Sundby v. Marquee Funding Group, Inc. ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 DALE SUNDBY, Case No.: 3:19-cv-00390-GPC-AHG 12 Plaintiff, ORDER: 13 v. (1) QUASHING ORDER TO SHOW 14 MARQUEE FUNDING GROUP, INC., CAUSE AGAINST EDITH SUNDBY et al., AND RUSSEL MYRICK; 15 Defendants. 16 (2) DENYING AS MOOT MOTION TO MODIFY ORDER TO SHOW 17 CAUSE; 18 (3) DENYING THE INVESTOR 19 DEFENDANTS’ MOTION FOR 20 FURTHER SANCTIONS; and 21 (4) ISSUING SANCTIONS AGAINST 22 PLAINTIFF DALE SUNDBY 23 [ECF Nos. 143, 188] 24 25 26 27 28 1 This matter comes before the Court upon consideration of the matters raised in the 2 Court’s Order to Show Cause (ECF No. 132), Plaintiff’s initial and supplemental written 3 responses to the Order to Show Cause (ECF Nos. 139, 155), the testimony at the 4 June 15, 2020 Show Cause Hearing (ECF No. 148), and the Investor Defendants’1 Motion 5 for further sanctions and related briefing (ECF Nos. 188, 191, 199). 6 I. BACKGROUND 7 As recounted in the Order to Show Cause (ECF No. 132), which is incorporated by 8 reference herein, Plaintiff did not want the Rule 45 deposition of his wife, Edith Sundby, 9 to proceed as scheduled on May 29, 2020, absent an agreement from defense counsel that 10 they would not use certain discovery documents as exhibits during Mrs. Sundby’s 11 deposition. Plaintiff’s concern regarding the documents arose during Plaintiff’s 12 May 28, 2020 deposition, when defense counsel used the documents as deposition exhibits. 13 The exhibits at issue included: (1) Exhibit 17, an April 2017 email from Plaintiff to 14 R.J. Solovy, the Vice President of Defendant Marquee Funding Group, Inc. (“Marquee”) 15 (the “April 2017 email”); (2) Exhibit 118, a letter attached to Exhibit 17, sent by Plaintiff 16 to an executive at Morgan Stanley & Co, regarding Plaintiff’s offer for an exclusive 17 licensing deal for a patent-pending innovation (the “Morgan Stanley letter”); (3) 18 Exhibit 32, a May 2018 email from Plaintiff to Mr. Solovy (the “May 2018 email”); and 19 (4) Exhibit 33, Mr. Solovy’s email in response to Plaintiff’s email in Exhibit 32 (the 20 “Solovy response email”). See ECF No. 139, Exs. 4-7. 21 Plaintiff contended the documents contained confidential information and asked 22 23 24 1 The Investor Defendants include Salomon Benzimra, Trustee, Stanley Kesselman, 25 Trustee, Jeffrey Myers, Kathleen Myers, Andres Salsido, Trustee, Benning Management Group 401(k) Profit Sharing Plan, Christopher Myers, Vickie McCarty, Delores 26 Thompson, Kimberly Gill Rabinoff, Steven Cobin, Trustee, Susan Cobin, Trustee, Equity 27 Trust Company, Custodian FBO Steven M. Cobin Traditional IRA, Todd B. Cobin, Trustee, Barbara A. Cobin, Trustee, and Fasack Investments, LLC. 28 1 defense counsel to agree to redact them or else not use them during his wife’s deposition 2 the next day. Defense counsel would not agree to the redactions. Edith Sundby’s deposition 3 was slated to move forward the following morning at 10:00 a.m. 4 At 9:13 a.m. on May 29, 2020, Plaintiff sent an email to defense counsel and counsel 5 for his wife, Russel Myrick, with the subject line “Motion for Protective Order – 6 Suspension of Edith Littlefield Sundby’s Deposition Pursuant to FRCP 30(d)(3)(A).” ECF 7 No. 139 at 52. The body of the email read: 8 Pursuant to FRCP 30 et seq., and subsequent to our failed meet and 9 confer efforts at yesterday’s deposition, I am hereby demanding the witness deposition currently set for 10:00 a.m. today be “suspended for the time 10 necessary to obtain an order.” FRCP 30(d)(3)(A). 11 I intend to move for a protective order under seal to limit the scope of this deposition promptly. 12 13 Id. Mr. Myrick responded three minutes later at 9:16 a.m.: “Received and understood. 14 Please advise me when the Court has ruled on the motion so that we may re-calendar the 15 deposition.” Id. 16 Three minutes after Mr. Myrick responded to Plaintiff’s email, at 9:19 a.m., counsel 17 for the Investor Defendants Troy Slome also replied to all recipients, stating that he had 18 spoken to Lew Landau, counsel for Marquee, “and informed him that I will not be 19 introducing Exhibits 17, 32, and 33 at the deposition of Edith Sundby today. However, I 20 am reserving all rights to use Exhibits 17, 32, and 33 in the remainder of the case and at 21 trial.” Id. at 54. Additionally, Mr. Slome reminded Plaintiff that the Court requires parties 22 to participate in a telephonic discovery conference with the Court before motion practice 23 on any discovery dispute is permitted. Id. Accordingly, Mr. Slome asked Plaintiff to 24 confirm that he was available to speak to the undersigned that morning, and stated that he 25 would contact the undersigned’s law clerk to set a hearing. Id. Mr. Slome received no 26 response. 27 Mr. Slome promptly contacted the Court to intervene. The Court set the issue for an 28 immediate hearing on the docket (ECF No. 128) and began attempting to contact all parties 1 involved to ensure they knew of the hearing. However, as set forth in detail in the Court’s 2 Order to Show Cause and recounted by the undersigned’s law clerks on the record during 3 the show cause hearing, the Court was unable to contact Mr. Myrick, Plaintiff, or Mrs. 4 Sundby, despite endeavoring to do so for over an hour by email and phone. See ECF No. 5 132 at 4-5; ECF No. 134 at 4-8. See also ECF No. 139, Ex. 14 (emails sent by chambers 6 staff to Plaintiff, Mr. Myrick, and Mrs. Sundby on the morning of May 29, 2020 regarding 7 the hearing). Although the hearing was initially set for 10:20 a.m., the Court eventually 8 commenced the hearing at 11 a.m. with only Mr. Slome and Mr. Landau in attendance. 9 Following the hearing, the Court immediately ordered both Plaintiff and Edith Sundby to 10 appear for the deposition by noon. ECF Nos. 129, 130. As detailed in the Order to Show 11 Cause, the Court then made every effort to inform Plaintiff, Mrs. Sundby, and Mr. Myrick 12 of the order to appear, to no avail. See ECF No. 132 at 4-5. Mr. Slome excused the 13 videographer and court reporter at 12:18 PM and requested a Certificate of Non- 14 Appearance. 15 The Court’s Order to Show Cause followed on June 1, 2020, directed to Plaintiff, 16 Mr. Myrick, and Mrs. Sundby, and setting a show cause hearing for June 15, 2020. ECF 17 No. 132. All persons to whom the order was directed were permitted to file a written 18 response in advance of the show cause hearing no later than June 10, 2020. Id. at 9. Plaintiff 19 filed a written response to the Order to Show Cause by the deadline (“written response”), 20 but neither Mr. Myrick nor Mrs. Sundby filed a response. See ECF No. 139. In the written 21 response, Plaintiff argued that the show cause hearing should not include Edith Sundby or 22 Mr. Myrick, because “the required showing includes the very confidential information that 23 Edith Sundby cannot be exposed to.” ECF No. 139 at 2. Plaintiff also argued that showing 24 the exhibits to Ms. Sundby during her deposition “would unnecessarily and unjustifiably 25 cause her anguish, threaten her health, burden the marital relationship.” ECF No. 139 26 at 6 (emphasis in original). Plaintiff also filed a Motion to Modify the Court’s Order to 27 Show Cause (ECF No. 143) on June 12, 2020 on the same basis, asking the Court to strike 28 its requirement that Edith Sundby and her counsel attend the show cause hearing, and 1 further asking that the Court strike certain language from its Order to Show Cause— 2 namely, that Plaintiff contended the documents at issue were confidential, and stated his 3 intention to move for a protective order “to ensure that they were not shown to Edith 4 Sundby.” See ECF No. 143; ECF No. 132 at 3. Plaintiff argued that the final portion of that 5 sentence was “unnecessar[y],” and objected to the Court having sent the Order to Show 6 Cause, which required her appearance, to Ms. Sundby,2 “in essence alerting her: ‘Mrs. 7 Sundby, your husband is withholding confidential information from you.’” ECF No. 143 8 at 3. 9 Plaintiff also sought to continue the show cause hearing by approximately three 10 months, a request that the undersigned denied. The denial was affirmed by the District 11 Judge over Plaintiff’s Rule 72(a) objection on the day of the show cause hearing. See ECF 12 Nos. 140, 144, 146, 147. The show cause hearing proceeded as scheduled on June 15, 2020, 13 with Plaintiff, Mr. Myrick, and Ms. Sundby in attendance. ECF No. 148. Without leave of 14 Court, Plaintiff filed the anticipated Motion for Protective Order regarding the sensitive 15 documents on the same day as the show cause hearing. ECF No. 145. The Court set an 16 expedited briefing schedule on the Motion for Protective Order during the show cause 17 hearing, and also rescheduled Edith Sundby’s deposition for two alternative dates— 18 June 24 or July 22, 2020—depending on whether Plaintiff intended to file an objection to 19 the forthcoming ruling on the Motion for Protective Order. See ECF No. 149. The Court 20 ultimately denied the Motion for Protective Order on June 23, 2020, and Plaintiff filed a 21 notice of intent to object, triggering the later date for Edith Sundby’s deposition. ECF Nos. 22 23 24 2 At the time the Court issued the Order to Show Cause—and indeed, to date—Mr. Myrick 25 had never entered an appearance in the case or otherwise filed anything on Mrs. Sundby’s behalf, and the Court’s understanding that he represented Mrs. Sundby was based solely 26 on secondhand information from the parties. Mr. Myrick had also failed to respond to any 27 of the Court’s May 29, 2020 communications. Accordingly, absent confirmation that she was represented by counsel, the Court gave direct notice to Edith Sundby of the order 28 1 156, 157. The District Judge affirmed the denial of the protective order over Plaintiff’s 2 Rule 72(a) objection (ECF No. 177), and Defendants were thus allowed to use the sensitive 3 documents during Edith Sundby’s deposition on July 22, 2020. 4 On August 3, 2020, the Investor Defendants filed a Request for Further OSC Re 5 Sanctions Seeking Monetary and Non-Monetary Sanctions Against Plaintiff in Response 6 to Court’s Prior Order to Show Cause (“Motion for Further Sanctions”). ECF No. 188. In 7 the Motion for Further Sanctions, Investor Defendants report that Edith Sundby confirmed 8 under oath during her deposition that she was, all along, aware of Plaintiff’s medical issues 9 mentioned in the deposition documents, despite Plaintiff’s repeated arguments to the Court 10 that Ms. Sundby was not aware of this information, and that disclosing the documents to 11 her would cause her anguish, threaten her health, and burden the marriage relationship. 12 See, e.g., ECF No. 139 at 5-6. Investor Defendants identify at least six pleadings filed with 13 the Court and one email that Plaintiff sent to the undersigned in which Plaintiff falsely 14 stated that his wife was not aware of his medical issues discussed in the sensitive 15 documents. ECF No. 188 at 4-5. 16 Investor Defendants contend the Court should issue further sanctions based on 17 Plaintiff’s false statements to the Court, including (1) monetary sanctions to satisfy the 18 excess costs, expenses, and attorney fees reasonably incurred by Investor Defendants in 19 unnecessarily responding to Plaintiff’s false arguments in his Motion to File Under Seal 20 (ECF No. 138) and Motion for Protective Order (ECF No. 145) that the documents at issue 21 contained sensitive information of which his wife was unaware; and (2) non-monetary 22 sanctions in the form of striking Plaintiff’s claim for Declaratory Judgment under the 23 Court’s inherent power. ECF No. 188 at 6-7. 24 II. LEGAL STANDARDS 25 Fed. R. Civ. P. 37(b)(2)(A) provides sanctions for failure to obey a discovery order, 26 as follows: 27 If a party . . . fails to obey an order to provide or permit discovery, including an order under Rule 26(f), 35, or 37(a), the court where the action is pending may 28 1 issue further just orders. They may include the following: (i) directing that the matters embraced in the order or other designated facts 2 be taken as established for purposes of the action, as the prevailing party 3 claims; (ii) prohibiting the disobedient party from supporting or opposing designated 4 claims or defenses, or from introducing designated matters in evidence; 5 (iii) striking pleadings in whole or in part; (iv) staying further proceedings until the order is obeyed; 6 (v) dismissing the action or proceeding in whole or in part; 7 (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 8 to submit to a physical or mental examination. 9 Fed. R. Civ. P. 37(b)(2)(A). 10 Additionally, Fed. R. Civ. P. 37(b)(2)(C) provides that “[i]nstead of or in addition to 11 the orders above, the court must order the disobedient party, the attorney advising that 12 party, or both to pay the reasonable expenses, including attorney’s fees, caused by the 13 failure, unless the failure was substantially justified or other circumstances make an award 14 of expenses unjust.” 15 Disciplinary sanctions under Rule 37 are intended to serve three purposes. 16 First, they ensure that a party will not benefit from its own failure to comply. Second, they are specific deterrents and seek to obtain compliance with the 17 particular order issued. Third, they are intended to serve a general deterrent 18 effect on the case at hand and on other litigation, provided that the party against whom they are imposed was in some sense at fault. 19 20 Update Art, Inc. v. Modiin Pub., Ltd., 843 F.2d 67, 71 (2d Cir. 1988) (citations omitted). 21 Rule 37 is not the only source of sanctions available to the Court. Under the Court’s 22 inherent power, the court may levy sanctions, including attorney fees, for “‘willful 23 disobedience of a court order’” or when a party has “‘acted in bad faith, vexatiously, 24 wantonly, or for oppressive reasons.’” Fink v. Gomez, 239 F.3d 989, 991 (9th Cir. 2001) 25 (quoting Roadway Express, Inc. v. Piper, 447 U.S. 752, 776 (1980)). See also Civ.LR 26 83.1(a) (“Failure of counsel or of any party to comply with these rules, with the Federal 27 Rules of Civil or Criminal Procedure, or with any order of the court may be grounds for 28 imposition by the court of any and all sanctions authorized by statute or rule or within the 1 inherent power of the court, including, without limitation, dismissal of any actions, entry 2 of default, finding of contempt, imposition of monetary sanctions or attorneys’ fees and 3 costs, and other lesser sanctions”). 4 “The inherent powers of federal courts are those that are necessary to the exercise of 5 all others. The most common utilization of inherent powers is a contempt sanction levied 6 to protect the due and orderly administration of justice and maintain the authority and 7 dignity of the court.” Primus Auto. Fin. Servs., Inc. v. Batarse, 115 F.3d 644, 648 (9th Cir. 8 1997) (internal quotations, citations, and alterations omitted). 9 The Court’s “authority to impose sanctions under its inherent powers is broad, but 10 not limitless.” Mendez v. County of San Bernardino, 540 F.3d 1109, 1132 (9th Cir. 2008). 11 The Court’s inherent power “is ‘both broader and narrower than other means of imposing 12 sanctions.’ [] On the one hand, the inherent power ‘extends to a full range of litigation 13 abuses.’ On the other, the litigant must have ‘engaged in bad faith or willful disobedience 14 of a court’s order’” to levy sanctions including attorney’s fees. Fink, 239 F.3d at 992 15 (quoting Chambers v. NASCO, Inc., 501 U.S. 32, 46–47 (1991)). A “willful” violation of 16 a court order “does not require proof of mental intent such as bad faith or an improper 17 motive, but rather, it is enough that a party acted deliberately.” Evon v. Law Offices of 18 Sidney Mickell, 688 F.3d 1015, 1035 (9th Cir. 2012). “Before awarding [attorney fee] 19 sanctions under its inherent powers, however, the court must make an explicit finding that 20 counsel’s conduct constituted or was tantamount to bad faith.” Primus, 115 F.3d at 648 21 (internal quotations and citation omitted). An explicit finding of bad faith “is especially 22 critical when the court uses its inherent powers to engage in fee-shifting.” Id. (noting that 23 a “court’s inherent power to impose attorney’s fees as a sanction [is limited] to cases in 24 which a litigant has engaged in bad-faith conduct or willful disobedience of a court’s 25 orders.”). 26 A party “demonstrates bad faith by ‘delaying or disrupting the litigation or 27 hampering enforcement of a court order.’” Primus, 115 F.3d at 649 (quoting Hutto v. 28 Finney, 437 U.S. 678, 689 n.14 (1978)). Thus, a party’s interference with the opposing 1 party’s ability to take third-party discovery under Rule 45 may justify the imposition of 2 sanctions. See Price v. Trans Union, L.L.C., 847 F. Supp. 2d 788, 794 (E.D. Pa. 2012) 3 (finding a “clear” and “sanctionable” violation of Rule 45 where a party’s counsel 4 interfered with third-party discovery by advising “the person commanded by the [Rule 45] 5 subpoena . . . to ignore the subpoena’s command.”); Fox Indus., Inc. v. Gurovich, No. 03– 6 5166, 2006 WL 2882580, at *1-2, *5-10 (E.D.N.Y. Oct. 6, 2006) (sanctioning defense 7 counsel both for abuse of process and pursuant to the court’s inherent authority, after 8 counsel, instead of “immediately” moving to quash the plaintiff’s Rule 45 subpoenas on 9 nonparties as defense counsel stated he would do, instead wrote letters to the nonparties 10 instructing them not to comply with the subpoenas; the court found the letters were “clear 11 evidence” of counsel’s “bad faith and vexatious behavior, evincing a deliberate effort to 12 usurp the authority of the court.”). 13 The Court’s inherent authority to sanction willful conduct also includes “the 14 authority to sanction the conduct of a nonparty who participates in abusive litigation 15 practices, or whose actions or omissions cause the parties to incur additional expenses.” In 16 re Avon Townhomes Venture, 433 B.R. 269, 304 (Bankr. N.D. Cal. 2010), aff'd, No. BAP 17 NC-11-1068-HDOD, 2012 WL 1068770 (B.A.P. 9th Cir. Mar. 29, 2012), aff'd, 575 F. 18 App’x 715 (9th Cir. 2014) (citing Chambers v. NASCO, Inc., 501 U.S. 32, 50-51 (1993)) 19 (other citations omitted) (emphasis added). See also Corder v. Howard Johnson & Co., 53 20 F.3d 225, 232 (9th Cir. 1994) (“[E]ven in the absence of statutory authority, a court may 21 impose attorney’s fees against a non-party as an exercise of the court’s inherent power to 22 impose sanctions to curb abusive litigation practices.”). A non-party may also be held in 23 contempt for “fail[ing] without adequate excuse to obey” a Rule 45 subpoena or the Court’s 24 orders relating to it. Fed. R. Civ. P. 45(g). See also 28 U.S.C. § 636(e)(6)(B)(iii). 25 Finally, the Court has statutory authority pursuant to 28 U.S.C. § 1927 to require 26 anyone “who so multiplies the proceedings in any case unreasonably and vexatiously . . . 27 to satisfy personally the excess costs, expenses, and attorneys’ fees reasonably incurred 28 because of such conduct.” The imposition of sanctions under § 1927 requires a finding that 1 the person against whom the sanctions are imposed acted “recklessly or in bad faith[.]” 2 United States v. Blodgett, 709 F.2d 608, 610 (9th Cir. 1983) (citation omitted). Notably, 3 section 1927 sanctions may be imposed on a pro se party, not just attorneys. Wages v. 4 I.R.S., 915 F.2d 1230, 1235-36 (9th Cir. 1990). Section 1927 sanctions may be appropriate 5 where counsel or a party circumvents the proper procedure under Rule 45 to quash or limit 6 the scope of a subpoena, if such circumvention of the procedure is done willfully or in bad 7 faith to hinder discovery. See Price, 847 F. Supp. 2d at 795-96. 8 III. DISCUSSION 9 During the show cause hearing, Mr. Myrick confirmed that he represented Edith 10 Sundby, but stated that he was unaware that Plaintiff had agreed to accept service of the 11 Investor Defendants’ Rule 45 subpoena on Edith Sundby’s behalf, and he did not know 12 whether she had ever been served with the subpoena. Nevertheless, Mr. Myrick agreed that 13 Edith Sundby did not object to the subpoena, and clarified that he did not take the position 14 that she was not required to appear for her deposition as scheduled. However, Mr. Myrick 15 explained that he and Edith Sundby failed to appear because he understood that there was 16 or would be a pending motion for protective order on file, based on Plaintiff’s email. 17 Mr. Myrick further stated that he did not recall receiving any emails on the morning 18 of May 29, 2020, and that he had been without email service while working on his new 19 home that day, which is why he did not respond to any phone calls or emails after sending 20 the 9:16 a.m. email confirming that he had received Plaintiff’s email purporting to suspend 21 Mrs. Sundby’s deposition. 22 For his part, Plaintiff explained that the notice of his own deposition on 23 May 28, 2020 indicated there would be a realtime transcript available, but that there was 24 none, and he needed the transcript for proof in support of his anticipated motion for 25 protective order as well as to properly respond to the Order to Show Cause. Plaintiff 26 contended that the transcript from his deposition would show that defense counsel refused 27 to meet and confer regarding the use of the sensitive documents during Edith Sundby’s 28 deposition the next day, in contrast to Mr. Slome’s position the following morning that he 1 agreed not to use the documents. Plaintiff insisted that the Court needed to compare the 2 statements made by defense counsel during the deposition to those made to the Court the 3 following morning to properly evaluate whether sanctions against Plaintiff were warranted. 4 Absent the transcript, Plaintiff argued that he would have been deprived of his right to be 5 fully heard had he engaged in the deposition dispute resolution process required by the 6 Court or otherwise involved the Court before unilaterally declaring the deposition 7 suspended under Rule 30(d)(3)(A). Additionally, and as Plaintiff also discussed in his 8 written response, Plaintiff noted that Mr. Slome’s agreement not to use the documents was 9 not joined by Marquee’s counsel Mr. Landau, nor did it extend to Exhibit 118, the Morgan 10 Stanley letter attached to Exhibit 17 (Plaintiff’s April 2017 email to R.J. Solovy). Thus, 11 any such agreement made on the morning of May 29 was not sufficient to quell his concerns 12 about Edith Sundby seeing the sensitive documents. 13 In addition to the written response to the Court’s Order to Show Cause that Plaintiff 14 filed by the deadline of June 10, 2020 (ECF No. 139), Plaintiff also filed a supplemental 15 response to the Order to Show Cause after the hearing on June 21, 2020 (“supplemental 16 response”), once he had access to the transcript from his deposition. ECF No. 155. 17 The Court has considered the testimony from the hearing and all papers submitted 18 to the Court on the issue of sanctions. For the reasons that follow, the Court SANCTIONS 19 Plaintiff pursuant to the inherent authority of the Court, QUASHES the Order to Show 20 Cause against Edith Sundby and her counsel Russel Myrick, and DENIES the Investor 21 Defendants’ Motion for Further Sanctions due to their failure to establish the fees and costs 22 incurred as a result of the unnecessary briefing on Plaintiff’s Motion for Protective Order 23 and Motion to File Documents Under Seal. 24 A. Sanctions Against Plaintiff 25 The Court first finds that sanctions are warranted against Plaintiff pursuant to the 26 Court’s inherent authority. Plaintiff willfully interfered with the discovery process by 27 causing the suspension of Edith Sundby’s deposition and vexatiously multiplied the 28 proceedings. Worse, he did so on the apparently false premise that showing the sensitive 1 documents to his wife during her deposition would reveal a medical condition that she was 2 unaware of, and that revelation would cause great harm. 3 Plaintiff had no legitimate basis to demand the suspension of his wife’s deposition. 4 As discussed above, despite the subject line of Plaintiff’s May 29 email referring to a 5 “Motion for Protective Order” and Mr. Myrick’s reference to “the motion” in his response, 6 Plaintiff had not moved for a protective order, nor could he have done so without first 7 seeking leave of Court pursuant to the undersigned’s chambers rules. Indeed, Plaintiff did 8 not file a motion for protective order regarding the documents at issue until more than two 9 weeks later, on June 15, 2020. ECF No. 145. Although Plaintiff made clear in the body of 10 his email that he intended to move for a protective order “promptly,” Plaintiff did not file 11 a notice with the Court of his intent to file such a motion or otherwise contact the Court 12 regarding the dispute at all, in contravention of the undersigned’s chambers rules.3 13 The full text of Rule 30(d)(3)(A), the provision cited by Plaintiff in his email, permits 14 a deponent or a party to “[a]t any time during a deposition” to “move to terminate or limit 15 it on the ground that it is being conducted in bad faith or in a manner that unreasonably 16 annoys, embarrasses, or oppresses the deponent or party. The motion may be filed in the 17 court where the action is pending or the deposition is being taken.” (emphasis added). If 18 the objecting party demands that the deposition be suspended while the Court considers 19 the motion, the deposition must be suspended “for the time necessary to obtain an order” 20 21 22 3 The undersigned’s chambers rules dictate that if a dispute arises during a deposition, the 23 parties must meet and confer before contacting chambers to seek an immediate ruling from the Court. If the Court is not immediately available, the parties must proceed with the 24 deposition in other areas of inquiry until the Court is able to respond. No discovery motion 25 may be filed until the Court has conducted the pre-motion telephonic conference on the dispute, unless the movant has obtained leave of Court. See Chmbr. R. at 3, available at 26 https://www.casd.uscourts.gov/judges/goddard/docs/Goddard%20Civil%20Pretrial%20Pr 27 ocedures.pdf. Plaintiff is well aware of the undersigned’s chambers rules, as he had previously participated in the required pre-motion telephonic conferences. 28 1 from the Court. The subsequent provision states that the Court, in addressing the motion, 2 may order that the deposition be terminated or limit its scope and manner as provided in 3 Rule 26(c). Fed. R. Civ. P. 30(d)(3)(B) (emphasis added). Moreover, Rule 30(c)(2) 4 provides that an objection to evidence at a deposition “must be noted on the record, but the 5 examination still proceeds; the testimony is taken subject to any objection.” Fed. R. Civ. 6 P. 30(c)(2). 7 Not only did Plaintiff fail to file a motion for protective order; he also did not file a 8 motion under Rule 45(d)(3)(B) seeking to quash or modify the properly served subpoena. 9 Therefore, no valid grounds existed for Edith Sundby to fail to obey the Rule 45 subpoena, 10 or for Plaintiff to instruct her not to appear. 11 In his written response to the Court’s Order to Show Cause, Plaintiff not only 12 concedes that his actions were willful, but he also doubles down on his willfulness, by 13 insisting that defiance of the Court’s rules was necessary because he believed the Court 14 would likely rule against him. Plaintiff argues that, when addressing past discovery 15 disputes, the Court has not allowed him an opportunity to be fully heard, pointing to the 16 Court’s April 20, 2020 hearing as an example and contending that it “was more ‘telling’ 17 than hearing.” ECF No. 139 at 10. Therefore, Plaintiff argues, “[w]ith the personal stakes 18 so great regarding the immediate issue” of the sensitive deposition exhibits, “just as 19 Plaintiff could not afford even the possibility of surprise by defense counsel in Edith 20 Sundby’s deposition, Plaintiff could not afford even the possibility of a surprise by the 21 Court, should it not order both Mr. Slome and Mr. Landau not to use the Sensitive Exhibits 22 in Edith Sundby’s deposition, or that there would be no full record available for review.” 23 Id. at 10-11 (emphasis omitted). 24 Plaintiff makes a similar argument in his unauthorized and untimely supplemental 25 response to the Order to Show Cause, filed on June 21, 2020: 26 Judge Goddard’s Chambers Procedures includes: 27 No discovery motion may be filed until the Court has conducted its pre-motion 28 telephonic conference, unless the movant has obtained leave of Court. The 1 Court may strike any discovery motion that is filed without complying with this process. 2 3 As such, Plaintiff had three choices; (1) participate in a pre-motion telephonic conference, (2) seek leave to file a discovery motion, or (3) file a discovery 4 motion that risked the Court striking it. 5 Option 1 - Telephonic Conference. A telephonic conference would conclude with an order of some type, but only of the telephonic conference 6 itself. There would be no immediately available review of a motion, with 7 arguments and evidence, that had not yet been filed. This meant that, if Judge Goddard disagreed with Plaintiff’s position, the deposition might have 8 continued, and defense counsel would be free to show Edith Sundby the 9 sensitive words or sensitive exhibits, which in effect would have denied Plaintiff his right to file the motion for a protective order; a bell that could not 10 be unrung. 11 Option 2 – Seek Leave to File the Motion for Protective Order. A request seeking leave to file a motion would only involve additional delay. 12 Option 3 – File a Motion for Protective Order. Even if the Court decided 13 to strike the motion, the order striking it would be reviewable, and the motion’s arguments and evidence would be on record for the review. 14 ECF No. 155 at 3-4 (emphasis added; Plaintiff’s emphasis omitted). 15 Plaintiff lays bare that he continues to believe that his willful circumvention of the 16 Court’s procedures to avoid an unfavorable outcome was the only “rational” choice and is 17 therefore justified. See id. at 4-5 (“Betting something so important on . . . what the Court 18 may or may not do (when there was no way to know, and prior decisions made the risk 19 clear), guessing wrong (an order allowing the disclosure before the motion [for protective 20 order] could be filed) would be unforgivable . . . making it an irrational choice. Choosing 21 rational over irrational should be an adequate show of cause.”). 22 There could be no clearer illustration of willful conduct by a litigant than Plaintiff’s 23 own description of his rationale in ignoring the Court’s discovery dispute rules because he 24 thinks they will result in a ruling against him. “Litigants who are willful in halting the 25 discovery process act in opposition to the authority of the court and cause impermissible 26 prejudice to their opponents. It is even more important to note, in this era of crowded 27 dockets, that they also deprive other litigants of an opportunity to use the courts as a serious 28 1 dispute-settlement mechanism.” G–K Props. v. Redevelopment Agency of the City of San 2 Jose, 577 F.2d 645, 647 (9th Cir. 1978). 3 Plaintiff’s arguments in his responses serve only to compound his bad faith and 4 willful conduct. First, Plaintiff fails to note that the undersigned’s chambers rules also 5 instruct parties in the midst of a deposition dispute to “proceed with the deposition in other 6 areas of inquiry” if the dispute cannot be immediately reviewed by the Court. Second, it is 7 unclear which of the three options Plaintiff outlines that he believes he pursued. While 8 Plaintiff did in fact eventually file a motion for protective order without leave of Court, as 9 outlined in “Option 3,” he did not do so at the time he invoked Rule 30(d)(3)(A) as a basis 10 for demanding the suspension of his wife’s deposition on May 29. Rather, Plaintiff sent an 11 email to opposing counsel that he was demanding the deposition be suspended because he 12 intended to file such a motion, did not bring the issue before the Court, informed his wife 13 that the deposition had been suspended, and purportedly went to sleep for several hours so 14 that he could not respond to the Court’s multiple messages to him. See ECF No. 139 at 63 15 (“Mr. Myrick asked if he should inform Edith. I told him that I was on my way to get some 16 much needed sleep, and would do it. Having just finished getting ready for her deposition, 17 Edith was not happy to learn of the suspension, especially in the absence of me being able 18 to offer any sensible explanation.”). Third, Plaintiff does not explain how seeking leave to 19 file a motion for protective order on the morning of his wife’s deposition would have 20 caused “additional delay” beyond the delay he created by causing his wife to fail to appear 21 for her deposition by falsely telling her it had been suspended, immediately and 22 purposefully making himself unavailable for a hearing on the issue, and then filing the 23 motion over two weeks later without seeking leave of Court. 24 Fourth, Plaintiff wrongly presumes that complying with the Court’s requirement of 25 a telephonic conference would have resulted in an immediate ruling, without the 26 opportunity for motion practice or even Court review of the disputed documents at issue. 27 By acting unilaterally instead of respecting the Court’s process, Plaintiff deprived the Court 28 of the opportunity to order the most reasonable and efficient solution that would have 1 preserved his privacy concerns: proceeding with the deposition as scheduled, without 2 questioning on the sensitive documents, subject to reopening if the Court denied the 3 anticipated motion for protective order. Indeed, that is the default solution set forth in the 4 undersigned’s chambers rules. It should go without saying that fearing an adverse ruling 5 from the Court is simply not a legitimate basis to willfully act in opposition to the Court’s 6 authority to address—and rule on—discovery disputes. 7 Plaintiff’s argument that he did not see any of the Court’s communications after 8 sending his email does not change this analysis. In his written response, Plaintiff contends 9 that, “immediately after sending the Suspension Email, Plaintiff put his computer into sleep 10 mode, put his mobile phone into airplane mode, informed Edith Sundby that her deposition 11 was suspended, and went to bed.” ECF No. 139 at 11. However, the willful conduct at issue 12 preceded the Court’s efforts to contact Plaintiff for a hearing on the dispute. Plaintiff’s 13 conscious decision to ignore the Court’s rules for raising the dispute in the first place, 14 coupled with his direct interference with a third-party Rule 45 subpoena requiring his wife 15 to appear for her deposition, constitutes sanctionable conduct whether or not Plaintiff’s 16 subsequent choice to make himself immediately unavailable after sending the email could 17 be viewed as innocent. 18 Plaintiff’s argument that he needed the deposition transcript before he could be fully 19 heard on his anticipated motion for protective order also misses the point. Plaintiff is simply 20 not entitled to decide on his own that the procedures in place under the Court’s rules and 21 the Federal Rules of Civil Procedure can be ignored where he believes they would prevent 22 him from being able to make the most robust possible argument in his favor. Even if the 23 deposition transcript demonstrated that Mr. Slome had lied to the Court by reporting that 24 he did not intend to use the disputed documents during Edith Sundby’s deposition, that he 25 had informed Plaintiff of the same, and that they “left it at the end of the day” that the 26 27 28 1 parties would “get together and discuss this today, before the deposition in the morning,” 2 Plaintiff was simply not entitled to defense counsel’s agreement not to use the documents 3 or to only use redacted versions of the documents, three of which Plaintiff himself had 4 produced during discovery. And, as Plaintiff himself outlines as one of the options 5 available to him under the Court’s rules, Plaintiff could have sought leave of the Court to 6 file a motion for protective order concerning the documents and asked that any questioning 7 of Edith Sundby regarding those documents be prohibited until the briefing was complete 8 and the motion decided, while still allowing the deposition to move forward in other areas 9 of inquiry. 10 Again, by Plaintiff’s own telling of the events of May 29, 2020, Plaintiff’s choice to 11 cause Ms. Sundby to fail to appear for her Rule 45 deposition was done willfully and in 12 13 14 4 The five pages of deposition transcript that Plaintiff ultimately filed with the Court as 15 attachments to his supplemental response proved no such thing. See ECF No. 155, Exs. 1- 4. Rather, it showed that at the close of Plaintiff’s deposition, Mr. Slome stated on the 16 record that “I told Mr. Sundby during the break that my proposal is, is that I will agree to 17 not use Exhibit 17, 32, and 33 at the deposition of Edith Sundby tomorrow until and unless one of two things happen: Number one, we either get an agreement between counsel before 18 the deposition commences, which is 10:00 a.m. on May 29, or after it commences, or to 19 the extent that counsel and the plaintiff can’t reach an agreement for the deposition, that we call Judge Goddard and raise this issue with Judge Goddard. However, under no 20 circumstances am I in agreement at all or any threat that Mr. Sundby made that somehow 21 he’s going to file a motion for a protective order and seek to cancel the deposition tomorrow.” ECF No. 155 at 14-15, D. Sundby Dep. 339:18-340:7. In response, Plaintiff 22 stated, “[W]hat you just said is not true. I never anywhere in the record or off the record 23 said that I intended to cancel anything. I only made the statement about seeking the protective order. That cancellation never even c[a]me up in my mind. You’ve just now 24 brought it up, I guess. . . . I’ve been very specific about the exact words [I want redacted]; 25 said it multiple times. It’s very reasonable. They have nothing to do with the case; only to do with the health-related concern I have with regards of noticing Edith and alarming Edith. 26 And so I thought you were going to give me an answer. You’re not going to give me an 27 answer.” Id. 340:9-23. Tellingly, in his supplemental response, Plaintiff simply inserted “[not]” before “agree” in Mr. Slome’s statement that he “will agree to not use Exhibit 17, 28 1 bad faith to hinder discovery because he did not want her to see the disputed documents, 2 and because he feared that he would not have the power to prevent her from seeing them if 3 he allowed the Court to participate in the decision. Therefore, fee-shifting sanctions are 4 warranted under both the Court’s inherent authority and Section 1927 due to Plaintiff’s 5 vexatious multiplying of the proceedings and bad faith conduct, evidenced by his choice 6 to delay the litigation and hamper enforcement of the Rule 45 subpoena. Primus, 115 F.3d 7 at 649; Hutto, 437 U.S. at 689 n.14 (1978). See also Price, 847 F. Supp. 2d at 795-96 8 (finding a “clear” and “sanctionable” violation of Rule 45 where a party’s counsel 9 interfered with third-party discovery by advising “the person commanded by the [Rule 45] 10 subpoena . . . to ignore the subpoena’s command”). 11 Accordingly, the Court SANCTIONS Plaintiff by requiring him to pay $1,790.00 12 to reimburse Investor Defendants for unnecessary attorney fees and costs, based on the 13 Declaration filed by Mr. Slome outlining the expenses incurred as a result of the thwarted 14 deposition of Edith Sundby. ECF No. 136. Specifically, Mr. Slome provides the following 15 breakdown of fees and costs incurred, based on his hourly billing rate of $300.00 per hour: 16 A. 3.10 hours for drafting the deposition outline and preparing the exhibits for Mrs. 17 Sundby’s deposition: $930 18 B. .7 hours for drafting meet and confer emails to Plaintiff and Mr. Myrick regarding 19 the deposition: $210 20 C. 3.3 hours for attending the deposition and participating in the telephonic hearing 21 with the Court on the morning of May 29, 2020: $990 22 D. Court reporter fees: $240 23 E. Videographer fees $560 24 TOTAL: $2,930.00 25 The Court GRANTS reimbursement of the $990 in attorney fees incurred by 26 Investor Defendants in connection with Mr. Slome’s attendance at the deposition and 27 participation in the May 29th hearing. Additionally, the Court GRANTS reimbursement of 28 the wasted court reporter and videographer fees totaling $800. However, the Court 1 DENIES reimbursement for the fees incurred by Mr. Slome in drafting the deposition 2 outline, preparing the exhibits, and drafting meet and confer emails to Plaintiff and 3 Mr. Myrick regarding Mrs. Sundby’s deposition. The Court finds these costs were not 4 unnecessary or wasted given that Mrs. Sundby’s deposition ultimately went forward on 5 July 22, 2020. Accordingly, Plaintiff is ORDERED to pay sanctions to the Investor 6 Defendants in the amount of $1,790.00. 7 B. Investor Defendants’ request for non-monetary sanctions in the form of striking Plaintiff’s claim for declaratory judgment 8 9 In the Motion for Further Sanctions (ECF No. 188), Investor Defendants seek both 10 non-monetary and monetary sanctions in light of the revelation during Edith Sundby’s 11 deposition that she knew about Plaintiff’s medical condition discussed in the disputed 12 deposition documents all along. Specifically, Investor Defendants provided a deposition 13 transcript showing that Edith Sundby was not at all surprised by the information contained 14 in the sensitive documents. Mr. Slome first asked Ms. Sundby to read one of the sensitive 15 documents, an email from Plaintiff where he states: “I will share some very personal 16 information for your eyes only. No one, even Edie, is aware of recent developments.” ECF 17 No. 188 at 15, E. Sundby Dep. 221:8-18. Mr. Slome then asked Ms. Sundby to read the 18 last paragraph of an attachment to the email, a letter in which which Plaintiff states in 19 relevant part, “I am flying to New York this weekend to have dinner with my daughter on 20 her birthday. Leaving Tuesday for Mayo Clinic.” See id. 221:19-222:8. This exchange 21 followed: 22 Q. Okay. Are you aware of Mr. Sundby having visited the Mayo Clinic in 2017? 23 A. I am aware that Dale has had some issues. . . . I don’t recall 24 specifically [in] April of 2017, visiting the Mayo Clinic. I don’t recall specifically. 25 Q. Okay. So—but you are aware that Mr. Sundby had health issues 26 in 2017? A. Yes. 27 Q. Okay. Were those a serious illness? 28 A. Well, yes, I think quite – quite – quite serious. 1 Q. Was it a fatal illness? A. I think that there was a diagnostic concern. I cannot tell you 2 specifically what it was. You’d have to get all of [the] specifics 3 from Dale. Q. And when did you become aware of this information? 4 A. That Dale had some serious issues, health issues? 5 Q. Yes. A. I’m thinking 2017. I’m not—I cannot recall specifically. 6 7 Id. 222:11-223:9. Defense counsel then directed Mrs. Sundby’s attention back to the email, 8 and specifically the portion where Plaintiff states “if [I] succumb in the intervening period, 9 an irrevocable trust holds a $6m life policy (used to be $21m)” including a trust provision 10 that the trustee would pay off the full balance of the mortgage or other indebtedness of the 11 settlor at the time of his death. See id. 224:17-20 (quoting ECF No. 139 at 36). In response 12 to reading this portion of the email, Edith Sundby merely commented “Yes. . . . Dale had 13 an insurance policy. I had an insurance policy, yes.” E. Sundby Dep. 224:21-22. When 14 pressed further about whether she was aware of Plaintiff’s medical conditions in 2017, she 15 confirmed, “I was aware that there were medical issues, yes.” Id. 224:25-225:1. 16 As for the letter attached to the email , Mr. Slome asked Mrs. Sundby to confirm that 17 “. . . learning this information in the letter, in reviewing it regarding Mr. Sundby talking 18 about succumbing to an illness, and that he’s going to the Mayo Clinic, does not come as 19 a surprise to you?” Id. 226:5-9. Mrs. Sundby responded: “No.” Id. 226:10. 20 This deposition testimony is salient because the language from the sensitive 21 documents discussed during these exchanges are the exact portions of the exhibits that 22 Plaintiff insisted must be redacted from the exhibits before they could be shown to his wife. 23 In Plaintiff’s Motion for Protective Order, he specifically requested the redaction of these 24 precise “sensitive words” on the basis that they would “create awareness and alarm” on the 25 part of his wife. See ECF No. 145 at 2-3 (moving to redact from the April 2017 email the 26 phrase “RJ, I will share some very personal information (your eyes only; Jeff is ok too if 27 helpful) . . . no one, even Edie, is aware of this very recent development (she does not need 28 1 the added stress)” and moving to redact “Mayo Clinic” from the attached letter). 2 It is clear from Edith Sundby’s testimony that she was not in the dark about the fact 3 that Plaintiff suffered from serious health issues in 2017, and that nothing in the supposedly 4 sensitive documents came as a surprise to her, even if she could not recall specifics. This 5 calls into serious question Plaintiff’s repeated representations to the Court that he never 6 told his wife about any of his health issues, and that learning of them during the deposition 7 would cause great harm. See, e.g., ECF No. 139 at 5-6 (“When Plaintiff encountered his 8 own health challenges, he knew that any knowledge of it would only cause Edith Sundby 9 serious and ongoing distress. So he decided that any personal health battles needed to be 10 kept strictly private. Beyond Plaintiff’s clear right to privacy, showing Edith Sundby the 11 subject exhibits, without redacting, or framing any question in a manner that the same 12 personal information might be revealed, would unnecessarily and unjustifiably cause her 13 anguish, threaten her health, and burden the marriage relationship.”) (emphasis in 14 original). See also ECF No. 188 at 4-5 (collecting examples of Plaintiff’s various 15 representations to the Court that Edith Sundby was never and was still not aware of the 16 medical issues discussed in the April 2017 email or any of the personal medical information 17 contained in the disputed exhibits). 18 It appears, then, that Plaintiff’s proffered reason for unilaterally suspending Edith 19 Sundby’s deposition, moving to file documents under seal, moving for a protective order, 20 attempting to delay the show cause hearing, moving to exclude Edith Sundby and her 21 counsel from appearing at the show cause hearing, forcing opposing counsel to engage in 22 motion practice on all of these issues, and requiring the Court—both the magistrate judge 23 and the district judge—to expend time and resources on reviewing and ruling on the related 24 motions, was concocted. The Investor Defendants seek further sanctions in light of this 25 revelation. 26 The harshest sanctions available under Rule 37 are dismissal and default. See In re 27 Rubin, 769 F.2d 611, 617 (9th Cir. 1985). “Dismissal is encouraged when the counsel or 28 party, willfully or in bad faith, fails to comply with the ‘rules of discovery or court orders 1 enforcing the rules, or in flagrant disregard of those rules or orders.’” WRB, Inc. v. Vision 2 Mktg., LLC, No. 2:16-CV-436-RMP, 2018 WL 3259754, at *2 (E.D. Wash. Feb. 23, 2018) 3 (quoting Sigliano v. Mendoza, 642 F.2d 309, 310 (9th Cir. 1981)). See also Wanderer v. 4 Johnston, 910 F.2d 652, 655–56 (9th Cir. 1990) (explaining that courts are afforded 5 “considerable discretion to impose the extreme sanction of dismissal or default where there 6 has been flagrant, bad faith disregard of discovery duties”) (citing National Hockey League 7 v. Metro Hockey Club, Inc., 427 U.S. 639, 643 (1976)). 8 To impose such an extreme sanction, in addition to finding that a party acted 9 willfully or in bad faith, the Court must consider the following five factors: (1) the public’s 10 interest in expeditious resolution of litigation, (2) the court’s need to manage its dockets, 11 (3) the risk of prejudice to the party seeking sanctions, (4) the public policy favoring 12 disposition of cases on their merits, and (5) the availability of less drastic sanctions. 13 Wanderer, 910 F.2d at 656. 14 Investor Defendants’ motion to strike one of Plaintiff’s claims from the operative 15 complaint would amount to partial dismissal of the action, and is therefore subject to the 16 same standard as a dismissal sanction. See R & R Sails, Inc. v. Ins. Co. of Penn, 673 F.3d 17 1240, 1247 (9th Cir. 2012) (explaining that where a “sanction amount[s] to dismissal of a 18 claim,” the court is “required to consider whether the claimed noncompliance involved 19 willfulness, fault, or bad faith, and also to consider the availability of lesser sanctions.”) 20 (internal citations omitted).5 21 22 23 5 Additionally, such a sanction would be dispositive and thus cannot be ordered directly by a magistrate judge, although the undersigned could recommend such a sanction be imposed 24 by the District Judge. See, e.g., United States v. Rivera-Guerrero, 377 F.3d 1064, 1068 (9th 25 Cir. 2004) (explaining that the district court “must look to the effect of the motion” in determining whether it is properly characterized as dispositive or non-dispositive of a 26 claim, and thus outside of the magistrate judge’s authority to grant under 28 U.S.C. 27 § 636(b)); Ocelot Oil Corp. v. Sparrow Indus., 847 F.2d 1458, 1462 (10th Cir. 1988) (finding that a discovery sanction striking some of a plaintiff’s claims was dispositive 28 1 Here, although the Court has indeed found that Plaintiff acted willfully and in bad 2 faith, the relevant factors weigh heavily against recommending the drastic sanction 3 requested of striking Plaintiff’s claim for declaratory judgment. The District Judge has 4 already issued a ruling on Plaintiff’s declaratory judgment claim on its merits, as favored 5 by public policy. See ECF No. 209 at 41-53. Because the Court’s summary judgment ruling 6 has already issued, the factors of the public’s interest in expeditious resolution of litigation 7 and the court’s need to manage its dockets are also not implicated here. But even if the 8 Court had not yet issued a ruling on that claim, the undersigned would not recommend it 9 be stricken. Plaintiff’s Declaratory Judgment claim was the crux of his case. The prejudice 10 to Plaintiff if it were stricken would be enormous, and would far outweigh the harm caused 11 to Defendants by Plaintiff’s misrepresentations regarding whether Ms. Sundby knew of his 12 medical issues in 2017, and his related willful conduct causing the delay of her deposition 13 by approximately two months. Most importantly, there are numerous lesser sanctions 14 available that are more appropriately tailored to the misconduct at hand. The only harm 15 identified by Investor Defendants in their Motion for Further Sanctions is that they “were 16 forced to incur the unnecessary legal fees and costs in responding to the Plaintiff’s false 17 argument in the Motion to File Under Seal and the Motion for Protective Order.” ECF No. 18 188 at 5 (citations omitted). 19 Perhaps recognizing that the harsh dismissal sanction requested would not be 20 granted pursuant to Rule 37, Investor Defendants instead argue in their Motion for Further 21 Sanctions that the Court should strike the claim under its inherent power. ECF No. 188 at 22 6 (citing Monsanto Co. v. E.I. Du Pont de Nemours & Co., 748 F.3d 1189, 1200-01 (Fed. 23 Cir. 2014)). The Court finds Monsanto inapposite. There, the lower court had stricken 24 certain of the defendant’s counterclaims specifically because the defendant “repeatedly 25 misrepresented its subjective belief in order to support” the counterclaims, “which 26 27 28 1 prolonged the already-protracted proceedings and caused unnecessary expense to [the 2 plaintiff] and needless effort by the court.” Id. at 1200 (internal quotations and alteration 3 omitted). Therefore, the decision to strike portions of the defendant’s second amended 4 answer and counterclaims was directly related to the vexatious and abusive conduct at 5 issue—namely, making “repeated misrepresentations” about the basis of its amended 6 counterclaims when seeking leave to file them, which “compromised the integrity of the 7 case[.]” Id. at 1200-01. Consequently, the Monsanto court concluded that “the district court 8 properly exercised its discretion in imposing targeted sanctions by carefully fitting its 9 sanctions to the conduct that it found to be improper.” Id. at 1202 (emphasis added). 10 Here, Plaintiff’s misrepresentations regarding whether his wife knew about the 11 medical issues discussed in the sensitive documents are, at best, only tangentially related 12 to his claim for declaratory judgment that the altered deeds and notes underlying this 13 litigation are void, because her knowledge was arguably relevant to Defendants’ equitable 14 unclean hands defense. However, Investor Defendants were ultimately able to depose Edith 15 Sundby regarding the documents and her knowledge of the content discussed therein, and, 16 despite being granted leave to do so, chose not to supplement their summary judgment 17 motion based on the testimony elicited from Ms. Sundby regarding the documents. 18 Accordingly, the requested sanction of striking the declaratory judgment claim is not 19 narrowly tailored to the misconduct identified. A more appropriately tailored and less 20 drastic sanction is available: requiring Plaintiff to pay for the unnecessary costs incurred 21 by Defendants in briefing Plaintiff’s frivolous motions premised on his wife’s lack of 22 knowledge. The Court turns to those sanctions now. 23 C. Investor Defendants’ request for monetary sanctions 24 The Court finds that the additional evidence provided by Investor Defendants in the 25 Motion for Further Sanctions (ECF No. 188) bolsters its existing finding that Plaintiff has 26 unreasonably and vexatiously multiplied the proceedings in this action by delaying Edith 27 Sundby’s deposition without reason and in bad faith. This finding justifies the exercise of 28 the Court’s statutory authority pursuant to 28 U.S.C. § 1927 to require anyone “who so 1 multiplies the proceedings in any case unreasonably and vexatiously . . . to satisfy 2 personally the excess costs, expenses, and attorneys’ fees reasonably incurred because of 3 such conduct.” 4 However, the Court has already issued fee-shifting sanctions against Plaintiff for his 5 conduct related to the suspension of Edith Sundby’s May 29th deposition. Although the 6 Court agrees with the Investor Defendants that the Court would be warranted in ordering 7 Plaintiff to pay the further sanctions of the unnecessary fees and costs incurred by Investor 8 Defendants in opposing Plaintiff’s baseless Motion for Protective Order and Motion to File 9 Documents Under Seal, the Investor Defendants fail to support this request with adequate 10 information to order such sanctions. Nowhere in the Investor Defendants’ motion or in the 11 attachments are these fees and costs outlined. Nor does the Court think it necessary to 12 require additional motion practice on this issue simply to justify imposing such sanctions. 13 Consequently, under the circumstances, the Court DENIES the Motion for Further 14 Sanctions (ECF No. 188). 15 D. Sanctions against Edith Sundby and Russel Myrick are not warranted 16 In his written response to the Order to Show Cause, Plaintiff argues that “Edith 17 Sundby is at most guilty of trusting her husband of 44 years.” ECF No. 139 at 15. The 18 Court agrees. There is no evidence establishing that Ms. Sundby willfully disobeyed the 19 Rule 45 subpoena or the Court’s minute order requiring her to appear for her deposition. 20 Although Defendants could have moved for her joinder, Ms. Sundby is a non-party to this 21 case and does not receive direct notices of filings on the docket. Therefore, her lack of 22 notice of the order is understandable and her failure to comply was not clearly in bad faith. 23 Further, Plaintiff admits that he is at fault for wrongly informing her that her deposition 24 was suspended as an automatic result of his email demanding its suspension, and further 25 admits that he did not provide her any explanation. Ms. Sundby’s counsel, Mr. Myrick, 26 was also of no help to her on the day of her deposition, simply taking Plaintiff’s word that 27 his email was sufficient to suspend Ms. Sundby’s deposition without any notice to, or 28 involvement of, the Court, despite the fact that her deposition was compelled by a Rule 45 1 subpoena issued by the Court, and despite the fact that the plain text of the rule on which 2 Plaintiff relied anticipates suspension of a deposition only upon motion of a party “filed in 3 the court where the action is pending or the deposition is being taken.” Fed. R. Civ. P. 4 30(d)(3)(A). Additionally, Plaintiff contends that his wife was frustrated and disappointed 5 by the sudden suspension of her deposition. Ms. Sundby’s mistake in trusting her attorney 6 and her husband cannot be considered willful or otherwise sanctionable conduct. 7 Mr. Myrick’s conduct is a closer call. Although Mr. Myrick represented to the Court 8 that he relied on Plaintiff—who, unlike Mr. Myrick, is not an attorney—in deciding that 9 Plaintiff’s email demand was a legitimate way of suspending the deposition of Mr. 10 Myrick’s client, in an email to Mr. Myrick sent at 10:33 AM on May 29, 2020, court staff 11 specifically addressed and corrected any misconception that Mr. Myrick may have had that 12 Plaintiff had actually filed a motion for protective order or obtained a court order 13 terminating Edith Sundby’s deposition, explaining that no such motion had been filed and 14 there was “no court order permitting a stay or abeyance of the deposition that was 15 scheduled to begin at 10 AM.” The email instructed Mr. Myrick to immediately call in to 16 the hearing if he wished to move to stay the deposition on Edith Sundby’s behalf, and 17 further warned that Rule 45(g) may apply if Edith Sundby failed to appear for her 18 deposition without adequate excuse. Mr. Myrick did not respond or otherwise appear for 19 the hearing or deposition. 20 The Court is skeptical of Mr. Myrick’s representations that he simply did not see any 21 of the numerous email communications from opposing counsel or the Court that followed 22 rapidly on the heels of Mr. Myrick’s last email communication sent from his iPhone at 23 9:16 a.m. Mr. Slome’s email stating that he was contacting the Court to intervene was sent 24 only three minutes later. Nonetheless, despite the Court’s misgivings about the truthfulness 25 of Mr. Myrick’s representations, there is not sufficient evidence to make a finding that 26 Mr. Myrick acted willfully or bad faith, rather than merely exercising extremely poor 27 judgment as an attorney by trusting a non-attorney to properly report whether Mr. Myrick’s 28 client remained under a Court-ordered obligation or not. And like Ms. Sundby, Mr. Myrick 1 || does not receive direct notice of court filings. Moreover, based on the evidence presented 2 ||to the Court, Mr. Myrick’s conduct did not directly cause Ms. Sundby’s failure to appear 3 || for her deposition. Instead, both Mr. Myrick and Plaintiff are consistent in reporting that 4 || Plaintiff was the driving force behind both Mr. Myrick’s and Ms. Sundby’s failures to 5 || appear, due to Plaintiffs incorrect reading of Rule 30(d)(3)(A) and his willful disregard of 6 || the Court’s chambers rules. 7 Accordingly, the Court will not impose sanctions against either Ms. Sundby or Mr. 8 || Myrick and QUASHES the Order to Show Cause against both of them. 9 IV. CONCLUSION 10 For the foregoing reasons, the Court ORDERS as follows: 11 (1) Plaintiff is ORDERED to pay fee-shifting sanctions to the Investor Defendants 12 in the amount of $1,790.00 due to his willful and bad-faith conduct in causing 13 the suspension of Edith Sundby’s deposition; 14 (2) The Court’s Order to Show Cause (ECF No. 132) directed to Edith Sundby and 15 Russel Myrick is hereby QUASHED; 16 (3) Plaintiffs Motion to Modify the Order to Show Cause (ECF No. 143) is 17 DENIED as moot; and 18 (4) Investor Defendants’ Motion for Further Sanctions (ECF No. 188) is DENIED. 19 50 IT IS SO ORDERED. 21 Dated: September 24, 2020 _SpbiormH. Xion Honorable Allison H. Goddard 23 United States Magistrate Judge 24 25 26 27 28