Opinion
1:21-cv-01078-CL
05-27-2022
RICARDO ORDONEZ GREGORIO, GILBERTO GARCIA ORDONEZ, ANDRES ORDONEZ JIMENEZ, GABRIEL GREGORIO HERNANDEZ, JULIO CARDONA ORDONEZ, JOAQUIN ORDONEZ CARDONA, ALFREDO ORDONEZ CARDONA, ALICIA HERNANDEZ GREGORIO, ELMER ESCALANTE GREGORIO, ROGELIO ORDONEZ ANDRES, ISMAEL ORDONEZ ANDRES, GABRIEL GARCIA ORDONEZ, ANDRES SANTOS VELASQUEZ, CELESTINO HERNANDEZ CARDONA, JUAN ANDRES GOMEZ, ANDRES VELASQUEZ FABIAN, CEFERINO LEONEL GOMEZ, Plaintiffs, v. COLT JAMISON HANSEN, an individual WESTCOAST GROWERS, LLC., TOPSHELF HEMP, LLC., FIRE HEMP, LLC., Defendants.
FINDINGS AND RECOMMENDATION
MARK D. CLARKE, UNITED STATE'S MAGISTRATE JUDGE
Plaintiffs move the Court for terminating sanctions, resulting in the entry of default judgment against the defendants Westcoast Growers, LLC., Topshelf Hemp, LLC, Fire Hemp, LLC., and Colt Jamison Hanson for failing to comply with a Court Order and failing to appear and otherwise defend this action. For the reasons below, Plaintiffs' Motion (#34) should be GRANTED.
BACKGROUND
Plaintiffs allege that they are seasonal agricultural workers who were recruited by an unlicensed contractor, “Celestino” to work at the defendants' hemp warehouse, located at 700 Merlin Rd. Bldg. E. Grants Pass, OR 97526 and farm located at 3903 Helms Rd. Grants Pass, OR 97527. Plaintiffs allege that from approximately October 26, 2020, until approximately November 12, 2020, they performed seasonal or temporary agricultural work for defendants in Grants Pass, Oregon.
Six of the Plaintiffs worked for a shorter time, from November 3 to November 12.
Plaintiffs claim that defendants did not give them employment disclosures or employment contracts, failed to ensure that their housing complied with safety and health laws, and failed to pay them their final wages. Plaintiffs allege that Defendants are not registered or licensed to provide migrant agricultural housing in Oregon. Plaintiffs ultimately claim that they are entitled to recover statutory damages and unpaid wages under the Migrant and Seasonal Agricultural Worker Protection Act (AWPA), Oregon Camp Operator Registration Act (CORA), Oregon Contractor Registration Act (OCRA), and Oregon wage statutes.
Two companion cases, with different Plaintiffs, different but similar facts, and overlapping defendants, have been recently pending in this Court. In Hernandez Ramirez v. Hansen, No. 1:21-cv-00324 (D. Or. filed Mar. 02, 2021), a case with facts similar to this one, Defendants defaulted after choosing to ignore the Summonses with which they were served. In Chim et al. v. Westcoast Growers, No. 1:21-cv-01078 (D. Or. filed Jul. 21, 2021), Defendants retained counsel, appeared, and answered the Complaint, but later failed to respond to written discovery and have now violated two court orders. As in this case, the plaintiffs in Chim have filed a motion for terminating sanctions. The Court will enter a Findings and Recommendation in that case, contemporaneously with the one here, recommending that a default judgment be entered against Defendants in both cases.
LEGAL STANDARD
' Rule 37(b) of the Federal Rules of Civil Procedure permits sanctions against a party who “fails to obey an order to provide or permit discovery under Rule 26(f), 35, or 37(a).” Fed. R. Civ. P. 37(b)(2)(A). The Court has the discretion to “make such orders ... as are just” in regard to a party's failure to obey a discovery order. Valley Eng'rs v. Elec. Eng'g Co., 158 F.3d 1051, 1056 (9th Cir. 1998). This includes rendering a default judgment against the disobedient party, or treating the failure as contempt of court. Fed. R. Civ. P. 37(b)(2)(A)(vi)-(vii). Where it is determined that a party has acted willfully or in bad faith in failing to comply with court orders enforcing the rules of discovery, it is within the discretion of the court to render judgment by default against the party responsible for noncompliance United States v. Hempfling, No. CV F 05-0594 LJOSMS, 2008 WL 703809, at *7 (E.D. Cal. Mar. 13, 2008), affd, 385 Fed.Appx. 766 (9th Cir. 2010) (quoting U G-K Properties v. Redevelopment Agency of the City of San Jose, 577 F.2d 645, 647 (9th Cir. 1978)). Similarly, a terminating sanction under Rule 37(d) is proper “for a serious or total failure to respond to discovery even without a prior order.” Sigliano v. Mendoza, 642 F.2d 309, 310 (9th Cir. 1981).
The Ninth Circuit Court of Appeals applies a five-factor balancing test to determine whether a sanction entering default is “just”: (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 party seeking sanctions; (4) The public policy favoring disposition of cases on their merits; and (5) The availability of less drastic sanctions. Valley Engineers Inc., 158 F.3d at 1057 (citing Malone v. United States Postal Service, 833 F.2d 128, 130 (9th Cir. 1987).
DISCUSSION
The Court has federal question jurisdiction over this action pursuant to 28 U.S.C. § 1331, as this action is brought under the Migrant and Seasonal Agricultural Worker Protection Act (“AWPA”), 29 USC §§ 1801-1872. Pursuant to 28 U.S.C. § 1367, this Court has supplemental jurisdiction over the claims based on Oregon law, as they are so related to claims within the Court's original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution. Venue is proper in this district pursuant to 28 U.S.C. § 1391(b)(2) because the events giving rise to the claims occurred in this district and judicial division, and all parties are subject to this Court's personal jurisdiction with respect to this suit.
Plaintiffs' counsel and Defendants' counsel held a Rule 26 conference on September 29, 2021, where the parties agreed to exchange initial disclosures on October 29, 2021. Hayden Deci. ¶ 2. Despite several extensions and requests by Plaintiffs' counsel, Defendants never provided initial disclosures. Hayden Deci. ¶ 3. Later, on December 2, 2021, Plaintiffs' counsel . served Interrogatories and Requests for Production on Defendants through their counsel with a deadline to respond of January 4, 2022. Hayden Deci. ¶ 4. Defendants once again, failed to respond to Plaintiffs' request. Hayden Deci. ¶ 5.
These facts were also confirmed by Defense counsel at the requested discovery conference, as discussed below. .
In an effort to resolve discovery disputes, Plaintiffs' counsel requested a conference with the Court, and one was held on January 26, 2022. At that conference, the Court ordered Defendants to exchange initial disclosures with Plaintiffs no later than February 11, 2022. (Dkt. #27, 28). Additionally, the Court ordered Defendants to serve responses to. Plaintiffs' First Set of Interrogatories and First Request for Production of documents, no later than February 11, 2022. (# 27). Finally, the Court ordered that Defendants provide Plaintiffs' counsel dates they were available for deposition within a reasonable time after February 11, 2022, but no later than March 18, 2022. Id. The Court's Order warned that failure to comply with the order would result in sanctions determined by the Court. Id.
Plaintiffs' counsel emailed Defendants' counsel on February 10, 2022, to ask if they could expect initial disclosures and written discovery by the date of the Court's deadline, and Defendants' counsel responded that they would be unable to respond. Hayden Deci. ¶ 7. Plaintiffs' counsel later learned through an email from Defendants' counsel to this Court's Clerk, that the relationship between Defendants and their counsel had broken down and that Defendants' counsel would likely be seeking leave to withdraw. Hayden Deci. ¶ 10. On February 18, 2022, Defendants' counsel filed their motion to withdraw which was granted by this Court on February 23. (Dkt #31, #32).
On February 23, 2022, after granting Defendants' counsel's motion to withdraw, the Court ordered Defendants to file a status report within 30 days, advising the Court whether they intended to proceed with the case. (Dkt. #33). In its order, the Court warned that failure to proceed or otherwise appear and defend the case could result in a default being entered. Id.
To date, Defendants have not appeared or otherwise responded, and have not proceeded to defend the case in any way. .
I. The balancing test factors weigh in favor of entering default judgment against the defendants as terminating sanctions for failure to comply with a Court Order.
All of the factors weigh in favor of granting the motion for terminating sanctions. Default judgment should be entered against the Defendants.
a. The public's interest in expeditious resolution of litigation and the Court's need to manage its docket weigh in favor of terminating sanctions.
Where a court order is violated, the first two factors support sanctions. Adriana Int'l Corp. v. Lewis & Co., 913 F.2d 1406, 1412 (9th Cir. 1990). On January 27, 2022, this Court ordered Defendants to exchange initial disclosures with Plaintiffs and to serve responses to Plaintiffs' First Set of Interrogatories and First Request for Production of Documents no later than February 11, 2022. Defendants violated this Court's order by failing to exchange initial disclosures and to serve responses to Plaintiffs' First Set of Interrogatories and First Request for Production by that date. Then, on February 23, 2022, the Court ordered Defendants to file a status report within 30 days. Defendants violated a Court order for the second time when they failed to respond. Because Defendants have violated multiple Court orders, the first two factors weigh heavily in favor of granting terminating sanctions against Defendants.
b. The risk of prejudice to the party seeking sanctions weighs in favor of terminating sanctions.
The party seeking sanctions suffers prejudice if the other party's actions impair their ability to go to trial. Adriana Int'l Corp., 913 F.2d at 1412. Failure to produce documents as ordered is considered sufficient prejudice. Id. Litigants who are willful in halting the discovery process cause impermissible prejudice to their opponents and deprive other litigants of an opportunity to use the court as a serious dispute-settlement mechanism. Hempfling, 2008 WL 703809, at * 18. A Defendant acts willfully when their conduct is not shown to be outside of their control. Id. at *19.
Here, it appears as though the Defendants' violation of two Court orders were deliberate decisions. Defendants were given months to exchange initial disclosures, since their initial due date of October 29, 2021. They were granted several extensions by Plaintiffs to produce documents and to respond to interrogatories which were served on December 2, 2021. The Court's first order was a final attempt to have Defendants respond and move forward with litigation. In its order, the Court gave Defendants more than two weeks to exchange information and turn over documents that had been requested months before; still, Defendants failed to comply. Later, the Court issued a second order giving Defendants 30 days to file a status report; to date, Defendants have not responded.
Defendants have given no reason or excuse for their previous or present conduct. Moreover, Defendants have failed to show that their conduct was outside of their control. Therefore, the Court finds that Defendants have willfully halted the discovery process, causing impermissible prejudice to Plaintiffs. This factor weighs in favor of granting terminating sanctions, and a default judgment, against Defendants.
c. The public policy favoring a decision on the merits of the case weighs in favor of terminating sanctions and default judgment.
Courts often weigh the fourth factor in favor of not striking a pleading or a default. Johnson v. Monterey & Rancho Plaza, No. 18-CV-05718-BLF, 2020 WL 4368194, at *2 (N.D. Cal. July 30, 2020). However, “a case that is stalled or unreasonably delayed by a party's failure to comply with deadlines and discovery obligations cannot move forward toward resolution on the merits.” Id. (quoting In re. Phenylpropanolamine (PPA) Prod. Liab. Litig., 460 F.3d 1217, 1228 (9th Cir. 2006)).
Here, Defendants have consistently missed important dates and deadlines, failed to respond to discovery requests or engage in litigation, and failed to follow multiple Court orders. They have essentially abandoned their defense of this case and made proceeding on the merits impossible. As such, the fourth factor also favors granting terminating sanctions.
d. The availability of less drastic sanctions weighs in favor of granting default.
The fifth factor involves consideration of three subparts: “whether the court (1) explicitly discussed the alternative of lesser sanctions and explained why it would be inappropriate; (2) implemented lesser sanctions before ordering the case dismissed; and (3) warned the offending party of the possibility of dismissal.” Computer Task Group, Inc. v. Brotby, 364 F.3d 1112, 1116-17 (9th Cir. 2004) (citing Anheuser-Busch v. Nat. Beverage Distribs., 69 F.3d 337, 348 (9th Cir. 1995)). Warning that failure to obey a court order will result in dismissal can itself meet the “consideration of alternatives” requirement. In re Phenylpropanolamine (PPA) Prod. Liab. Litig., 460 F.3d at 1229.
Here, the Court has provided multiple warnings to Defendants that failure to obey the Court's orders could result in sanctions, up to and including default. Specifically, in the second, most recent Order, (#33), the Court warned Defendants that failure to proceed or otherwise appear and defend the case could result in a default being entered. Accordingly, the “consideration of alternatives” requirement has been met, and this factor weighs in favor of terminating sanctions and default judgment.
RECOMMENDATION
For the reasons above, the Court recommends that Plaintiffs' motion for terminating sanctions (#34) be GRANTED. Default Judgment should be entered in favor of Plaintiffs against Defendants.
Plaintiffs request relief in the form of declaratory judgments, as well as statutory damages, and compensatory damages in the form of unpaid wages, plus statutory penalty wages, and liquidated damages for unpaid overtime wages, as well as prejudgment interest, and Plaintiffs' costs and attorney fees. No hearing has yet been held, nor any affidavit or declaration submitted regarding an accounting of Plaintiffs' damages. Plaintiffs should submit whatever evidence it wishes the Court to consider regarding damages, filed as affidavits or declarations, within the next 30 days. The Court will review and recommend appropriate relief to the District Court.
This order will serve as Notice to Defendants that such an accounting will take place and further non-appearance could result in the full request for damages being awarded to Plaintiffs.
SCHEDULING
This recommendation is not an order that is immediately appealable to the Ninth Circuit Court of Appeals. Any notice of appeal pursuant to Federal Rule of Appellate Procedure Rule 4(a)(1) should not be filed until entry of the district court's judgment or appealable order. The Report and Recommendation will be referred to a district judge. Objections to this Report and .Recommendation, if any, are due fourteen (14) days from today's date. If objections are filed, any response to the objections is due fourteen (14) days from the date of the objections. See Fed. R. Civ. P. 72, 6.