United States District Court Central District of California
March 9, 2009
HOVEK BADEMYAN, PLAINTIFF,
THE RECEIVABLE MANAGEMENT SERVICES CORPORATION D/B/A RMS, DEFENDANT.
The opinion of the court was delivered by: Margaret M. Morrow, United States District Judge
ORDER GRANTING DEFENDANT'S MOTION TO HOLD ARAKSI BADEMYAN IN CONTEMPT
On February 11, 2009, the court granted defendant RMS's ex parte application for an order setting a hearing on its motion to hold Araksi Bademyan ("Mrs. Bademyan") in contempt.*fn1
I. FACTUAL & PROCEDURAL BACKGROUND
This case arises under the Fair Debt Collection Practices Act of 1978 ("FDCPA"), 15 U.S.C. § 1692 et seq., and California's Rosenthal Fair Debt Collection Practices Act ("Rosenthal Act"), California Civil Code § 1788 et seq. In his first amended complaint, plaintiff Hovek Bademyan ("Bademyan") alleges that RMS, a consumer debt collection corporation, engaged in abusive, deceptive, and unfair debt collection practices while attempting to secure payment of a credit card debt.*fn2 Bademyan contends that, as a result of RMS's alleged unlawful debt collection activities, he has suffered emotional distress, including sleeplessness, loss of appetite, loss of weight, and loss of interest in life. Specifically, during his deposition, Bademyan testified that RMS's collection efforts caused emotional distress, leading him to visit a doctor and obtain a prescription.*fn3 Bademyan claimed that he could not remember the name of the doctor or the name of the prescribed medication, but stated that his mother, Mrs. Bademyan, could provide both pieces of information since she was the individual who had driven him to the doctor and picked up his medication from the pharmacy.*fn4
RMS sought to depose Mrs. Bademyan to verify Bademyan's emotional distress claim. Mrs. Bademyan was personally served with a deposition subpoena on November 10, 2008 and a notice to appear on November 21, 2008 at 10 a.m.*fn5 Mrs. Bademyan was given $64 in witness fees when served.*fn6 Nonetheless, she did not appear for her deposition on November 21.*fn7
RMS subsequently filed an ex parte application for an order specially setting a hearing on a motion to compel Mrs. Bademyan to appear for deposition.*fn8 After granting the ex parte application,*fn9 Magistrate Judge Ralph Zarefsky ordered Mrs. Bademyan to appear.*fn10 RMS served Mrs. Bademyan with a copy of Judge Zarefsky's order, a deposition subpoena, and a deposition notice on January 15, 2009.*fn11 The deposition was scheduled for January 22, 2009; once again, Mrs. Bademyan did not appear.*fn12 RMS then filed its ex parte application seeking an order specially setting a hearing on its motion to hold Mrs. Bademyan in contempt. As noted, the court granted RMS's ex parte application,*fn13 and directed Mrs. Bademyan to file any opposition no later than February 25, 2009. Mrs. Bademyan has not opposed RMS's motion to hold her in contempt.
A. Propriety of Civil Contempt Order
Courts have inherent power to enforce their orders through civil contempt. See Spallone v. United States, 493 U.S. 265, 276 (1990) (citing Shillitani v. United States, 384 U.S. 364, 370 (1966)). A district court has wide latitude in determining whether there has been a contemptuous defiance of one of its orders. Stone v. City of San Francisco, 968 F.2d 850, 856 (9th Cir. 1992), cert. denied, 506 U.S. 1081 (1993). The Ninth Circuit's inquiry regarding contempt "has long been whether [contemnors] have performed 'all reasonable steps within their power to insure compliance' with the court's orders." Stone, 968 F.2d at 856 (quoting Sekaquaptewa v. MacDonald, 544 F.2d 396, 404 (9th Cir. 1976), cert. denied, 430 U.S. 931 (1977)).
Rule 45(e) of the Federal Rules of Civil Procedure provides that a "court may hold in contempt a person who, having been served, fails without adequate excuse to obey [a] subpoena." FED.R.CIV.PROC. 45(e). "Even though subpoenas are issued by attorneys, they are issued on behalf of the Court and should be treated as orders of the Court." Higginbotham v. KCS Int'l, Inc., 202 F.R.D. 444, 455 (D. Md. 2001) (citing Advisory Committee Notes to Rule 45(a) ("Although the subpoena is in a sense the command of the attorney who completes the form, defiance of a subpoena is nevertheless an act of defiance of a court order and exposes the defiant witness to contempt sanctions")); Halawani v. Wolfenbarger, No. 07-15483, 2008 WL 5188813, *7 (E.D. Mich. Dec. 10, 2008) (same).
The party moving for contempt bears the burden of establishing by clear and convincing evidence that the contemnor has violated a specific and definite order of the court. See Wolfard Glassblowing Co. v. Vanbragt, 118 F.3d 1320, 1322 (9th Cir. 1997) ("For Wolfard to succeed in its motion for civil contempt, it had to show by clear and convincing evidence that Zodiac violated the consent judgment beyond substantial compliance, and that the violation was not based on a good faith and reasonable interpretation of the judgment," citing In re Dual-Deck Video Cassette Antitrust Litigation, 10 F.3d 693, 695 (9th Cir. 1993)); Balla v. Idaho State Bd. of Corrections, 869 F.2d 461, 466 (9th Cir. 1989) ("As we have previously stated, civil contempt is appropriate when a party fails to comply with a specific and definite court order," citing Gifford v. Heckler, 741 F.2d 263, 265 (9th Cir. 1984)); Vertex Distributing v. Falcon Foam Plastics, Inc., 689 F.2d 885, 889 (9th Cir. 1982) ("We apply well-settled law. In a civil contempt proceeding, the contempt must be proved by clear and convincing evidence. Battaglia v. United States, 653 F.2d 419, 422 (9th Cir. 1981); United States v. Powers, 629 F.2d 619, 626 n. 6 (9th Cir. 1980). This requires more than does the preponderance of the evidence standard applicable in most civil cases. Battaglia, 653 F.2d at 422; Powers, 629 F.2d at 626, n. 6. . .").
Once the moving party shows by clear and convincing evidence that the contemnor has violated a specific and definite order of court, the burden shifts to the contemnor to demonstrate that he or she took every reasonable step to comply, and to articulate reasons why compliance was not possible. See Donovan v. Mazzola, 716 F.2d 1226, 1240 (9th Cir. 1983) ("To satisfy this burden the individual appellants were required to show 'categorically and in detail' why they were unable to comply with the court's previous order," quoting United States v. Rylander, 656 F.2d 1313, 1318 (9th Cir. 1981), rev'd on other grounds, 460 U.S. 752 (1983)), cert. denied, 464 U.S. 1040 (1984). In assessing whether an alleged contemnor has taken "every reasonable step" to comply with the terms of a court order, the district court can consider (1) a history of noncompliance and (2) a failure to comply despite the pendency of a contempt motion. See Stone, 968 F.2d at 857. The contempt need not be willful, Perry v. O'Donnell, 759 F.2d 702, 704-06 (9th Cir. 1985), and a party's subjective intent is irrelevant. See McComb v. Jacksonville Paper Co., 336 U.S. 187, 191 (1949); Donovan, 716 F.2d at 1240. If, however, "a defendant's action 'appears to be based on a good faith and reasonable interpretation of (the court's order),' he should not be held in contempt." Vertex Distributing, 689 F.2d at 889 (quoting Rinehart v. Brewer, 483 F.Supp. 165, 171 (S.D. Iowa 1980)).
B. Mrs. Bademyan Has Violated Judge Zarefsky's January 5, 2009 Order Compelling Her to Appear for Deposition
RMS has adduced clear and convincing evidence that Mrs. Bademyan did not appear for her deposition scheduled on January 22, 2009. Mrs. Bademyan has not asserted that she was unable to comply with the January 5, 2009 order to appear for deposition, and the court must conclude, based on the present record, that she has not taken all reasonable steps to comply with the order. Accordingly, the court concludes that Mrs. Bademyan is in contempt of the January 5, 2009 order, and that an order of contempt is properly entered.
C. The Appropriate Remedy
Sanctions for civil contempt are imposed to coerce compliance with a court order, to compensate the party pursuing contempt for injuries resulting from the contemptuous behavior, or both. United States v. United Mine Workers of America, 330 U.S. 258, 303-04 (1947) ("Judicial sanctions in civil contempt proceedings may, in a proper case, be employed for either or both of two purposes[:] to coerce the [contemnor] into compliance with the court's order, and to compensate the complainant for losses sustained" (citations omitted)); Perry, 759 F.2d at 705 ("[T]he purpose of civil contempt is remedial").
Whether contempt is civil or criminal turns "on the character and purpose of the sanction involved." Gompers v. Buck's Stove & Range Co., 221 U.S. 418, 441 (1911). The character of the relief is civil if the contemnor can avoid the sentence imposed, and purge himself of it, by complying with the terms of the original order. It is criminal if he may not. See Hicks on Behalf of Feiock v. Feiock, 485 U.S. 624, 632, 635 & n. 7 (1988). Where the purpose of the contempt order is to ensure a party's compliance, the court must "consider the character and magnitude of the harm threatened by continued contumacy, and the probable effectiveness of any suggested sanction in bringing about the result desired." Mine Workers, 330 U.S. at 304; see also Whittaker Corp. v. Execuair Corp., 953 F.2d 510, 516 (9th Cir. 1992) (quoting Mine Workers and citing General Signal Corp. v. Donallco, Inc., 787 F.2d 1376, 1380 (9th Cir. 1986), and Shuffler v. Heritage Bank, 720 F.2d 1141, 1148 (9th Cir. 1983)).
1. The Character and Magnitude of the Harm Threatened
Mrs. Bademyan's failure to appear for her January 22, 2009 deposition constitutes a violation of both the letter and spirit of Judge Zarefsky's order compelling her to appear. Given Mrs. Bademyan's failure to appear at her first scheduled deposition on November 21, 2008, the court does not believe the failure is isolated or that there is no danger of repetition. Indeed, Mrs. Bademyan's continued noncompliance with the January 5, 2009 order is strong evidence to the contrary. It suggests that Mrs. Bademyan intends not to comply and to attempt to impede RMS's ability to determine whether Bademyan has, in fact, suffered any emotional distress.
2. Probable Effectiveness of the Proposed Sanction
RMS requests that the court compel Mrs. Bademyan to appear at her deposition. The court believes this is an appropriate remedy, and therefore directs Mrs. Bademyan to appear for her deposition on March 12, 2009, in the jury room of Courtroom 540, located in the Roybal Federal Building, 255 E. Temple St., Los Angeles, CA 90012.
RMS also requests that the court impose monetary sanctions in the amount of $2,212.65 to cover the attorneys' fees and costs it has incurred attempting to depose Mrs. Bademyan.*fn14
a. Whether RMS is Entitled to Fees
The Ninth Circuit has held that a court may sanction a contemnor by ordering that she pay a party's attorneys' fees and costs. See Koninklijke Philips Elecs. N.V. v. KXD Tech., Inc., 539 F.3d 1039, 1042 (9th Cir. 2008) (holding that a court may sanction a contemnor for "attorney's fees, lost royalties, and storage costs [that] were assessed in order to compensate the [complainant] for losses sustained"); see also Corrales v. Castillo, No. 2:07-cv-00141-LRH-LRL, 2008 WL 4186233, *1 (D. Nev. Sept. 3, 2008) (sanctioning contemnor for "reasonable expenses, including attorney's fees and costs" incurred in filing the contempt motion and reply, preparing for and participating in the hearing on the motion, and conducting a contempt deposition); Henry Schein, Inc. v. Certified Business Supply Inc., No. SACV 03-1662 DOC (ANx), 2008 WL 4962851, *1 (C.D. Cal. Nov. 18, 2008) (recognizing that an award of reasonable attorneys' fees and costs is an appropriate sanction to impose on a party held in civil contempt).
RMS has incurred time and expense bringing Mrs. Bademyan's failure to comply with the January 5, 2009 order compelling her to appear for deposition to the court's attention. Moreover, it appears that Mrs. Bademyan has taken no affirmative steps to comply with the terms of the order. These are precisely the types of considerations that render an attorneys' fees award appropriate. See, e.g., Donovan v. Burlington Northern, Inc., 781 F.2d 680, 682 (9th Cir. 1986) ("courts in civil contempt proceedings must award attorney's fees when such fees have actually been incurred by the prevailing party and are otherwise allowable").
b. Whether RMS's Requested Fee Award is Reasonable
Once a party has established that it is entitled to an award of attorneys' fees, "[i]t remains for the district court to determine what fee is 'reasonable.'" Hensley v. Eckerhart, 461 U.S. 424, 433 (1983) (quoting Nadeau v. Helgemoe, 581 F. 2d 275, 278-79 (1st Cir. 1978)). The Ninth Circuit "requires a district court to calculate an award of attorneys' fees by first calculating the 'lodestar.'" Caudle v. Bristow Optical Co., 224 F.3d 1014, 1028 (9th Cir. 2000) (citing Morales v. City of San Rafael, 96 F.3d 359, 363 (9th Cir. 1996) (reversing the district court's award of attorney's fees because it failed to calculate a lodestar figure and assess the extent to which recognized bases for adjusting that figure applied)). "The 'lodestar' is calculated by multiplying the number of hours the prevailing party reasonably expended on the litigation by a reasonable hourly rate." Morales, 96 F.3d at 363. It incorporates consideration of the results obtained, as required by Hensley, 461 U.S. 424, and other relevant factors as well. Morales, 96 F.3d at 363 n. 8.
To calculate the lodestar figure, a plaintiff must submit "satisfactory evidence . . . that the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation." Blum v. Stenson, 465 U.S. 886, 895-96 n. 11 (1984). The relevant community is that in which the district court sits. See Schwartz v. Secretary of Health and Human Servs., 73 F.3d 895, 906 (9th Cir. 1995). Declarations regarding the prevailing market rate in the relevant community suffice to establish a reasonable hourly rate. See Widrig v. Apfel, 140 F.3d 1207, 1209 (9th Cir. 1998).
In support of its motion, RMS has submitted declaration from Brian Slome, one of its lawyers for this matter. It has not, however, provided the court with any declarations from lawyers not associated with this case. See, e.g., Benson v. Continental Casualty Company, 592 F.Supp.2d 1274, 1279 (C.D. Cal. 2009) ("As for the attorneys['] fees, Plaintiff submits not only a declaration by each lawyer about their experience and rates but also affidavits of other attorneys setting forth their customary rates, all of which support a finding that these rates are reasonable. See, e.g., United Steelworkers of America v. Phelps Dodge Corp., 896 F.2d 403, 407 (9th Cir. 1990) ("Affidavits of the plaintiffs' attorney and other attorneys regarding prevailing fees in the community, and rate determinations in other cases, particularly those setting a rate for the plaintiffs' attorney, are satisfactory evidence of the prevailing market rate")" (emphases added)). When a fee applicant fails to meet its burden of establishing the reasonableness of the requested rates, however, the court may exercise its discretion to determine reasonable hourly rates based on its experience and knowledge of prevailing rates in the community. See, e.g., Plan Administrator v. Kienast, No. 2:06-cv-1529, 2008 WL 1981637, *4 (W.D. Pa. May 2, 2008) ("If a party fails to meet its burden to demonstrate a prima facie case that the requested rates were the prevailing rates in the community, 'the district court must exercise its discretion in fixing a reasonable hourly rate,'" quoting Washington v. Philadelphia Court of Common Pleas, 89 F.3d 1031, 1036 (3d Cir. 1996)); Moreno v. Empire City Subway Co., No. CV 05-7768 (LMM) (HBP), 2008 WL 793605, *7 (S.D.N.Y. Mar. 26, 2008) (where the fee applicant "has submitted no evidence of the prevailing market rate for attorneys of like skill litigating cases similar to plaintiff's . . . it is within [the court's] discretion to determine the reasonable hourly rate at which plaintiff[']s counsel should be compensated based on [the court's] familiarity with plaintiff's case and the prevailing rates in the [relevant community]"); Shephard v. Dorsa, No. CV 95-8748 ER (JGx), 1998 WL 1799018, *2 (C.D. Cal. July 2, 1998) (determining a reasonable hourly rate based on "(1) the Court's own experience in considering the prevailing market rates in Los Angeles, (2) other fee awards in the relevant market, and (3) ALTMAN WEIL, PENSA, SURVEY OF LAW FIRM ECONOMICS (1996)" in a case where the fee applicant failed to establish the reasonableness of the lawyer's hourly rate). In this case, the court elects to evaluate whether RMS's requested hourly rates are reasonable based on its experience with similar cases and its knowledge of prevailing rates in the community.
Counsel for RMS represent that the associates who worked on the original and subsequent motions to compel Mrs. Bademyan's appearance at deposition billed their time at $175.00 per hour, and that the hourly rate of the senior partner who was to conduct the second scheduled deposition of Mrs. Bademyan was $235.00 per hour. The court concludes that these rates are reasonable -- indeed quite low -- based on its familiarity with prevailing market rates in the Central District of California, and its experience determining reasonable hourly rates in other cases.
A court may award attorneys' fees only for the number of hours it concludes were reasonably expended litigating the case. At the outset, "[t]he fee applicant bears the burden of documenting the appropriate hours expended in litigation and must submit evidence in support of those hours worked." Gates v. Deukmejian, 987 F.2d 1392, 1397 (9th Cir. 1992). "'The party opposing the fee application has a burden of rebuttal that requires submission of evidence to the district court challenging the accuracy and reasonableness of the hours charged or the facts asserted by the prevailing party in submitted affidavits.'" Common Cause v. Jones, 235 F.Supp.2d 1076, 1079 (C.D. Cal. 2002) (quoting Deukmejian, 987 F.2d at 1397 (citing Blum, 465 U.S. at 892 n. 5 and Toussaint v. McCarthy, 826 F.2d 901, 904 (9th Cir. 1987)). RMS seeks reimbursement for a total of 11.8 hours that were expended preparing for and attending Mrs. Bademyan's first and second noticed depositions, as well as preparing the motions to compel necessitated by Mrs. Bademyan's repeat nonappearance.
Although neither Bademyan nor his mother has contested the reasonableness of the hours, the court has an independent obligation to review them and determine if they are reasonable in light of the work performed. See Common Cause, 235 F.Supp.2d at 1079 (even where a defendant has not rebutted the reasonableness of the hours billed, the court "may not uncritically accept a fee request," citing Sealy, Inc. v. Easy Living, Inc., 743 F.2d 1378, 1385 (9th Cir.1984)). Having carefully reviewed the documents submitted, the court concludes that the hours expended are reasonable.
For the foregoing reasons, the court finds that Mrs. Bademyan is in contempt of Judge Zarefsky's January 5, 2009 order compelling her to appear for deposition. The court imposes sanctions on Mrs. Bademyan of $2,212.65, representing the attorneys' fees and costs RMS reasonably incurred attempting to depose her. The sanctions are calculated as follows:
Associate at $175/hour11.3 hours$1,977.50
Senior Partner at $235/hour0.5 hours$117.50
Reporter's Appearance 1 $46.65
Reporter's Appearance 2 $71.00
GRAND TOTAL $2,212.65
The court further orders Mrs. Bademyan to appear for her deposition on March 12, 2009 in the jury room of Courtroom 540, located in the Roybal Federal Building, 255 E. Temple St., Los Angeles, CA 90012. If she does not, RMS may seek additional sanctions, including a daily fine and/or coercive incarceration. RMS is directed to serve a copy of this order upon Mrs. Bademyan immediately and to file proof of service with the court no later than March 10, 2009.