Free Motion to Dismiss Counts/Claims - District Court of Arizona - Arizona

M. Brett Burns (admitted pro hac vice) [email protected] Stephanie K. Osteen (admitted pro hac vice) [email protected] AKIN GUMP STRAUSS HAUER & FELD LLP 1700 Pacific Avenue, Suite 4100 Dallas, Texas 75201 (214) 969-2800 facsimile (214) 969-4343 Tricia Schafer (018748) [email protected] MARISCAL, WEEKS, MCINTYRE & FRIEDLANDER, P.A. 2901 North Central Avenue, Suite 200 Phoenix, Arizona 85012 (602) 285-5000 facsimile (602) 285-5100 Attorneys for Defendants UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA Patrice Jerome, No. CV03-1913-PHX-MHM Plaintiff, v. Midway Holdings, Inc. et al. Defendants. DEFENDANTS' MOTION TO DISMISS PLAINTIFF'S ECONOMIC DAMAGES CLAIM AS DISCOVERY SANCTION OR, IN THE ALTERNATIVE, TO CONTINUE DEFENDANTS' DISPOSITIVE MOTION DEADLINE AND MEMORANDUM IN SUPPORT ORAL ARGUMENT REQUESTED

Defendants Midway Holdings, Inc. and Midway Chevrolet, Inc. submit this Motion to Dismiss Plaintiff's Economic Damages Claim as Discovery Sanction or, in the Alternative, to Continue Defendants' Dispositive Motion Deadline. 1
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PRELIMINARY STATEMENT In this discrimination and harassment case, Defendants Midway Holdings, Inc. and Midway Chevrolet, Inc. seek to dismiss Plaintiff's claim for economic damages as a sanction for Plaintiff's continued failure to provide requested and necessary discovery, even after being ordered to do so by the Court. The requested discovery primarily focuses on Plaintiff's claim for economic damages and her employment and other sources of income after being terminated by Midway Holdings, Inc. The requested discovery is necessary for Defendants to adequately present their defenses to Plaintiff's claims, including defenses appropriate for summary judgment disposition. Alternatively, if the Court does not dismiss Plaintiff's claim for economic damages, Defendants respectfully request a continuance of the deadline to file their summary judgment motions, so they may have adequate time to obtain the outstanding discovery from Plaintiff, subpoena necessary records from third parties, and possibly depose more witnesses. Defendants also will need to provide some of the discovery material to one or more of their expert witnesses, who will in turn require a reasonable amount of time to analyze the information and possibly provide supporting declaration testimony for Defendants' motions. FACTUAL BACKGROUND 1. On September 15, 2004, Defendants served their first discovery requests on

Plaintiff, and Plaintiff responded on November 2, 2004. (Ex. A, Declaration of Stephanie K. Osteen ("Osteen Decl.") ¶ 3 and Ex. A1.) Among other things, Defendants requested: (1) calculations related to Plaintiff's claim for back pay; (2) information 2
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related to Plaintiff's efforts to secure subsequent employment; and (3) documents supporting this information. (See Ex. A1.) 2. On April 8, 2005, Plaintiff served her Initial Disclosures, which contained

only a conclusory estimate of damages. (Ex. A, Osteen Decl. ¶ 4 and Ex. A2.) 3. In Plaintiff's deposition on July 27, 2005, Plaintiff testified that she had pay

records relating to her subsequent employment. (Ex. A, Osteen Decl. ¶ 5 and Ex. A3, Jerome Dep. 317:13-318:11, 322:12-323:5, 324:3-7, 325:17-326:4, 330:3-332:2.) 4. On August 30, 2005, counsel for Defendants faxed a letter to counsel for

Plaintiff requesting the pay records that Plaintiff testified about in her deposition and identified the Request For Production to which the records were responsive. (Ex. A, Osteen Decl. ¶ 6 and Ex. A4.) 5. On August 31, 2005, Defendant Midway Holdings, Inc. served a Second

Request for Production of Documents on Plaintiff. (Ex. A, Osteen Decl. ¶ 7 and Ex. A5.) The requests sought: (1) Plaintiff's federal and state income tax returns for 2002, 2003, and 2004; (2) original signed releases for Plaintiff's federal and state tax information, social security earnings, and unemployment records; and (3) all bank statements for any checking or savings accounts owned by Plaintiff from April 1, 2002 through present. (See Ex. A5.) 6. Plaintiff's responses to the Second Request for Production of Documents

were due by September 30, 2005. Fed. R. Civ. P. 33(b), 34(b). Plaintiff did not respond by that date and has yet to respond. (Ex. A, Osteen Decl. ¶ 15.) Plaintiff did provide

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faxed copies of the requested releases on December 12, 2005, but has yet to furnish the original1 signed releases as of the date of this motion. (Ex. A, Osteen Decl. ¶ 15.) 7. On September 27, 2005, counsel for Defendants sent a second letter to

Plaintiff's counsel again requesting the pay records that Plaintiff testified about in her deposition. (Ex. A, Osteen Decl. ¶ 8 and Ex. A6.) 8. On September 28, 2005, counsel for Defendants sent a third letter to

counsel for Plaintiff confirming their conversation from the previous day regarding outstanding discovery. In the letter, counsel for Defendants asked counsel for Plaintiff to confirm when she could expect to receive the pay records that Plaintiff testified about in her deposition and supplemental calculations for Plaintiff's alleged economic damages. (Ex. A, Osteen Decl. ¶ 10 and Ex. A7.) 9. On October 25, 2005, counsel for Defendants sent a fourth letter to counsel

for Plaintiff again requesting the pay records that Plaintiff testified about in her deposition and supplemental calculations for Plaintiff's alleged economic damages, which still had not been received. (Ex. A, Osteen Decl. ¶ 11 and Ex. A8.) 10. On December 1, 2005, Defendants notified the Court that they needed the

Court's assistance in compelling Plaintiff's responses and resolving the outstanding discovery issues in this case. (Ex. A, Osteen Decl. ¶ 12 and Ex. A9.)

As the Court may be aware, governmental agencies, such as the Arizona Department of Economic Security, the Social Security Administration, and the Internal Revenue Service, require original signatures on releases.

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11.

The Court conducted a Discovery Dispute Hearing on December 6, 2005

with counsel for the parties. (See Docket Entry No. 52.) Counsel for Plaintiff represented to the Court that some of the documents sought by Defendants were no longer in Plaintiff's control or custody. (See id.) The Court ordered that Plaintiff provide other outstanding discovery, including supplemental damages calculations and responses to Defendants' August 31, 2005 discovery requests, by December 16, 2005, as the mandatory Settlement Conference with Magistrate Judge Duncan was scheduled for December 20, 2005. (See id.) 12. Despite this Court's Order, Defendants did not receive the requested

discovery by December 16, 2005, nor did Defendants receive the requested discovery before the Settlement Conference on December 20, 2005. (Ex. A, Osteen Decl. ¶ 13.) Therefore, Defendants were required to participate in settlement discussions without the benefit of the information ordered produced by the Court. (See Docket Entry No. 52.) 13. The parties were unable to resolve and settle the case at the Settlement

Conference. (See Docket Entry No. 53.) 14. After the Settlement Conference ended on December 20, 2005, Plaintiff's

counsel faxed a letter later that day containing what Plaintiff describes as supplemental disclosures regarding back pay calculations and earnings estimations for 2003, 2004, and 2005. (Ex. A, Osteen Decl. ¶ 14 and Ex. A10.) 15. The letter merely provides estimates and admitted conjecture of Plaintiff's

2003, 2004, and 2005 interim earnings and is wholly inadequate. (Ex. A10.) The letter

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does not breakdown the calculations or tie the earnings estimates to any employers or other sources of income. (See Ex. A10.) 16. Plaintiff still has not responded to Defendants' August 31, 2005

discovery requests. (Ex. A, Osteen Decl. ¶ 15.) The only documents that have been produced in response to these requests are releases that do not contain original signatures; no other responses or documents have been produced. (Ex. A, Osteen Decl. ¶ 15.) 17. The deadline for dispositive motions is January 19, 2006. (See Docket

Entry No. 54.) POINTS AND AUTHORITIES I. Plaintiff's Claims for Economic Damages Should Be Dismissed Plaintiff has shown a disregard for her obligations under the Federal Rules of Civil Procedure, and repeated attempts by Defendants to obtain the requested information without Court intervention have been fruitless. When the Court intervened and ordered Plaintiff to produce discovery information and documents by December 16, 2005, Plaintiff disregarded the Court's deadline, providing only some of the information four days late. This behavior justifies dismissal of Plaintiff's claim for economic damages. When deciding whether to dismiss a case or part of case as terminating sanctions, a court should consider five factors: (1) the public's interest in expeditious resolution of litigation; (2) the Court's need to manage its docket; (3) the risk of prejudice to the defendants; (4) the availability of less drastic measures; and (5) the public policy favoring disposition of cases on the merits. Computer Task Group, Inc. v. Brotby, 364 F.3d 1112, 1115 (9th Cir. 2004) (considering these factors and upholding district court's terminating 6
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sanctions under Federal Rule 37(d)); Pagtalunan v. Galaza, 291 F.3d 639, 642 (9th Cir. 2002) (examining these factors and upholding district court's dismissal of case for failure to prosecute); Malone v. United States Postal Serv., 833 F.2d 128, 130 (9th Cir. 1987) (applying factors and upholding dismissal of case for failure to comply with pretrial order). As discussed below, these factors all weigh in favor of dismissing Jerome's claims for economic damages. See Pagtalunan, 291 F.3d at 643 (affirming dismissal where three factors weighed in favor of dismissal); Yourish, Yourish v. California Amplifier, 191 F.3d 983, 992 (9th Cir. 1999) (affirming dismissal where three factors "strongly favor[ed] dismissal"); Malone, 833 F.2d at 133 n.2 (affirming dismissal where four factors weighed in favor of dismissal). A. The public's interest in expeditious resolution of the litigation

When a party has a violated a court order, as Plaintiff has here, this factor weighs in favor of dismissal. Brotby, 364 F.3d at 1115; Malone, 833 F.2d at 130. Further, one of Defendants' defenses is that Plaintiff has failed to take reasonable measures to mitigate her alleged damages. (See Defendants' Answer ¶ 42, Docket Entry No. 27.) As discussed in Section III below, Defendants cannot adequately present this defense because Plaintiff has not provided necessary information requested by Defendants through written discovery. Defendants will need additional time to obtain Plaintiff's social security records to verify the places where she worked and the amount of income she earned after her employment with Midway Holdings, Inc. ended. This information, even on an expedited basis, can take weeks or months to obtain once the original social

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security administration release is received from Plaintiff2, and the dispositive motion deadline is less than thirty days away. If Plaintiff's economic damages claim is not dismissed, Defendants will require a reasonable extension of the dispositive motion deadline to obtain and analyze this information. If the release had been timely provided in late September, when it was due, Defendants would not be in the position of needing an extension, thereby delaying resolution of this case. Plaintiff's actions are hindering the case from moving forward, which is wholly unacceptable and weighs in favor of dismissal. See Yourish, 191 F.3d at 990 (upholding dismissal of action and noting "Plaintiffs' noncompliance has caused this action to come to a complete halt, thereby allowing Plaintiffs to control the pace of the docket, rather than the Court."). B. The Court's Need To Manage Its Docket

When a party has a violated a court order, as Plaintiff has here, this factor also weighs in favor of dismissal. Brotby, 364 F.3d at 1115. The same reasons discussed in relation to the first factor apply equally here ­ the Court, not Plaintiff, should be controlling the docket. Yourish, 191 F.3d at 990. The fact that Plaintiff sent some, but not all, of the requested discovery four days after the Court ordered deadline does not tip the scales away from dismissal with respect to this factor. See Yourish, 191 F.3d at 990. In Yourish, the court ordered the plaintiffs to amend their complaint by a certain date or face dismissal. 191 F.3d at 990. The plaintiffs missed the deadline and instead filed a motion (three days after the deadline had passed for them to amend) seeking clarification
See the Social Security Administration's website regarding Freedom of Information Act Requests. http://www.ssa.gov/foia/html/foia_guide.htm
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of the judge's original order directing them to amend. Id. The Ninth Circuit rejected the plaintiffs' argument that their behavior did not weigh in favor of dismissal with respect to this factor. Id. at 990-991. Instead, the Ninth Circuit found that the plaintiffs' delay created a waste of judicial resources by not complying with the order. Id. at 990; see also N. Am. Watch Corp. v. Princess Ermine Jewels, 786 F.2d 1447, 1451 (9th Cir. 1986) (upholding dismissal of case and noting "[b]elated compliance with discovery order does not preclude the imposition of sanction"). Likewise, Plaintiff's belated and inadequate letter supplement does not cure the defect and this factor weighs in favor of dismissal. C. The risk of prejudice to the defendants

This third factor also weighs in favor of dismissal given the prejudice Defendants will continue to experience due to Plaintiff's delay. Plaintiff's failure to supplement discovery and provide complete information concerning her subsequent employment has impeded Defendants' ability to present defenses that would be used in dispositive motions and at trial. Plaintiff's failure to comply with the Court's order and to respond to discovery has therefore impaired Defendants' "ability to go to trial or threaten[s] to interfere with the rightful decision in the case." Health Data Sciences Corp., Nos. 9456221, 95-55355, 1996 WL 103811, at *2 (9th Cir. Mar. 7, 1996) (finding prejudice to defendants where plaintiff's failure to produce discovery impeding defendant's ability to present and prepare counterclaims). "Unnecessary delay inherently increases the risk that witnesses' memories will fade and evidence will become stale." Pagtalunan v. Galaza, 291 F.3d 639, 643 (9th Cir. 2002); see also Brotby, 364 F.2d at 1116 (finding failure to produce documents as ordered is evidence of prejudice). 9
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Also, courts have noted that the risk of prejudice to the defendants is related to the plaintiff's excuse or reason for delay or not responding to an order. Yourish, 191 F.3d at 991; Malone, 833 F.2d at 131. Excuses such as a plaintiff's counsel's busy schedule or a party's recent relocation are not acceptable reasons for noncompliance. See, e.g., Brotby, 364 F.3d at 1115, 1117 (finding "no legitimate reason" for failure to cooperate where plaintiff blamed loss of documents on "earthquake, . . . dropped computer[,] and on a residential move"); Pagtalunan, 291 F.3d at 642-43 (rejecting pro se plaintiff's excuse that he was unable to retain counsel); Malone, 833 F.2d at 131 (rejecting excuse that plaintiff was financially unable to comply with court order). D. The availability of less drastic measures

"Less drastic measures" would be of no avail here where Plaintiff has demonstrated a consistent pattern of ignoring Defendants' discovery requests and repeated informal and formal attempts to obtain the requested discovery. This dilatory behavior reached a pinnacle when Plaintiff disregarded the Court's order that the requested discovery be provided by December 16, 2005, and Plaintiff failed to comply. (See Docket Entry No. 52.) Because Plaintiff violated the Court's Order, there was no need for the Court to explicitly warn Plaintiff that she was facing dismissal if she failed to comply with the Order. See Malone, 833 F.2d at 133 ("we find a warning unnecessary here. A plaintiff can hardly be surprised by a harsh sanction in response to [a] willful violation of pretrial order."); see also, Henry, 983 F.2d at 949 ("disobedient conduct not shown to be outside the control of the litigant is all that is required to demonstrate

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willfulness . . ."). This factor weighs in favor of dismissal of Plaintiff's claim for economic damages. E. The public policy favoring disposition of cases on the merits

Plaintiff's failure to provide requested discovery, adequately supplement discovery as required under the Federal Rules of Civil Procedure,3 and comply with the Court's Order has made it impossible for the case to be decided on its merits. While public policy may favor disposition on the merits, it would be unfair, if not impossible, to do so when considering the other factors present here. Accordingly, Defendants respectfully request that the Court dismiss Plaintiff's claims for economic damages as sanctions for her dilatory behavior and flagrant disregard for the Court's Order. II. Alternatively, The Deadline For Defendant To File Dispositive Motions Should Be Continued To Allow Defendants Time To Obtain Outstanding And Necessary Discovery From Plaintiff And Third Parties. If the Court does not dismiss Plaintiff's claim for economic damages, Defendants respectfully request that their deadline to file motions for summary judgment be continued to allow adequate time for the outstanding discovery to be obtained. As detailed supra, despite repeated attempts by Defendants' counsel to obtain supplemental responses to Defendants' first set of discovery requests, supplemental responses to Plaintiff's Initial Disclosures, and complete responses to Defendants' second set of discovery requests, Defendants still have only: (1) faxed releases for tax and social security information which do not contain original signatures necessary to obtain the
The Court's April 29, 2005 Rule 16 Scheduling Order requires the parties to supplement disclosures and discovery responses as required by Fed. R. Civ. P. 26(e).
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requested information; and (2) a December 20, 2005 letter from Plaintiff's counsel purporting to be Plaintiff's "conservative" estimates of how much money she earned at subsequent employers and an estimate of her alleged back pay damages. Defendants still do not have: (1) releases with original signatures; (2) written responses or objections to their second set of discovery;4 or (3) bank statements that were requested in the second set of discovery. Further, the December 20, 2005 letter from Plaintiff's counsel creates as many questions as it provides answers regarding how much Plaintiff earned after her employment with Midway Holdings, Inc. ended ­ a crucial component to Defendants' failure to mitigate defense.5 In the same letter that Plaintiff provides conclusory estimates of her interim earnings, Plaintiff's counsel represents that "Ms. Jerome has not filed tax returns for several years and some of her employers since she left Midway did not issue her either 1099 forms or W-2 forms . . . ." (See Dec. 20, 2005 ltr. from S. Montoya to S. Osteen.) Defendants should not be required, however, to rely on
Since Plaintiff did not timely respond, she has waived any objections to the requests. Ramirez v. County of Los Angeles, 231 F.R.D. 407, 409-10 (C.D. Cal. 2005); Safeco Ins. Co. of Am. v. Rawstrom, 183 F.R.D. 668, 671-72 (C.D. Cal. 1998). Defendants ask this Court to compel Plaintiff to respond to this discovery without objection. 5 See Teichgraeber v. Memorial Union Corp., 932 F. Supp. 1263, 1266 (D. Kan. 1996) ("The plaintiff's claim for back pay makes relevant all matters involved in the calculation of her interim earnings."); Handwerker v. AT&T Corp., 211 F.R.D. 203, 209 (S.D.N.Y 2002) (sanctioning the plaintiff in an employment discrimination lawsuit for failing to produce subsequent employment information.). Information relating to a plaintiff's subsequent employment is essential for assessing Plaintiff's claim for back pay and front pay damages. See, e.g., Sellers v. Delgado College, 902 F.2d 1189, 1193 (5th Cir. 1990). Specifically, back pay damages are determined by calculating the difference between the wages Plaintiff would have earned had he not been discharged, less any interim earnings. Id. Without information pertaining to interim earnings, including but not limited to tax returns, W-2's, and paycheck stubs, a complete and accurate calculation is impossible.
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Plaintiff's rough estimates in her counsel's letter as to what Plaintiff earned each year, especially when there is no evidence that these numbers are linked to particular employers or places of employment. Defendants need, at a minimum, to obtain Plaintiff's records from the Social Security Administration, as well as Plaintiff's bank statements, to confirm or deny her representations concerning her alleged economic damages, including claims for back pay and front pay. As discussed supra¸ obtaining the Social Security Administration records could take weeks or even months, and Plaintiff has yet to respond to the discovery requests due in late September seeking copies of her bank statements and records. Accordingly, Defendants request an extension of the summary judgment deadline to obtain this needed, overdue information that is vitally necessary for them to adequately evaluate, brief, and, if necessary, try their affirmative defenses. III. Conclusion For the reasons articulated above, Defendants respectfully ask the Court to dismiss Plaintiff's claim for economic damages. In the alternative, Defendants ask that the Court continue the deadline for Defendants to file motions for summary judgment until thirty days after Defendants receive Plaintiff's Social Security Administration records and bank statements. DATED this 30th day of December, 2005.

AKIN GUMP STRAUSS HAUER & FELD LLP

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/s/ Stephanie K. Osteen M. Brett Burns (admitted pro hac vice) Stephanie K. Osteen (admitted pro hac vice) 1700 Pacific Avenue, Suite 4100 Dallas, Texas 75201-4618 (214) 969-2800 facsimile (214) 969-4343 Tricia Schafer MARISCAL, WEEKS, MCINTYRE & FRIEDLANDER, P.C. 2901 North Central Avenue, Suite 200 Phoenix, Arizona 85012 (602) 285-5000 facsimile (602) 285-5100 Attorneys for Defendants

LOCAL RULE 7.2(j) CERTIFICATE To the extent this motion qualifies as "discovery motion" under Local Rule 7.2(j), the undersigned certifies that Defendants are bringing this motion after counsel has personally consulted with counsel for Plaintiff and made sincere efforts to satisfactorily resolve this matter. A complete account of those efforts are detailed in the Declaration of Stephanie K. Osteen, attached to this motion as Exhibit A. Further, the Court held a Discovery Dispute Hearing on December 6, 2005, but the matter has still not been resolved. /s/ Stephanie K. Osteen Stephanie K. Osteen

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I hereby certify that on this 30th day of December, 2005, I electronically transmitted the foregoing to the Clerk's Office using the CM/ECF System for filing [and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants]: Stephen G. Montoya Montoya Jiminez, P.A. 3200 North Central Avenue, Suite 2550 Phoenix, Arizona 85012 Attorney for Plaintiff COPY mailed to: Honorable Mary H. Murguia United States District Court Sandra Day O'Connor U.S. Courthouse, Suite 525 401 West Washington Street, SPC 53 Phoenix, Arizona 85003-2154

By: /s/ Stephanie K. Osteen
#5848920

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