United States v. Lozano

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA, 
Plaintiff-Appellee,
v.
PROPERTY, 3714 CANCUN LOOP,
WEBB COUNTY, LAREDO, TEXAS,
WITH ALL APPURTENANCES AND
IMPROVEMENTS THEREON,
Defendant,  No. 00-1710
v.
JOSE ANTONIO LOZANO,
Claimant-Appellant,
and
HILL TOP FARM, LIMITED,
Claimant.

Appeal from the United States District Court
for the Middle District of North Carolina, at Durham.
William L. Osteen, District Judge.
(CA-98-11-1)
Submitted: October 24, 2000
Decided: December 29, 2000
Before WILLIAMS and TRAXLER, Circuit Judges, and
HAMILTON, Senior Circuit Judge.
Vacated and remanded by unpublished per curiam opinion.
2 UNITED STATES v. PROPERTY, 3714 CANCUN LOOP
COUNSEL
Jose Antonio Lozano, Appellant Pro Se. Lynne P. Klauer, OFFICE
OF THE UNITED STATES ATTORNEY, Greensboro, North Caro-
lina, for Appellee.
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
OPINION
PER CURIAM:
Jose Antonio Lozano appeals from the district court’s orders strik-
ing his claim in this forfeiture action for failure to respond to discov-
ery requests, entering default against him, and entering a judgment of
forfeiture. Because, on this record, we are not convinced that that the
district court was within its discretion when it granted the Govern-
ment’s motion to strike Lozano’s claim, we vacate the default and the
judgment of forfeiture and remand for further consideration of the
Government’s motion to strike.
The Government filed a civil forfeiture action against a parcel of
real property, alleging that either the property was used or was
intended to be used to facilitate drug offenses or was purchased with
drug proceeds. Lozano, a federal prisoner incarcerated on drug
charges proceeding pro se, filed a claim to the property, alleging that
he had purchased the property with legal funds and that the Govern-
ment had promised during his plea negotiations not to seek forfeiture
of his home if he provided substantial assistance.
On June 8, 1999, the district court granted the Government’s
motion to compel Lozano to respond to discovery, extending the time
for response until July 25, 1999, and informing Lozano that a failure
to comply could result in dismissal of his claim. On July 20, Lozano
filed a reply stating that he was trying to comply with discovery but
UNITED STATES v. PROPERTY, 3714 CANCUN LOOP 3
asserting that it was difficult to gather the information and documents
from prison. Nonetheless, Lozano attached affidavits, identification
documents, tax information, releases, and other documents. On
August 11, 1999, the Government filed a motion to strike Lozano’s
claim, contending that the documents filed by Lozano were respon-
sive to interrogatory 1, but that discovery was still incomplete. The
Government did not file a copy of its discovery requests, nor did it
outline specifically which documents and responses were missing.
On August 30, Lozano filed a response outlining his frequent
moves within the prison system and his diligent attempts to comply
with discovery. Lozano also attached additional documents and affi-
davits. On February 8, 2000, the district court granted the Govern-
ment’s motion to strike Lozano’s claim. On February 15, the district
court entered default against Lozano. On March 6, Lozano filed a
copy of the Government’s request for documents annotated with
descriptions of documents and the dates he allegedly mailed
responses to each request. Finally, Lozano attached more documents,
including bank statements and more affidavits. On March 15, the dis-
trict court entered a final decree and judgment of forfeiture against the
property.
The district court may dismiss an action if a party fails to timely
answer or object to discovery requests. See Fed. R. Civ. P. 37(d). The
dismissal of an action as a sanction for discovery violations is
reviewed for abuse of discretion. See National Hockey League v. Met-
ropolitan Hockey Club, 427 U.S. 639, 642 (1976). However, the sanc-
tion of dismissal is reserved for flagrant cases of bad faith and callous
disregard for the district court’s authority. See Hillig v. Commis-
sioner, 916 F.2d 171, 174-75 (4th Cir. 1990).
This court applies a four part test to determine the propriety of dis-
missal: (1) whether the noncomplying party acted in bad faith; (2) the
amount of prejudice to the other party; (3) the need for deterrence of
the particular sort of noncompliance; and (4) the effectiveness of a
less drastic sanction. See Mutual Fed. Sav. & Loan Ass’n v. Richards
& Assoc., 872 F.2d 88, 92 (4th Cir. 1989). On this record, we cannot
determine whether the district court abused its discretion in striking
Lozano’s claim and entering a default judgment. See Hathcock v.
4 UNITED STATES v. PROPERTY, 3714 CANCUN LOOP
Navistar Int’l Transp. Corp., 53 F.3d 36, 40 (4th Cir. 1995) (range of
discretion is narrower when court sanctions by imposing default).
First, the current record does not support a finding of bad faith. The
Government argues, and the district court adopted this reasoning as
its own, that Lozano’s bad faith is established by his failure to comply
with the court order issued June 8, 1999, ordering discovery response
by July 25. However, on July 20, Lozano timely submitted many doc-
uments purporting to be responsive to the Government’s requests. He
also outlined the difficulty in fully complying while in prison and
attached documents showing that even before the June 8 order, he had
been contacting people in attempts to gather all the documents. More-
over, the Government did not file a copy of its discovery requests nor
did it analyze which documents or responses it was missing. Further,
when the district court granted the motion to strike, we cannot deter-
mine whether the discovery requests were part of the record, so that
the district court could properly analyze this factor. Although Lozano
later filed the Government’s document requests, the Government’s
interrogatories are still not part of the record if they were included in
a separate document.
Lozano appears to have attempted to comply with the court’s order,
and because the record is incomplete, we are unable to determine
what discovery is still outstanding, if any. While the district court’s
finding of bad faith might be supported by a further analysis of the
requests versus the responses, neither the current record nor the dis-
trict court’s brief order adequately enables us to review the finding
that Lozano willfully and flagrantly failed to comply with a court
order. While Lozano’s conduct was likely partially deficient, the
record does not demonstrate a "pattern of indifference and disrespect
to the authority of the court" which this court has previously held to
warrant the outright dismissal of a case. See Mutual Fed. Sav., 872
F.2d at 93; see also Wilson v. Volkswagen of Am., 561 F.2d 494, 499-
510 (4th Cir. 1977) (evidence that party did not completely respond
to two orders compelling discovery insufficient to establish pattern of
misconduct warranting dismissal).
Second, the Government contends that it was prejudiced by the fact
that Lozano withheld material information. However, the Government
did not specify which documents or responses they were missing. In
UNITED STATES v. PROPERTY, 3714 CANCUN LOOP 5
the absence of a more particularized showing, the Government failed
to show that it was so prejudiced as to require an outright dismissal
of Lozano’s claim.
Third, the Government asserted that failure to dismiss Lozano’s
claim would send the message that courts may be "pushed, ignored,
and defied to the outermost limits." However, the record before us
does not demonstrate that this is a case where a party has intentionally
ignored discovery requests.
Finally, the Government contended that alternative sanctions would
be futile, as Lozano was proceeding in forma pauperis. However, the
district court did not consider any lesser sanctions. Further, the record
reflects that Lozano received a $4000 check during the proceedings,
so it is not at all clear that monetary sanctions would have been futile.
Based on the foregoing, we vacate the judgment of forfeiture, as
well as the entry of default, and remand for expansion of the record
and further consideration of the Government’s motion to strike. We
express no opinion on the merits of the motion to strike, holding only
that the record did not contain adequate support for the District
Court’s action. We dispense with oral argument because the facts and
legal contentions are adequately presented before the court and argu-
ment would not aid the decisional process.
VACATED AND REMANDED