Acevedo v. Russell Cellular, Inc. ( 2023 )

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 EASTERN DISTRICT OF CALIFORNIA 9 10 MARCO ACEVEDO, Case No. 1:20-cv-01440-JLT-SAB 11 Plaintiff, ORDER REQUIRING MICHAEL FREIMAN TO SHOW CAUSE WHY FURTHER 12 v. SANCTIONS SHOULD NOT BE IMPOSED, WHY HE SHOULD NOT BE HELD IN 13 RUSSELL CELLULAR, INC., CONTEMPT, AND WHY HE SHOULD NOT BE DISBARRED FROM THE 14 Defendant. EASTERN DISTRICT OF CALIFORNIA 15 (ECF Nos. 50, 55) 16 SEVEN DAY DEADLINE 17 18 I. 19 BACKGROUND 20 Plaintiff Marco Acevedo initiated this action in state court on September 8, 2020. (ECF 21 No. 1-3.) On October 8, 2020, Defendant Russell Cellular, Inc. removed the action to this Court. 22 (ECF No. 1.) On May 19, 2021, the Court stayed this matter to allow the parties to participate in 23 arbitration. (ECF No. 15.) Since then, the parties, though primarily Plaintiff through counsel 24 Michael Freiman (“Counsel” or “Mr. Freiman”), failed to demonstrate diligence in moving this 25 case forward through arbitration, and failed to timely or appropriately submit status reports or 26 otherwise respond to the Court’s orders. The Court issued numerous orders to show cause, and 27 imposed monetary sanctions on Plaintiff and Counsel. (See ECF Nos. 20, 21, 23, 27, 30, 34, 35, 36, 38, 40, 43, 46.) 1 On June 9, 2022, the Court ordered Mr. Freiman to pay the Clerk of the Court a total 2 sanctions amount $1,400.00, to be paid within thirty (30) days of entry of the order; to report the 3 sanctions to the State Bar of California within thirty (30) days of entry of the order; and to file a 4 declaration attesting to reporting to the State Bar of California within forty (40) days of entry of 5 the order. (ECF No. 50.) On the same date, the Court also issued findings and recommendations 6 that this action be dismissed for failure to prosecute. (ECF No. 51.) 7 On July 12, 2022, because Mr. Freiman had not paid the sanctions amount by the end of 8 the thirty (30) day deadline, the Court issued an order to show cause on or before July 18, 2022, 9 as to why further sanctions should not be imposed. (ECF No. 55.) Mr. Freiman did not respond 10 to the July 12, 2022 order, and additionally, the forty (40) day deadline to file a declaration 11 regarding reporting to the State Bar of California expired and Mr. Freiman filed no such 12 declaration. Therefore, on July 20, 2022, the Court issued an order imposing further daily 13 sanctions. (ECF No. 56.) Therein, the Court noted it was “concerned that counsel has not filed 14 anything in this action since June 3, 2022, when Mr. Freiman declared he was suffering from 15 COVID-19.” (Id. at 2.) The Court also noted that subsequently this case was closed. (Id.) The 16 Court decided to impose further sanctions, but did not have the sanctions begin accruing until the 17 close of business on July 20, 2022, despite Mr. Freiman not submitting anything between June 9, 18 2022, and July 20, 2022. (Id.) Specifically, the Court ordered that Mr. Freiman pay the previous 19 sanctions amount of $1,400.00, plus an additional $50 sanction for each day the Court is open 20 and that the total sanction amount had not been paid, and a declaration to the State of California 21 has not been filed. (Id. at 3.) The Court additionally added a footnote to make the amount of 22 sanctions due on a given date clear, stating: “In other words, if Mr. Freiman pays the original 23 sanction amount of $1,400 and files the declaration before the close of business on July 20, 2022, 24 whether or not in response to this order, that will be the final amount due. If paid on July 21, 25 2022, before close of business, he shall pay $1,450. If he pays on July 22, 2022, before close of 26 business, he shall pay $1,500, and so on.” (Id. at 3 n.1.) 27 On March 15, 2023, Mr. Frieman paid the Court $1,400.00 in sanctions. No other filings 1 II. 2 LEGAL STANDARD 3 The Federal Rules of Civil Procedure provides that the underlying purpose of the rules is to 4 “secure the just, speedy and inexpensive determination” of an action. Fed. R. Civ. P. 1. To 5 effectuate this purpose, the rules provide for sanctions against parties that fail to comply with court 6 orders or that unnecessarily multiply the proceedings. See, e.g., Fed. R. Civ. P. 16(f); Fed. R. Civ. 7 P. 37(b). Rule 16(f) authorizes the Court to issue any just order if a party or attorney fails to obey 8 a scheduling or other pretrial order. 9 The Court also possesses inherent authority to impose sanctions to manage its own affairs 10 so as to achieve the orderly and expeditious disposition of cases. Chambers v. NASCO, Inc., 501 11 U.S. 32, 43 (1991). The Court’s inherent power is that which is necessary to the exercise of all 12 others, including to protect the due and orderly administration of justice and maintain the authority 13 and dignity of the Court. Roadway Exp., Inc. v. Piper, 447 U.S. 752, 764 (1980). In order to 14 coerce a party to comply with the Court’s orders, the Court may issue sanctions for every day that 15 party fails to respond to the Court’s orders to show cause. See Lasar v. Ford Motor Co., 399 F.3d 16 1101, 1110 (9th Cir. 2005) (discussing court’s authority to impose civil sanctions “intended to be 17 remedial by coercing the defendant to do what he had refused to do.”). 18 Similarly, the Local Rules of the Eastern District of California provide that “[f]ailure of 19 counsel or of a party to comply with these Rules or with any order of the Court may be grounds 20 for imposition by the Court of any and all sanctions authorized by statute or Rule or within the 21 inherent power of the Court.” L.R. 110. Local Rule 180(e) provides: “Every member of the Bar 22 of this Court, and any attorney permitted to practice in this Court under (b), shall become 23 familiar with and comply with the standards of professional conduct required of members of the 24 State Bar of California and contained in the State Bar Act, the Rules of Professional Conduct of 25 the State Bar of California, and court decisions applicable thereto, which are hereby adopted as 26 standards of professional conduct in this Court.” L.R. 180(e). 27 Further, “[i]n the event any attorney subject to these Rules engages in conduct that may 1 contempt under 18 U.S.C. § 401 or Fed. R. Crim. P. 42, or may, after reasonable notice and 2 opportunity to show cause to the contrary, take any other appropriate disciplinary action against 3 the attorney.” L.R. 184(a). “In addition to or in lieu of the foregoing, the Judge or Magistrate 4 Judge may refer the matter to the disciplinary body of any Court before which the attorney has 5 been admitted to practice.” Id. 6 “Courts have the ability to address the full range of litigation abuses through their 7 inherent powers.” F.J. Hanshaw Enterprises, Inc. v. Emerald River Dev., Inc., 244 F.3d 1128, 8 1136 (9th Cir. 2001). “While it is preferable that courts utilize the range of federal rules and 9 statutes dealing with misconduct and abuse of the judicial system, courts may rely upon their 10 inherent powers to sanction bad faith conduct even where such statutes and rules are in place.” 11 Id. at 1136–37. 12 III. 13 DISCUSSION 14 On March 15, 2023, Mr. Freiman paid $1,400.00 to the Court, but not the total amount 15 due under the $50 per day additional sanction. Mr. Freiman also did not file a declaration 16 attesting to compliance with the Court’s order to file a declaration regarding reporting to the 17 State Bar of California. Therefore, Mr. Freiman is still in non-compliance with the Court’s July 18 20, 2022, order imposing further sanctions, nor the Court’s June 9, 2022 order. (ECF Nos. 50, 19 56.) In the Court’s July 20, 2022 order, the Court further warned Mr. Freiman that “contempt 20 hearings may follow if the sanctions are not paid.” (ECF No. 56 at 2.) By the Court’s 21 calculation, it appears if Mr. Freiman were to make a payment on March 16, 2023, he would owe 22 an additional amount of $8,050.00. 23 Therefore, the Court shall issue an order to show cause why further sanctions should not 24 be imposed for the failure to comply with the Court’s orders, why Mr. Freiman should not be 25 held in contempt, and why Mr. Freiman should not be disbarred from practicing in the Eastern 26 District of California. 27 / / / 1 IV. 2 ORDER 3 Accordingly, IT IS HEREBY ORDERED that within seven (7) days of entry of this 4 | order, Mr. Freiman shall show cause in writing as to why further sanctions should not be 5 | imposed for the failure to comply with the Court’s orders dated June 9, 2022, and July 20, 2022; 6 | why Mr. Freiman should not be held in contempt; and why Mr. Freiman should not be disbarred 7 | from practicing in the Eastern District of California. 8 9 IT IS SO ORDERED. DAA (e_ 10 | Dated: _March 16, 2023 _ UNITED STATES MAGISTRATE JUDGE 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28