added: 2024-06-11T17:53:49.268891
License: Public Domain

FLETCHER, Circuit Judge,
dissenting:
I respectfully dissent. The majority affirms a default judgment of-1.8 million dollars against a defendant for failure to appear at a deposition that was never noticed. Fed. R.Civ.P. 30, requires that a party “desiring to take the deposition of any person upon oral examination shall give reasonable notice in writing to every other party to the action.” That did not happen here.
The court on January 5,1995 set a February 10,1995 deadline to complete the deposition of the defendant. It ordered the defendant tc appear “in either Las Vegas, Nevada or in Taiwan. If Defendant declines to appear for deposition in Las Vegas, then the Defendant shall prepay all expenses for Plaintiffs counsel to travel to Taiwan to take Defendant’s deposition.” This order was the result of Hwang’s second failure to appear for a noticed deposition. The order also *526included a $2,100 sanction against Hwang to cover plaintiffs attorneys’ fees.
On January 24, 1995, plaintiffs counsel notified defendant’s counsel of its intent to take defendant’s deposition. Previously he had estimated costs of the Taiwan deposition to be between $20,000 and $40,000. In the letter he asked “which option defendant has selected.” On January 30, 1995, defendant’s counsel left a telephone message, confirmed by letter on February 3, 1995, that “Mr. Hwang does not intend to appear for deposition in Las Vegas and will not prepay $20,000 to $40,000, which we received as an estimate for plaintiffs expenses to have Mr. Hwang’s deposition in China.” No further communication between the parties occurred and the deadline passed.
On this record, the district court awarded Stars’ a $1,885,000 default judgment, plus prejudgment interest, costs, attorney’s fees and post-judgment interest.- This wás an abuse of discretion.
Hwang argues that Stars’ estimate of $20,-000 to $40,000 in expenses to take a deposition in Taiwan was unreasonable and contends that airfares and hotel rates, in early 1995, indicate a cost closer to $2,000 for one person to fly to Taiwan, spend two nights in a hotel, and record the deposition by tape recorder, as provided by Fed.R.Civ.P. Rule 30(b)(2).
The district court relied on Fed.R.Civ.P. 37(d) for the proposition that even if the estimate was unreasonable, it was Hwang’s responsibility to file for a protective order in order to be protected from the consequences of his “failure to act.” Rule 37(d), however, states that a judge may make orders in regard to the failure to act “[i]f a party ... fails (1) to appear before the officer who is to take the deposition, after being served with a proper notice.” (emphasis added).
Hwang, however, was not served with any notice, let alone a “proper notice”. Further, while Hwang did not offer a reasonable estimate of the costs, neither did Stars’. The breakdown of communication on both sides after Hwang’s February 3, 1995 letter should not result in a default judgment against Hwang; it appears clear that Stars’ $20,000-$40,000 estimate was excessive. The district court places the responsibility for a reasonable estimate on Hwang, yet in the telephonic conference call concerning plaintiffs second motion for sanctions, the court specifically decided not to specify a dollar amount associated with the prepaid expenses in the order, but instead decided to “let you two work that out.” That implies a mutual responsibility to arrive at an agreed upon figure. Both parties are at fault in failing to negotiate a fair figure.
The court also uses Hwang’s failure to pay the $2,100 sanction as justification for the default. As the majority correctly notes, Wanderer v. Johnston, 910 F.2d 652, 656 (9th Cir.1990) lays out a five-factor test that a district court must consider before entering a default judgment against a defendant for failure to comply adequately with discovery obligations. The fifth factor, the availability of less drastic sanctions, is dispositive here. It was clearly Hwang’s responsibility to pay the sanction. However, I can think of many less drastic sanctions than a 1.8 million dollar judgment, plus costs and interest, for the failure to pay $2,100.
On this record, neither party is blameless. Stars’ did not notice a deposition, supply a good-faith estimate of costs, or make any effort after February 3, 1995 to negotiate a satisfactory time, place, or manner of discovery in order to meet the court’s February 10 deadline. Further, it failed to allege how not deposing Hwang would prejudice its case: it offers no evidence of information that it expected to adduce at the deposition or why it could not simply proceed to trial. The action was for a gambling debt incurred by Hwang at Stars’ casino.
Default and dismissal are sanctions which are authorized only in “extreme circumstances.” Fjelstad v. American Honda Motor Co., Inc., 762 F.2d 1334, 1338 (9th Cir.1985). I find such circumstances absent here. Both parties contributed to the failure to meet the court’s February 10 deadline. Accordingly, I dissent.