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“Civil Death Penalty” Sanction May Not Implicate Due Process Concerns

By Henry R. Chalmers, Litigation News Associate Editor – March 24, 2011

Nevada courts are not required to provide an evidentiary hearing to a defendant faced with the possibility of having its answer on liability stricken as a discovery sanction, says the Nevada Supreme Court, as long as the defendant remains able to contest damages. A defendant’s due process rights to an evidentiary hearing in Nevada are implicated only by case-concluding sanctions that resolve both liability and damages. Bahena v. Goodyear Tire & Rubber Co. [PDF].

Non-Case-Concluding Sanction for Discovery Violations
The case arose out of a multifatality auto accident in which a tire manufactured by Goodyear separated from one of the vehicles. Near the end of discovery, the plaintiffs sought sanctions against Goodyear for three alleged discovery violations.

The first concerned the plaintiffs’ motion to compel Goodyear to index each of the documents it produced to the plaintiffs’ corresponding document request. Although Nevada’s rules of civil procedure give a producing party the option of producing documents as kept in the ordinary course of business, the discovery commissioner assigned to the case ordered Goodyear to prepare an index. Goodyear did not comply with the order.

The discovery commissioner then ordered Goodyear to produce a representative for deposition to authenticate 74,000 documents produced by the company. Any document not affirmed or denied would be deemed authenticated. Goodyear did not produce a deponent by the commissioner’s deadline and thereafter filed a formal objection. Finally, Goodyear also failed to verify its interrogatory responses.

The district court approved the discovery commissioner’s recommendations and rulings. It then struck Goodyear’s answer as to liability and damages. At a hearing on a motion for reconsideration, the district court entertained factual proffers from the parties’ attorneys. The court also considered voluminous exhibits and affidavits. It did not, however, allow the parties to conduct an evidentiary hearing, present witnesses, or engage in cross examination.

After the hearing, the district court reduced its sanction by dismissing Goodyear’s answer as to liability only. At trial, the jury returned a verdict of $30 million in compensatory damages but did not award any punitive damages.

Evidentiary Hearings and Due Process
On appeal, the Nevada Supreme Court rejected Goodyear’s argument that it was entitled to conduct a full evidentiary hearing into the allegations against it before having its answer stricken. The court held that only “case concluding” sanctions implicate such a due process right and a sanction on a defendant is not “case concluding” unless it resolves both liability and damages.

Instead of an evidentiary hearing, the supreme court determined that the “court should, at its discretion, hold such hearing as it reasonably deems necessary to consider matters that are pertinent to the imposition of appropriate sanctions.”

Because Goodyear’s sanction was not “case concluding,” the district court’s decision also was subject to review only for an abuse of discretion. Had the district court not revised its original sanction of default as to damages also, its decision would have been reviewed under a heightened standard.

The supreme court noted that the district court’s authority to issue its sanction arose from that court’s “inherent equitable power to assess appropriate sanctions based upon the criteria of willfulness, bad faith and prejudice.” Similar to federal courts, the authority of Nevada courts to sanction also arises under Rule 37 of Nevada’s Rules of Civil Procedure.

Nevada departs from federal practice, though, when it comes to preceding dismissal penalties with less severe sanctions. According to the Nevada Supreme Court, the state “does not follow the federal model of requiring progressive sanctions against a party for failing to comply with a discovery order.”

Ultimately, the most the state supreme court was willing to offer to those seeking a chance to fight non-case-concluding sanctions was an admonition that courts “should be encouraged to exercise their discretion to hold evidentiary hearings regarding non-case-concluding sanctions when requested and when there are disputed issues of material fact regarding the discovery dispute identified by the parties.”

“Civil Death Penalty” Too Extreme?
The decision does not sit well with Betsy Collins, Mobile, AL, cochair of the ABA Section of Litigation’s Pretrial Practice and Discovery Committee. “I think due process concerns are implicated when you take away a defendant’s answer and only allow it to contest damages,” she says.

Collin’s fellow committee cochair, Kent A. Lambert, New Orleans, wonders why the court did not opt for a sanction short of a “civil death penalty.” He is “concerned that such an approach isn’t very realistic given the volume of data involved in discovery these days.”

Rounding out the triumvirate of the Section’s Pretrial Practice and Discovery Committee cochairs is Ian H. Fisher, Chicago, who expresses some sympathy for the decision. “A court faced with a discovery dispute should be able to take officers of the court at their word,” says Fisher, adding that, “where no true factual disputes remain, an evidentiary hearing should not be necessary.”

“Unfortunately,” Fisher notes, “discovery abuses like those found here happen, and it’s necessary to make examples of parties who flagrantly violate discovery rules.” “Sanctions may be one of the only things that will keep some parties in line and help avoid discovery abuses,” he adds.

This troika of procedural mavens do agree, however, that the sanction in Bahena was on the “extreme” side. According to Lambert, “a scheme of progressive sanctions may have been a better approach in this case.”

Keywords: litigation, discovery, civil death penalty sanction, pretrial practice

Related Resources

  • » Bahena v. Goodyear Tire & Rubber Co., 235 P.3d 592 (Nev. July 1, 2010), aff’d on reconsid., 2010 Nev. LEXIS 57 (Dec. 30, 2010).


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