Rosenstiel v. McDonald

U.S. District Court, District of Minnesota August 26, 2024

Trial Court Opinion

                UNITED STATES DISTRICT COURT                             
                    DISTRICT OF MINNESOTA                                


Michael Rosenstiel, II,            Case No. 23-cv-1876 (NEB/TNL)         

          Plaintiff,                                                     

v.                              REPORT AND RECOMMENDATION                

John Paul McDonald,                                                      

          Defendant.                                                     


                       I. INTRODUCTION                                   

    This matter is before the Court, United States Magistrate Judge Tony N. Leung, on 
Plaintiff Michael Rosenstiel, II’s Motion for Sanctions Against  Defendant John Paul 
McDonald, ECF No. 51. This motion has been referred to the undersigned for a report and 
recommendation to the district court, the Honorable Nancy E. Brasel, District Judge for the 
United States District Court for the District of Minnesota, under

28 U.S.C. § 636

and D.
Minn. LR 72.1. The Court took the motion under advisement, on the papers, without a
hearing. ECF No. 57; see also D. Minn. LR 7.1(b). For the reasons set forth below, the
Court recommends that Plaintiff’s motion for sanctions be granted.
II. BACKGROUND
According to Plaintiff, issues relating to discovery began with Defendant’s failure
to attend his own deposition, see Pl.’s Mem. in Supp. at 1, ECF No. 52, resulting in multiple
amended pretrial scheduling orders, see ECF Nos. 16 and 19. On April 23, 2024, Plaintiff
filed a Motion to Compel Discovery Responses. ECF No. 28. Plaintiff contended that it
served Defendant with its Second Set of Interrogatories on March 13, 2024 via U.S. Mail,
and Defendant had not responded to the interrogatory. Decl. of Aaron Ponce ¶¶ 8-9, ECF

No. 31; see also Ex. 1 to Ponce Decl., ECF No. 34; Pl.’s Mem. in Supp. of Mot. for
Discovery at 2, ECF No. 30. Plaintiff moved for an order compelling Defendant to respond
to Plaintiff’s interrogatory. ECF No. 28. Defendant never responded to Plaintiff’s motion.
Plaintiff has already brought a second motion to compel, see ECF No. 44, relating to his
newly permitted punitive damages claim, see ECF No. 38, and Defendant also failed to
respond to Plaintiff’s second motion to compel. See ECF No. 57.

On May 7, 2024, the Court granted Plaintiff’s Motion to Compel Discovery
Responses. See ECF No. 38. The Court incorporates its May 7, 2024 Order by reference
herein. As relevant to the pending motion before the Court, the May 7, 2024 Order required
Defendant to “serve its answers to Plaintiff’s interrogatory within 21 days” of the Court’s
May 7, 2024 Order.

Id.

According to Plaintiff, Defendant has not complied with the Court’s

May 7, 2024 Order. Pl.’s Mem. in Supp. at 4, ECF No. 52. Specifically, “Defendant has
not responded nor has he offered any viable justification for his non-response.” Id.; Decl.
of Aaron Ponce ¶ 10, ECF No. 53.
On July 22, 2024, Plaintiff filed his motion for sanctions against Defendant for his
non-compliance with the Court’s May 7, 2024 Order. ECF No. 51. Plaintiff moves the

Court to enter default judgment as to liability against Defendant and to award Plaintiff his
reasonable attorney’s fees incurred in bringing its motion for sanctions. Pl.’s Mem. in Supp.
at 3-5, ECF No. 52. Defendant did not file a responsive memorandum of law and any
affidavits or exhibits, nor request an extension of time to do so.
III. ANALYSIS
Pursuant to Rule 37(b)(2) of the Federal Rules of Civil Procedure, Plaintiff moves

the Court to enter default judgment against Defendant as to liability and award Plaintiff his
reasonable attorney’s fees incurred in bringing its motion for sanctions. Pl.’s Mem. in Supp.
at 3-5, ECF No. 52.
Under Rule 37, if a party “fails to obey an order to provide or permit discovery,” a
court may issue an order that includes the following:

(i) directing that the matters embraced in the order or other
designated facts be taken as established for purposes of the
action, as the prevailing party claims;

(ii) prohibiting the disobedient party from supporting or opposing
designated claims or defenses, or from introducing designated
matters in evidence;

(iii) striking pleadings in whole or in part;

(iv) staying further proceedings until the order is obeyed;

(v) dismissing the action or proceeding in whole or in part;

(vi) rendering a default judgment against the disobedient party; or

(vii) treating as contempt of court the failure to obey any order
except an order to submit to a physical or mental examination.

Fed. R. Civ. P. 37(b)(2)(A)(i)-(vii). Instead of, or in addition to, these sanctions, “the court
must order the disobedient party, the attorney advising that party, or both to pay the
reasonable expenses, including attorney’s fees, caused by the failure, unless the failure was
substantially justified or other circumstances make an award of expenses unjust.” Fed. R.
Civ. P. 37(b)(2)(C).
Rule 37 sanctions are “not merely to penalize those whose conduct may be deemed
to warrant such a sanction, but to deter those who might be tempted to such conduct in the

absence of such a deterrent.” Nat’l Hockey League v. Metro. Hockey Club, Inc.,

427 U.S. 639, 643

 (1976) (per curiam). “A court’s discretion to issue Rule 37 sanctions is bounded 
by the requirement of Rule 37(b)(2) that the sanction be just and relate to the claim at issue 
in  the  order  to  provide  discovery.”  Owens  v.  Linn  Companies,  No.  16-cv-776 
(WMW/TNL),

2017 WL 2304260

, at *11 (D. Minn. Apr. 17, 2017) (quotations omitted), 
report and recommendation adopted,

2017 WL 2304210

 (D. Minn. May 25, 2017), aff’d, 

720 Fed. App’x 816 (8th Cir. 2018).                                       
    “If a party . . . fails to obey an order to provide or permit discovery . . . the court 
where the action is pending may issue further just orders,” such as “rendering a default 
judgment against the disobedient party.” Fed. R. Civ. P. 37(b)(2)(A)(vi). “Entry of default 
judgment as a sanction should be a ‘rare judicial act.’” United States v. Yennie,

585 F. Supp. 3d 1194

, 1199 (D. Minn. 2022) (quoting Edgar v. Slaughter,

548 F.2d 770, 773

 (8th 
Cir. 1977)). “The sanction of default judgment under Rule 37 may be appropriate when a 
party’s ‘failure to comply with discovery has been due to . . . willfulness, bad faith, or any 
fault of that party.’” Yennie, 585 F. Supp. 3d at 1199 (quoting Societe Internationale Pour 
Participations Industrielles Et Commerciales, S.A. v. Rogers,

357 U.S. 197, 212

 (1958)). 

“When the facts show willfulness and bad faith . . . the district court need not investigate 
the propriety of a less extreme sanction.” Everyday Learning Corp. v. Larson,

242 F.3d 815

, 817–18 (8th Cir. 2001). “[T]he selection of a proper sanction . . . is entrusted to the 
sound discretion of the district court.” Avionic Co. v. Gen. Dynamics Corp.,

957 F.2d 555, 558

 (8th Cir. 1992). However, “default judgment is not an appropriate sanction for a 
marginal failure to comply with time requirements.” Ackra Direct Mktg. Corp. v. Fingerhut 

Corp.,

86 F.3d 852, 856

 (8th Cir. 1996) (quotation marks omitted). Willfulness and bad 
faith are found where a party has repeatedly failed to engage in discovery. See, e.g., 
Forsythe v. Hales,

255 F.3d 487, 490

 (8th Cir. 2001) (affirming default-judgment sanction 
because defendants failed to engage in discovery, failed to appear at depositions and 
hearings, and failed engage with counsel for numerous months); Everyday Learning Corp.,

242 F.3d at 818

  (affirming  default-judgment  sanction  because  defendant  repeatedly 

violated a court order, delayed production of documents, evaded subpoenas, and sought 
untimely  discovery);  Comiskey  v.  JFTJ Corp.,

989 F.2d 1007, 1009

  (8th  Cir. 1993) 
(affirming default-judgment because defendant violated numerous court orders and failed 
to comply with discovery requests).                                       
    In this matter, Defendant has delayed the progress of this matter by being non-

responsive with respect to discovery matters. Defendant has failed to attend at least one 
deposition, failed to respond to multiple motions for discovery, and has failed to respond 
to several discovery requests, even when ordered to do so by this Court. Defendant has also 
failed to respond to Plaintiff’s motion for sanctions and has failed to provide an explanation 
for his failure to comply with his discovery obligations. Defendant’s defiance is more than 

“a marginal failure to comply with time requirements.” Ackra Direct Mktg. Corp.,

86 F.3d at 856

. Therefore, the Court recommends finding that Defendant has willfully and in bad
faith violated the Federal Rules of Civil Procedure and this Court’s May 7, 2024 Order.
This type of conduct warrants a default-judgment sanction as to liability.
Furthermore, in addition to the above sanction, “the court must order the disobedient
party, the attorney advising that party, or both to pay the reasonable expenses, including

attorney’s fees, caused by the failure, unless the failure was substantially justified or other
circumstances make an award of expenses unjust.” Fed. R. Civ. P. 37(b)(2)(C). The Court
recommends ordering Defendant, but not Defendant’s former attorney, to reimburse
Plaintiff all reasonable expenses and attorney’s fees associated with bringing the motion
for sanctions. Fed. R. Civ. P. 37(b)(2)(C).1
Accordingly, Defendant shall pay Plaintiff reasonable expenses and attorney’s fees

incurred in bringing his motion for sanctions. Plaintiff shall file no later than September
6, 2024 an affidavit setting forth the time reasonably spent on his motion for sanctions, the
hourly rate requested for attorney’s fees, any expenses incurred in bringing the motion for
sanctions, and any factual matters pertinent to attorney’s fees. Defendant shall file any and
all objections to Plaintiff’s affidavit no later than September 20, 2024. Further, to the

extent he has not already done so, the Court will again order Defendant to respond fully
and appropriately to Plaintiff’s discovery requests as set forth in the Court’s May 7, 2024
Order. As a final matter, Defendant is warned, and Plaintiff should also take heed, that the
Court will not hesitate to impose additional appropriate sanctions should the record reflect
a continuing pattern of Defendant’s failure to comply with its discovery obligations.

1 An award of attorney’s fees and costs associated with Plaintiff bringing its motion for sanctions is also appropriate
under this District’s Local Rules for Defendant’s failure to timely file and serve a responsive memorandum of law and
any affidavits and exhibits. See D. Minn. LR 7.1(g)(4) (“If a party fails to timely file and serve a memorandum of law,
the court may: . . . (4) award reasonable attorney’s fees to the opposing party . . . .”). As noted above, Defendant did
not file a responsive memorandum of law and any affidavits or exhibits, nor request an extension of time to do so.
IV. RECOMMENDATION
Based on the foregoing, and all of the files, records, and proceedings herein, and for

the reasons stated above, IT IS HEREBY RECOMMENDED that:
1. Plaintiff’s Motion for Sanctions Against Defendant John Paul McDonald, ECF
No. 51, be GRANTED.

2. Defendant shall reimburse Plaintiff all reasonable expenses and attorney’s fees
associated with bringing his motion for sanctions.

3. On or before September 6, 2024, Plaintiff shall file an affidavit setting forth
the time, reasonably spent on his motion for sanctions, the hourly rate requested
for attorney’s fees, any expenses incurred in bringing the motion for sanctions,
and any factual matters pertinent to attorney’s fees.

4. On or before September 20, 2024, Defendant shall file any and all objections
to Plaintiff’s affidavit.

5. All prior consistent orders remain in full force and effect.

6. Failure to comply with any provision of this Order or any other prior consistent
Order shall subject the non-complying party, non-complying counsel and/or the
party such counsel represents to any and all appropriate remedies, sanctions and
the like, including without limitation: assessment of costs, fines and attorneys’
fees and disbursements; waiver of rights to object; exclusion or limitation of
witnesses, testimony, exhibits and other evidence; striking of pleadings;
complete or partial dismissal with prejudice; entry of whole or partial default
judgment; and/or any other relief that this Court may from time to time deem
appropriate.

Dated: August 26, 2024 s/ Tony N. Leung
Tony N. Leung
United States Magistrate Judge
District of Minnesota

Rosenstiel v. McDonald,
Case No. 23-cv-1876 (NEB/TNL)

NOTICE

Filing Objections: This Report and Recommendation is not an order or judgment of the
District Court and is therefore not appealable directly to the Eighth Circuit Court of
Appeals.

Under Local Rule 72.2(b)(1), “a party may file and serve specific written objections to a
magistrate judge’s proposed finding and recommendations within 14 days after being
served a copy” of the Report and Recommendation. A party may respond to those
objections within 14 days after being served a copy of the objections. LR 72.2(b)(2). All
objections and responses must comply with the word or line limits set for in LR 72.2(c).