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Sherwin Williams Co. v. Courtesy Oldsmobile-Cadillac, Inc.

United States District Court, E.D. California

July 24, 2017

SHERWIN WILLIAMS COMPANY, Plaintiff,
v.
COURTESY OLDSMOBILE-CADILLAC, INC., AND BEN WELLS Defendants.

          ORDER IMPOSING MONETARY SANCTIONS ON COUNSEL FOR BOTH PARTIES THIRTY DAY DEADLINE FOR PAYMENT OF SANCTIONS TO THE COURT

          MICHAEL J. SENG UNITED STATES MAGISTRATE JUDGE.

         I. Procedural History

         On March 31, 2017, the parties requested a stay of the deadline to file dispositive motions on the ground that they had reached a tentative settlement agreement. (ECF No. 66.) On April 3, 2017, the Court extended the dispositive motion fourteen days. (ECF No. 67.)

         The fourteen day deadline passed with no submissions by the parties. On April 20, 2017, the Court ordered the parties to file a joint status report regarding the progress of settlement. (ECF No. 68.) The parties filed a status report indicating that they continued to work on a final settlement agreement. They did not request a further extension of any court deadlines. (ECF No. 69.)

         On May 1, 2017, the Court filed a minute order noting that the parties had not filed a joint pretrial statement as previously ordered. The parties were ordered to file a joint pretrial statement by May 2, 2017. (ECF No. 70.)

         On May 2, 2017, the parties filed a motion to stay the proceedings pending execution of a final settlement agreement. (ECF No. 71.) They stated their intent to file a stipulation to dismiss the action with prejudice within sixty days.

         The Court did not grant the motion to stay but vacated all pending dates and matters. The parties were ordered to file dispositional documents within sixty days. (ECF No. 72.)

         The sixty day deadline passed. The parties did not file dispositional documents or seek an extension of time to do so. On July 7, 2017, the Court ordered the parties to show cause why sanctions should not be imposed for failure to obey the Court's order. (ECF No. 73.) Counsel for Plaintiff responded to the order to show cause on July 21, 2017. (ECF No. 75.) Counsel for Defendants responded belatedly on July 24, 2017.

         II. Applicable Law

         Local Rule 110 provides: “Failure of counsel or of a party to comply with these Rules or with any order of the Court may be grounds for imposition by the Court of any and all sanctions authorized by statute or Rule or within the inherent power of the Court.” The district court has the authority, both under its inherent power and under 28 U.S.C. § 1927[1], to impose monetary sanctions payable to the Court when counsel has willfully disobeyed a court order or otherwise conducted litigation in bad faith. See Roadway Express, Inc. v. Piper, 447 U.S. 752, 766 (1980); see also Toombs v. Leone, 777 F.2d 465, 471 (9th Cir. 1985). Indeed, the imposition of monetary sanctions on counsel under these circumstances has been looked upon favorably in this Circuit. Toombs, 777 F.2d at 471 n.10 (quoting Miranda v. Southern Pacific Transp. Co., 710 F.2d 516, 522-23 (9th Cir. 1983)).

         III. Discussion

         Counsel has had notice and an opportunity to be heard regarding the imposition of sanctions. See Miranda v. Southern Pacific Transp. Co., 710 F.2d 516, 522-23 (9th Cir.1983) (sanctions should not be imposed without giving counsel notice and an opportunity to be heard).

         The parties provide lengthy and persuasive explanations as to why they were unable to finalize their settlement agreement sooner. Such explanations may well have provided good cause for an extension of time had either party submitted such a request. Neither party did.

         The Court's concern here is not with the reasons for delay in finalizing the settlement, but with counsels' failures to timely respond to court orders. Defendants provide no justification for same. Plaintiff states merely that the parties “regrettably failed to advise the Court by the deadline that the Parties were expecting to jointly dismiss the ...


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