Marlyn Sali v. Corona Regional Medical Center

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
MARLYN SALI, on behalf of No. 15-56389
themselves, all others situated and
the general public; DEBORAH D.C. No.
SPRIGGS, on behalf of themselves, all 5:14-cv-00985-
others situated and the general PSG-JPR
public; BISNAR CHASE, LLP,
Plaintiffs-Appellants,
OPINION
v.
CORONA REGIONAL MEDICAL
CENTER; UHS OF DELAWARE INC.,
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
Philip S. Gutierrez, District Judge, Presiding
Argued and Submitted February 6, 2017
Pasadena, California
Filed March 19, 2018
Before: Andrew J. Kleinfeld, Sandra S. Ikuta,
and Jacqueline H. Nguyen, Circuit Judges.
Opinion by Judge Nguyen
2 SALI V. CORONA REG’L MED. CTR.
SUMMARY *
Discovery
The panel affirmed the district court’s contempt
judgment arising after plaintiffs’ counsel failed to pay
sanctions when they did not produce their expert at a
deposition as ordered.
The panel held that under Fed. R. Civ. P. 37’s general
discovery enforcement provisions, a court can order a party
to produce its nonparty expert witness at a deposition, and if
the party makes no effort to ensure that its witness attends
the deposition, sanction the party’s counsel when the witness
fails to appear unless the failure to produce the expert “was
substantially justified or other circumstances make an award
of expenses unjust.” Fed. Civ. P. 37(b)(2)(C). The panel
held that the Rule 37 sanctions were reasonable in this case.
COUNSEL
Jerusalem F. Beligan (argued) and Brian D. Chase, Bisnar
Chase LLP Newport Beach, California, for Plaintiffs-
Appellants.
Christina H. Hayes (argued), Khatereh Sage Fahimi, and
Stacey E. James, Littler Mendelson P.C., San Diego,
California, for Defendants-Appellees.
*
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
SALI V. CORONA REG’L MED. CTR. 3
OPINION
NGUYEN, Circuit Judge:
The discovery process in theory should be cooperative
and largely unsupervised by the district court. But when
required disclosures aren’t made or cooperation breaks
down, Federal Rule of Civil Procedure 37 allows a party to
move for an order compelling disclosures or discovery. If
the order is disobeyed, the court can impose contempt and
other sanctions. Federal Rule of Civil Procedure 45, which
governs the issuance of subpoenas, also provides for
contempt sanctions when a subpoena is disobeyed.
The question here is whether Rule 45 is the exclusive
mechanism for compelling a nonparty to appear at a
deposition and obtaining sanctions for noncompliance. We
hold that under Rule 37’s general discovery enforcement
provisions, a court can order a party to produce its nonparty
expert witness at a deposition and, if the party makes no
effort to ensure that its witness attends the deposition,
sanction the party’s counsel when the witness fails to appear
unless the failure to produce the expert “was substantially
justified or other circumstances make an award of expenses
unjust.” Fed. R. Civ. P. 37(b)(2)(C). Because the Rule 37
sanctions were reasonable in this case, we affirm the district
court’s judgment.
I.
Marlyn Sali and Deborah Spriggs are registered nurses
who instituted a class action against their former employer,
Corona Regional Medical Center, and its corporate parent,
UHS of Delaware Inc., for alleged violations of wage and
hour laws. Plaintiffs moved for class certification with
supporting declarations from their expert economist, Mark
4 SALI V. CORONA REG’L MED. CTR.
Falkenhagen, and expert statistician, Dr. Richard Drogin. As
defendants were preparing their opposition, the parties
became embroiled in a discovery dispute.
Defendants sought to depose Falkenhagen and Drogin in
advance of the April 16, 2015 deadline for filing the
opposition to class certification. After an unproductive
email exchange, in which the parties’ counsel dickered over
fees, defendants subpoenaed Falkenhagen to be deposed on
March 30, 2015. Plaintiffs interposed various objections,
which defendants dismissed as “insufficient to prevent a
subpoenaed deposition from moving forward.” On the
scheduled day of the deposition, neither Falkenhagen nor
plaintiffs’ counsel showed up.
The next day, on April 1, defendants informed plaintiffs
that they would be applying ex parte for sanctions and to
compel Falkenhagen’s deposition. Counsel then met and
conferred regarding the expert depositions as required under
the local rules. See C.D. Cal. L.R. 37-1. Defendants agreed
to pay Falkenhagen’s fee prior to his deposition. They
sought to depose him on April 9, but plaintiffs’ counsel was
taking a vacation that week and told defendants’ counsel that
Falkenhagen would be unavailable then. Plaintiffs offered
to produce Falkenhagen for deposition on April 13, 1 but
defendants didn’t accept because they felt “it was imperative
the depositions occur prior to April 10.”
1
According to defendants’ counsel, plaintiffs’ counsel
“affirmatively stated that [he would be] available for Mr. Falkenhagen’s
deposition on [April 13].” Plaintiffs’ counsel asserted that he told them
“maybe, maybe” he could produce Falkenhagen then, but he needed to
know before he left on vacation in order to set it up. The magistrate
judge found that, regardless of context, plaintiffs never disputed that they
represented Falkenhagen was available on April 13.
SALI V. CORONA REG’L MED. CTR. 5
Defendants then applied ex parte to compel
Falkenhagen’s and Drogin’s depositions on April 9 and 10,
respectively. In an order dated April 7, 2015, the magistrate
judge denied the request, finding that defendants were “not
without fault in creating the circumstances” because they
inexcusably waited to arrange the depositions. The
magistrate judge acknowledged that plaintiffs’ counsel
“exacerbated this situation by apparently failing to respond
to inquiries from Defendants, having extremely limited
availability, and failing to seek a protective order concerning
the noticed depositions.” However, given plaintiffs’ offer to
make Falkenhagen available for deposition immediately
after their attorney’s vacation, the magistrate judge found
that defendants would have sufficient time to incorporate his
testimony into their opposition to class certification. The
order concluded: “Plaintiffs are, however, instructed to
produce Falkenhagen for deposition on April 13.”
Defendants subpoenaed him for that date.
Once again, Falkenhagen and plaintiffs’ counsel failed
to appear at the deposition. 2 Defendants moved for
sanctions under Rule 37. The magistrate judge found that
plaintiffs weren’t substantially justified in disobeying the
order to produce Falkenhagen for deposition and sanctioned
counsel $15,112 for defendants’ costs associated with the
deposition and motion for sanctions. When counsel didn’t
2
In its order denying class certification, the district court cited this
incident as an example of plaintiffs’ counsel’s “lax approach” to
prosecuting the action. The court found that plaintiffs’ counsel wasn’t
adequate to represent the proposed class.
6 SALI V. CORONA REG’L MED. CTR.
pay, the district court entered a contempt judgment, from
which plaintiffs and their counsel appeal. 3
II.
We have jurisdiction pursuant to 28 U.S.C. § 1291. We
review de novo whether the magistrate judge had the power
under Rule 37 to order the plaintiffs’ counsel to produce their
expert at a deposition and sanction them for noncompliance.
See Unigard Sec. Ins. Co. v. Lakewood Eng’g & Mfg. Corp.,
982 F.2d 363, 367 (9th Cir. 1992) (per curiam) (citing
Halaco Eng’g Co. v. Costle, 843 F.2d 376, 379 (9th Cir.
1988)). The sanctions order is reviewed for abuse of
discretion, and the underlying factual findings for clear error.
Valley Eng’rs Inc. v. Elec. Eng’g Co., 158 F.3d 1051, 1052
3
Defendants contend that we lack jurisdiction to review the
underlying order compelling plaintiffs to produce Falkenhagen because
plaintiffs didn’t timely appeal it. But an order to produce discovery isn’t
immediately appealable. Mohawk Indus., Inc. v. Carpenter, 558 U.S.
100, 108 (2009). The subsequent sanctions order and contempt
judgment were likewise interlocutory and non-appealable until entry of
final judgment. See Cunningham v. Hamilton County, 527 U.S. 198, 210
(1999). Although “certain exceptions are recognized in cases involving
orders and sanctions against non-parties,” David v. Hooker, Ltd.,
560 F.2d 412, 415 (9th Cir. 1977), the discovery order and sanctions here
were directed at plaintiffs and their counsel—not Falkenhagen.
Subsequently, pursuant to the parties’ stipulation, the district court
entered a final order dismissing all claims and counterclaims. Plaintiffs
and their counsel then timely appealed the sanctions order and contempt
judgment. Therefore, we have jurisdiction to consider those orders as
well as the underlying discovery order. See, e.g., In re Rains, 428 F.3d
893, 901 (9th Cir. 2005) (“[O]nce a final judgment is entered, an appeal
from an order that otherwise would have been interlocutory is then
appealable.” (quoting In re Eastport Assocs., 935 F.2d 1071, 1075 (9th
Cir. 1991))).
SALI V. CORONA REG’L MED. CTR. 7
(9th Cir. 1998) (citing Anheuser-Busch, Inc. v. Nat.
Beverage Distribs., 69 F.3d 337, 348 (9th Cir. 1995)).
III.
Plaintiffs and their counsel contend that the district court
lacked authority to compel Falkenhagen’s deposition under
Rule 37(a) and impose sanctions under Rule 37(b). They
also contend that their actions were substantially justified
and the sanctions unjust.
A.
When interpreting the scope of a Federal Rule of Civil
Procedure, we begin with the text. See Krupski v. Costa
Crociere S. p. A., 560 U.S. 538, 547 (2010). Rule 30
authorizes a party to take the deposition of “any person,”
generally without the court’s permission. Fed. R. Civ. P.
30(a)(1). “The deponent’s attendance may be compelled by
subpoena under Rule 45.” Id. If the deponent disobeys the
subpoena, the district court can hold the deponent in
contempt. Fed. R. Civ. P. 45(g). While a subpoena’s
judicial imprimatur and the threat of sanctions for
noncompliance is one way to ensure that a deponent shows
up for a deposition, it isn’t the only way.
The magistrate judge issued sanctions under Rule 37(b),
which empowers the court to take remedial action if a party
“fails to obey an order to provide or permit discovery,
including an order under Rule . . . 37(a).” Fed. R. Civ. P.
37(b)(2)(A). Rule 37(a) provides generally that “a party may
move for an order compelling disclosure or discovery.” Fed.
R. Civ. P. 37(a)(1). In particular, Rule 37(a) permits a party
to seek to compel “an answer, designation, production, or
inspection” under certain circumstances, Fed. R. Civ. P.
37(a)(3)(B), including when “a deponent fails to answer a
8 SALI V. CORONA REG’L MED. CTR.
question asked under Rule 30 or 31,” Fed. R. Civ. P.
37(a)(3)(B)(i). Plaintiffs were ordered to produce their
expert, Falkenhagen, for deposition, where he would be
required to respond to questions and disclose his expert
views, see Fed. R. Civ. P. 30. As we have recognized, Rule
37(a) encompasses an order to attend a deposition. See SEC
v. Seaboard Corp., 666 F.2d 414, 416 (9th Cir. 1982) (“Since
the [Rule 37(a)] order required [the cross-defendant] not
only to pay money, but also to give his deposition, it was
clearly also ‘an order to provide or permit discovery.’”
(quoting Fed. R. Civ. P. 37(b)(2))).
In the context of Rule 37(b) sanctions, we “read broadly”
the term “order” under Rule 37(a). Unigard, 982 F.2d at 368
(citing Henry v. Sneiders, 490 F.2d 315, 318 (9th Cir. 1974)).
Both the advisory committee notes and case law suggest that
Rule 37’s “requirement for an ‘order’ should . . . include any
order relating to discovery.” Halaco Eng’g, 843 F.2d at 379;
see Fed. R. Civ. P. 37(b) advisory committee’s note to 1970
amendment (“The scope of Rule 37(b)(2) is broadened by
extending it to include any order ‘to provide or permit
discovery’ . . . . Various rules authorize orders for discovery
. . . . Rule 37(b)(2) should provide comprehensively for
enforcement of all these orders.”).
Rule 37 explicitly authorizes the court to sanction parties
for failing to attend their own depositions. See Fed. R. Civ.
P. 37(d)(1)(A)(i). No subpoena is needed. The only
requirement is that the party be “served with proper notice”
of the deposition beforehand. Id.; see 7 James Wm. Moore
et al., Moore’s Federal Practice § 30.21 (3d ed. 2017); see
also Jules Jordan Video, Inc. v. 144942 Can. Inc., 617 F.3d
1146, 1158 (9th Cir. 2010) (observing that “a simple notice
of deposition is sufficient to compel [a party’s] attendance”).
SALI V. CORONA REG’L MED. CTR. 9
Although a nonparty’s attendance generally can be
compelled only by subpoena, 4 Jules Jordan Video, 617 F.3d
at 1158, here the court’s discovery order and sanctions were
directed not at the retained expert but rather at the parties
themselves and their counsel. Rule 37 is largely silent as to
whether the court can compel a party to produce its general
employees or persons over whom the party might reasonably
be expected to exert influence or control. However, the rule
isn’t entirely silent. Rule 37(b)(2)(B) provides for sanctions
“[i]f a party fails to comply with an order under Rule 35(a)
requiring it to produce another person for [physical or
mental] examination.” Rule 35(a), in turn, authorizes the
court “to order a party to produce for examination a person
who is in its custody or under its legal control.” Fed. R. Civ.
P. 35(a)(1). This means, for example, that “that a parent or
guardian suing to recover for injuries to a minor may be
ordered to produce the minor for examination.” Id. advisory
committee’s note to 1970 amendment.
4
There are exceptions to this rule. If the party is a corporation or
other organization, its officers, directors, managing agents, and persons
the organization designates to testify about the deposition’s subject
matter can be sanctioned for disobeying a court order to appear. See Fed.
R. Civ. P. 30(b)(6), 37(b)(2)(A). Some courts have expanded this
principle to include witnesses who are effectively under the party’s
control, such as family members, see Robbins v. Abrams, 79 F.R.D. 600,
602 (S.D.N.Y. 1978), and officers of wholly owned subsidiaries, see
Martin Eng’g Co. v. Vibrators, Inc., 20 Fed. R. Serv. 2d 486
(E.D. Ark. 1975). See Moore et al., supra § 30.21. Because it isn’t
necessary for us to decide, we assume that a typical expert witness like
Falkenhagen has too attenuated a relationship with the party engaging
his services to be personally subject to court sanctions absent a subpoena.
But cf. In re Hanford Nuclear Reservation Litig., 534 F.3d 986, 1016
(9th Cir. 2008) (holding that testimony of opposing party’s expert was
properly introduced as admission of party opponent).
10 SALI V. CORONA REG’L MED. CTR.
As to whether courts can order parties to produce
nonparties generally, our interpretation of Rule 37(a)(5) is
relevant. Rule 37(a)(5) requires, upon a party’s successful
motion to compel discovery, that the court order “the party
or deponent whose conduct necessitated the motion, the
party or attorney advising that conduct, or both to pay the
movant’s reasonable expenses incurred in making the
motion, including attorney’s fees.” “It applies,” we have
explained, “to . . . motions to compel nonparties to attend
depositions.” Pennwalt Corp. v. Durand-Wayland, Inc., 708
F.2d 492, 494 n.4 (9th Cir. 1983). 5
Thus, Pennwalt strongly suggests that the district court’s
discovery order and sanctioning of plaintiffs for disobeying
that order was within the scope of its Rule 37 powers. Other
circuits have approved of similar orders and sanctions. See
Barrett v. Atl. Richfield Co., 95 F.3d 375, 380 (5th Cir. 1996)
(concluding district court properly sanctioned plaintiffs for
violating discovery-related scheduling order in part “by
failing to produce their experts for scheduled depositions”);
Taylor v. Medtronics, Inc., 861 F.2d 980, 986 (6th Cir. 1988)
(affirming sanction for discovery abuses under Rule 37(b)(2)
where plaintiffs repeatedly failed to make their expert
available for deposition); Nat’l Life Ins. v. Hartford Accident
& Indem. Co., 615 F.2d 595, 600 (3d Cir. 1980) (concluding
district court should have granted Rule 37 motion to compel
accountant to appear for deposition without asserting
privilege indiscriminately). We see no reason why Rule 37,
which broadly empowers the district court to issue orders
5
Pennwalt refers to Rule 37(a)(4), which was recodified as
subdivision (a)(5) in 2007. See Linde v. Arab Bank, PLC, 706 F.3d 92,
104 n.39 (2d Cir. 2013). The rule’s substance is unchanged. Pennwalt’s
statement in this regard was dictum because that case involved a
nonparty’s failure to comply with a subpoena duces tecum.
SALI V. CORONA REG’L MED. CTR. 11
enforcing a party’s discovery obligations, wouldn’t allow
the court to compel a party to produce its expert for
deposition.
Citing Pennwalt, plaintiffs concede that “Rule 37 used to
authorize courts to compel nonparties to attend depositions,”
but claim without explanation that “that authority has since
been eliminated.” The rule’s language, however, is the same
as it was when Pennwalt was decided. We therefore
disagree with plaintiffs that its meaning has changed.
Plaintiffs argue that the order compelling them to
produce Falkenhagen “defies common sense” because their
counsel doesn’t represent him and they have no legal
relationship with him that would enable them to compel him
to attend a deposition against his will. It’s true that without
a subpoena neither plaintiffs nor the court could have
compelled Falkenhagen to appear at the deposition. See
Jules Jordan Video, 617 F.3d at 1158. But plaintiffs
misunderstand the nature of the order.
While an order to produce a deponent under Rule 37 and
a subpoena under Rule 45 are intended to bring about the
same outcome, the order’s focus and the consequences of
noncompliance are different. A Rule 37 order is directed at
the party. It compels the party to use its best efforts to secure
the nonparty’s attendance at the deposition. But it doesn’t
demand the impossible. The party can avoid sanctions by
showing that it attempted in good faith to comply with the
order but was unable to produce the nonparty—regardless of
whether the nonparty’s absence was justified. See Falstaff
Brewing Corp. v. Miller Brewing Co., 702 F.2d 770, 784 n.8
(9th Cir. 1983) (“[T]he use of Rule 37 sanctions must be
tempered by due process. . . . [I]t is improper to dismiss a
claim or to exclude evidence if the failure to comply with a
discovery order is due to circumstances beyond the
12 SALI V. CORONA REG’L MED. CTR.
disobedient party’s control.”); see also Société
Internationale Pour Participations Industrielles et
Commerciales, S.A. v. Rogers, 357 U.S. 197, 212 (1958)
(“Rule 37 should not be construed to authorize dismissal of
this complaint because of petitioner’s noncompliance with a
pretrial production order when it has been established that
failure to comply has been due to inability, and not to
willfulness, bad faith, or any fault of petitioner.”).
Thus, a party won’t incur Rule 37 sanctions if, despite its
efforts, a recalcitrant nonparty witness refuses to attend an
ordered deposition. Even if the party could have produced
the nonparty but fails to do so, the party can still avoid
incurring “reasonable expenses . . . caused by the failure” if
it “was substantially justified or other circumstances make
an award of expenses unjust.” Fed. R. Civ. P. 37(b)(2)(C).
A subpoena under Rule 45, in contrast, is directed at the
nonparty. It obligates the nonparty to appear at the
scheduled deposition at pain of being held in contempt.
None of the other sanctions available under Rule 37 are
available against the nonparty. 6 And the standard for a
6
These include:
(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;
SALI V. CORONA REG’L MED. CTR. 13
contempt finding differs from a Rule 37 sanction. The court
“may hold in contempt a person who, having been served,
fails without adequate excuse to obey the subpoena or an
order related to it.” Fed. R. Civ. P. 45(g). Although
“[i]nability to comply with an order is ordinarily a complete
defense to a charge of contempt,” United States v. Asay,
614 F.2d 655, 660 (9th Cir. 1980), as it is with a motion for
Rule 37 sanctions, the focus is on the deponent’s rather than
the party’s ability to comply.
As a practical matter, a party seeking to compel a
nonparty’s deposition would be wise to use the subpoena
process. Still, there may be good reason to seek an order
compelling the opposing party to produce its witness. For
example, if the party seeking the deposition suspects that the
opposing party is the bottleneck—either directing or
encouraging its witness not to appear—an order directed at
the opposing party may be fruitful. Or the opposing party
“may have . . . practical reasons for not wanting its own
witness to be served with a subpoena,” and “service of an
unnecessary subpoena . . . against the wishes of [the
opposing party’s] counsel would [be] unseemly and
inordinately bellicose.” In re Keystone Foods, Inc., 134 B.R.
828, 830 (Bankr. W.D. Pa. 1991).
(iv) staying further proceedings until the order is
obeyed;
(v) dismissing the action or proceeding in whole or in
part; [and]
(vi) rendering a default judgment against the
disobedient party . . . .
Fed. R. Civ. P. 37(b)(2)(A).
14 SALI V. CORONA REG’L MED. CTR.
B.
The magistrate judge ordered Sali “to produce
Falkenhagen for deposition on April 13, 2015,” an order
under Rule 37(a) to cooperate in discovery. There’s no
evidence that plaintiffs made any effort to secure
Falkenhagen’s attendance at the deposition, after counsel
affirmatively represented to the court and opposing counsel
that Falkenhagen would be available for deposition on April
13. To the contrary, plaintiffs’ counsel went on vacation for
a week knowing there was a pending ex parte application to
compel the deposition but making no provision for
responding to the court’s ruling. Counsel didn’t even read
the order until after the time for the deposition had passed.
There was no justification for plaintiffs’ failure to
attempt to comply with the court’s order. Accordingly, the
court had authority under Rule 37(b)(2)(A) to “issue further
just orders” in the nature of sanctions, including ordering the
payment of expenses “unless the failure was substantially
justified or other circumstances make an award of expenses
unjust.” Fed. R. Civ. P. 37(b)(2)(C). Here, the award of
defendants’ deposition-related costs wasn’t unjust. Rather,
it was the mildest of the possible Rule 37 sanctions.
* * *
For the foregoing reasons, the district court’s contempt
judgment is AFFIRMED.