Operating Engineers' Health and Welfare Trust Fund for Northern California v…

Background

The plaintiffs brought an action under the Employee Retirement Income Security Act to compel Central Valley Construction to comply with an audit of payroll records covering October 29, 2014, through the date of inspection. Central Valley scheduled an audit and supplied some documents, but the plaintiffs alleged that it failed to provide its cash disbursements journal or equivalent records.

The plaintiffs later served discovery requesting information ordinarily disclosed by that journal. Central Valley did not respond. After a meet-and-confer process, the court ordered Central Valley to provide discovery responses and responsive documents by January 10, 2019, and later issued another order requiring production within 21 days of March 13, 2019. Central Valley did not meet those deadlines. The court also noted that defense counsel David C. Johnston did not appear at an August 27, 2019 case-management conference and did not timely respond to earlier orders to show cause.

Motion for sanctions

The plaintiffs moved for sanctions under Federal Rule of Civil Procedure 37 based on Central Valley’s failure to comply with three court orders requiring document production. Rule 37 permits sanctions for disobeying discovery orders, including monetary sanctions, limits on evidence or claims, striking pleadings, staying proceedings, dismissal, default judgment, or contempt. The court found that the discovery had been overdue for almost a year, that Johnston had received multiple opportunities to produce the documents, and that his personal hardships did not justify the failure or make an award of fees and costs unjust.

The court therefore granted the plaintiffs’ motion for sanctions. It rejected Central Valley’s argument that the requested sanctions were unreasonable because they exceeded the amount potentially at issue in the underlying case. The court stated that this motion concerned Central Valley’s failure to meet its discovery obligations, not the merits of the underlying case.

Amount of the award

The plaintiffs requested $6,986.50 in attorney fees and $403.89 in costs. The court deducted $1,150 from the requested fees because five hours of attorney Matthew P. Minser’s time related to an earlier sanctions motion that had been denied for failure to provide billing records. The court found the remaining attorney and paralegal hours reasonable and found the requested hourly rates—$230 for attorneys and $135 for paralegals—reasonable.

The court awarded $5,836.50 in attorney fees and $403.89 in costs, totaling $6,240.39. The court stated that the costs were for Lexis research and courtesy-copy delivery after the plaintiffs clarified their original cost description.

Who must pay

Johnston accepted responsibility at the hearing for the failure to produce the documents and the delay of more than one year. The court ordered Johnston to personally pay the sanctions award and prohibited him from passing any part of the expense to Central Valley, which the court found had not been responsible for his conduct.

Separate order to show cause

The court had required Johnston to explain why he should not personally pay $1,000 for failing to attend the case-management conference and whether he could continue representing Central Valley. Although the court found that Johnston was responsible for appearing and complying with court orders, it declined to impose separate sanctions because Johnston had found new counsel for Central Valley and expected a substitution of counsel to be filed. The court discharged the September 30, 2019 order to show cause.

Disposition

The court granted the plaintiffs’ motion for sanctions in the amount of $6,240.39. Johnston was ordered to pay the award directly to the plaintiffs within 60 days, Central Valley was ordered to produce the previously ordered documents within 30 days, and the September 30, 2019 order to show cause was discharged.