Opinion
Cause No. IP01-0546-C-Y/G.
February 28, 2002.
Michael C Kendall, Kendall Law Office, Indianapolis, IN., for Plaintiff.
Columbus R Gangemi, Winston Strawn, Chicago, IL., and Susan M Zoeller, Barnes Thornburg, Indianapolis, IN., for Defendants.
REPORT AND RECOMMENDATION ON THE MAGISTRATE JUDGE'S ORDER TO SHOW CAUSE
On two separate occasions, the Court ordered the parties to submit a case management plan. Both times Plaintiff's counsel failed to provide Plaintiff's inserts to the plan. On December 18, 2001, when Plaintiff's counsel disregarded the Court's order a second time, the Court issued an Order to Show Cause. On February 12, 2002, the Court heard evidence and argument regarding the Order. For the reasons set forth below, the Magistrate Judge recommends that Plaintiff's counsel, Michael C. Kendall, be held in contempt of Court and ordered to pay Defense counsel $ 1300 as a monetary sanction.
The Court notes that Stephanie Jane Hahn, who also appeared in this case for Plaintiff, was not present at the February 12 hearing. Kendall states in his affidavit Hahn was responsible for preparing the case management plan in the Court's original order to file a case management plan.
Nonetheless, in light of the evidence presented, the Court finds no additional action against Hahn is warranted.
On June 6, 2001, the Court issued a "Notice of Initial Pretrial Conference" ordering the parties to submit a case management plan no later than August 20. On August 15, 2001, Defendant faxed Plaintiff's counsel a draft of the proposed case management plan and requested the Plaintiff's inserts to the plan. At 4 p.m. on the date the case management plan was to be filed with the Clerk, Plaintiff's counsel faxed Plaintiff's inserts to counsel for Defendant. However, due to Plaintiff's counsel's tardiness, Defendant had already sent for filing the case management plan without Plaintiff's inserts at 3:30 pm. [Docket # 8]. Kendall attributed this failure to a "typing backlog." From August 20 to November 29, Plaintiff's counsel never filed an amendment to the case management plan to cure this defect.
On November 29, 2001, Kendall appeared (albeit late) for the Court's initial pretrial conference. Among the topics discussed at this conference was the need for the parties to submit an amended case management plan that included the Plaintiff's inserts. On December 3, 2001, the Court issued an Order for the parties to submit an amended case management plan no later than December 18, 2001. [Docket #13].
Between December 3 to December 18, counsel for Defendant left two messages with Plaintiff's counsel regarding the filing of the amended case management plan. Plaintiff's counsel failed to respond to these calls. On December 17, Defendant faxed Plaintiff's counsel a letter requesting that Plaintiff's counsel provide updated inserts. On December 18, when Plaintiff's counsel did not respond to Defendant's counsel's phone calls or facsimile, Defendant filed the amended case management plan without Plaintiff's inserts.
II. DISCUSSION
A. CONTEMPT OF COURT
In addition to Federal Rule of Civil Procedure 37, a federal court has inherent powers to sanction a litigant for bad-faith conduct. These inherent powers "are governed not by rule or statute but by the control necessarily vested in courts to manage their own affairs so as to achieve the orderly and expeditious disposition of cases." Quela v. Payco-General American Creditas, Inc., 2000 WL 656681, *6 (N.D.Ill. 2000), quotingChambers v. NASCO, Inc., 501 U.S. 32, 43 (1991). A court's civil contempt power rests in its inherent limited authority to enforce compliance with court orders and ensure judicial proceedings are conducted in an orderly manner. See Ferrell v. Pierce, 785 F.2d 1372, 1378 (7 th Cir. 1986). To form the basis for a finding of contempt, a court's order must include "an operative command capable of enforcement." DeVry/Becker Educational Development Corp. v. Totaltape, Inc., 2002 WL 99743, *1-2 (N.D.Ill. 2002), quoting H. K. Porter Co., Inc. v. National Friction Prods. Corp., 568 F.2d 24, 26 (7 th Cir. 1977); see also Jefferson v. Miles, 2002 WL 63530, *1 (N.D.Ill. 2002) (sanctions for civil contempt must be predicated on a violation of an explicit court order); Jones v. Lincoln Electric Co., 188 F.3d 709, 738 (7 th Cir. 1999) (same).
The purposes of a civil contempt order are to "coerce compliance with the underlying order and/or to compensate the complainant for loss sustained by disobedience." F. T. C. v. Think Achievement Corp., 144 F. Supp.2d 1029, 1033 (N.D.Ind. 2001), quoting Blocksom Co. v. Marshall, 582 F.2d 1122, 1124 (7th Cir. 1978). Therefore, civil contempt proceedings are coercive and remedial, but not punitive in nature, and sanctions for civil contempt are designed to compel the contemnor into compliance with an existing court order or to compensate the complainant for losses sustained as a result of the contumacy. Connolly v. J. T. Ventures, 851 F.2d 930, 932 (7th Cir. 1988); see also D. Patrick, Inc. v. Ford Motor Co., 8 F.3d 455, 459 (7 th Cir. 1993) (civil contempt proceedings are part of the action from which they stem, and their purpose is to secure compliance with a prior court order). Under their inherent powers, courts have imposed sanctions for civil contempt including shifting attorney's fees and imposing default judgments. Diettrich v. Northwest Airlines, Inc., 168 F.3d 961, 964 (7 th Cir. 1999) (inherent power permits a court to impose the ultimate sanction of a grant of judgment).
In this case, Plaintiff's counsel failed to submit Plaintiff's case management plan inserts until 4 p.m. on August 20, the day it was to be filed with the Court. Plaintiff's counsel failed to take remedial action by filing (or requesting leave to file) an amended plan. When the Magistrate Judge discovered this oversight and ordered the parties to file an amended plan by December 18, Plaintiff's counsel again failed to provide Plaintiff's inserts, or otherwise assist in preparing, signing and filing the plan, violating the Court's order a second time. In addition, since the Court still has not received a case management plan with Plaintiff's inserts, he continues to violate the Court's order.
Plaintiff's counsel provides two excuses for violating the Court's orders. Both are without merit. With regard to the June 6 Order, the case management plan was not due to be filed with the Court until August 20. Kendall testified his office was unable to provide Defendant's counsel Plaintiff's inserts until August 20 at 4 p.m. because of a "typing backlog." Assuming that such a backlog existed, even the most severe typing backlog should not have prevented Plaintiff's counsel from providing a few paragraphs worth of input in a 2 ½ month period.
With regard to the December 3 Order, Kendall testified at the hearing that he instructed Defendant's counsel to file the inserts he provided for the August 20 plan. Defendant disputes this contention, and the Court is unpersuaded by Kendall's testimony. Kendall's credibility is subject to challenge given Kendall made sworn statements in his December 29, 2001 affidavit that subsequently proved to be untrue. In his affidavit, Kendall stated that he never received a December 17 fax requesting Plaintiff's inserts. [Kendall Affid., ¶¶ 42-44]. However, in his testimony at the hearing, Kendall recanted his affidavit testimony by conceding he did receive the fax. Tellingly, Kendall made this concession only after Defendant submitted a facsimile "transmission record" demonstrating that Kendall's office received the December 17 fax at 10:18 a.m. [Def. `s Ex. 3]. In any event, assuming Plaintiff's counsel wished for Defendant to file the plan that reflected the August 20 inserts, he still failed to cooperate in the drafting of the plan by not responding to Defendant's requests to provide revised inserts in letters, facsimiles, and telephone calls, or even making arrangements to review and sign the plan. Since Plaintiff's counsel failed to comply with Defendant's December 17 letter, Defendant's counsel had no choice but to file the plan without Plaintiff's counsel's inserts or signature.
The Court finds that these actions violate the Court's Orders of June 6 and December 3. Therefore, the Magistrate Judge recommends that Plaintiff's counsel, Kendall, be held in contempt of Court and that an appropriate sanction issue.
B. Appropriate Sanction
Having found that Plaintiff's counsel are in contempt of the June 6 and December 3 Order, the Magistrate Judge now considers the appropriate sanction, mindful that the purpose of a civil contempt sanction is compensatory rather than punitive. Oxford Capital Illinois, L. L. C. v. Sterling Payroll Financial, L.L.C., 2001 WL 1491521, *9 (N.D.Ill. 2001), citing South Suburban Housing Center v. Berry, 186 F.3d 851, 854 (7th Cir. 1999); In the Matter of Maurice, 73 F.3d 124, 127-28 (7th Cir. 1995).
The Court finds that dismissal of this action is not warranted since Plaintiff should not be punished for the conduct of her attorney. However, the Court finds that an appropriate sanction would be to require Kendall to pay some of the attorney's fees associated with Defendant preparing and filing an amended case management plan and preparing for and attending the hearing on the order to show cause. Michael P. Roche, Chicago counsel for Defendant, testified he spent 1.5 to 2 hours preparing and filing the amended case management plan, and that his hourly rate at that time (2001) was $275. The Court finds that two hours at the rate of $275/hour ($ 550) is reasonable and appropriate. In addition, the hearing on the order to show cause lasted approximately two hours. The Court finds that 2.5 hours of time, which would include .5 hours of preparation time, is reasonable and appropriate in connection with this hearing. Roche testified that his hourly rate for 2002 is $300, which the Court also finds reasonable and appropriate. Thus, fees reasonably charged to Kendall as a result of this hearing are $750, for a total monetary sanction of $1300 ($ 750 + $550).
The Court notes that the Defendant actually incurred more than $1300 in fees and costs as a result of Kendall's conduct. For example, the Court has not awarded any time to Defendant for its preparation of its reply to Plaintiff's response to the show cause order. In addition, Defendant was represented at the show cause hearing by local counsel, who testified her 2002 hourly rate is $210. Moreover, no fees or costs will be awarded to Chicago counsel traveling to Indianapolis for this hearing. Overall, however, the Court finds that a sanction of $1300 is reasonable and appropriate when balanced against Kendall's blatant disregard of two Court orders and the resulting fees and costs incurred by Defendant.
Finally, the Magistrate Judge recommends that Plaintiff's counsel be ordered to file an amended case management plan within 10 days of the District Judge's adoption of this entry.
III. Conclusion
For the foregoing reasons, the Magistrate Judge recommends that Michael C. Kendall be found in civil contempt of the Court's June 6 and December 3, 2001 Orders. As a sanction for this contempt, within 10 days of the District Judge's adoption of this entry, the Magistrate Judge recommends that Plaintiff's counsel be ordered to file an amended case management plan containing Plaintiff's inserts and pay Defendant $1300.
Any objections to the Magistrate Judge's Report and Recommendation shall be filed with the Clerk in accordance with 28 U.S.C. § 636 (b)(1), and failure to file timely objections within the ten days after service shall constitute a waiver of subsequent review absent a showing of good cause for such failure.
So ordered.