Johnson v. Clearview AI, Inc.

Background

Charles Johnson sued Clearview AI, Inc., Hoan Ton-That, and Richard Schwartz in 2023. According to the amended complaint, Johnson founded SmartCheckr, LLC, with the individual defendants in 2017. A later Wind-Down Agreement allegedly gave Johnson a ten-percent ownership interest in Clearview AI and rights to certain sales commissions. Johnson principally claimed that the defendants breached that agreement.

The defendants answered the amended complaint and asserted a counterclaim against Johnson. Johnson answered the counterclaim. In January 2025, while the court was addressing discovery problems, Johnson stated that he wanted to dismiss his claims. Those claims were dismissed with prejudice, but the counterclaim remained, so discovery continued.

Discovery violations and prior sanctions

The court described repeated problems with Johnson’s discovery responses and document searches. It found that Johnson and his counsel had not adequately searched or produced potentially relevant texts, social-media materials, and other documents. The court also found that Johnson made false or misleading statements about the Signal messaging platform and about supposed Department of Homeland Security agents who allegedly prevented him from providing discovery. The court stated that the agency could not locate a special agent with the names Johnson provided and concluded there was no basis for withholding discovery.

The court had repeatedly warned Johnson about violating its orders. It also restricted his direct contact with defendants and prohibited social-media statements about defense counsel, while warning that further violations could lead to sanctions. In April 2025, the court imposed $2,000 and $5,000 sanctions for two Substack posts and warned that continued violations could result in larger monetary sanctions, striking his Answer, or default judgment. In May 2025, defendants reported that Johnson still had not produced documents or electronically stored information and had said he would not provide further discovery. The court then ordered him to explain why his Answer should not be stricken and default judgment should not be entered on the counterclaim.

Jurisdiction ruling

Johnson moved under Federal Rule of Civil Procedure 12(b)(1), which allows a party to challenge the court’s subject-matter jurisdiction. The court denied that motion. It concluded that the counterclaim was compulsory because it arose from the same transaction or occurrence as Johnson’s original claim, that the court retained supplemental jurisdiction after Johnson dismissed his claims, and that the court alternatively had independent jurisdiction under 28 U.S.C. § 1332. The court also concluded that it had jurisdiction to impose sanctions.

Sanctions analysis

The court applied Federal Rule of Civil Procedure 37 and its inherent authority to control proceedings and sanction bad-faith conduct. It considered the willfulness and reason for Johnson’s noncompliance, whether lesser sanctions had worked, the length of the noncompliance, and the warnings Johnson had received.

The court found that Johnson’s conduct was willful and undertaken in bad faith. It determined that repeated warnings, conferences, and earlier monetary sanctions had not corrected the conduct. It also found that the discovery violations and prohibited postings had continued for a lengthy period and that Johnson had repeatedly been warned about the consequences. The court concluded that the case presented an extreme situation warranting severe sanctions.

Order

The court imposed the following sanctions:

- A $10,000 fine for Johnson’s continued violations, in addition to the $7,000 in earlier sanctions. - Striking Johnson’s Answer in its entirety. - Directing the Clerk of Court to enter default against Johnson. - Ordering Johnson to pay the reasonable expenses, including attorney’s fees, caused by his failure to comply with discovery orders.

The court specifically found that Johnson’s failure was not substantially justified and that no other circumstances made an award of expenses unjust. It stated that judgment would be entered against Johnson regarding liability on the defendants’ counterclaim. The matter was referred to Magistrate Judge Sarah Netburn for an inquiry into damages on the counterclaim and the fees and expenses recoverable under Rule 37. The court separately denied Johnson’s Rule 12(b)(1) motion to dismiss for lack of subject-matter jurisdiction.