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Discovery Sanctions — Attorney's Fees under Rule 37(b)(5) — Although Phrased in Seemingly Mandatory Terms, Court's Discretion Is Broad — Excessive Fee Request May Be Denied as "Unjust" — Standard under 12(c) = Summary Judgment
Joseph Hage Aaronson
Jones v. Dufek, 2016 U.S. App. LEXIS 13549 (D.C. Cir. July 26, 2016):
Tawanda Jones owed $1,050.29 to Bank of America. Bank of America sold the debt to CACH, LLC. That company hired the Law Office of David Sean Dufek in San Diego, California, to help it collect on the debt. In 2013, Dufek sent Jones the following letter:
Dear TAWANDA JONES,
This office has been retained to collect the debt owed by you to CACH, LLC.
As of the date of this letter you owe the sum of $1,050.29. Because of interest, late charges and other charges that may vary from day to day the amount due on the day you pay may be greater.
You are hereby advised: Unless you, the consumer, notify this office within thirty days after receipt of this notice that you dispute the validity of this debt or any portion thereof, the debt will be assumed to be valid by this office. [*2] If you, the consumer, notify this office in writing within thirty days after receipt of this notice, that the debt or any portion thereof is disputed, this office will obtain verification of the debt or a copy of a judgment against you and a copy of such verification or judgment will be mailed to you by this office. Upon your written request within thirty days after receipt of this notice this office will provide you with the name and address of the original creditor, if different from the current creditor.
Please remit your payment to: David Sean Dufek
If you would like to make a payment online, please visit our website: [website URL]
Please call our office. The toll free number is [telephone number].
[Signature]
Attorney David Sean Dufek
Please be advised that we are acting in our capacity as a debt collector and at this time, no attorney with our law firm has personally reviewed the particular circumstances of your account.
Be advised this is an attempt to collect a debt. Any information obtained will be used for that purpose.
The letter appeared entirely on one sheet of letterhead captioned at the top with the words "Law Office of David Sean Dufek." The text of the letter, [*3] as well as the disclaimers below the signature block, were in the same readable font and size.
Jones alleges that this letter was deceptive and violated three statutes: the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq.; the District of Columbia Consumer Protection Procedures Act, D.C. Code § 28-3901 et seq.; and the District of Columbia Debt Collection Law, D.C. Code § 28-3814 et seq. She relies on different sections of each of these statutes, but there is one basic argument underlying all of her claims: that the letter falsely implies both that Dufek is meaningfully involved with the case as an attorney and that the creditor is threatening to bring a lawsuit to collect the debt. We disagree. The letter does not threaten any legal action, and the prominent disclaimer made clear that Dufek was acting only in his capacity as a debt collector.
The district court properly resolved these questions as a matter of law on a motion under Rule 12(c). See Jones, 77 F. Supp. 3d at 137. We agree that no reasonable juror could find the letter deceptive. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986); see also, e.g., Alexander v. City of Chicago, 994 F.2d 333, 336 (7th Cir. 1993) ("[T]he standard courts apply for summary judgment and for judgment on the pleadings 'appears to be identical.'") [*13] (quoting 5A Charles A. Wright and Arthur R. Miller, Federal Practice and Procedure § 1368 at 530 (1990)). As the Fifth Circuit put it, "There are some letters that, as a matter of law, are not deceptive . . .." Gonzalez, 577 F.3d at 606.
One extraneous matter remains. While their Rule 12(c) motion was awaiting a ruling, the defendants filed a motion for a protective order under Rule 26(c) to stop Jones from issuing "unauthorized discovery requests." A month later, the court denied this motion in a Minute Order. See Minute Order denying Motion to Quash, No. 1:14-cv-00533-RJL (D.D.C. Sept. 7, 2014). In response, Jones moved for attorneys fees under Federal Rule of Civil Procedure 26(c)(3). This rule incorporates Rule 37(a)(5) and states that if the court denies a motion for a protective order, the court "must, after giving an opportunity to be heard, require the movant . . . to pay" the opposing party's expenses and attorney's fees. Rule 37(a)(5) also states that "the court must not order this payment if the motion was substantially justified or other circumstances make an award of expenses unjust." Fed. R. Civ. P. 37(a)(5)(B).
District courts have "considerable discretion" to manage discovery. United States v. Philip Morris Inc., 347 F.3d 951, 955 (D.C. Cir. 2003). In particular, courts "possess broad discretion to impose sanctions for discovery violations under Rule 37." Parsi v. Daioleslam, 778 F.3d 116, 125 (D.C. Cir. 2015). In 1970, Rule 37 was amended and the [*14] section for awarding attorney's fees was rephrased in mandatory terms -- the court "must" grant attorney's fees under certain conditions and "must not" grant them under others. Fed. R. Civ. P. 37(a)(5)(B). The conditions are fairly vague, particularly the catch-all term that the court must not grant fees if doing so would be "unjust." Id. The advisory committee explained that this amendment did "not significantly narrow the discretion of the court" to award attorney's fees for discovery violations. Fed. R. Civ. P. 37 advisory committee's notes to 1970 amendments; see Marquis v. Chrysler Corp., 577 F.2d 624, 642 (9th Cir. 1978).
The district court did not explicitly deny the motion for attorney's fees. Its failure to award fees may be taken as a denial of the motion. Rule 37(a)(5) states that under certain circumstances, the court "must not order this payment," and that is what the court did. Fed. R. Civ. P. 37(a)(5); see also Fed. R. Civ. P. 52(a)(3). The district court did not abuse its discretion in coming to this decision. Jones's counsel had asked for $29,241 for sixty-five hours of work on this discovery issue.6 The court had discretion to find that this award would be excessive and therefore "unjust." In upholding the district court's refusal to grant Jones's motion, we are mindful that Rule 26(c)(3) is meant to prevent needless litigation and wasteful discovery [*15] disputes. Requiring still further proceedings in this case would not be consistent with that objective.
6 Jones's counsel initially asked for $22,761 for fifty-six hours of work, but later increased that figure by nearly 30% for the additional nine hours of work required to respond to Dufek's opposition to paying attorney's fees. Compare Motion for Attorney Fees at 8, No. 1:14-cv-00533-RJL (D.D.C. Sept. 15, 2014), ECF No. 28; with Errata Reply to Defendant's Opposition to Motion for Attorney Fees at 7, No. 1:14-cv-00533-RJL (D.D.C. Oct. 14, 2014), ECF No. 31.
Accordingly, we affirm the district court's judgment.
§ 1447(c) Sanctions: No Bad Faith Required; Abuse of Discretion Review — Evidence on Sanctions Motions: Rule 408 Does Not Bar Consideration of Settlement Discussions to Prove Bad Faith in Connection with a Sanctions Proceeding (Here, Relevant to Size of Sanctions Award) — Adequate Opportunity to Be Heard Afforded by Allowing Supplemental Briefing
Interlocutory Orders (Here, Compelling Arbitration) Do Not Merge Into A Final Judgment Of Dismissal Under Rule 41(b)
"Sanctions Should Not Be Used Lightly, And Should Be Used As A Lethal Weapon Only Under Extreme Circumstances" (Good Quote) — Inherent Power to Dismiss for Violation of Court Order Or Rule of Procedure Should Be Confined to Instances of Bad Faith — Meaning of "Excusable Neglect" — Factors under Rule 60(b) (Relief from Final Judgment) — Involuntary Dismissals "Should Be Confined To Instances Of 'Bad Faith — Dismissal Disfavored When Sanctionable Conduct Attributable to Counsel, Not Client
Purposes of Rule 37 Sanctions – Necessity District Court Set Forth Reasons – If Granted, Fees Are "Generally Mandatory" – Three Exceptions – 4 Ways An Appellant Can Abandon A Claim – Rule 69 Doesn't Limite Post-Judgment Discovery to Federal, As Opposed to State, Discovery Mechanisms – Dismissal Without Prejudice After Statute Of Limitations Has Run Is Reviewed As If It Were With Prejudice
Rule 37 Sanctions — Default Judgment — Three Purposes of Rule 37 Sanctions — Oral Order Sufficient under Rule 37(b)(2)(A) — Consideration of Lesser Sanctions Need Not Explicit, Particularly If Misconduct Is Egregious — Recidivism Appropriately Considered
Rule 37 Sanctions — Default Judgment — Death Penalty Sanctions: 4 Factors: (1) Willfulness, Bad Faith Or Fault (e.g., Flouting Court Order), (2) Client, Not Counsel, Responsible, (3) Substantial Prejudice, (4) Lesser Sanctions Insufficient — For Non-Death Penalty Sanctions, Sanction Merely Need Be Just And Related to The Particular Claim at Issue — List of Sanctions in Rule 37 Is Not Exhaustive
Rule 11 Sanctions — Appealability: Mere Criticism in Order Separately Imposing Sanctions Is Unappealable — Due Process Satisfied by Order Giving Clear Notice of Specific Conduct to Be Considered for Sanctions Even If Words "Show Cause" (Rule 11(c)(3)) Missing — Firm Appearing on Signature Page "Present[s]" Brief to Court (Unless Merely "Secondary" Counsel) — When Counsel Appears Unopposed, A Stricter Standard of Candor Applies — Mischaracterization of Submitted Document Sanctionable — Good Quotes: "Rule 11 Is Not A Strict Liability Provision" / "The Argument Is Like The Thirteenth Chime of A Clock: You Not Only Know It's Wrong, But It Causes You to Wonder About Everything You Heard Before" / "Pursuit of Sanctions by a Court Can Alter Its More Customary Relationship with Counsel and Its Role As Neutral Decisionmaker"
Rule 37(c)(1) Sanctions — Exclusion of Critical Evidence Generally Requires Willful Deception or Flagrant Disregard of Court Order — Disclosure of Undisclosed Rule 26(a)(1)(A)(i) During Discovery Precludes Claim of Surprise or Prejudice (and Satisfies Rule 26(e)(1)(A))
Inherent Power Sanctions — Notice of Contemplated Sanctions against Client (in Motion and Show Cause Order) Did Not Provide Notice of Potential Sanctions against Counsel — Finding of Bad Faith Required for Inherent Power Sanctions
Spoliation Sanctions: (1) Meaning of "Relevance" for Preservation vs. for Adverse Inference Purposes; (2) Only "Very Slight Showing" of Latter Required; (3) Adverse Inference Instruction OK for Negligent Spoliation of Tangible Evidence in D.C. Cir.; (4) Preponderance of Evidence for Adverse Inference Instruction vs. Clear & Convincing for Attorney's Fees; (5) Wide Range of Inherent Power Sanctions Available; (6) Two Sets of Factors for Adverse Inference Instruction (D.C. Cir.) — Prerequisites and Propriety in the Circumstances; (7) Ordinary vs. Gross Negligence; (8) Cite
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