In re TFT-LCD (Flat Panel) Antitrust Litigation
In re TFT-LCD (Flat Panel) Antitrust Litigation
Opinion of the Court
ORDER RE CIVIL CONTEMPT AND AWARD OF SANCTIONS AGAINST OBJECTORS ALISON PAUL, LEVETA CHESSER, AND THEIR COUNSEL JOSEPH DARRELL PALMER
On December 5, 2012, class counsel for the Indirect-Purchaser Plaintiff Class Actions (“IPPs”) filed a Renewed Motion for an Order to Show Cause re Finding of Civil Contempt and Award of Sanctions against Objectors Alison Paul, Leveta Chesser, and their counsel, Joseph Darrell Palmer. The Court
BACKGROUND
Objectors Alison Paul and Johnny Kessel, unnamed class members in the Indirect-Purchaser Class Action, first filed an objection around April 13, 2012, in response to the IPP Motion for Preliminary Approval to the Round 1 Settlements. Docket No. 5531. On April 20, 2012, IPP counsel served Paul and Kessel with deposition notices and document production demands. In response, Joseph Darrell Palmer, counsel to Paul and Kessel, sent a letter to IPP counsel explaining that he would not produce his clients for deposition without a court order. Docket No. 6885-13. The Court preliminarily approved the Round 1 Settlements on July 11, 2012, see Docket No. 6130, and Paul and Kessel filed a Notice of Appeal with the Ninth Circuit on August 6, 2012, see Docket No. 6388.
On September 6, 2012, IPP counsel served Paul with a subpoena issued from the Southern District of California, where she lives,
In October of 2012, IPP counsel moved to compel the depositions of various objectors, including Paul and Kessel, see Docket No. 6884. Palmer opposed the motion, arguing that the Court lacked jurisdiction, that the objectors were not subject to the Special Master’s jurisdiction, that IPP counsel sought privileged material as well as irrelevant material, and that the requests were unduly burdensome, see Docket No. 6952. In addition, a motion that Paul had filed in the Southern District of California, to quash the deposition subpoena served on Paul there, was transferred to this District for decision here; it was opposed by IPP counsel.
On October 18, 2012, the Special Master conducted a telephonic hearing on these issues,
A few days before the Special Master issued this Order, Kessel and a new objector, Leveta Chesser,
IPP counsel followed up with Palmer by phone and email to schedule the depositions of Paul and Kessel, and requested that he accept service on behalf of Chesser. Palmer responded by email, threatening to bring claims of legal malpractice against the Zelle
In response to their objections to the Special Master’s Order, IPP counsel filed a(l) Response to Paul and Kessel Objections to Special Master’s Order and (2) Cross-Motion for Order to Show Cause regarding finding of Civil Contempt and Award of Sanctions Against Paul, Kessel, and Palmer. Docket No. 7129. The motion also requested that the Court compel Leveta Chesser to participate in discovery on the same terms as Paul and Kessel, as set out in the Special Master’s Order. On November 14, 2012, this Court issued an Order (1) denying Paul’s and Kessel’s objections to Special Master’s Order, (2) denying the IPP’s requested OSC re civil contempt and sanctions, and (3) compelling the depositions of Paul, Kessel, and Chesser by November 21, 2012. Dkt. No. 7152. Palmer was specifically “ORDERED to communicate with and cooperate with IPP counsel in scheduling these depositions.” Id. Kessel appeared for deposition on November 20, 2102, but Paul and Chesser did not.
IPP counsel thereafter filed a Renewed Motion for Order to Show Cause re Finding Civil Contempt and Award of Sanctions Against Paul, Chesser, and Palmer for failure to comply with the Court’s November 14, 2012 Order and for Palmer’s unprofessional conduct at Kessel’s deposition. Docket No. 7296. IPP counsel seek a civil contempt finding and award of monetary and dismissal sanctions in the amount of $10,000 for attorneys’ fees and $1,154.11 in costs associated with its efforts in pursuing these depositions. Id. Palmer filed an Opposition to the IPP’s Renewed Motion raising the same objections as in previous briefings and arguing that IPP counsel exceeded the scope of permissible topics ordered by the Special Master at Kessel’s deposition. Docket No. 7397.
On January 9, 2013, the issued an OSC, ordering Paul, Chesser, and Palmer to show cause why the Court should not find them in civil contempt and award sanctions. Docket. No. 7465.
LEGAL STANDARD
Rule 37(b)(1) of the Federal Rules of Civil Procedure provides, “[i]f the court where the discovery is taken orders a deponent to be sworn or to answer a question and the deponent fails to obey, the failure may be treated as contempt of court.”
In fashioning civil contempt sanctions, the court has the discretion to award reasonable fees and costs as a remedial measure, regardless of whether the party that is in contempt acted wilfully. Perry v. O'Donnell, 759 F.2d 702, 704-705 (9th Cir. 1985); General Ins. Co. v. Eastern Consol. Util., Inc., 126 F.3d 215, 220 (3d Cir. 1997) (upholding monetary sanction of expenses and attorney’s fees for non-party’s failure to appear at a deposition).
DISCUSSION
The Court’s January 9, 2013, Order required Objectors Paul and Chesser, and their counsel Palmer, to show cause why the Court should not find them in civil contempt and award sanctions. The Order set a hearing date of February 12, 2013. See Docket No. 7465. In their response, Objectors and Palmer argue that IPP counsel were attempting to conduct “needless depositions” of the Objectors; that Objectors and Palmer have not engaged in any sanetionable or improper conduct; and that IPP counsel have not shown any prejudice by the inability to conduct the depositions. Docket No. 7584.
At the hearing on February 12, 2013, Palmer argued that his wife, Ms. Paul, did not want to appear for deposition, and Mr. Palmer knew of no precedent where an attorney could be held responsible for his client’s failure to attend a deposition. He also challenged IPP’s service of Paul, arguing that after the motion to quash the subpoena was transferred from the Southern District of California to the Northern District of California, the date for the noticed deposition had passed, and thus, IPP counsel were required to issue a new subpoena. IPP counsel asserted its repeated attempts, in light of each objectors’ failure to provide their address on their objections, to serve objectors and their requests to Palmer that he accept service on their behalf.
The Court concludes that IPP counsel have demonstrated, by clear and convincing evidence, that Objectors Paul and Chesser, and their counsel, Palmer, violated the Court’s November 14, 2012 Order requiring Paul and Chesser to appear for deposition. Although Palmer asserted at the hearing that he should not be held accountable for Paul’s refusal to comply with the Court Order, the Court finds this assertion disingenuous. From the time Paul was served with a deposition notice on April 20, 2012, Palmer refused to produce his client without a Court order. Once a Court order was issued requiring his clients to appear for deposition, Palmer continued to refuse to produce his clients on the same grounds he had asserted to the Special Master and to the Court and that had been repeatedly rejected. He has never asserted in any briefing that Paul did
The Court also finds Palmer’s assertion that IPP counsel were attempting to conduct “needless depositions” of Objectors without merit. This Court’s Order compelling discovery participation of Paul and Chesser speaks to the contrary. The November 14, 2012 Order observed and approved the Special Master’s order that the scope of document requests and depositions be limited to relevant information. Palmer also asserts that IPP counsel have not been prejudiced and thus, sanctions are unwarranted. Consideration of prejudice to the movant, however, is only relevant in cases where sever sanctions such as dismissal may be awarded. See Adriana Intern. Corp. v. Thoeren, 913 F.2d 1406, 1412 (9th Cir. 1990). The cases cited by Palmer similarly involve more severe sanctions than monetary sanctions. Although the Court could find that Palmer acted willfully, and thus award dismissal sanctions, the Court declines to strike the objections raised by Paul and Chesser. See In re Phenylpropanolamine (PPA) Products Liability Litig., 460 F.3d 1217, 1233 (9th Cir. 2006) ([dismissal, the most drastic sanction, generally requires a finding that the conduct was “due to willfulness, bad faith or fault of the party,” including “[disobedient conduct not shown to be outside the litigants’s control.”). As such, Palmer’s argument is without merit.
Accordingly, because Paul, Chesser, and Palmer have failed to demonstrate that they took efforts to comply with the Court’s order or provide sufficient justification for failing to comply with the Order, the Court hereby holds Paul, Chesser, and Palmer in civil contempt and awards monetary sanctions to compensate IPP counsel for fees incurred pursuing the depositions after the Court issued its November 14, 2013 Order. The Court will award sanctions in the amount of $9,254.11, which represents $8,100 of attorneys’ fees spent attempting to secure compliance with this Court’s November 14, 2012 Order plus an additional $1,154.11 in costs. See Docket No. 7613, Supplemental Declaration of Patrick B. Clayton, ¶ 6; Docket No. 7296-1, Scarpulla Declaration, ¶ 4.
The Court therefore orders as follows:
1. Pursuant to Fed.R.Civ.P. 37(b)(1), Joseph Darrell Palmer, Alison Paul, and Leveta Chesser are in civil contempt of this Court for their failure to comply with the Order filed on November 14, 2012, directing Paul and Chesser to appear for deposition and Palmer to communicate and coordinate with IPP counsel to schedule the depositions.
2. Objectors Alison Paul and Leveta Chesser, and their counsel, Joseph Darrell Palmer, are SANCTIONED in the amount of $9,254.11, jointly and severally.
3. This Order is stayed for ten days from the date of the Order to Show Cause hearing held on February 12, 2013, in order to allow contemnors to seek a stay from the Ninth Circuit Court of Appeals.
IT IS SO ORDERED.
. Alison Paul is attorney Palmer's wife.
. Palmer did not appear for this telephonic hearing.
. Leveta Chesser is Palmer’s aunt.
. In its Order for Final Approval of the Round 1 Settlements, the Court overruled objections to the Round 1 Settlements. See Docket No. 6130, ¶ 14. Alison Paul did not file objections to the Round 2 Settlement. However, the substance of Paul’s Round 1 objections involved topics that were specifically reserved for later review in the Round 2 Settlement process. See Docket No. 6130, ¶ 15. As to such topics (class attorneys' fees, expenses, and awards, and allocation) Paul’s objections remain at issue.
. Although the deposition was noticed in the Southern District of California, where Paul lives, that court transferred Paul’s motion to quash to the Northern District of California and held that ”[a]ny determinations relating to the district court’s jurisdiction pending the appeal to the Ninth Circuit should be made by the MDL court in Northern District of California.” Thus, Rule 37(b)(1), which refers to “where the discovery is taken,” will still be applicable here, in the Northern District of California. See also 28 U.S.C. § 1407(b) (authorizing the transferee judge to “exercise the powers of a district judge in any district for the purpose of conducting pretrial depositions”); U.S. ex rel. Pogue v. Diabetes Treatment Centers of America, Inc., 444 F.3d 462, 468-69 (6th Cir. 2006) ("A judge presiding over an MDL case ... can compel production by an extra-district nonparly; enforce, modify, or quash a subpoena directed to an extra-district nonparty; and hold an extra-district nonparty deponent in contempt, notwithstanding the non-party's physical situs in a foreign district where discovery is being conducted.”) (citing 28 U.S.C. § 1407(b)).
. Palmer's response was due by 1/31/13 but was not filed until February 2, 2013. Palmer requested that the Court allow the late filing, offering several dramatic reasons for the late filing. See Dkt. No. 7584. The Court has allowed and considered the late filing, and the IPP’s subsequent reply, in making its determination.
. Palmer’s conduct could be sanctioned under the Court’s inherent authority. See 28 U.S.C. § 1927 ("Any attorney .... who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys’ fees reasonably incurred because of such conduct").
Reference
- Full Case Name
- In re TFT-LCD (FLAT PANEL) ANTITRUST LITIGATION
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- 6 cases
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- Published