1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 8 MENGYANG DAI, et al., Case No. 24-cv-00356-VKD

9 Plaintiffs, ORDER RE SANCTIONS v. 10

11 ERDAN LIU, et al., Defendants. 12

13 14 On July 16, 2025, the Court held a hearing on its order directing the parties to show cause 15 why they should not be sanctioned for their failure to comply with the Court’s Standing Order re 16 Pretrial Preparation and May 12, 2025 order (Dkt. No. 102). At the hearing, each side was given 17 an opportunity to be heard. See Dkt. No. 107. Based on the discussion held at the hearing, the 18 Court orders as follows: 19 District courts have inherent authority to manage their dockets and courtrooms with a view 20 toward the efficient and expedient resolution of cases. Dietz v. Bouldin,

(2016). 21 The Court’s inherent power is “governed not by rule or statute but by the control necessarily 22 vested in courts to manage their own affairs so as to achieve the orderly and expeditious 23 disposition of cases.” Link v. Wabash R. Co.,

(1962). Moreover, federal 24 courts have inherent power to impose monetary or other sanctions in order to control the conduct 25 of the proceedings, protect the “orderly administration of justice” and to maintain “the authority 26 and dignity of the court.” Roadway Express, Inc. v. Piper,

(1980) (citations 27 omitted). 1 motion, “may issue any just orders, including those authorized by Rule 37(b)(2)(A)(ii)-(vii), if a 2 party or its attorney: (A) fails to appear at a scheduling or other pretrial conference; (B) is 3 substantially unprepared to participate—or does not participate in good faith—in the conference; 4 or (C) fails to obey a scheduling or other pretrial order.” Fed. R. Civ. P. 16(f)(1). “Instead of or in 5 addition to any other sanction, the court must order the party, its attorney, or both to pay the 6 reasonable expenses—including attorney’s fees—incurred because of any noncompliance with 7 this rule, unless the noncompliance was substantially justified or other circumstances make an 8 award of expenses unjust.” Fed. R. Civ. P. 16(f)(2). As the purpose of Rule 16 is “to encourage 9 forceful judicial management, a court has broad discretion to sanction attorneys and parties who 10 fail to comply with the court’s reasonable case management orders.” Smith v. Humboldt Cnty. 11 Sheriff’s Office Corr. Facility, No. 24-cv-01035-PHK,

(N.D. Cal. Jan. 7, 2025) 12 (quotations and citations omitted). 13 As the parties utterly failed to comply with the Court’s Standing Order re Pretrial 14 Preparation1 and the May 12, 2025 Order (Dkt. No. 97), the Court was unable to proceed with the 15 July 16, 2025 final pretrial conference, which was scheduled more than a year ago (see Dkt. No. 16 21). At the show cause hearing, neither side offered a persuasive reason explaining why they 17 could not comply with the Court’s ordered deadlines. While plaintiffs’ counsel, Xiaoyong Lai, 18 stated that he experienced recurring bouts of allergies beginning in April 2024, that does not 19 explain why he could not have timely sought an extension well before June 25, 2025 (when the 20 court-ordered pretrial deadlines began to run), or why he did not attempt to obtain a stipulation for 21 an extension of time until July 9, 2025, i.e., after most of the court-ordered deadlines had already 22 passed and on the day the parties’ joint pretrial statement was due. Defendants’ counsel, Zheng 23 Liu, also provided no reasonable explanation for defendants’ non-compliance. Defendants’ 24 references to scheduling mishaps after the trial was continued are implausible. As defendants 25 themselves noted in a recent filing, the Court’s May 12, 2025 order expressly stated that 26 notwithstanding the continuance of the trial, the final pretrial conference remained set for July 16, 27 1 2025, and the parties were expected to comply with the deadlines set in the Standing Order re 2 Pretrial Preparation. See Dkt. No. 97; see also Dkt. No. 101.2 Noting that defendants may dismiss 3 their counterclaims, defendants’ counsel further stated that defendants could not comply with their 4 obligations and deadlines under the Standing Order re Pretrial Conferences because plaintiffs also 5 failed to comply with their respective obligations. As discussed at the July 16, 2025 hearing, the 6 contemplated dismissal of defendants’ counterclaims is irrelevant, and defendants’ obligations to 7 comply with the Standing Order re Pretrial Preparation are not contingent on plaintiffs’ 8 compliance with that order. 9 The Court’s records reflect that this is not the first time the parties or their counsel have 10 been admonished to comply with relevant standing orders and/or the Civil Local Rules. See Dkt. 11 Nos. 46, 54, 58, 79, 96, 102. 12 The Court finds that the parties’ failure to comply with the Standing Order re Pretrial 13 Preparation and the May 12, 2025 order warrants the imposition of sanctions as follows: 14 1. Each law firm currently representing the parties is sanctioned in the amount of $500.00 15 payable to the Clerk of the Court by July 24, 2025. The law firms shall not bill their 16 clients for the sanctions amount or require their clients to pay the sanctions amount. 17 2. Each attorney who will try this case must complete a bar-approved CLE course or 18 courses on pretrial and trial practice before the federal courts. The Court strongly 19 recommends that counsel complete the CLE courses before the November 3, 2025 start 20 of trial. However, the Court requires counsel to complete the CLE courses within six 21 months from the date of this order, i.e., January 12, 2026.3 Within 10 court days of 22 the completion of the CLE courses, counsel must file with the Court a certification, 23 under oath, attesting that they have completed the CLE courses by the January 12, 24 2026 deadline. Counsel’s certification must attach any certificate of completion from 25

26 2 Although defendants characterize the May 12, 2025 order as an “admonish[ment to] Plaintiff[s]” (see Dkt. No. 101 at 1), that order was directed to all parties. 27 1 the CLE provider. 2 IT IS SO ORDERED. 3 Dated: July 16, 2025 4 ¢ oe 5 Virginia K. DeMarchi 6 United States Magistrate Judge 4 8 9 10 11 12

15 16

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